Alamos Mitigating Risks Through Underground Expansion

Q: How did the acquisition of Argonaut Gold reshape your operations and priorities in Mexico and Canada?

A: We finalized the acquisition of Argonaut Gold in July, 2024. Our objective was to enhance our portfolio by leveraging synergies, integrating technologies, and reducing operating costs. To manage Argonaut's Mexican properties, a separate entity was established. We are focusing on fostering collaboration between Island Gold and Magino to establish one of the largest and most productive mines in Canada.

About 60%-70% of Alamos Gold's value and production is derived from Canada. Given the political climate in Mexico, we are prioritizing opportunities in Canada, but we remain committed to our long-term operations in Mexico. Should favorable conditions emerge, we will actively explore growth opportunities. Our primary focus in the short term is on organic growth through the concessions we obtained under previous administrations, which we hope will remain stable.

Q: What strategies is the company deploying to maintain stability and profitability in a politically uncertain environment?

A: Alamos Gold has successfully navigated the uncertainties of the mining sector over the years by cultivating stable investment conditions. Our strategies emphasize leveraging advanced technologies and optimizing cost management, as demonstrated by our most recent Mexican development, La Yaqui Grande. Favorable metal prices, particularly for gold and silver, have also bolstered our resilience in the face of regulatory challenges.

Q: How is the potential government ban on open-pit mining expected to impact the sector?

A: The mining industry is demonstrating resilience in the face of evolving government mining policies, notably the potential ban on open-pit mining. This ban would have an array of negative impacts across Mexico if enforced, including the loss of economic growth, jobs and future employment opportunities, and community benefits.

However mining companies have a near-term hope that the new government will take a more balanced approach on the matter, to recognize the sector’s consistent adherence to applicable environmental laws and regulations

Q: As a Canadian company, what potential implications would judicial reforms have on your investments in Mexico?

Concerns have been raised that judicial reforms could undermine the independence of judges, potentially making them more susceptible to influence from the executive branch of government. If judges are swayed or pressured by the government, it could lead to biased or unfair decisions during a legal proceeding (for example, this would cause issues in the case of a legal challenge to a company’s mining concession). 

It is vital to cultivate open dialog between the mining sector and government authorities. Recently, US and Mexican CEOs committed to a US$20 billion investment over the coming years, yet US$6.8 billion remains tied up due to permit delays. Enhanced collaboration between the government and industry stakeholders can unlock this potential, driving economic growth and promoting sustainable practices.

Q: What factors have driven La Yaqui Grande’s outstanding performance in 2024, and what strategies are being implemented to maintain this momentum in 2025?

A: The Yaqui project has achieved remarkable success, consistently producing 150,000oz annually. This success is driven by several critical factors, including the recently quantified abundant underground reserves and resources surrounding our primary site. These resources enable us to sustain production levels while strategically transitioning from open-pit operations to underground mining between 2027-2028. These projects present a significant opportunity as they align with current governmental priorities for underground mining, and we anticipate a smooth extension of our permits.

The well-being of our community is also paramount to our success. We employ about 1,500 individuals and place a strong emphasis on job security. Our organization has established unprecedented agreements with local communities to provide essential services, including medical, water, electricity and education. Our goal is to foster sustainable, long-term benefits for all stakeholders.

Alamos Gold is a Canadian intermediate gold producer that operates three mines in North America: the Young-Davidson and Island Gold mines in Canada, and the Mulatos mine in Mexico.