Alamos Gold Inc (TSE: AGI) (NYSE: AGI) (FRA: 1AL) has experienced a significant operational setback at one of its main operations.
The company reported two seismic events in mid-June at its Young-Davidson mine in Ontario. One event occurred in an active mining area and damaged infrastructure.
No workers were injured, but the incidents blocked access to two high-grade stopes scheduled for exploitation in this year’s second quarter. Power outages from a late-May storm added further disruption with three days of unplanned downtime.
These issues led Alamos to cut its second quarter production guidance to between 130,000 and 135,000 ounces, a 12 per cent reduction from the previous midpoint. The gold miner now expects full-year 2026 consolidated production to fall below the low end of earlier guidance, with costs rising above targets. Alamos says it will provide a full update with its Q2 results in late July.
Alamos Gold shares fell sharply after the update. The stock dropped as much as 20 per cent in Toronto trading due to the news. The Bank of Montreal (TSE: BMO) (NYSE: BMO) lowered its price target to C$73.00 from C$79.00 and Bank of America Corp (NYSE: BAC) (FRA: NCB) sliced its target from US$57.00 to US$50.00.
Young-Davidson forms a key part of Alamos’s Canadian operations alongside the Island Gold District. The underground mine near Matachewan holds proven and probable reserves of about 2.98 million ounces as of the end of 2025.
$AGI
-Bank of America lowers Alamos Gold target to $50 from $57
Buy
–$ALGM
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Buy
–$AMAT
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Overweight
–$APP
-Citi reiterates AppLovin $710 target
Buy
–— stock setter (@MarcJacksonLA) June 22, 2026
Read more: NevGold Corp. reports antimony grades up to 53.7 per cent at Nevada project
New exploration success lightens the loss
Despite the setback at Young-Davidson, Alamos reported encouraging drill results from the Island Gold District this week.
Some of the strongest results came from areas close to the main deposit and processing plant. These included 12.05 grams per tonne gold over 5.20 metres, which contained a section of 36.67 g/t Au over 1.50 metres.
Even higher-grade hits appeared in nearby zones around the main area, with one reaching 132.90 grams per tonne over 2.21 metres. The richest results came from surrounding areas further away, including former mine sites about seven kilometres from the main processing plant.
These results add to recent exploration work in the district and point to more high-quality gold. The district remains on schedule for its full-year goals and is expected to deliver stronger production in the second half of 2026 and in the years ahead.
Official secures provincial leadership position
Alamos achieved another success this month when its Chief Operating Officer, Luc Guimond, became Chair of the Ontario Mining Association Board of Directors.
“Luc has played a pivotal role in the success of the Young-Davidson mine and has helped strengthen our operations through a focus on safety, performance and long-term value creation,” said Alamos on social media.
“His appointment as OMA Chair reflects the respect he has earned across the industry and his dedication to advancing a safe, responsible and competitive mining sector in Ontario.”
The recent high-grade drill results and leadership milestone have helped Alamos offset disappointment about the Ontario production setback. So has the company’s solid financial position made possible by high gold pricing.
Read more: NevGold launches 20,000-metre drill campaign at Nevada antimony-gold project
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