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Alamos Gold Has a Young-Davidson Problem

The Deep Dive Jul 7, 2026

Summary

Seismic events at Alamos Gold's Young-Davidson mine (sudden rock failures underground) cut planned mining rates from 8,000 to 5,000 tons per day.

Damage has closed access to two high-grade stopes (ore blocks slated for mining this quarter) until underground infrastructure repairs are made.

Q2 production guidance dropped 12% at midpoint to 130,000-135,000 ounces, and full-year output is now expected below the low end.

Young-Davidson already carries the portfolio's highest costs, with Q1 AISC (All-In Sustaining Cost — what it really costs to produce an ounce) of $2,181.

The stock fell as much as 20% after the announcement, and repeated operational problems are raising bigger questions for investors.

Key points on Alamos Gold

  • The host reports that two seismic events at Young-Davidson damaged underground infrastructure and cut off access to two high-grade stopes, with planned mining rates nearly halved from 8,000 to 5,000 tons per day for the rest of 2026.
  • Q2 2026 production guidance has been cut from 135,000-150,000 ounces to 130,000-135,000 ounces (a 12% midpoint decline), and the host expects full-year output to come in below the low end of the original 570,000-650,000 ounce guidance.
  • Costs are expected to exceed the upper end of guidance ($1,020-$1,120 cash costs and $1,500-$1,600 AISC per ounce, per the host), with Young-Davidson already the portfolio's high-cost mine at $2,181 per ounce AISC in Q1 2026.
  • The stock fell as much as 20% after the announcement, and the host argues a second mine hit by seismic events just eight months after Island Gold is prompting investors to question what is going on at Alamos.
  • A full guidance update, including revised full-year estimates, is expected alongside Q2 results.

Steve Hyland's takeaways

  • Top takeaway The host frames Alamos Gold as a slow-moving train wreck, arguing that repeated operational setbacks now raise bigger questions for investors than any single guidance miss.
  • He is skeptical that Alamos' planned mine sequencing and ground support measures will restore higher mining rates, saying only 'time will tell' whether that is operationally feasible.
  • He argues the three days of May downtime, the loss of high-grade stopes, and the reduced mining rates combine into severe near-term pressure, leaving the size of the full-year cut as the key open question.
  • He notes the market largely overlooked Island Gold's seismic events and guidance cut in October, but says a second affected mine just eight months later has eroded that benefit of the doubt in a down gold market.