Alamos Gold Inc. Stock

Good morning. I'll now turn the call over to Scott Parsons, Alamos' Senior Vice President of Corporate Development and Investor Relations.

Thank you, operator, and thanks, everybody, for attending Alamos' Second Quarter 2026 Conference Call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer; Greg Fisher, Chief Financial Officer; Luc Guimond [indiscernible] Officer; and Scott R.G. Parsons, Senior Vice President of Exploration.

We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes in the presentation, news release and MD&A as well as the risk factors set out in our annual information form. Technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior Vice President of Technical Services and a qualified person. Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in U.S. dollars unless otherwise noted.

Now John will provide you with an overview.

Thank you, Scott. I'll start with Slide 3. During the second quarter, we produced 130,600 ounces of gold, in line with our revised quarterly guidance and 5% higher than the first quarter. The Island Gold District continues to perform well with a strong overall quarter offsetting lower-than-expected production from Young-Davidson and Mulatos.

Total cash costs increased 6% from the first quarter while all-in sustaining costs of $1,728 per ounce were 7% lower, driven by the timing of sustaining capital spending. Financially, we continue to generate strong free cash flow of $144 million net of our reinvestment in high-return growth in exploration. Consistent with our balanced approach to capital allocation, we returned $67 million to shareholders through share buybacks and dividends in the second quarter. Through the first half of 2026, our shareholder returns increased to $84 million, already exceeding total returns in 2025.

Turning to Slide 4, as previously disclosed, the seismic event that occurred in June at Young-Davidson has impacted our near-term operations and is the main driver of the revision to our full year production and cost guidance. There were no injuries, but there was localized damage to underground infrastructure at Young-Davidson, limiting access to higher-grade stopes in the 9410 level that were scheduled to be mined this year. This is expected to result in lower than planned mining rates and grades for the rest of the year, which Luc will touch on in more detail later in the call.

In addition to the challenges we experienced at Young-Davidson, a slower-than-expected leach pad cycle at La Yaqui Grande is delaying the recovery of ounces previously stacked on the leach pad. As a result, we have updated our 2026 full year consolidated production guidance to between 510,000 and 560,000 ounces, a 12% reduction from the previous guidance. Despite this temporary setback, we expect stronger production in the second half of the year driven by higher underground mining rates and grades at Island Gold.

Our full year all-in sustaining cost guidance has increased 18%. This is due to lower production, higher costs at Young-Davidson for rehabilitation work and enhanced ground support as well as increased labor inflation and contractor costs in Canada. Greg will provide more detail on these changes in his financial review.

All growth projects are advancing well, including the expansion of the Island Gold District, which is the key engine of our strong long-term outlook. We expect significant improvements in both our production and costs in each of the next several years and remain on track to achieve our target of producing 1 million ounces of gold annually by the end of the decade.

Turning to Slide 5. We significantly increased our shareholder returns in the second quarter with $50 million in share buybacks and our quarterly dividend of $17 million, which was increased in the first quarter. We also eliminated all the remaining 2026 gold hedges inherited from the Argonaut Gold transaction at a cost of $92 million, all funded by ongoing free cash flow.

On the exploration front, we increased another series of exceptional high-grade results across multiple targets within the Island Gold District. These results highlighted the ongoing evolution of the Island Gold District and significant upside potential to what was outlined in the Island Gold District expansion study earlier in the year.

Now looking at Slide 6, we have a clear path outlined to grow our annual production and decrease our costs over the remainder of the decade to reach 1 million ounces by 2030. This growth is expected to be internally funded from ongoing free cash flow generation and a strong balance sheet with $1.2 billion in available liquidity. The completion of the Phase 3+ [indiscernible] expansion at Island Gold is within sight. Our Magino mill expansion is well underway, and construction activities continue to ramp up at Lynn Lake and PDA. These are high-return projects, all lower costs and largely derisked, underpinning one of the best growth profiles in the sector.

I'll now turn the call over to our CFO, Greg Fisher, to review our financial performance. Greg?

Thank you, John. Moving to Slide 7. We sold 130,800 ounces of gold in the second quarter at an average realized price of $4,504 per ounce for quarterly revenues of $594 million. Total cash costs were $1,303 per ounce and all-in sustaining costs were $1,728 per ounce.

Operating cash flow before changes in noncash working capital was $287 million in the second quarter or $0.68 per share. This was down from the previous quarter, reflecting the lower realized gold price and $92 million or $0.22 per share of cash that was used to repurchase and eliminate the remaining 35,000 ounces of legacy Argonaut Gold hedges maturing in 2026.

These hedges were scheduled to mature in the second half of this year and by eliminating them, we have increased upside to higher gold prices. To date, we repurchased approximately 280,000 out of the 330,000 ounces hedged by Argonaut prior to maturity, including 50,000 ounces repurchased this year. We will continue to monitor opportunities to repurchase and eliminate the remaining 50,000 ounces of gold forward contracts maturing in the first half of 2027.

Our reported net earnings were $270 million in the second quarter or $0.64 per share. This included after-tax gains on commodity derivatives of $27 million, an after-tax inventory net realizable value adjustment of $7 million, unrealized foreign exchange gains recorded in deferred taxes of $4 million and other losses of $1 million. Excluding these items, our adjusted net earnings were $248 million or $0.59 per share.

Capital spending in the quarter totaled $181 million and included $36 million of sustaining capital, $130 million of growth capital and $15 million of capitalized exploration. We continue to fund our high-return growth internally while generating strong free cash flow. This included $144 million of free cash flow generated in the second quarter. During the first half of the year, we generated $245 million in free cash flow, of which nearly 90% was used to return capital to shareholders and reduce our gold hedge exposure.

We were active on our share buyback in the second quarter, repurchasing 1.4 million shares at a cost of $50 million. Including our quarterly dividend payments, we have now returned $84 million to shareholders and spent $135 million on repurchasing hedges for a combined spending of $219 million this year. As John noted, the $84 million return year-to-date already exceeds our total shareholder returns from last year.

We are focused on delivering increasing returns to our shareholders, including evaluating opportunities to continue to be active on our buyback while also balancing our other capital allocation priorities. This includes reinvesting in our high-return growth projects and capitalizing on opportunities to repurchase the remaining gold hedges set to mature in 2027.

We ended the quarter with a healthy cash position of $637 million and net cash of $437 million. We expect continued free cash flow generation through the remainder of the year with significant growth starting in 2027 while continuing to self-fund our organic growth plans.

Turning to Slide 8. Following the seismic event at Young-Davidson, and due to a longer leach cycle at La Yaqui Grande, we revised our 2026 production guidance to between 510,000 and 560,000 ounces. This is the largest driver of our increase in cost guidance this year, with an expected $190 per ounce impact on all-in sustaining costs, given the similar level of gross costs spread over lower production.

On the labor front, we are seeing increased contractor costs in Northern Ontario as well as ongoing labor inflation, which is expected to increase our all-in sustaining costs by approximately $90 per ounce. However, this also reflects a new compensation and retention program that was implemented midyear at all our Canadian operations, which is expected to improve recruitment and retention to further support our ramp-up at Island Gold and overall productivity at our operations.

Additionally, required rehabilitation work and enhanced ground support on -- underground at Young-Davidson are expected to increase consolidated all-in sustaining costs by an additional $15 per ounce. These increases are expected to be partially offset by a $20 per ounce benefit due to the weaker Canadian dollar. As a result of these factors, our 2026 total cash cost guidance has increased 14% to a midpoint of $1,225 per ounce and all-in sustaining cost guidance is 18% higher to a midpoint of $1,825 per ounce. This is a temporary increase in costs in large part driven by the lower production and higher costs expected from Young-Davidson in the second half of the year. We expect a significant decrease in our costs in 2027 and over the next several years driven by improvements at Young-Davidson and low-cost growth at the Island Gold District.

I will now turn the call over to our COO, Luc Guimond, to provide an overview of our operations. Luc?

Thank you, Greg. Over to Slide 9. The Island Gold District had a solid quarter with record production of 67,500 ounces, up 10% from the first quarter. The operation remains on track to achieve its original full year production guidance with further growth expected into the second half of the year, reflecting higher underground mining rates and grades.

Underground mining rates averaged a record 1,550 tonnes per day, consistent with our ramp-up schedule. Grades mined at 9.15 grams per tonne were in line with guidance and are expected to increase slightly in the third quarter with a further increase in the fourth quarter. Open-pit operations continue to perform well with mining rates averaging 55,000 tonnes per day, including 13,000 tonnes per day of ore during the quarter.

Total milling rates from the Island Gold District averaged a new high of over 10,000 tonnes per day in the second quarter. This included nearly 8,900 tonnes per day from the Magino mill and 1,230 tonnes per day from the Island Gold mill. Second quarter total cash costs and mine site all-in sustaining costs were $1,304 and $1,715 per ounce, respectively. Both are expected to decrease in the second half of the year, reflecting the increase in underground mining rates and grades as well as higher mill throughput at Magino.

However, given the increased labor and contractor costs reflecting the more competitive labor environment in Northern Ontario as well as energy -- as well as increased energy costs, the 2026 total cash costs and mine site all-in sustaining cost guidance has been revised higher. The Island Gold District generated record mine-site free cash flow of $100 million in the second quarter. That is a significant capital investment related to the Phase 3+ [indiscernible] project, Magino mill expansion and exploration. At current gold prices, the Island Gold District is expected to continue generating strong free cash flow while funding its expansion plans and a significant exploration program.

Moving to Slide 10. The ramp-up of underground mining rates at Island Gold is a key driver of our production growth in the second half of 2026 and over the next several years. During the second quarter, mining rates steadily increased every month and averaged a record 1,550 tonnes per day. With an increase in personnel, equipment and mining fronts, our mining rates have continued to increase into the third quarter. We remain on track to reach a year-end rate of 2,000 tonnes per day, with a further increase to 2,400 tonnes per day in the first quarter of 2027 following the commissioning of the shaft.

Moving to Slide 11. Magino's milling rates also increased to a new quarterly record of 8,900 tonnes per day, an 18% increase over the first quarter. This included steady improvements on a monthly basis with June averaging a monthly record of 9,800 tonnes per day. The increase is being driven by improving performance and reliability of the overall circuit as well as the addition of supplemental ore feed from the temporary pressure.

This improvement has continued into July, with milling rates on pace to average approximately 10,000 tonnes per day. Given the substantial increase in milling rates over the last several months and greater overall consistency of the operation, the mill is on track to average similar milling rates through the remainder of the year.

Moving to Slide 12, during the quarter, we spent $66 million in growth capital at the Island Gold District advancing both the shaft and mill expansion. Substantially, all capital for the Phase 3+ shaft expansion has been spent or committed. Since shaft sinking was completed late in the first quarter, progress has been made on shaft equipping and the shaft bottom infrastructure with commissioning expected to be completed in the first quarter of 2027. This is an important catalyst to increase underground mining rates to 2,400 tonnes per day in the first quarter of 2027 and ultimately to 3,000 tonnes per day in 2029.

The Island Gold District expansion is also well underway with 33% of the growth capital spent or committed. As shown on the slide, cladding and roofing activities for the new mill building are now complete, with all 8 leach tanks and 2 detox tanks erected. With all the earthworks, concrete foundation and steel erected, the key elements of the mill expansion have been significantly derisked. The Island Gold District remains on track for completion in the first quarter of 2028, and we'll turn the operation to one of Canada's largest, lowest cost and most profitable gold mines.

Over to Slide 13. Young-Davidson produced 33,000 ounces of gold in the second quarter, 10% higher than the previous quarter, but below plan. Production was impacted by the seismic event in June and weather-related power outages in May. The seismic event in June impacted access to higher-grade stopes that were supplying approximately 2,500 tonnes per day. This contributed to lower than planned mining rates of 7,132 tonnes per day and grades of 1.75 grams per tonne.

As previously disclosed, we are expecting lower mining rates through the remainder of the year as well as lower grades. As a result, our full year production guidance for Young-Davidson has been reduced to between 110 -- sorry, 100,000 and 115,000 ounces with a corresponding increase in our cost guidance.

Despite what was a challenging quarter for Young-Davidson, the operation generated strong mine site free cash flow of $67 million. At current gold prices, we expect the operation will continue generating positive free cash flow through the second half of 2026.

Turning to Slide 14. I'll now provide more detail on the seismic event and impact. Seismicity is a normal part of underground mining and seismic events are not uncommon. Our ongoing focus is to extract our mineral reserves with a disciplined and geotechnically sound approach that manages and mitigates stress underground in order to ensure the safety of our workforce and minimize any disruptions.

We experienced 2 seismic events in June, one of which had no impact. The other cause damage to the drift access on the 9410 level. In both cases, there were no injuries given the systems and protocols we have in place. Seismic event near the 9410 level has delayed access to higher grade stopes that were supplying approximately 2,500 tonnes per day and scheduled to be mined during the second half of this year. As a result, our mining rates are expected to average 5,000 tonnes per day for the remainder of the year, and we expect mine grades to average similar levels as the 1.75 grams per tonne mined in the second quarter.

We have not lost any reserves in the impacted area, and we will be completing rehabilitation work to reestablish access to the 9410 level during the second half of 2026. We also will be implementing enhanced ground support and other measures, which are all expected to support higher mining rates beyond 2026. These include longer primary support through the use of 8-foot dynamic ground support bolts, additional cable bolting, use of [ Harrier ] gauge screen and optimization of the extraction sequence to manage and mitigate stress as underground mining moves deeper.

The rehabilitation work and additional ground support is expected to add approximately $10 million of sustaining capital. Combined with the lower production rates, Young-Davidson's costs are expected to temporarily increase in the second half of the year with total cash costs averaging $2,100 per ounce and mine site all-in sustaining costs averaging $3,300 per ounce.

Looking beyond 2026, we expect the rehab work, optimized mine plan and enhanced ground support will drive mining and production rates higher and costs considerably lower. We are currently working on an updated mine plan, and we'll provide further detail our 3-year guidance release in early 2027.

Over to Slide 15. Production from the Mulatos district totaled 30,100 ounces, including 25,100 ounces from La Yaqui Grande. Production was 8% lower than the previous quarter, driven by lower tonnes and grade stack as well as slower-than-expected recoveries at La Yaqui Grande. Due to a longer leach cycle and increasing pad height, it is taking longer to recover ounces previously stacked on the leach pad. As a result, we have reduced our production guidance from Mulatos to between 120,000 and 135,000 ounces with a corresponding increase in costs. Our overall recovery expectations for La Yaqui Grande remains unchanged, and the 2026 production guidance revision only reflects the impact of timing.

The Mulatos district generated strong mine site free cash flow of $61 million, consistent with the first quarter, while funding construction of the PDA project, a significant exploration program and paying $27 million in cash taxes during the quarter.

Over to Slide 16. The PDA project remains within budget and on schedule for first production in mid-2027. Work during the quarter included [indiscernible] construction, underground mine development and structural steel and concrete foundation work for the mill. A total of $21 million of development capital was spent at PDA during the quarter. We expect capital spending to increase in the second half of the year as construction activities ramp up.

PDA is the future of Mulatos and just a starting point as the operation transitions to processing higher grade sulfide mineralization. The addition of a mill for PDA is opening up a number of new near mine and regional exploration opportunities for additional higher-grade mineralization within the district.

Over to Slide 17. At Lynn Lake, we spent $36 million in development capital during the quarter, advancing several key construction milestones. Major achievements included completing the temporary camp expansion, progressing work on the permanent camp and continuing site preparation and earthworks for the mill area and other site-wide infrastructure. We also began the [ Collins ] starter pit visible on the top left corner of this photo taken earlier in July. The project remains on budget and on schedule for completion in the first half of 2029 and will be a key contributor to achieving our goal of producing 1 million ounces annually by the end of the decade.

With that, I will turn the call over to our Senior Vice President of Exploration, Scott R.G. Parsons to discuss our recent exploration results at the Island Gold district.

Thank you, Luc. Turning to Slide 18, in June, we provided an exploration update for Island Gold District, which outlined why we have confidence the operation will continue growing well beyond what was detailed in Island Gold District expansion study. In addition to ongoing success in the main Island Gold structure, we have continued to define high-grade mineralization across several other targets in the district. These targets are being evaluated as potential sources of higher -- additional higher-grade mill feed that would allow us to increase the proportion of high-grade ore to be processed with an expanded Magino mill and push production rates well above the 534,000 ounce annual average outlined in the study.

These target areas include Island Gold West extension, Island Gold West [indiscernible] located in proximity to existing underground infrastructure as well as the past producing Cline-Pick and Edwards mines located 7 kilometers from the Magino mill.

Turning to Slide 19. One of the highlights of the release was the discovery of a new high-grade zone located between 250 and 500 meters west of existing underground reserves and resources. This new zone is a long [indiscernible] gold deposit, measures 200 by 300 meters based on drilling completed to date and remains open down plunge into the West. We also further expanded high-grade mineralization closer to surface within Island Gold West upplunge area. The West [indiscernible] is accessible via the existing ramp, offering a low-cost near-term opportunity to further increase underground mining rates beyond the planned 3,000 tonnes per day to be skipped via the shaft. Additional high-grade underground ore would boost the district's future annual production by displacing lower grade Magino open pit feed in the expanded mill.

Turning to Slide 20. Looking regionally, drilling the past producing Cline-Pick and Edwards mine continues to extend high-grade mineralization beyond the limits of previous mining. Earlier this year, we reported the best hole drilled to date at Cline-Pick having intersected 178 grams per tonne gold over 3.5 meters. Step-out drilling from this hole continues to successfully intersect and extend additional higher-grade mineralization. This included another highlight hole announced in June, which intersected 68 grams per tonne over 3.1 meters.

Over to Slide 21. Taking a step back, this 10-kilometer long section highlights the significant potential across the district. Island Gold main structure has grown in each and every year that we've owned it from less than 2 million ounces of reserves and resources in 2017 to what is now approaching 7 million ounces, net of the 1.7 million ounces produced. High-grade mineralization at Island Gold has so far been defined to a depth of 1,600 meters, and the deposit remains open laterally and at depth.

Over to the east, the deepest hole drilled today at Cline-Pick to a vertical depth of 540 meters, and the target remains open in multiple directions, including at depth. By comparison, underground mines within the Canadian Shield are being mined beyond depths of 3 kilometers, highlighting the significant potential for growth. Additionally, limited drilling has been completed with a 7-kilometer gap between Island Gold and Cline-Pick and further along strike to the northeast across our broader 60,000-hectare land package.

We have no shortage of high-quality, higher grade targets and believe we're only starting to scratch the surface of exploration across the district. As we further define these targets and additional sources of high-grade ore, we see excellent potential for this to support further production growth by leveraging our existing and planned infrastructure.

With that, I'll turn the call back to John.

Thank you, Scott. I'll turn the call over to the operator and open the call for your questions. .

[Operator Instructions] And our first question comes from Sathish Kasinathan with Bank of America.

My first question is on the cost guidance for the year. Thanks for all the details that you've provided. Can you provide a bit more color on the $90 per ounce increase in costs related to labor inflation? More specifically, what assumptions were embedded in your original guidance at the start of the year? And what changed over the last 6 months? And how much of this increase should we see as structural as you move into 2027?

Sathish, it's Greg here. The $90 per ounce is a combination of contractors and labor, like our internal labor, so it's not all in our internal labor. But our assumption at the beginning of the year was about a 4% increase in labor rates and contractor rates. We've seen more profound increases on the contractor side, especially with respect to underground development. And as we've -- as we're ramping up Island Gold, we're relying a little bit more heavily on contractors, and we've seen that cost pressure there.

So it's a little bit on that side. It's also on the open pit side with our mechanics and on the contractors that help with the big open pit equipment that we've seen a little bit of pressure as well and also just a higher reliance on it this year. But as we move to put the [indiscernible] in place by the end of this year, we'll wind that reliance down.

But then the last piece is just we implemented what we call a retention program for our Canadian operations midyear. And that had a cost impact of about $30 per ounce at our Canadian operations. And it's something that is much more retention focused. So it will be payable in future years, but we need to accrue that cost over the next couple of years. And that's just something that we had not budgeted, but we implemented midyear just in response to the competitive market environment that we're seeing in Canada.

Okay. Maybe my second question is on the underground mining rates at Island Gold. Second quarter saw solid improvement 1,550 tonnes per day. As you think about reaching 2,000 tonnes per day by year-end, can you walk us through the key operational milestones required over the next 6 months? What are the primary gating factors today?

Yes. Sathish, it's Luc here. So it's a continuation of our ramp up. Certainly, it's been tracking quite well in the first half of the year. And as we continue to advance with our development rates in the second half of the year to support additional mining fronts, we'll continue to be able to meet the second half expectation with regards to the ramp up. So it will be a gradual ramp up over the next 6 months, but our plan is to exit at the end of the year at 2,000 tonnes per day.

Okay. My final question is on the capital allocation side, with $1.2 billion in liquidity, strong free cash flow and the portfolio of organic projects already underway, how are you thinking about M&A today? Has the recent disruption at Young-Davidson changed your appetite for acquisitions as a way to diversify your portfolio?

We're not really that focused on M&A right now. We have a watching brief across the market as you can appreciate all mining companies do. But I think we outlined for you in the in the presentation on the call so far that we've got plenty of things to focus on over the next 6 months in terms of getting our Young-Davidson operation back on track, completing the -- all the development work we need to achieve over the course of the balance of this year and into next year, to sustain higher mining rates at Island Gold. We are -- we've moved underground now at Mulatos. We've got 2 [indiscernible] going underground. We've got a mill under construction there.

And we've got a full-blown construction project at Lynn Lake. That's basically a $920 million project, building a brand in mine. So we've got plenty of organic growth underway as we speak and plenty of things to focus on. And I think for Alamos at the moment, while we see the market as being fairly attractive, especially with gold prices having pulled back so strongly over the last number of months. It's just not a focus for us right now.

Your next question comes from the line of Fahad Tariq with Jefferies.

Sorry if I missed this, but on La Yaqui Grande, the longer leach cycles, is that expected to -- can you just provide a bit more detail as to what's causing it. I saw that it was related to the height of the pad. Is there any way to kind of resolve that? And does it impact, I guess, 2027?

Yes, it's Luc here. It's 2 things. It's just the ore characteristic itself that's being stocked as well as the height of the leach pad, which is resulting in the longer leach cycle. But overall, recoveries are still expected to be 85%, just taking a bit longer to come through over the course of the plan that we expected for 2026. So no loss of ounces. The ounces will just end up being deferred into the 2027 plan, and we'll provide further clarity on that as well once we certainly update our 3-year guidance at the end of the year with regards to our mine plans moving forward for for Mexico, including PDA.

And I think it's important to note that the mine is right at the very end of its life. I mean, we've -- we'll continue stacking ore into Q1 of next year. But by that time, it's pretty much done. And after that, it's residual leaching. So it's not like this is some sort of an ongoing issue for us over many years to come. We're talking about a number of months, additional months to get out the balance of the gold that we stacked on the leach pad.

Yes. The other thing I would add there is given our experience with the Mulatos operation as well. We stopped mining there it a couple of years ago, and we've been still residual leaching, but from the point of view of the number of ounces that we stack at the Mulatos district over the life of that mine, it would take that amount of time to be able to get all the ounces out, but we've been actually getting all the ounces, and we expect to recover all the ounces that we had in inventory.

So we don't see anything different with regards to La Yaqui Grande. Obviously, it's not a similar scale to what we did at Mulatos from a point of view, height of the leach pad and the amount of tonnes that we stock. But at the end of the day, we still expect to get all of the ounces in a shorter time frame over the course of 2027.

Okay. That's helpful. And then maybe just switching gears to Island Gold. Obviously, a prolific kind of exploration upside there, really high grade, lots of kind of other additional deposits that are being explored. Can you just remind us, theoretically, if we think about the underground rates, I recall that it's not constrained, but that 3,000 tonnes per day could be kind of the upper limit or close to the upper limit. Can you just remind us how the ore feed could theoretically change if there's additional high-grade ounces that are discovered underground and that can be mined.

Sorry, Fahad. Could you just repeat that question for me?

I'm just trying to get a sense of what Island Gold underground, what could be the theoretical kind of upside to the 3,000 tonnes per day because there seems to be a lot of underground ounces that are high grade that are being discovered additional deposits, more upside. I'm just trying to understand like how much higher than 3,000 tonnes per day could be mined underground at Island Gold.

Yes. Well, there's certainly opportunities with regards to the infrastructure that we have in place. I mean, ultimately, with the shaft infrastructure we're putting in place, we'll have capacity to be able to handle 5,500 tonnes a day of ore and waste through that infrastructure.

Certainly, we're embarked on -- the first step is getting us to 2,400 tonnes a day when we move into 2027 and ultimately 3,000 tonnes a day once we move into 2029. Regionally, there are a number of targets within the Island Gold District that provide opportunities for additional mill feed at higher grade, displacing some of the lower grade that we get out of Magino. Certainly, in the Upper West area, where we're starting to have some success there with regards to exploration as well as within the region itself with Cline-Pick and Edwards, those are other independent access points for infrastructure requirements that would provide additional mill feed to be able to support higher grade over the long term for that district. And really, that's one of the big visions that we have for that camp and which was really the driver for overall -- looking at that overall mill expansion as well to 20,000 tonnes per day.

In the time frame Luc's referring to, 3,000 tonnes a day is -- that's a pretty good rate for that shop to handle and you've got to realize it's as much a function of having enough faces open across the mine in order to supply that 3,000 tonnes a day, where the opportunity lies is utilizing the ramp. Where we're having success in the Upper West extension, that's on a much shallower level than where we're mining underground right now. It's up around the 700-meter level. And we would we would envision with the operations shifting from ramp to shop, we'd open up the possibility to bring us as much as 1,000 tonnes a day up from the Upper West zone utilizing the ramp. So that's where I think the immediate opportunity lies for us to increase mining rates from underground at Island.

Your next question comes from Ovais Habib with Scotiabank. .

Just a couple of questions from me. Just starting off with Island Gold District. In terms of -- mining rates seem to be improving at Island Gold, milling rates and mining rates seem to be improving at Magino as well. I was just wondering in terms of you brought the upper end of the guidance down a little bit on the Island Gold District. Any color on that front? And what's the plan kind of going into then 2027? Is that what we should be expecting going into 2027? Or this is just the ramp-up period that we should be kind of considering?

So Ovais, it's Greg here. I mean we've kept the original guidance. I mean, ultimately, our low-end previously was 290,000 ounces. That stays the same. So we have strong confidence that we're going to hit our guidance as a starting point. As you pointed out, the mining rates are ramping up exactly as we expected. Q1 was over 1,400 tonnes per day. Q2 was 1,550. We're starting to see that improve even into July as we expected. So mining rates are going very well. On the Magino side, Q1 was a slower start. But since then, we've seen a significant improvement with June being at 9,800 tonnes per day and into July, we're at 10,000 tonnes per day. .

So the mine is performing very well as expected. I think where we just viewed it as we were in a position that we were revising our guidance overall, given the seismic events at Island -- sorry, seismic event at Young-Davidson. So we just took the opportunity to tighten the range. Ultimately, it was a 40,000 ounce range, and given the first half has already been completed, we just felt that 40,000 ounces was a big range for the second half. So we just tightened that down to 20,000 ounces, but it's not indicative of our view on this asset, meaning its production guidance for for 2026 and no impact into 2027 onwards.

Got it. And then just a follow-up to Fahad's question in terms of increasing mining rates and taking more from Island to displace some of the ore from Magino. I mean, John, you talked about the West side, and that's been showcasing fairly well in terms of what Scott is doing on the exploration side. When would you be in some sort of position to start talking about or start including that into your mine plan? And just how should we look at it? Is that more of a 2027 situation? Or do you think it's more longer term?

Just a second, I'll get my crystal ball. That's -- we're in the exploration phase there right now. It's going very, very well. We started the year with roughly 300,000 ounces of inferred. I'd like to see it grow into that 0.5 million ounce range because that's when it makes sense to start putting a mine plan around the zone and really focused on the effort that it's going to take to develop it as a, call it, theoretical 1,000 tonne per day ramp operation.

And we've -- obviously, this is a real focus for us it's such an immediate -- it's very low CapEx and a very, very quick payback, utilizes an existing infrastructure, all falls within our permits. I mean, there's very little that we would have to do and very little capital required in order to get that all rolling. So you can imagine it's a real high priority for us, but precisely when we -- I'd love to see it come in by 2029, that would be a big win. If we get any earlier than that, it would be a massive win.

But we're throwing everything at it right now, and that started with a big big portion of our exploration budget. Thankfully, the numbers are coming in very, very nicely. And I think we're going to start putting some shapes around those resources at the end of the year and see if we can expand on the reserve. And then from there, we would be working on mine plans and so forth.

Your next question comes from the line of Cosmos Chiu with CIBC.

Maybe my first question is on CapEx, especially growth CapEx. I see that in Q2 for Island Gold District, for example, growth CapEx decreased from Q1. And Lynn Lake, on the other hand, increase. But if I were to look at those 2 assets, if I took a look at first half spend, still below 50% of your full year guidance. So I guess my question is, the Q2 spending, was it as planned? And if that's the case, what's the plan in terms of increasing that velocity of spend in the second half to get to your guidance?

This is Greg here. So the -- it's timing related. And with Lynn Lake, it's obviously a ramp-up. So as we continue on with the project, we're going to be spending a little bit more. So Q2 was a little bit lower, but as we move into Q3 and Q4, we're going to see that continue to step up, and that's going to continue to step up even further into '27 as part of that ramp-up. On Island Gold, it was just simply timing. Ultimately, we still plan to spend what we had put in our guidance for the year, and that's going to put us on track for the shaft being completed in in the first quarter, and it's setting ourselves up well for the Magino mill expansion to be completed in the first quarter of 2028.

Great. Maybe talking about guidance here. As you mentioned, you increased your cost guidance for all 3 assets. And I understand Young-Davidson, the reasons behind in [indiscernible], the reason behind it. Island Gold, you talked about inflation as well. But as you mentioned, Greg, production really didn't change. Production guidance didn't really change for Island Gold. And so even on that cost guidance went up by about 17%.

So again, is that really pure inflation in terms of Island Gold that cost increase? And would you say Q2-wise, did you see a lot of the inflationary pressure come through in Q2 versus Q1? Was there any kind of impact on Q1? Did they all come through in Q2? And if that's the case, what have you factored in, in terms of further inflationary pressures as you formulate your full year guidance for costs? Like are you seeing another straight line in terms of did you factor in even more inflation into Q3 and Q4 to come up with your new guidance for Island Gold in terms of cost for the year?

Yes. So breaking down that, I mean, you're right, production doesn't changed. So it's not a production driver. It is what I'd call inflation and a little bit of scope change on the contractors. And I touched on this earlier in the call -- we are relying -- given the fact that we're going from 8,000 meters of development to 10,000 meters of development this year to -- we're ultimately getting up to 15,000 meters of development over the longer run at Island Gold, we're hiring, but at the same time, we need to bring contractors in to support that extra development. Those contractors are costing more money than what we had anticipated. We've seen that more profoundly in Q2 than in Q1 and we expect that to continue through the rest of the year.

The other piece is in -- as I mentioned, midyear, we put in a new compensation structure, really a retention program for all for our Canadian operations, that was implemented in June. So that is having an impact on the second half of the year, and that will continue into 2027 as something that's impacting the cost structure at at Island Gold, but it's also critically important to making sure that we hit our ramp-up to achieve what we want to achieve this year and moving into higher -- even higher mining rates in 2027.

Okay. And maybe one last question, earlier this month, we're all kind of suffocating from those forest fires or the [indiscernible] of the forest fires in [indiscernible] even in Toronto. Any kind of impact on your Northern Ontario operations to both of them in terms of the forest fires up north?

Cosmo, it's Luc here. No, nothing significant. Young-Davidson had no interruptions at all due to any sort of forest fires in the region. Actually has been pretty quiet in that region. The Island District had more -- it was not necessarily [indiscernible] proximity to the mining operation was more related to smoke. We did have some -- a couple of minor interruptions with a couple of ships, but nothing significant and really had no effect on our performance through the second quarter. At Lynn Lake, we were evacuated for 1 week. It was a fire evacuation that was provided notice to the community as well as our project. But we were only out of the project for a week and remobilized within about a week after that. So probably about a 2-week effect overall from the notice of evacuating to getting back to full-scale construction activities other than that, nothing. It's been noneventful for the year.

And your next question is from the line of Don DeMarco with National Bank.

Luc, just -- first question to you. you mentioned that in H2, at Young-Davidson, the rehabilitation work in the 9410 levels to be completed and you expect to get back into the stope and continue mining. With this, do you expect just a step change right back up to 2,500 tonnes per day? Or will it be more of a progressive ramp-up in mining rates?

Yes. I mean our focus is certainly to look at providing the additional enhanced ground support on 9410, but also a couple of other levels within that Western mining front area. And to your point, it was providing about 2,500 tonnes per day of of a mining rate through that district. Once we get the rehabilitation completed through the second half of the year, we will look -- our expectation is to get above 7,000 tonnes a day moving forward. But part of this is also just reviewing the overall extraction sequence of the ore body at depth below 9410. And that's part of the work that's ongoing right now. And we'll be looking to provide further clarity to that by the end of the year as part of our 3-year guidance. But our full expectation is to ramp up certainly as we move forward into 2027 and for the longer term. And with the expectation of being above 7,000 tonnes per day.

Okay. Just continuing with Young-Davidson, and you mentioned that maybe some of the other levels might require some additional support. Like is the higher level ground support? Is it mine wide? Or is it just the 9410 level or in the vicinity of that area? And how much of the increase in costs are just onetime versus those that might be structural like do you foresee requiring an indefinite level of higher ground support in some areas?

Yes. It's primarily in the lower levels, below 9410, Don, that we're talking about with regards to the enhanced ground support. So the areas that we've already developed, certainly, we'll look to apply that enhanced ground support, which, as I mentioned on the call, refers to a little longer embedded dynamic support, some cabling requirements as well as the gauge of the mesh that we're using as part of that enhanced ground support. So that will occur, like I said, over the rest of the year.

The other advantage we have, just to be aware of, is there's a lot of the developments that's not actually in place in the lower mine. So that's -- those are areas that we just haven't brought into the mine plan yet. But over the course of the next number of years, we would be bringing into the mine plan. So that will be brand new development. And as part of that brand-new development, it will have the enhanced ground support that we're implementing currently with what we're upgrading in the areas that we've already developed.

So I mean just adding that it will be the standard going forward in the lower mine. We will have added costs associated with that, but it might be $10 million -- $10 million to $15 million a year. That is added to sustaining capital. It's not a bigger number than that.

And maybe just as a final question and sticking with Young-Davidson mill. Can you provide some color on the frequency and magnitude of seismic events over Young-Davidson operating mine? Just trying to get a sense of the probability of something like this reoccurring? I mean, you mentioned seismic is a normal part of mining. Have you noticed trends at Young-Davidson, are the events occurring at a higher frequency as the mine deepens? If you could just provide a little bit more color on the history and looking forward on these type of events.

Yes. I think we've touched on this before. It is a normal part of mining activity. Once you're underground mining, you are going to create seismic activity. It is just normal course of business once we started tracking the ore body. But as far as the frequency or the the magnitude of the events, it's not that we're seeing more events overall or higher events overall. It's just a function of, obviously, the extraction sequence and what we're doing from an underground perspective. And as part of this review that I'm talking about with regards to the overall extraction sequence in the lower mine and the development plan that we're putting in place with regards to the enhanced ground support in the existing development as well as where we're going to be in the new sections that we haven't developed yet. We fully expect with what we're going to put in place from a ground support point of view and a point of view of reviewing the mining sequence that we'll be able to effectively manage seismicity and manage the seismicity and extract the ore body responsibly as we continue to do all along and be more reliant on a consistent mining plan to deliver on.

There are no further questions at this time. This concludes the morning's call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at (416) 368-9932, extension 5439.

Good morning, and welcome to the Annual General Meeting of Shareholders of Alamos Gold. Thank you very much for joining us. My name is Rob Prichard, and I am the Chair of the company, and I will also serve as Chair of this meeting. The Annual General Meeting of Shareholders is being held entirely online through the Lumi virtual platform to permit a greater number of shareholders to participate. This platform allows Alamos shareholders and duly appointed proxy holders to participate, submit questions and vote on the matters before us today.

Shareholders and proxy holders can submit questions or comments at any time by clicking on the messaging icon at the top of their screens. Management will address any questions unrelated to the formal portion of the meeting following John McCluskey's corporate presentation. I declare that voting is now open, and I will explain the voting procedure for this virtual meeting.

If you have already voted or sent in a proxy, there is no need for you to vote during this meeting. Registered shareholders and duly appointed proxy holders who have not already voted in advance of the meeting may cast their vote by using the voting panel on the screen. You may choose to submit your votes immediately or you may choose to wait until each resolution has been read prior to casting your vote. Voting will remain open throughout the meeting until the last item of business has been put to a vote, and I declare the voting closed.

In the interest of time, I've asked shareholders, Khalid Elhaj, Vice President, Business Development and Investor Relations; and Grace Tang, Vice President, Treasurer, to move and second motions where required. The purposes of today's meeting are fourfold: first, to receive and consider the consolidated financial statements of the company for the financial year ended December 31, 2025, and the auditor's report thereon; second, to elect 11 directors who will serve until the next Annual Meeting of Shareholders; third, to reappoint auditors that will serve until the next Annual Meeting of Shareholders and to authorize the directors to set their remuneration; and fourth, to consider and if deemed appropriate, to pass with or without variation a nonbinding advisory resolution on the company's approach to executive compensation.

Each of these matters is detailed in the company's management information circular dated April 10, 2026, as made available to our shareholders and on SEDAR+ and EDGAR. I will now call the meeting to order. Ward Sellers, Alamos' Vice President and General Counsel, will act as Secretary of the meeting, and I appoint Computershare Trust Company of Canada to act as the scrutineers.

The notice and proxy materials for the meeting were mailed to shareholders, and we have affidavits of Computershare and Broadridge confirming their mailing. Unless anyone objects, the reading of the notice shall be dispensed with. I see no objections, so I will continue.

The preliminary report of the scrutineers indicates that a quorum is present for the meeting, so we will proceed. The first order of business of this meeting is the receipt of the consolidated financial statements of the company and the auditor's report for the fiscal year ended December 31, 2025, with comparative figures relating to the previous fiscal period ended December 31, 2024. I propose that the reading of these financial statements be dispensed with. If anyone has any question regarding the financial statements, I ask that they submit them now and they will be dealt with during the general question-and-answer period of this meeting.

For the next item of business, the election of directors, each of management's proposed nominees has consented to act as a director of the company. We have not received any further nominations in accordance with the company's bylaws. I therefore move that the following individuals be elected as directors of the company. Alex Christopher, Elaine Ellingham, David Fleck, Tony Giardini, Claire Kennedy, Chana Martineau, John McCluskey, Rick McCreary, Monique Mercier, Shaun Usmar and myself, Rob Prichard. I ask that Khalid Elhaj to second the motion.

I second the motion.

Thank you very much. I ask those shareholders and duly appointed proxy holders who have not yet voted to submit their votes using the voting buttons on their screen now. The results of this meeting item will be tabulated and announced at the end of this meeting. I would like to thank the nominees for agreeing to stand for election as directors of the company.

The next order of business of this meeting is the approval of KPMG LLP as auditors for the company for the following year. I move that KPMG be appointed auditors for the company for the ensuing year at a fee to be fixed by the directors, and I ask Khalid Elhaj to second the motion.

I second the motion.

Thank you again, Khalid. I ask those shareholders and duly appointed proxy holders who have not yet voted to submit their votes using the voting buttons on their screen now. The results of this meeting item will be tabulated and announced at the end of this meeting. Thank you.

The next order of business of this meeting is the approval of the company's approach to executive compensation. Details of this advisory resolution regarding the company's approach to executive compensation are set forth in the circular. The advisory resolution must be approved by a majority of votes cast by shareholders present or represented by proxy at this meeting. I move that the advisory resolution approving the company's approach to executive compensation as set forth in the circular of the company be passed as a nonbinding advisory resolution of Alamos Gold. I ask Khalid Elhaj to second the motion.

I second the motion.

Thank you again, Khalid. I ask those shareholders and duly appointed proxy holders who have not yet voted to submit their votes using the voting buttons on their screen now. I will take a brief pause here to give you time to submit your votes, after which I will declare the voting closed on all voting items. So we'll pause for a few seconds here.

[Voting]

Thank you all very much. Voting for all items of this meeting is now closed. Based on the votes submitted in advance, I can confirm that there are a sufficient number of votes submitted in favor of each of the resolutions presented at this meeting for such resolutions to be passed. The scrutineers will tabulate the results of the meeting, and a final report on the vote will be furnished by the scrutineers subsequent to this meeting.

The results will be incorporated into a press release and posted on SEDAR+ and EDGAR promptly following today's meeting. And on behalf of the directors who have been elected and myself, I want to thank our shareholders for your confidence in us and your support for us to serve you.

That completes the formal business for today's meeting. If there's no further business to be brought before the meeting, I will ask Khalid Elhaj and Grace Tang for a motion to terminate the meeting.

I move that the meeting terminate.

Thank you, Khalid. Grace?

I second the motion.

Thank you very much, Grace. That motion is carried. Ladies and gentlemen, thank you for your attention. I declare the formal meeting of the shareholders to be terminated. I'd now like to take this opportunity to congratulate John McCluskey and the management team for a transformative year in 2025 and for significant continued successes thereafter.

Alamos continues to advance our high-return growth initiatives with substantial continued progress at the Island Gold District expansion and continued advancement of construction of the Lynn Lake project in Manitoba and the Puerto Del Aire project in Mexico, coupled with outstanding exploration results and prospects. Under John's exceptional leadership, Alamos is looking forward to delivering on one of the strongest outlooks in the gold sector.

I will now turn the meeting over to John McCluskey, our President and Chief Executive Officer. John?

Thank you very much, Rob. We're very grateful for the support of the shareholders and the support of the Board. I'd like to welcome everyone, and thank you for joining us for Alamos Gold's 2026 Annual General Meeting. 2025 was another strong year for Alamos. We delivered a record financial performance, including generating record free cash flow while continuing to advance our portfolio of high-return growth projects. We also strengthened our balance sheet, increased our return to shareholders and continue to create value from within through ongoing exploration success, which is supporting growing reserves and expansions of our operations.

Turning to the next slide. In 2025, we were impacted by several short-term operational challenges, but this in no way took away from our strong outlook. We made excellent progress on our growth initiatives, posting one of the strongest growth profiles in the sector and delivered a record year financially. Our all-in sustaining cost margins increased by more than 60%, driving record cash flow from operations and a 30% increase in free cash flow to a record $352 million while continuing to reinvest in high-return growth. With significant low-cost growth to come over the next several years, this is a trend we expect will continue.

Looking at the next slide, our long-term commitment to delivering and creating value for our shareholders continued in 2025. We returned $81 million to shareholders, nearly double 2024, and we are on a pace to increase that further in 2026 with $64 million returned year-to-date. This included increasing our dividend by 60% in the first quarter and completing $30 million of share buybacks in May.

We continue to eliminate the legacy Argonaut hedges, increasing our exposure to higher gold prices with 50,000 ounces of hedges eliminated in '25 and another 15,000 ounces in Q1 of 2026. In October 2025, we completed the sale of our Turkish development projects for $470 million in cash, a strong outcome for assets that the market was ascribing minimal to no value to.

We were also recognized as a top performer over the past 3 years by the Toronto Stock Exchange with inclusion in the TSX30 for the second consecutive year. This is an extension of a longer-term track record with our share price up more than 400% over the past 4 years, significantly outperforming gold, the gold ETFs and the S&P 500.

Turning to the next slide. Our ongoing exploration success has been a key driver of our value creation. Over the past 7 years, our mineral reserve has grown by 64% to 16 million ounces, net of 4.1 million ounces of depletion. Over that time frame, we've discovered 9 million ounces at an average discovery cost of $33 per ounce. That is the leverage you get from owning a high-quality gold company versus gold itself. We are finding millions of ounces of gold in the ground at a cost of $33 and ultimately mining and selling it at current gold prices of $4,500.

This growth is supporting the development of new projects as is the case with the PDA project and Lynn Lake and the expansion of current operations such as Island Gold. And given our ongoing success and potential, we see our assets in the long term trending to continue, supported by large exploration budgets. And this year, it will exceed $90 million, in fact, approaching $100 million.

Turning to the next slide. We're looking forward to the coming year as our outlook has never been stronger. We've been one of the strongest growing companies in the sector for the last several years, and all of that growth is based on lower cost production that we -- and we can fund it all internally.

Turning to the next slide. In February, we announced the Island Gold District expansion to 20,000 tonnes per day. The expansion is starting to unlock the true potential of the Island Gold District. Following the completion of the expansion in 2028, production is expected to increase to average 534,000 ounces a year over the initial 10 years at all-in sustaining costs of $1,025 per ounce. At a $4,500 gold price, the expansion has an after-tax IRR of 69% and a net present value of $12 billion.

The Island Gold District is quickly evolving into one of Canada's largest and most profitable and frankly, one of the most valuable operations. We believe there is more upside to come given the significant exploration potential and the effort we're putting into exposing that potential over the next several years.

Turning to the next slide. The Island Gold District will be a key driver of our growth over the next several years. Near term, this will be driven by the ramp-up of underground mining rates and the completion of the shaft expansion. Early this year, we completed the shaft to its planned depth of 1,381 meters. Commissioning of the shaft is expected to be completed by early 2027, an important catalyst to increasing underground mining rates to 2,400 tonnes a day in 2027 and ultimately to 3,000 tonnes a day by 2029.

In parallel to the shaft expansion, the larger expansion of the mill to 20,000 tonnes per day is well underway. Key elements of the expansion are already derisked with all the earthworks completed, concrete foundation poured and steel erected on the new buildings. The expansion remains on track for completion in early 2028 and will be a key driver of future growth.

Looking at the next slide. In Mexico, construction activities on the PDA project are ramping up, putting the project on track for initial production in mid-2027. PDA alone is expected to extend the Mulatos mine life by at least 9 years, but we see excellent potential for further upside given the ongoing exploration success that we're having across the Mulatos district.

And with respect to Lynn Lake, construction of the Lynn Lake project in Manitoba started this quarter, and we are effectively ramping up with over 200 people on site. This project is expected to be completed in the first half of 2029. Lynn Lake is an important part of our longer-term growth as a long-life, low-cost project with significant exploration upside across a larger land package.

Next slide. Collectively, we expect these assets to provide steady growth over the next several years from approximately 600,000 ounces in 2026 to approximately 1 million ounces by 2030. All of this growth is lower cost, and we can fund it all internally while generating growing free cash flow.

We generated $350 million of free cash flow in 2025 while investing in our growth. By 2030, we expect that to increase to more than $2 billion per year. We have one of the strongest outlooks in the sector and everything we need to be successful.

And finally, that concludes our formal presentation. I'll now turn the call over to Scott Parsons, our Senior Vice President of Corporate Development and Investor Relations. We'll take any questions that might have come through the webcast. Scott?

Thank you, John. No questions have been submitted at this time. So I will turn the meeting back to yourself.

Thank you, Scott. That concludes our 2026 Annual General Meeting of Shareholders. I want to thank you all for joining, and we look forward to speaking to all of you again soon.

Good morning, everyone. I'm Sathish. I'm part of the North American Metals and Mining Equity Research Team here at BofA. And I'm pleased to welcome John McCluskey, the CEO of Alamos Gold. So John has chosen a hybrid format, so he will start with a few slides, and then we'll jump into Q&A. John, over to you.

Thank you.

Thank you for being here.

Thank you. Thanks for having us. I'm just going to go over a few slides from our presentation deck. They help more or less orientate anybody, especially anybody new to the story. Alamos has an amazing track record for growth. We -- this company basically started in the early 2000s with an asset that we picked up when gold was under $300 an ounce.

We secured an option to purchase our first asset, the Mulatos project. The company that had it, Placer Dome, they put about $50 million into that project over about a 6-year period. But as they were spending that money, the gold price was just going down and down and down, and they had several changes at the top. And by the time this new CEO had come in, in the early 2000s, he wanted to sort of get out of Mexico and shed noncore assets and Mulatos was sold at around CAD 10 million, roughly USD 7 million at the time. And we took that asset.

And by 2005, we built the mine, and we had it producing. If you saw the way we did it, it was quite remarkable. We bought a secondhand truck fleet. We bought secondhand crushers out of Nevada. We bought an ADR plant from a bankrupt gold operation in the Yukon in Canada. And we stitched together that project in pretty solid. But we put it together for $72 million, and I've been talking to Placer Dome and said, we couldn't build that thing for $100 million, $150 million. And that's the capability and the initiative that smaller companies are willing to take, and that's why I think they've got a good place in this industry.

Anyway, we had that mine up and running, and it's since generated over $1 billion in free cash flow. And it's never had a longer reserve life than it does today. When we first started it, it had a 6-year reserve life. That was 2005. We should have been out of business in 2011 on that basis. But here we are in 2026. The last 3 years have been 3 of its most profitable years, and the mine is now transitioning from an open pit heap leach operation into pit -- going from oxides to sulfides. So we're going underground to higher grades now. And we see in reserves right now, another 10 years of production out in front of us, and we think it goes much, much further than that.

So that kind of template became our objective for growing the company. We wanted to do that again, if possible. And you can see we've managed to do it a number of times. We picked -- we didn't do anything really much between Mulatos and the acquisition of Young-Davidson. But when gold had pulled back from $1,900 back to about $1,100 an ounce in 2015, we did the first merger of equals in the mining space, combining Alamos with a company called AuRico, and that brought the Young-Davidson operation into Alamos.

It had a big reserve, but it needed quite a bit of capital to finish the construction of the project. We finished that over the next few years. And since we completed it, it's managed to generate at least $100 million of free cash flow from 2020 on. The last couple of years, we've done in excess of $200 million free cash flow from the mine. It's, in other words, been a great acquisition for us.

So if you look at our acquisition cost and then compare it to the free cash flow we've generated plus the consensus NAV, it's another example of value creation. And probably the most extraordinary example is what we've done at Island Gold, where in, again, the depths of the market, summer of 2017 with gold at about $1,250 an ounce, we took over a company called Richmont Mines because we really like this Island Gold project, even though it had a relatively small reserve at the time. It had less than 1 million ounces of reserves, another 1 million ounces or so of resources. But we saw a big potential there and most people didn't.

So our -- the initial greeting of that deal was rather poor, but we've gone on to have tremendous exploration success. We've been ramping up the operation practically since we acquired it. Right now, we're in the process of sinking a shaft and expanding milling capacity and so forth. So we're on our way at Island Gold to turning that into a mine that will produce about 535,000 ounces a year at all-in sustaining costs of around $1,100 per ounce. That's another great example of value creation. The market consensus value today on that asset is just over USD 11 billion.

So relative to where we acquired it, if you look at the success we've had in exploration plus the capital we've invested to expand it, it's just been another great example of how we create shareholder value.

And I love talking to that slide. Each one of those projects is near and dear to my heart, and each one of them -- they're going to provide tremendous free cash flow generation. And with the gold price environment that we're in today, it's just dramatic when you consider where we're going once we've built out the whole platform, we'll be generating $1.5 billion in annual free cash flow at gold price assumption of about $4,500 an ounce.

Another place where we've really driven value is through the drill bit. We've had a tremendous track record of exploration success, and particularly at Island Gold, as I said, when we took it on, it was -- we had about 700,000 ounces of reserves. And this was back in 2017, not many people observing the gold market at that time. I think in a meeting room like this, we might have 6 to 8 people, not a joke.

And we basically took the view that if you're going to acquire countercyclically, you've got to invest countercyclically. And we started to heavily invest in exploration because we knew if that mine was going to turn into what we wanted it to be, we were going to effectively have to sink a shaft. Well, to justify the investment of upwards of CAD 1 billion to sink a shaft, you've got to have a strong-enough reserve platform to justify that investment and 1 million ounces just wouldn't cut it.

So we invested quite heavily through those years when most of the peer group was really paring back expenditures on exploration. We invested heavily in exploration. And that's driven our reserve growth from sub-1 million ounces to over 5 million ounces at Island Gold, net of depletion. And across the board, we've added 9 million ounces to our operations over the last 6 years at a finding cost of roughly $33 an ounce.

So this is a great example of why you might want to invest in a gold equity, for example, rather than buying an ETF or buying the physical itself. ETFs have to go into the market, and they have to pick up an ounce of gold at a prevailing market price, where we're identifying ounces in the ground at $33 an ounce. And if you consider we have to spend another $1,100 all-in sustaining cost to extract that gold, it's still an extremely attractive proposition.

And all of these assets that we're drilling still have further scope for growth. But when you look at the track record over time, we've depleted roughly 4 million ounces over those years, but we've added significantly not only replacing the gold that we're mining every year, but actually growing our production, growing our reserves.

And as far as production is concerned, we're in a heavy capital investment phase right now. And you can see where it's going to take us. This is very heavily driven by a major expansion we're undertaking at Island itself, but it also envisions the construction of the Lynn Lake project, which is a fully permitted operation in -- a fully permitted project in Northern Manitoba. And we have about 200 people on site right now, and the full construction is underway there. And we'll have it completed by the end of 2028 and into production in 2029, and it will generate about 200,000 ounces a year at sub-$1,000 all-in sustaining costs.

So in addition to the fact that we're growing production from our current rate, we're forecasting about 600,000 ounces this year. We're growing it to over 1 million ounces by 2030. We're doing so at the same time as we're bringing down our costs. And that's just driven by productivity, and it's driven by the fact that we're bringing on more valuable ounces. And I think that's a good place to end the presentation and open it up to some questions. So I'll just leave that there.

Okay. Thanks, John, for that excellent overview. There was a lot to unpack, but we can go into each of these operations. But maybe we can start with a bigger picture question. So when investors look at Alamos today, I mean, do we look at as a near-term Island Gold price inflection story? Or should we look at as a medium-term free cash flow inflection story or like a longer-term Canadian growth champion given that you have a target of 1 million ounces?

Frankly, I think you can look at it in every -- one of those perspectives. I mean we -- every operating company has an obligation to forecast what its production and costs will be and then meet those production and costs or exceed those production costs. So that's just -- that's your everyday business. But you can see that we've -- we have a long-term track record of doing just that. We had a few hiccups last year as we integrated the new Magino acquisition. There's just some elements of that project that -- the way it was designed, it wasn't perfectly suited for the Canadian climate, but nothing that we can't fix.

And frankly, as part of the Island Gold expansion, we're taking the mill throughput capacity to 20,000 tonnes a day, and we're doing so by, first of all, getting rid of the whole front end where the real problems exist. We're going to be putting in a gyratory crusher there. It will have 25,000 tonnes of capacity. We'll direct dump into that gyratory crusher and then feed 2 10,000 tonne per day mills. That more or less deals with the primary issues that we've been having at the Magino mill site. It's also powered right now by CNG, compressed natural gas.

And that means the site is -- the mill is heavily dependent on gas deliveries. That doesn't sound like much of a problem, except in the -- in a deep Canadian winter, similar to the one we've just had, they close the roads and then you can't get the gas deliveries. So that was never meant to be a long-term plant.

In other words, the previous operator that put it in place envisioned eventually bringing in grid power. Well, we've been working on a grid power project, getting it all permitted and moving it forward for the last 3 years. That grid -- pardon me, that power line is being constructed as we speak, and it will be completed by the end of this year and commissioned in the first quarter of next year.

So the primary issues dogging that production in 2025 being ore stockpiles at the front end, basically freezing in the cold weather and slowing down the delivery of material into the mill and then delay in power deliveries, keeping the plant running, both those issues will be mitigated as a part of the expansion.

So yes, medium term, we certainly have our job to do. But when you look at what we're doing in terms of driving production and driving reserve growth. It's extraordinary where we're going. There's very few companies that have a growth profile to match that one. And it's not just growth for the sake of growth. I mean we're bringing on more production at a lower cost.

And I think that's kind of key to the overall message because it means if you've got even a fairly conservative gold price forecast, I was just speaking to your commodity analyst and he's looking at $6,000 gold. And I think that's a perfectly reasonable forecast to have on gold in the market that we're in. I'd love to hear his presentation on gold. But when you -- if you consider a $6,000 gold price, a company like ours generating effectively 1 million ounces will be just over 1 million ounces a year at around $1,000 all-in sustaining costs. That's massive free cash flow generation. I mean, relatively speaking, our current share price looks cheap on those economic assumptions.

You touched upon the massive free cash flow generation. So how should investors think about balancing the capital allocation priorities between your growth projects and capital return in terms of buybacks and dividends?

So we're in a heavy capital investment phase right now. In fact, this year is our -- probably our biggest year. We're spending about $1 billion across the various projects. We're building a new mill down in Mexico to process the high-grade ore from underground. We're in the process of starting construction at Lynn Lake. That will be a $900 million project between now and the end of 2028.

And of course, we're still -- we're in the process of expanding on the expansion we were already working on at Island Gold because now it also involves the integration of the Magino open pit. And between the 2, ramping up the underground to 3,000 tonnes a day, bringing on the Magino open pit operation to about 17,000 tonnes a day. We're effectively going to be doing 535,000 ounces a year between those 2 operations.

The interesting thing to consider, though, is that for the time being, that's a great mix because 3,000 tonnes a day is -- that's a reasonable rate to expect from the Island Gold underground operation for the time being. But we're developing across about a 2-kilometer strike and the shaft, it can actually handle more than the 3,000 tonnes a day that we're envisioning. But we also have a ramp system. And the ramp system goes through an area of the mine to the west where we've been having great exploration success over the last year, and we're continuing to drill quite aggressively this year.

And what I envision is there are higher grade reserves being brought on in that west side that we'll be able to bring up through the ramp and at least 1,000, maybe as much as 2,000 tonnes a day coming up that ramp because it's only about 400 meters below surface there. You could easily do 2,000 tonnes a day of additional higher grade supplanting the low grade. So you more or less change the mix, 17.3 to say, 15.5. And by doing so, at a very nominal capital investment is basically development. You're driving your production up at that very low cost rate. And so I think that's where the really great opportunities lie in terms of ongoing expansion.

Yes. Maybe staying with Island Gold. So last year, you had some seismic events towards the end of the year, and then you had obviously the winter production issues. Looking at the ramp-up process, are you -- I mean, like the guidance implies a strong pickup in production from Island Gold in the second half. So what gives you confidence that you will be able to hit that run rate?

Well, first of all, we didn't have a single seismic event. Every single day, every underground operation in our industry basically experienced the seismicity. That's just the reality. It's just rare from time to time, you might get a higher seismic reading than what you typically get. You want a certain amount of seismicity because that's the rock settling, and that means you're not getting any buildup of stress.

The seismic event you're referring to wasn't really much of an event. I mean it was a 0.27 measure on the scale, and that's relatively low. It just happened to hit at a fairly critical point that affected our ability to mine in the particular stopes that were key to the mine plan. Normally, we would never have even announced something like that, except that by limiting our ability to access those stopes, it was going to mean we're going to miss our guidance for production from that mine. So that's the reason why we announced. But I think that our ability to handle seismicity is very, very good.

And we've been operating that mine since 2017. And in all that time, we just had that one relatively minor event. I mean we continued mining elsewhere underground. We've gone in, and we've rehabilitated that area, and it's completed now. It's not really part of the current mine plan, but we're going to be getting back into it probably early next year. It's just part of mining that you have to accept. But in terms of our forecasted production for this year, we've built in a lot of conservatism to our forecast.

You could argue that we might have been a little too -- maybe a little too aggressive. And we're probably experiencing that level of confidence because we've gone 14 straight quarters without a miss. We either met or exceeded guidance for 14 quarters in a row. And then we had a couple of things happen and it threw us off. But it doesn't mean that suddenly we don't know what we're doing anymore. So we're more or less -- we're back on track.

This year, we were scheduled to have our lowest production quarter in Q1, and it continues to ramp up over the course of 2026. We're going to exit the year with our best quarter, and we'll achieve record production this year of 600,000 ounces, and it should be a year of record cash flow generation as well. But the interesting part of it all is, as we go through the balance of this year, we've already finished the -- we've already taken the shaft down to shaft bottom. We'll have finished building all the shaft infrastructure.

So we go into Q1 of '27, transitioning from a ramp operation at Island Gold to a shaft operation at Island Gold, and that allows our throughput to start to scale up and our cost to come down. So it's a pretty exciting year.

We have less than 5 minutes. So I wanted to give the opportunity to anyone to ask any questions.

To what degree do you look at per share metrics in terms of reserve growth, production growth? And then secondly, over time, you've been -- you've timed your acquisitions well. What gold price would make you think about selling something if there was a gold price?

Well, explicitly start selling off all our assets. We're not in the gold mining business anymore. So I would rather consider expanding on our assets through further investment in exploration. I think one thing that's been really overlooked by investors, and I've been in this job long enough to see fashions come in and fashions go out again. And so for example, in the 1980s and 1990s, reserves, reserves, reserves, investors are really focused on reserves and on per share metrics as well.

In the current market environment, there just hasn't been that much investor focus on reserves. And yet, if you were to ask the average CEO, what he worries about most, that would be a depletion of reserves. And if you look at the big mining companies and where they were in the early 2000s relative to where they are now, I mean, there is a mad dash for reserves. They've been depleting the reserves at some of their best assets and where they have reserve growth, it tends to be in some of the riskier assets, in riskier jurisdictions.

So there's no doubt that, that's a concern for the industry. And I think it's going to be something that will be more of a focus for investors going forward. We have heavily invested in that. I learned very on in my career that they're absolutely key to the value creation for our company.

So we have virtually, nearly 20 years of reserve life across all of our operations. That's probably best-in-class. And that really matters. And if you wonder where I think further valuation is going to come from, it's maximizing that reserve profile by making sure you match it with a production profile that takes full advantage of what you've created.

So we created most of those reserves when nobody was really paying attention to the gold market at all. And now there is a focus. Just watch how they're going to start to underpin the value of our shares.

Now we have another slide in our deck. I didn't include it in this presentation. I was able to keep it to just a few slides. But it shows how we've added value per share in terms of reserves per share, cash flow per share. We basically show how we've created value on per share metrics. like we've never done an M&A transaction that didn't result in an increase in value on per share metrics.

So again, I think that track record is very hard to match. And if anybody wants to see that slide, I'm sure Scott can pull it up for you on his laptop. But I think this is absolutely key. It's something that we've been focused on. It's why we tend to do M&A on a countercyclical basis. We were extremely active between 2015 and 2017. We did something relatively unusual in making an acquisition in 2024 with the gold price at about $2,200 an ounce. But that was a completely unusual circumstance where the next-door mine became available. Their share price had gone from $4 a share down to $0.22 as they struggled with execution on that project. And we took full advantage of that.

So even though the gold price had gone that way, their share price had gone down. And so there was an opportunity. There will always be anomalous opportunities. And if you're in a good position to take advantage of them, then so much the better. But we're never going to just grow for the sake of growth. We're never going to add a project just because it makes us bigger, then we can say we're bigger than the guy next to us. I don't think that's the name of the game. I think the name of the game is value creation for shareholders, and that's the one we're focused on.

Any other questions? We are actually out of time. I think we can stop there. And thank you, John, for your time, and I appreciate you.

Thank you.

Good morning. I'll now turn the call over to Scott Parsons, Alamos' Senior Vice President of Corporate Development and Investor Relations. Please go ahead.

Thank you, operator, and thanks to everybody for attending Alamos' first quarter 2026 conference call.

In addition to myself, we have on the line today, John McCluskey, President and Chief Executive Officer; Greg Fisher, Chief Financial Officer; and Luc Guimond, Chief Operating Officer. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session.

As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release and MD&A as well as the risk factors set out in our Annual Information Form. Technical information in this presentation has been reviewed and approved by Chris Bostwick, our Senior VP, Technical Services and a qualified person. Also, please bear in mind that all the dollar amounts mentioned in this conference call are in U.S. dollars unless otherwise noted.

Now John will provide you with an overview of the quarter.

Thank you, Scott. And I'm going to start with Slide 3. First quarter production was 124,000 ounces, in line with quarterly guidance with a strong performance from the Island Gold District, offsetting lower-than-planned production at Young-Davidson. The Island Gold District had a solid overall quarter with the shaft and larger mill expansion advancing, underground mining rates increasing to a new record of over 1,400 tonnes per day and a significant improvement in Magino's milling rates over the past 6 weeks.

The continued ramp-up of underground mining rates at Island Gold as well as improvements in mining rates and grades at Young-Davidson are expected to increase our second quarter production by approximately 20%. With the Island Gold District expected to drive further production growth in the second half of the year, we remain well on track to meeting our full year production guidance.

With our year-end disclosure in February, we guided to costs for the first quarter being above the first half guidance range. All-in sustaining costs were $1,862 per ounce and are expected to decrease by approximately 5% during the second quarter. A more significant improvement is expected in the second half of the year, reflecting an increase in low-cost production from the Island Gold District.

Financially, we had another strong quarter with record revenues and margins. Relative to a year ago, our all-in sustaining cost margins nearly tripled to approximately $3,000 per ounce. This contributed to record cash flow from operations and another solid quarter of free cash flow of $102 million, while reinvesting in high-return growth.

Now turning to Slide 4. We had a catalyst-rich first quarter that included releasing highlights of a successful 2025 exploration program across our portfolio. This supported a 32% increase in year-end mineral reserves to 16 million ounces and included a near doubling of reserves at the Island Gold District to over 8 million ounces.

This growth was incorporated into the Island Gold District expansion study, which was also released in the first quarter. The study outlined a large, long-life, low-cost operation that is expected to be one of Canada's most profitable mines.

At a $4,500 per ounce gold price, the Island Gold District is expected to generate over $1 billion in annual free cash flow and has a $12 billion after-tax NPV, making it one of the most valuable gold mines in Canada. Based on the ongoing exploration success we are seeing across the district, we believe there is further upside to come.

Toward the end of the first quarter, the shaft sink at Island Gold reached its planned depth of 1,381 meters. We expect to complete the commissioning of the shaft early in 2027, which will be a key catalyst driving a further increase in production and decrease in costs. With strong ongoing free cash flow generation at current gold prices and significant growth expected ahead, we announced a 60% increase in our dividend in February, and we'll continue evaluating opportunities for additional shareholder returns.

Turning to Slide 5. We have previously outlined a clear path to 800,000 ounces of annual production by 2028 with costs expected to decrease 18% relative to 2025. We expect our annual production to continue increasing to 1 million ounces by 2030 with a further decrease in costs. This growth is expected to be internally funded by ongoing free cash flow generation and a strong balance sheet with $1.2 billion in available liquidity.

Our team is making strides towards our long-term plans across our asset portfolio. The completion of the Phase 3+ Shaft Expansion at Island Gold is less than a year away. Our larger Magino mill expansion is well underway and construction activities are ramping up at Lynn Lake and PDA. These are high-return projects, all lower cost and largely derisked, underpinning one of the best growth profiles in the sector.

I'll now turn the call over to our CFO, Greg Fisher, to review our financial performance. Greg?

Thank you, John. Moving to Slide 6. We sold 122,000 ounces of gold in the first quarter at an average realized price of $4,829 per ounce for record quarterly revenues of $597 million. Total cash costs were $1,230 per ounce and all-in sustaining costs were $1,862 per ounce. As previously disclosed, first quarter costs were expected to be above the first half guidance range.

We are continuing to monitor the impact of ongoing inflationary pressures across our cost structure, including higher labor, contractor, diesel and electricity costs. We expect to manage any cost pressures with ongoing productivity improvements through the year, which are expected to drive costs lower and significant margin expansion at current gold prices.

Operating cash flow before changes in noncash working capital increased to a record $338 million in the first quarter or $0.80 per share. This included a reduction of $43 million or $0.10 per share for cash utilized to buy out an additional 15,000 ounces of the legacy Argonaut Gold hedges prior to maturity.

Our reported net earnings were $191 million in the first quarter or $0.46 per share. This included after-tax losses on commodity hedge derivatives of $20 million, adjustments for unrealized foreign exchange losses of $19 million and other adjustments of $1 million. Excluding these items, our adjusted net earnings were $232 million or $0.55 per share.

Capital spending in the quarter totaled $184 million and included $45 million of sustaining capital, $127 million of growth capital and $11 million of capitalized exploration. We continue to fund our high-return growth internally, while generating strong free cash flow. This included $102 million of free cash flow generated in the first quarter, net of $82 million in cash taxes paid.

In the first quarter, we repurchased and eliminated an additional 15,000 ounces of gold forward contracts ahead of their maturity in the second half of 2026. These hedges were inherited as part of the Argonaut Gold acquisition in 2024. Existing cash of $43 million was used to eliminate these hedges, providing further upside to higher gold prices.

To date, we have eliminated 245,000 out of the 330,000 ounces that were hedged by Argonaut prior to maturity. We will continue to monitor opportunities to repurchase and eliminate the remaining contracts, which totaled 85,000 ounces across the second half of 2026 and first half of 2027.

Our ongoing free cash flow drove a further increase in our cash position to $660 million at the end of the first quarter. We expect growing production and declining costs to drive stronger free cash flow through the remainder of the year and into the next several years, while continuing to self-fund our organic growth plans.

I'll now turn the call over to our COO, Luc Guimond, to provide an overview of our operations. Luc?

Thank you, Greg. Over to Slide 7. First quarter production from the Island Gold District totaled 61,200 ounces, in line with plan and an improvement from the previous quarter. Underground mining rates averaged a record 1,423 tonnes per day, a 23% increase from the fourth quarter and in line with our ramp-up schedule.

Grades mined of 9.4 grams per tonne were also consistent with guidance. We expect a gradual ramp-up of mining rates to 2,000 tonnes per day by the end of 2026 and higher grades into the second half of the year to drive growing production through the rest of 2026.

Open pit operations continue to perform well with mining rates averaging 50,000 tonnes per day, including nearly 12,000 tonnes per day of ore mined during the quarter. Grades mined and milled were in line with guidance.

Total milling rates from the Island Gold District averaged close to 8,800 tonnes per day in the first quarter, with the Magino mill averaging 7,500 tonnes per day and the Island Gold Mill averaging 1,260 tonnes per day. Magino's milling rates are expected to increase in the second quarter and through the second half of the year, driven by recent improvements to the crushing circuit.

Total cash costs and mine site all-in sustaining costs were above annual guidance, but expected to decrease significantly in the second half of the year. This is expected to be driven by higher mill throughput at Magino as well as an increase in underground mining rates and grades at Island Gold.

The Island Gold District generated mine site free cash flow of $58 million in the first quarter, net of the significant capital investment related to the Phase 3+ Shaft project, larger Magino mill expansion and exploration. At current gold prices, the Island Gold District is expected to continue generating strong free cash flow, while funding its expansion plans and a large exploration program.

Moving to Slide 8. In the latter part of February, a temporary crusher was added to the Magino mill, providing supplementary crushed ore feed into the processing plant. The addition of the crusher has contributed to a substantial improvement in milling rates, which averaged 9,200 tonnes per day over the past 6 weeks.

Milling rates are expected to remain at similar levels in the second quarter with the SAG and ball mill liner changes and conveyor replacements scheduled for the quarter. Consistent with guidance, milling rates are expected to increase to steady-state levels of 10,000 tonnes per day by the third quarter.

Combined with the Island Gold Mill, the District is expected to process in excess of 11,000 tonnes per day of ore in the second half of the year and into 2027.

Over the long-term, a number of initiatives currently underway are expected to support higher milling rates and greater operational consistency. Connecting the Magino mill to grid power will provide a more reliable source of power at substantially lower costs into 2027.

Additionally, the construction of the gyratory crusher, new truck dump configuration and ore bins will greatly improve the performance of the existing circuit by reducing rehandling of ore and ensuring a more consistent flow of ore into the mill. All of these improvements will be in place by early 2028 as part of the larger mill expansion to 20,000 tonnes per day.

Moving to Slide 9. Growth capital for the Phase 3+ Shaft Expansion has been largely all spent or committed. Shaft sinking to a planned depth of 1,381 meters was completed in the first quarter and paste plant construction is on track for completion in the second quarter. Commissioning of the shaft and other surface infrastructure is expected to be completed by early 2027. This is an important catalyst to increase underground mining rates to 2,400 tonnes per day in 2027 and ultimately, 3,000 tonnes per day in 2029.

Over to Slide 10. In February, we announced the results of the larger Island Gold District expansion study. The study included an expansion of the Magino mill to 20,000 tonnes per day, accelerated underground development to support mining rates of 3,000 tonnes per day and other infrastructure investments. The larger expansion is well underway with 11% of the growth capital spent or committed, primarily related to the expansion of the Magino mill to 20,000 tonnes per day.

As shown on the slide, construction of the mill building is well advanced, including structural steel and exterior cladding and all 8 leach tanks erected. With all the earthworks, concrete foundations and steel erected, the key elements of the larger expansions have been significantly derisked.

The expansion remains on track for completion in early 2028 and will be a game changer for the operation, with production expected to increase to average 534,000 ounces per year at $1,025 per ounce all-in sustaining cost starting in 2028. The Island Gold District is expected to evolve into one of Canada's largest, lowest cost and most profitable gold mines.

Over to Slide 11. Young-Davidson produced 30,000 ounces in the first quarter, lower than planned, primarily due to lower mining and milling rates. Milling rates of 6,800 tonnes per day were below guidance, reflecting longer-than-anticipated downtime to complete scheduled maintenance as well as an unscheduled repair to a transformer in the mill.

Underground mining rates were also 5% lower than planned due to longer-than-expected time line to complete rehabilitation work on 1 of the 3 ore passes as well as delays in commissioning a newly constructed pass. This resulted in more rehandling of ore, reducing productivity during the quarter.

With 2 passes now fully operational, the total number of active ore passes has increased to 4. This is expected to provide greater operational flexibility and support increased mining and milling rates of approximately 8,000 tonnes per day in the second quarter and through the remainder of the year.

Mine grades were also below the low end of annual guidance, reflecting higher-than-planned mining dilution. Grades are expected to return to guided levels in the second quarter and combined with higher milling rates, we expect a substantial improvement in both production and costs through the rest of the year.

Young-Davidson continues to deliver strong mine site free cash flow with $72 million generated in the first quarter. At current gold prices, higher production and lower costs are expected to drive further free cash flow growth through the rest of the year.

Over to Slide 12. Production from Mulatos District totaled 32,700 ounces, including nearly 27,000 ounces from La Yaqui Grande. Costs were at the low end of annual guidance, reflecting the higher grade stacked. Grades stacked are expected to decrease in the second and third quarters towards the lower end of guidance and costs increased through the remainder of the year to be consistent with annual guidance.

The Mulatos District generated strong mine site free cash flow of $61 million, while funding the construction of the PDA project, a robust exploration program and paying $51 million in cash taxes during the quarter.

Over to Slide 13. Construction activities on the PDA project are well underway. Earthworks on key surface infrastructure is now substantially complete. The mill foundation work is progressing. And last week, we collared the portals and will continue underground development through the rest of the year.

The PDA project remains on budget and on schedule for first production in mid-2027. PDA is the future of the Mulatos operation. Based on the PDA deposit alone, this is a low-cost, high-return project, which will extend the Mulatos mine life by at least 9 years. We believe this is just the starting point as the operation transitions to processing higher-grade sulfide mineralization and expect there is a significant upside to come.

The addition of the mill for PDA is opening up a number of new opportunities for additional higher-grade mineralization within the district, such as Cerro Pelon and Halcon, where we are continuing to see strong ongoing exploration results.

With that, I will turn the call back to John.

Thank you, Luc. I'll now turn the call over to the operator, who will open the line for your questions.

[Operator Instructions] Your first question comes from the line of Ovais Habib of Scotiabank.

Just a couple of questions from me. My first question is on Island Gold. Really great to see mining rates averaging 1,400 tonnes per day, and those are expected to grow over the next couple of quarters. So looking forward to that. In regards to the area, which you had the seismic issue, how much more work is required to completely rehabilitate that area? And second part of that is, do you need this area to achieve the 2,000 tonnes per day that you're targeting by the end of the year?

Ovais, it's Luc here. Yes, with regards to the Island Gold mining front that we had to reestablish the escapeway. We completed that at the beginning of the year. So the escapeway is being reestablished so that allows us to actually continue mining in that area.

But as far as the overall ramp-up for this year in 2026 with what we're expecting, there's not a lot of production actually coming out of that area. So we will see some production starting in the second half of the year. And we're just continuing with some minor rehabilitation in this area since we've completed the escapeway, which allows us to continue activities in that region, but not critical to the overall ramp-up for 2026 and as we move into 2027.

And then just moving to YD. Good to hear mining rates are expected to now increase to average around 8,000 tonnes per day kind of Q2 onwards as both ore passes are now fully operate them. In regards to underground grades, they got hit in Q1 due to some mining [indiscernible]. How should we look at grades into Q2 and then kind of in the second half?

Yes. As I mentioned on the read, the issue that we had with Q1 was certainly some dilution from a couple of stopes. But as we move through the rest of the year, we expect to be within our guidance of that 1.9 to 2.05 grades from underground. And we're on track as we move forward through certainly into Q2 and as we follow the rest of the mine plan for the rest of the year.

So grades should be kind of around that 2 gram per tonne then kind of going into Q2?

Yes, within our guidance that we provided, which was between 1.9 and 2.05.

Perfect. Okay. And then just moving on to exploration and maybe this question is for Scott. Can you give us just kind of a brief overview of where you are currently focused on and especially if you continue to have any sort of success at Cline-Pick?

Yes, absolutely. Our 2026 exploration programs are well underway across the board at all sites. We're just concluding a -- starting with Lynn Lake, just concluding a program there focused on testing underground potential below MacLellan and Gordon deposits. And that was executed on time, just in time for spring breakup.

Hopping over to Island Gold. The focus there is on continued expansion of Island Gold deposits. So we're drilling from surface, extending -- focus on extending mineralization to the east and to the west and then also at depth below the bottom of the reserves and resources, and that program is well underway.

The other aspect, as you mentioned, was Cline-Pick. We're drilling there and excited what we're seeing as we follow up on the -- some of the results that we had issued earlier in the quarter and really looking at some of the controls on mineralization in that system and testing it down plunge and in and around existing mine workings with the intention of having a resource estimate by the end of 2026. So we're -- that's well underway as well.

Hopping over to Young-Davidson, the underground program is focused on continuing to define the hanging wall zones that we have really put some release -- results on earlier in the quarter. So both the mid-mine conglomerate zone and the south syenite zone, and that program is well underway as well as testing from surface some of the regional targets.

So looking at -- we completed a program at Otisse Northeast, which is the potential opportunity for additional open pit material can define a resource there, and that was successful in terms of that program as well as some of the other regional targets in the district.

And then Mulatos, that program is well underway. We're really focused at the start of the year at Halcon and Cerro Pelon. We're excited about what we're seeing at Cerro Pelon with the 200,000 ounces we've defined at the end of 2025. I think that will be just the starting point for that target as we continue stepping out on that sulfide mineralization, both in and around the pod we've defined, but also within the broader Cerro Pelon region. And Halcon as well. It's a new discovery in 2025, and we're still defining the extent of that system. That's an exciting opportunity as well for additional sulfide mineralization in the Mulatos District.

And then the last point I'll make, we're currently ramping up for our Qiqavik program, which is our project in Nunavik in Northern Quebec, and that will be underway later in the second quarter.

Good stuff, Scott. But lots going on. Looking forward to some results from these programs. That's it for me, guys. Again, looking forward to Q2 for improvement in production and costs and then looking forward to the site trip in summer as well.

Your next question comes from the line of Fahad Tariq of Jefferies.

There was a comment in the press release talking about managing cost pressures with productivity improvements. Can you talk about what specific productivity improvements there are across the portfolio?

Yes, Fahad, it's Greg here. That's referencing what we've already identified as part of our plan in 2026 and even moving into 2027. But I mean, the critical thing is obviously ramping up our mining rates at Island Gold from 1,400 tonnes per day, which we achieved in Q1 up to 2,000 tonnes per day by the end of the year. And as we increase our production from the underground at Island, that is critical for us because it's our lowest cost structure that we have across our portfolio. So that's obviously a focus.

The other piece would be ramping up the Magino mill from 7,500 tonnes per day in Q1 to closer to 10,000 tonnes through at least the second half of the year. That's obviously going to bring down our cost structure in the second half of the year.

And then the last would be the mining rates at Young-Davidson getting back up to 8,000 tonnes per day. So all of those things are items that are going to manage those cost pressures in 2026. And then as we move into 2027, there's the -- obviously, moving from ramp mining to shaft mining or skipping up the shaft is going to have a significant impact on our cost structure moving forward.

And then the last is the hooking up the grid power at the Magino mill, and that's something that we'll have -- we plan to have in place by early 2027 as well. So all of those are things that we've outlined previously, but they go a long way to managing any inflationary pressures that we're seeing.

Okay. Great. And then maybe just to follow up on that. Can you just talk about what pressures you're seeing, I think, I guess, April 1 onwards in terms of diesel? I think the press release even talked about labor, which might be like a second or third order effect, but just what you're seeing across the board on cost inflation?

Yes. And you do highlighted the 2 kind of primary ones. So diesel, obviously, that's a cost pressure that the entire industry is seeing. We're fortunate in that diesel isn't a big part of our cost structure. It's about 5%. And if you break it down, about 2/3 of that is in Canada and 1/3 in Mexico. And in Mexico, it's a regulated system. So you don't see the same effects of the higher diesel price in Mexico that we do in Canada. And then in Canada, it's about 20% of our diesel has been hedged at much lower rates than what we're seeing right now.

So all to say, very manageable because it's a small component of our cost structure and it being less than 5%. On labor, I'd say that the bigger pressure is more on contractor labor. We have put in place our increases for the year, all very manageable, all built into our budget. What we're seeing a little bit of is pressure from contractors to make sure that they can fill their roles and some increased costs there. But again, something that is manageable based on our cost guidance that we have for the rest of the year.

Your next question comes from the line of Ralph Profiti of Stifel.

Yes. My question is firstly on Young-Davidson. And within the context of this strong recovery that we're going to see through 2026, there is some discussion around stope overbreak leading to a review of the blasting design. And just wondering, is this something new that we're dealing with? Was this identified as a risk when we encountered some of the headwinds in the back half of '25? Just wondering, is the blasting review part of sort of just where we're having these stope overbreak issues? Or is this part of a broader all-stope encompassing plan?

Yes, it's Luc here. I mean the drilling and blasting review is always an ongoing process with regards to the mining, I guess, close out of the reconciliation of each of our stopes. So this is nothing new. We continue to review that on an ongoing basis.

I mean and historically, the performance has been good at Young-Davidson, we've been mining there now for the better part of 13 years. And actual results from a grade perspective usually reconcile quite well to the model, and we've got a good history of that. In this specific quarter, we did have a couple of stopes that underperformed from a dilution aspect where we typically model around 10% to 12% dilution, and we had some higher dilution on the basis of a couple of stopes that we mined in the quarter.

But really, the process of closing out the reconciliation is also looking at the drilling and blasting design and seeing if there's some improvements there based on that reconciliation to any modifications that we may need to make. And it could be specific to certain regions, maybe some geological structures within those regions that are adding to the dilution. And maybe we need to change our drill and blasting patterns as a result of that.

So we take all that into consideration and basically do a full analysis and part of it is certainly the drill and blast design as well.

Got you. Okay. And just as a sort of a minor follow-up. As it stands right now, do you envision the supplementary temporary crushing at Magino to be in place until the 20,000 tonne per day expansion is commissioned? Or does the existing secondary crusher, once it's optimized, sort of get you to meet the plan? Or do you envision sort of weaning off the temporary?

Yes. We currently still have it in place. I mean we commissioned that mid-February. And really, initially, it was to help us to get through -- certainly through the winter conditions, some of the challenges that we have operating in the winter and provided consistency for more supplemental feed into the mill grinding circuit.

So we still have it in place currently, but we -- I would say we would rely less on it through the summer months than we need to do in the winter months. But when we do have scheduled maintenance, it allows us to continue to provide -- if we have scheduled maintenance on the crushing circuit, it allows us to continue to provide mill feed into the grinding circuit. So that's the advantage of it. So periodically, it will get used -- continue to get used through the summer months as well.

But keep in mind, and I think we've discussed this, is once we do complete that larger mill expansion to 20,000 tonnes per day, we are going to change some of that crushing circuit and primarily adding a gyratory crusher will eliminate some of the winter challenges that we had certainly with regards to the front end of that crushing circuit that we currently operate with. So come 2028, certainly, we would not require that. But periodically, we will continue to use it, yes.

Okay. Helpful answers.

Your next question comes from the line of Don DeMarco of National Bank.

Great to see the growth trajectory affirmed. First question, going back to the discussion on diesel. We see that costs are expected to decrease by 5% in Q2. Does this assume that diesel prices remain flat?

Correct. It's based on the spot prices that were in place at March 31. So the higher rates that we're seeing now is what we've assumed when we talked about that 5% reduction in cost.

Okay. And as Luc has mentioned, the Island mining rates continue higher in Q1 on their way to 2,000 by the end of the year. Are you stockpiling this ore the delta between the nameplate at Island Gold? Or are you putting it through the Magino mill?

Yes. No, no stockpiling that's occurring there, Don. I mean the additional tonnes that come up from Island underground outside of what can be milled at the Island mill itself and up over at the Magino mill and we process it through the Magino mill. And we'll continue that as we move through the -- certainly the rest of the year with the ramp-up, any additional tonnes that cannot be fed into the Island mill will go into the Magino mill.

Okay. And then finally, do you plan to continue to settle the legacy Argonaut hedges each quarter? And are you looking at it more tactically? Or kind of -- are you thinking maybe the same amount that we saw in Q1 each quarter going forward?

I think we'll be opportunistic based on where we see the gold price going. So I think we've been tactical all along in taking out 250,000. That was the 330,000 ounces that we originally inherited, and we'll look to continue doing that as we approach the remaining 85,000 ounces.

Okay. Great. Good luck with Q2.

Your next question comes from the line of Lauren McConnell of Paradigm Capital.

Just on the Phase 3+ Expansion, it's good to see the shaft sink complete and 100% of the growth capital spend are committed with commissioning expected early next year. What are sort of the remaining critical path items? Is it that base plant that's currently on track for completion in Q2? And what are sort of the next sort of key milestones that we should continue to watch to make sure we keep seeing that on track for early 2027?

Yes. It's Luc here. Things are tracking well with regards to the -- certainly the Phase 3+ Expansion. I mean the 2 critical items, I guess, right now is, as you mentioned, we've completed all of the rock work in the shaft. So now we're actually -- we're refurbishing the shaft. So we're putting all of the structural steel in the shaft, separating the compartments for skipping, personnel travel and services. So that will occur over the rest of this year. Time line is that would be completed early in the first quarter of 2027.

And then the second component of that is away from the shaft, which is actually the ore and waste handling infrastructure that's required to be able to feed the shaft. We're well embarked on that as well. So we're in the process of doing some rock work in relation to one of the bins, one of the large bins for the underground loading pocket, and we'll be establishing our grizzly station as well as the loading pocket at 1,350. That work is also expected to be completed in early 2027 in the first quarter as well. So that will all kind of tie in together.

So I'd say by mid-Q1, we should have the ore waste handling components commissioned as well as the shaft commissioned to be able to start utilizing the shaft ore and waste movement and personnel movement as well.

Okay. Great. That's really helpful. And then just on the overall larger expansion, I think that it said that about 11% of the growth capital has been spent or committed. And so I was just wondering how much of that remaining, I think it was $542 million is still exposed to sort of inflation and procurement risk and any kind of scope changes at this point?

Yes. On that front, I mean, a bunch of that is development. So development is subject to labor inflation basically. The other piece would be the kind of core components of the mill. And we've got contracts in place for some of that, but we're still working through contracts. So technically, there is some inflationary pressure there, although we're not hearing right now that we're expecting much from that. So I'd say it would be normal course inflationary pressures of kind of 4% to 5%.

Okay. Great. That's really helpful.

And your last question come from the line of Sathish Kasinathan of Bank of America.

My first question is on capital allocation. We saw strong free cash flow generation in the first quarter, but there were no share buybacks. Given the free cash flow is expected to improve throughout the remainder of the year, how should we think about the potential for getting more active in buybacks?

Sathish. This is John speaking. We've always taken a very opportunistic approach to share buybacks. And we had -- what do you call it -- we had a focus in the first quarter on increasing the dividend and the buyback of -- we spent $45 million buying back part of the legacy Argonaut hedges. But if you take an opportunity like you see now with our shares underperforming in the market, probably a good guess would be that we're being opportunistic on that front. We expect to be more active with the share buyback in Q2 and for the remainder of the year.

Okay. And most of my other questions have been asked and answered. Maybe one on Magino. You expect meaningful cost savings from connecting the Magino mill to the grid power. Can you maybe quantify the dollar per ounce impact once it is fully online?

Yes, it's about $5 a tonne, correct?

$5 a tonne.

There are no further questions at this time. This concludes this morning's call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at (416) 368-9932 at extension 5439. That is (416) 368-9932 extension 5439.

This concludes today's conference call. You may now disconnect.

Good morning. I'll now turn the call over to Scott Parsons, Alamos' Senior Vice President of Corporate Development and Investor Relations.

Thank you, operator, and thanks to everybody for attending Alamos' Fourth Quarter 2025 Conference Call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer; Greg Fisher, Chief Financial Officer; Luc Guimond, Chief Operating Officer; and Scott Parsons, Vice President of Exploration. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release and MD&A as well as the risk factors set out in our annual information form.

Technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior VP of Technical Services and a qualified person. Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in U.S. dollars unless otherwise noted. Now John will provide you with an overview.

Thank you, Scott. So I'm going to start with Slide 3. Production for 2025 was 545,000 ounces, below our guidance as a result of severe weather in late December and other challenges at the Canadian operations. Our costs were above annual guidance, reflecting the same factors. Despite the setbacks, we delivered a number of financial records, including revenue of $1.8 billion and record free cash flow of over $350 million, while funding our high-return growth projects. Supported by strong free cash flow generation, we doubled our shareholder returns, further strengthened our balance sheet by reducing our debt and eliminated more of the hedges inherited from the Argonaut Gold transaction, giving us increased exposure to higher gold price.

Looking ahead to 2026, we expect a meaningful improvement in operational performance to drive a 12% increase in production. This will be driven by ramp-up of mining rates at Island Gold as part of the Phase 3+ Expansion as well as higher mining rates at Young-Davidson.

We expect further growth in production at lower costs in the coming years as we deliver on the larger Island Gold District expansion by 2028 and bring Lynn Lake into production by 2029. Our longer-term outlook remains firmly on track to nearly double our annual production of approximately over 1 million ounces a year at lower costs. Now turning to Slide 4. Over the past month, we outlined the key drivers of our strong outlook. As detailed in our updated 3-year guidance, we expect to deliver a 46% increase in production at approximately 20% lower all-in sustaining costs by 2028. We also provided exploration updates on our mines and exploration projects, highlighting significant upside potential across our portfolio.

Our successful exploration program in 2025 contributed to a 32% increase in year-end mineral reserves to 16 million ounces, making the seventh consecutive year of growth. This included a near doubling of reserves at Island Gold District to over 8 million ounces.

As announced earlier this month, this growth is being incorporated into a larger expansion of the district, which is expected to create one of the largest, longest life and most profitable gold operations in Canada. This is a high-return expansion that the Island Gold District can fund on its own while contributing to our increasing free cash flow. Reflecting this strong outlook and growing free cash flow, we are pleased to announce a 60% increase in our dividend commencing this quarter. As outlined in the expansion study, we will be expanding milling rates to 20,000 tonnes per day. The higher rate is supported by increased mining rates of 3,000 tonnes per day from underground and 17,000 tonnes per day from the open pit.

With the completion of the expansion in 2028, annual production from the Island Gold District is expected to average 534,000 ounces of gold for the initial 10 years at lower mine site all-in sustaining costs of $1,025 per ounce. This is more than double the 2025 production and at 30% lower costs. At a conservative $3,200 per ounce gold price, the operation will generate in excess of $800 million of annual free cash flow and have an after-tax net present value of $8.2 billion.

At a gold price of $4,500 per ounce, the after-tax NPV increases to $12 billion, making the Island Gold District one of the largest and most valuable gold operations in Canada. Now turning to Slide 6. Our 3-year guidance outlined a clear path to reach 800,000 ounces of gold production by 2028 at nearly 20% lower all-in sustaining costs of approximately $1,250 per ounce. Longer term, the completion of the Island Gold District expansion in 2028 and initial production from Lynn Lake in 2029 is expected to drive our production to approximately 1 million ounces per year by the end of the decade with a further decrease in costs.

We have one of the best growth profiles in the sector, and we can fund all our growth internally while we continue to generate increasing free cash flow. So I'll now turn the call over to our CFO, Greg Fisher, who will review our financial performance. Greg?

Thank you, John. Moving to Slide 7. We sold 142,000 ounces of gold in the fourth quarter at an average realized price of $3,998 per ounce for record quarterly revenues of $575 million. For the full year, we sold 531,000 ounces at a realized price of $3,372 per ounce for record annual revenues of $1.8 billion, up 34% from 2024. Our full year total cash cost of $1,077 per ounce and all-in sustaining costs of $1,524 per ounce were above annual guidance, driven by higher costs in the fourth quarter and the temporary challenges at our Canadian operations. Operating cash flow before changes in noncash working capital was $285 million in the fourth quarter or $0.68 per share.

This was reduced by $63 million or $0.15 per share, reflecting the cash utilized to eliminate the legacy Argonaut Gold hedges prior to maturity. For the full year, operating cash flow before changes in noncash working capital increased 27% to a record $924 million or $2.20 per share. Our reported net earnings were $435 million in the fourth quarter or $1.03 per share.

This included $227 million after-tax gain on the sale of noncore assets, loss on commodity hedge derivatives of $35 million and other adjustments of $16 million. Excluding these items, our adjusted net earnings were $228 million or $0.54 per share. Our full year adjusted net earnings were $587 million or $1.40 per share. Capital spending in the quarter totaled $158 million and include $50 million of sustaining capital, $97 million of growth capital and $11 million of capitalized exploration. For the full year, total capital expenditures were $507 million, including growth capital of $318 million. We continue to fund our high-return growth internally while generating strong free cash flow.

This included a record $157 million of free cash flow generated in the fourth quarter and a record $352 million for the full year. Reflecting our growing free cash flow and strong financial position, we returned $81 million to shareholders in 2025, double the amount returned in 2024. This includes the repurchase of 1.3 million shares at a cost of $39 million and dividend payments totaling $42 million.

With additional free cash flow growth ahead, we expect further increases in our shareholder returns, starting with a 60% increase in our dividend this quarter. We also paid down $50 million of debt and eliminated half the 2026 legacy hedges inherited from Argonaut Gold. To date, we have now repurchased and eliminated 230,000 out of the 330,000 ounces hedged by Argonaut prior to maturity, providing increased exposure to the rising gold price.

We will continue to look for opportunities to eliminate the remaining 100,000 ounces subject to hedges across the second half of 2026 and first half of 2027. Given our strong free cash flow, our cash position grew 90% from the end of 2024 to $623 million, while reducing our debt to $200 million.

We expect growing production and declining costs to drive increasing free cash flow over the next several years, while we continue to fund our organic growth plans. With that, I'll turn the call over to our COO, Luc Guimond, to provide an overview of our operations. Luc?

Thank you, Greg. Over to Slide 8. Fourth quarter production from the Island Gold District totaled 60,000 ounces, a 10% decline over the previous quarter due to lower underground mining rates as well as reduced mill throughput. For the full year, production totaled 250,400 ounces, a 33% increase over the previous year, but slightly below the low end of revised annual guidance.

During the fourth quarter, underground mining rates of 1,160 tonnes per day were impacted by additional rehabilitation work related to the seismic event that took place in October as well as downtime in late December due to severe winter weather. This prevented the delivery of supplies and access to site by personnel and emergency services, thus requiring a 3-day standdown of underground operations.

The Island Gold mill averaged 1,180 tonnes per day in the fourth quarter, consistent with underground mining rates. The underground rehabilitation work required to ramp up mining rates as part of the Phase 3+ shaft expansion is substantially complete. Mining rates are on track to increase to an average of 1,400 tonnes per day in the first quarter of 2026 and gradually increase to 2,000 tonnes per day in the fourth quarter, driving growing production through the year. The open pit portion of the operation continues to perform well with mining rates averaging 16,600 tonnes per day of ore in the fourth quarter and 15,000 tonnes per day for the full year, in line with guidance. Magino milling rates averaged 8,625 tonnes per day in the fourth quarter, a modest improvement over the third quarter, but below expectations, in part reflecting weather-related disruptions late in the quarter.

With a number of initiatives being implemented through the first quarter of 2026, milling rates are expected to improve substantially in the second half of the year. Total cash costs and mine site all-in sustaining costs were above annual guidance, driven by lower mill throughput at Magino and lower mining rates at Island Gold.

The Island Gold District generated mine site free cash flow of $61 million in the fourth quarter and a record $205 million for the full year, net of significant capital investment related to the Phase 3+ shaft expansion and exploration.

At current gold prices, the Island Gold District is expected to continue generating strong free cash flow while funding its expansion plans and a robust exploration program. We are expecting a significant improvement from the Island Gold District in 2026 with production expected to increase 24% to between 290,000 and 330,000 ounces, driven by the ramp-up of underground mining rates and improved milling rates at Magino.

Moving to Slide 9. To improve processing rates within the Magino mill, we have added a temporary crusher to provide supplemental crushed ore feed downstream from the existing secondary crusher. This is expected to help sustain the flow of crushed ore into the mill and support higher milling rates of 10,000 tonnes per day by the end of the second quarter.

Additional improvements we are implementing include ongoing work with third-party specialists to optimize and improve the reliability of the circuit and the restructuring of maintenance and mill operating management teams, which will ensure constant senior level oversight.

Longer term, the addition of the gyratory crusher, new truck dump configuration and ore bins as part of the larger expansion of 20,000 tonnes per day will support further improvements to the performance of the existing circuit. Moving to Slide 10. Substantially, all the capital related to the Phase 3+ expansion has been spent or committed with the shaft infrastructure and paste plant commissioning expected in the fourth quarter.

This will be the catalyst to increase mining rates to 2,400 tonnes per day in 2027 and ultimately, 3,000 tonnes per day in 2029 as part of the larger expansion. The photo on the right highlights the progress on the 1,350 shaft station. Once the station is completed, the remaining 29 meters to shaft bottom will be sunk by the end of the first quarter. Over to Slide 11.

As John previously noted, the Island Gold District expansion to 20,000 tonnes per day is expected to create one of the largest, lowest cost and most valuable gold mines in Canada. Following the completion of the expansion in 2028, production is expected to increase to average 534,000 ounces per year over the initial 10 years at mine site all-in sustaining cost of $1,025 per ounce.

This represents more than double the production from the district in 2025 at 30% lower all-in sustaining costs. At a $4,500 per ounce gold price, the expansion has an after-tax IRR of 69% and net present value of $12 billion. The Island Gold District is quickly evolving into one of Canada's largest, most profitable and valuable operations.

And as Scott will touch on later, we believe there is more upside to come given the significant exploration potential. Over to Slide 12. As detailed in the photos, the expansion to 20,000 tonnes per day is well underway.

As part of the Phase 3+ shaft expansion, we already started construction on a new mill building that was sized to accommodate the larger expansion. The new circuit will blend -- we'll process a blend of high-grade underground ore as well as open pit ore at a rate of 10,000 tonnes per day, while the existing circuit will process only open pit ore at only -- at also 10,000 tonnes per day. Construction of the open pit truck shop is well underway, which will follow for timely and cost-effective maintenance of the mobile fleet.

With all the earthworks and concrete foundations complete and structural steel already erected, the larger expansion of the operation has already been significantly derisked. Over to Slide 13. Young-Davidson produced 41,400 ounces in the fourth quarter, a 9% increase over the previous quarter, but below expectations.

Mining rates were impacted by severe weather conditions in late December, rehabilitation work required on 1 of 3 ore passes and the failure of a small portion of a paste plug underground. Production for the full year totaled 153,400 ounces, below revised guidance due to lower-than-expected mining rates and grades. With rehabilitation work completed on the impacted ore pass and an additional ore pass being commissioned this quarter, the total number of ore passes will increase to 4, providing additional operational flexibility.

This is expected to support improved mining rates of approximately 7,600 tonnes per day in the first quarter and 8,000 tonnes per day in the second quarter and through the rest of the year.

Cost per ounce were above guidance for the full year due to lower mining rates and grades processed. Despite the temporary challenges, Young-Davidson generated record mine site free cash flow of $250 million in 2025. In 2026, improved mining rates are expected to drive an increase in production from Young-Davidson to between 155,000 and 175,000 ounces, supporting strong ongoing free cash flow at current gold prices.

Over to Slide 14. Production from the Mulatos District totaled 40,100 ounces in the fourth quarter, an 8% increase over the previous quarter, reflecting higher stacking rates and the recovery of previously stacked ounces on the leach pad. Production for the full year was 141,600 ounces, in line with annual guidance, which was revised higher in October. For the full year, costs were also in line with guidance. The Mulatos District generated record quarterly mine site free cash flow of $92 million and $222 million for the full year, net of $100 million in cash tax payments.

The district remains well positioned to continue generating strong free cash flow while fully funding construction of the PDA project. For 2026, production from the Mulatos District is expected to be between 125,000 and 145,000 ounces at similar costs to 2025. I will now turn the call over to our VP of Exploration, Scott Parsons.

Thank you, Luc. Over to Slide 15. We continued our track record of growth with a 32% increase in mineral reserves to 16 million ounces at the end of 2025. This marked the seventh consecutive year of growth over which reserves have increased 64% with grades also increasing 24% as our reserve base continues to grow in both size and quality. This year's growth was mainly driven by the Island Gold District, which added nearly 4 million ounces to reserves in 2025. Measured and indicated resources increased 6% with growth at Young-Davidson, the Mulatos District and Lynn Lake more than offsetting resource conversion at Magino. Inferred resources decreased 63%, reflecting the successful conversion of Island Gold District resources to reserves.

We recently announced exploration updates for all of our mines and projects, highlighting the significant upside potential across our asset base. This led to an increase in our 2026 exploration budget to nearly $100 million, 37% higher than in 2025. Over to Slide 16. The big driver of the year-over-year increase in reserves was the impressive growth at the Island Gold District.

Underground reserves more than doubled, increasing 125% to 5.1 million ounces, while open pit reserves increased 56% to 3.1 million ounces. The increase was driven by a successful delineation drilling program at both deposits, which resulted in the conversion of a large portion of mineral resources into mineral reserves. Despite the focus on delineation drilling, we are successful in increasing our overall mineral inventory at Island Gold for the 10th consecutive year with mineral reserves and resources increasing to 6.8 million ounces. Over to Slide 17. Drilling continues to extend high-grade mineralization across the Main Island Gold structure as well as within several hanging wall and footwall structures.

This includes in the Lower Island East area, where reserves have grown to include 1.6 million ounces, grading 15 grams per tonne of gold. This represents one of the highest grade portions of the ore body, containing some of the deepest and best drill hole intersections to date. Based on our ongoing success and with the deposit open laterally and at depth, we expect the Main Island Gold deposit will continue to grow well into the future. Over to Slide 18.

At the regional scale, drilling at the past producing Cline-Pick and Edwards Mines continues to extend high-grade mineralization beyond the limits of historic drilling. This included intersecting the highest grade hole ever drilled at Cline-Pick at 178 grams per tonne over 3.5 meters. These regional targets are located within 7 kilometers of the Magino mill and represent potential future sources of higher-grade supplemental feed as part of a larger district expansion.

Over to Slide 19. The deepest holes drilled to date at Cline-Pick have intersected high-grade mineralization at depth of 540 meters. By comparison, drilling at Island Gold has intersected high-grade mineralization down to depths of over 1,600 meters. Both deposits remain open at depth and with similar deposits in the Canadian shield extending well beyond depth of 3,000 meters, there's significant potential for further growth and upside to the Island Gold District expansion study.

Additionally, limited drilling has been completed within the 7-kilometer gap between Island Gold and Quin Pick and further along strike to the Northeast across our broader 60,000-hectare land package, highlighting the district scale potential. With that, I'll turn the call back to John.

Thank you, Scott. And I'll turn the call over to the operator who will open up for your questions.

[Operator Instructions]

Your first question comes from Cosmos Chiu with CIBC.

Maybe my first question is on exploration here. Good to see that you're targeting some of the higher-grade mineralization at Young-Davidson and some of the newly defined hanging wall zones. I guess my question is, some of these new targets, are they still associated with the historic kind of cyanide intrusive rock? Or are you actually finding stuff in some of the sediments and ultramafic stratigraphy? And if it is still associated with cyanide, what makes it so that this is potentially higher grade?

Thanks for the question, Cosmos, this is Scott. So to start, I guess, what got us really excited initially about the hanging wall mineralization that we're intersecting at YD in 2024 initially was that it was a different style of mineralization. So it was in the hanging wall in a different lithologies. So we're seeing this in conglomerates, volcanics and the cyanides out there as well, but the higher grades we were seeing were associated with the conglomerate units.

And that's what we've been focusing on drilling with our hanging wall drift and do see potential for higher grade mineralization in that conglomerate. The second hanging wall target that we had highlighted in our press release on exploration for 2025 was something called the South cyanide. So it's a similar lithology to what hosts the main reserves at Young-Davidson, but this is offset 300 meters south. So it's a different cyanide body, we think, at this time. And we are seeing locally higher grades within that and we are working as we speak on drilling that to understand what's controlling the higher grade in that south cyanide body.

That's good to hear. And then I guess, another sort of deposit we don't talk enough about the PDA. And I know you talked about that a little bit -- quite a bit actually at the Investor Day. But can you remind me, as you mentioned, initial production is targeted for mid-2027. What kind of key deliverables are there in 2026? What are some of the kind of critical path items that you need to target in 2026 in order to get to your mid-2027 initial production?

Cosmos, it's Luc here. I'll take that question. So I mean, there's 2 key components there. Obviously, one is on the mining side, establishing the port entrances, which is what we're currently working on right now. So there'll be 2 port entrances into the PDA underground workings. And then obviously, over the next -- over the life of the mine, but certainly over the next 12 months as we're looking to prepare for -- sorry, for the next 18 months to be able to prepare for commissioning of the mill complex to bring that online will be development work and still preparation as far as being able to maintain and sustain our mining rates at 2,000 tonnes per day.

So that's the key aspect is really get the portals commissioned this year, established and start on the development work over the next 18 months and the rest of that life of the mine of that operation. The other key component is related to the processing plant. So we've already -- we're well advanced on that as well.

Most of the earthworks have been completed for the crushing station locations as well as the -- where the -- sorry, where the ball mill is going to be located for the mill complex. And we've already procured the long lead items that we need with regards to that construction schedule. And everything is well advanced to be able to have most of the work will get completed through the 2026 period. And then by mid-2027, we'll be wrapping up some of the construction-related activities related to the processing plant itself. But everything is tracking online, on schedule and certainly on budget for mid-2027.

Great. And then maybe one last question, bigger picture here. And it was certainly good to see that you've increased your dividend by 60%. But I guess my question is, do you feel like you're getting fully rewarded for this dividend by the market?

Or do you think you need to target a higher yield before you can get fully rewarded by the market for this dividend? And maybe broader, John, if you can talk about kind of your capital return strategy.

We've done -- historically, we've paid this dividend going back to 2010. We've always done a combination of dividends and share buybacks. Last year, we almost returned as much by way of share buybacks as we did through the dividend. And we're always going to keep that in balance. We're very opportunistic with respect with the share buyback. But the dividend itself, I think there's further room for growth, but this is a good indicator of our intentions.

And despite the fact that we're going through a heavy capital spend schedule over the next couple of years as we effectively double our production between now and the end of the decade, the gold prices are strong. We're generating phenomenal free cash flow. There is -- there was room to increase the dividend, and we did so. But I think investors should expect more dividends to come.

There are no further questions at this time. This concludes this morning's call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at 416-368-9932, extension 5439.

Good morning, and welcome, everybody, to Alamos Gold's 2026 Investor Day. My name is Scott Parsons, I'm the Senior Vice President of Corporate Development and Investor Relations, and I'm going to be providing a brief overview of the schedule this morning.

There we go. We are going to be making some forward-looking statements throughout this presentation. So please do review our cautionary notes. I'll start with a brief introduction to our presenters today. From our leadership team here in Toronto, we have John McCluskey, our President and CEO; Greg Fisher, Chief Financial Officer; Chris Bostwick, Senior VP of Technical Services; Luc Guimond, our Chief Operating Officer; John Fitzgerald, our SVP of Projects; Khalid Elhaj, our business -- our VP of Business Development and Investor Relations; and Scott R.G. Parsons, our Vice President of Exploration.

From the Island Gold District, we have Austin Hemphill, the General Manager of the district; Nathan Bourgeault, Technical Services Manager; and Tyler Poulin, geology superintended. For those of you here in person, we do have some core on display from the Island Gold District, some of the recent drill results we put out over the past week and the past year. Really high-grade intercepts from within the main structure as well as that spectacular new hole we released earlier this week from the Cline-Pick target. That is an upside opportunity beyond the expansion study that we're going to be outlining today.

But fundamentally, it's that pace of exploration success, which is driving the larger expansion of the district. So please take the time to speak with Tyler and Scott. They've been leading that pace of exploration success across the Island Gold District. They'll provide some insights into what we've found to date and why we see excellent potential for that growth to continue.

I'll provide a brief overview of the agenda today. In a few minutes, I'm going to turn it over to John to provide a more formal introduction. That's going to be followed by Greg, who's going to provide a more detailed review of our updated 3-year guidance. Luc is going to provide detail on the 3-year outlook for each of our operating mines as well as an update on the Lynn Lake project, which we included in our guidance release this morning.

We are going to pause for a Q&A segment at that point. We are covering a lot of material today. So I'd -- we'd ask that you just pause your questions until the designated Q&A segments. For those of you on the webcast, you can submit your questions through the Q&A button. After that, we'll take a short break and then move on to a more detailed review of the expansion study, and that's going to be led by Luc, Chris, Austin, and Greg will review the economics.

Following that, Scott is going to provide a more detailed review on our global exploration activities. We've had a number of releases out over the past couple of weeks. So he's going to tie that all together in terms of the potential we see across our asset base. Obviously, Island has been a big success story from an exploration standpoint, but there's a lot of success going across the rest of our portfolio.

And with that, I'll turn it over to John to provide a more formal introduction.

Thank you, Scott. Good morning, everyone. Welcome to our Investor Day. You can see from the thick size of that deck on your table there that there is an awful lot to cover today. I just want to give credit to Scott and Khalid and the IR team for pulling that together. It was a huge amount of work. And of course, the amount of information in there. We have a really amazing management team from our technical side, financial side, and there's been a big effort to pull this presentation together. They've done an exceptional job. This work has been going on for more than a year. So really, we started to contemplate what you're seeing in front of you now, not long after the acquisition of Richmont Mines and bringing in Magino. When the deal was first done, the focus really was on all the synergies because there was nearly $500 million in synergies that we were able to derive from that acquisition. But we really saw the opportunity in the optionality that, that merger gave us. And effectively, with Magino coming in, along came all the permits that they had obtained to go to 35,000 tonnes per day of production. They had permitted tailings capacity of 150 million tonnes. This gave the district amazing optionality. And now we weren't just talking about this low-grade open pit operation. Now we're talking about the low-grade open pit operation along with this very large high-grade operation.

And the opportunity was to integrate the 2 and create something more and something better than each of the operations would have been on their own. So that is the background to today's presentation. Most of you have seen these slides and know these slides. We've been talking for some time about a pathway to 1 million ounces a year. Well, now we're going to lay that pathway out in front of you, and we're going to show you the details and all the backup work that goes into it. All the mine plans have been done. It's -- these are the new numbers that are going to find their way into all the research reports and ultimately, I think, will really help drive value for the stock. In addition to the fact that we're growing our production, we're not doing it at the expense of costs. We're effectively -- we'll be growing our production and reducing our costs.

We've got long-life assets. I think that's another very important thing. We're not just ramping up production and rapidly depleting our resources, which I think all of you have seen in the past. If anything, these resources are going to continue to grow with future exploration success. This is a bit of a scorecard here. We've had a great track record of value creation for many years. I look back a lot further than most of you in the room. When I started it, the company had $1 million market cap. It was a pup. It was a little penny stock with an option to purchase our first project. That was it. And so we've gone from under that -- under $1 million, and here we are now over $20 billion, who would have thought. Gold was $264 an ounce at that point in time. It moves that much in a day right now. So it's very, very different times for sure.

We are going to continue with this process of value creation. And we've done it in 2 ways. We've done it with M&A, and we've done it with the drill bit. And a lot of focus always happens when an M&A transaction is done. And that tends to capture the market's imagination. The day-to-day work, the year-after-year work that we put in on the exploration front doesn't typically get as much market attention, but we've added 8 million ounces just in the last 6 years or so at an average mining cost of roughly $31 an ounce. And that's an exceptional result. We're going to continue with that. We have the biggest exploration budget we've ever had, and Scott will talk more to that later.

Growing free cash flow, Greg will be focusing on this -- if you assume a $4,500 gold price by 2028 when the expansion is done, we're looking forward to something like $1.3 billion in free cash flow. I mean that to me is the whole point. People are asking, well, where are you going? What are you doing as a company? This is probably the most common question that comes up in investor presentations. Well, here it is. We're going to be generating phenomenal cash flow that's going to allow us to fill those 3 buckets we always talk about. We always talk about returns to shareholders through dividends and share buybacks. We always talk about strengthening our balance sheet, so we could be opportunistic and ready for the next move. And we talk about the investment in capital that it takes in order to make our company better.

So we have a track record of shareholder returns. We've paid back $450 million in dividends and share buybacks. Our share price has been a phenomenal performer against any index that you can measure. When you look at this sort of template that we have, we sort of set the bar when we acquired Mulatos. It was a $10 billion deal. And true to form, the market had considered that I had overpaid for the asset at the time. Remember, gold was under $300. Well, look, what it's done, it's generated nearly $1 billion in free cash flow, and it still has a valuation of $1.5 billion. It's just been a phenomenal asset. It's basically funded everything else that we did. We pivoted to Canada in the mid-2015 in the mid-10s, and we effectively acquired assets that weren't exactly the big assets on the radar.

I remember John [ Ng ] going on BNN and saying our acquisition of Young-Davidson was just -- we're just picking up a piece of garbage at the bottom of the market. That was more or less his attitude. Well, it's gone on to generate phenomenal returns for us, and it continues to grow. We've got a similar reserve today as when we acquired it. And I think it's going to get better yet. And again, Scott will talk to some of the success we're having delineating high grade in the -- in hangwall and footwall.

Similarly, with Lynn Lake, we picked that up at the very bottom market January of 2016. I think gold actually went under $1,100 an ounce for a few weeks there, and that's when we closed that transaction. And it was about a $25 million deal. And virtually the same quarter, the Coffee project was acquired by Goldcorp for something like $550 million. And Lynn Lake went that way and the Coffee valuation went the other way. So it really is a mark of the vision that this management team has. It's not something we did once, and we got very lucky and now we're capitalizing on that. It's something that we repeatedly do. And I think if you're going to see us do M&A in the future, again, it's going to be very focused on value creation.

So without belaboring the point, this more or less just shows a bar chart of how effectively we've grown reserves over time. We're now sitting at just over 16 million ounces. Our grade has continued to climb. We've basically gone from being a low-grade heap leach operator in Mexico over time. We've gravitated to underground mining and higher grades. And of course, you've been watching the drill results come out over the last week or 2 as we've been publishing and updating, getting ready for the disclosure that we wanted to make at this conference. Grades are continuing to climb. Reserves are continuing to grow.

And with a $97 million budget, I think we're going to have continued success. This is just looking at it on a per share basis. Often, companies talk about growth and value creation in the aggregate. But on per share metrics, you can see we've effectively created value right across the board on all per share metrics. The way we're going to get to production is -- to 1 million ounces of production is it's not pie in the sky. We're permitted to get there. There's some ancillary permits we need as we go through these expansions, but the main permits for throughput and environmental permits and tailings permits, the real tough ones, we have those in hand. And we're basically fully funded. We fund all the growth that we're talking about here through our own cash flow generation. What we're talking about is real development that we can control. It's not predicated on some acquisition or some other major milestone that we have to achieve.

This is a relatively new slide because we often talk about the fact that we're a fast-growing company. Well, here's how we look relative to our peers in terms of growth, in terms of where we'll be with respect to costs. Our costs are fairly low now. They're going to be going lower. They're going to be at the very low end of the first quartile. Growth in reserves, you can see that we've got one of the longest life reserve profiles in the sector. And just the size of the reserve. It's really an amazing job that we've done in growing that over the last few years.

And part of the reason why we did it. I remember when the focus of the market was just on cash flow, cash flow -- all the market wanted to see was free cash flow. And we still allocated way more money than any investor would have thought wise into exploration because ultimately, we knew that's the lifeblood of the company, and it has really paid off well. And now, of course, look what's happened to the gold price as it's moved from $1,600 when I recall having a number of those conversations with investors.

Today at $4,500, sitting on 16 million ounces of reserves, that's value. And we're going to have a great set of presenters today. Everybody has -- we did a big walk through yesterday. I was pretty impressed. Some of you have already been looking at the numbers with the published press release. I look forward to sitting with you and listening to what we're going to do day. I'll come back later and just make some closing remarks. But at this point, I'm going to turn it over to Greg Fisher, and he'll go over some of the financial metrics. Thank you.

Thank you, John. So I will take us through the 3-year guidance We put that release out this morning. But before we get into the 3-year guidance, just a quick recap of 2025. So we finished 2025 in the fourth quarter with 142,000 ounces of production. That was in line with what we produced in the third quarter and that brought our full year production to 545,000 ounces. That was lower than what we expected. We've been pretty transparent about that. We had some challenges at the operations. And Luc is going to touch on that as part of his presentation, really focusing on some of the kind of things we're doing in the short term and the long term to get that back on track. But despite those challenges, we did have a record financial year.

I look at free cash flow always as a key metric as the CFO. And we -- despite the fact that we invested heavily in growing the business, we continue to invest in exploration, spent $75 million there. We're growing the business through our Phase II expansion. We still generated $350 million in free cash flow. And that's an important metric for us as we want to grow the business. We also want to ensure that we're continuing to generate that strong free cash flow. That led to a very strong cash position of over $600 million at the end of the year and net cash of over $400 million. The other piece is we were very focused on capital allocation in the fourth quarter.

As you know, we were going through an arbitration in Turkey. We were able to settle that and sell the asset and we thought that was a very good outcome for $470 million. We received the first amount of the proceeds of $160 million upfront in October, and we immediately put that money to work by using the share buyback. We bought back over 1 million shares, $30 million worth. In addition, we paid down some of the debt. That's debt that we inherited as part of the Argonaut acquisition. So we paid that down to $200 million.

And then in addition, we had legacy hedges as part of that acquisition. Those were hedges that were an $1,800 gold price scenario that we're going to set to mature in 2026. We bought it the first 6 months of that. And we did that at a -- when we saw that gold price dip down to about $4,050, we went in -- we stepped in and bought back 50,000 ounces of that. So that's looking pretty good at this -- the current gold price of $5,000. So that's put us in a position to continue to generate strong free cash flow and have that balance sheet to execute on the growth that John spoke of.

So looking at 2026 in more detail, production is expected to be between 570,000 and 650,000 ounces. So that's a 12% increase from what we did in 2025 of 545,000 ounces. It is lower than what we had expected for 2026 when we released our 3-year guidance last year. Really, the drivers of that are lower grades at Young-Davidson and Luc will touch on that as part of the sequencing that we're going through. And then a more conservative ramp-up of the Island underground as we look to ramp up to 2,400 tonnes per day. But still generating over 600,000 ounces a year at an all-in sustaining cost of about $1,550 per ounce. That's in line with what we are producing or what we produced at in 2025, but higher than where we expected to be.

And given the change there, we'll have a slide that will walk us through what are the key drivers of that all-in sustaining cost increase. 2026 is going to be a heavy capital year for us. I mean we are growing the business. We want to get to that 1 million-ounce platform over the next number of years. So we're investing about $900 million in capital. It includes the -- completing the Phase 3 expansion, which has been ongoing for a number of years at Island Gold. It's embarking on this Island Gold expansion to 20,000 tonnes per day, which we're going to spend a lot of time talking about today. It's resuming construction at Lynn Lake in the spring. And then finally, the PDA deposit and building that in Mexico.

And then just looking at a little bit more granular into 2026, it is a second half weighted production profile, and that makes sense. We're ramping up underground mining rates at Island Gold from, call it, 1,400 tonnes per day in the first quarter to closer to an exit rate of 2,000 tonnes per day as we look to support that ramp up to -- as we transition from ramp mining to bringing ore up the shaft. As a result, our production in the first half is going to be about 290,000 ounces and production in the second half at the midpoint is going to be about 320,000 ounces, with our first quarter being the lowest production quarter of the year.

From a cost perspective, as we see that ramp-up of underground at Island Gold. That is our lowest cost production that we have across the company, and that's going to bring down our cost profile from about $1,675 per ounce in the first half of the year to $1,450 in the second half of the year, and we're going to see a further decline into '27 and 2028, which I'm going to outline on the future slide. From a capital perspective, a little bit more capital in the first half of the year as we continue through the Phase 3 expansion, but that's going to wind down in the second half of the year as we bring that project to a completion. And what this means is higher production, lower costs, lower capital in the second half. We're going to generate significantly more free cash flow in the second half of the year and even more so as we move into 2027 and 2028.

So we did want to spend a little bit of time in kind of reconciling or showing how we've moved in our all-in sustaining cost guidance for 2026. We had previously said all-in sustaining cost guidance of about $1,200 per ounce for 2026. We're now at $1,550 per ounce. There's a couple of very obvious things. The first would be the gold price is quite a bit higher. That has a royalty impact on the business. The second would be inflation. We're very clear in our 3-year guidance that the future years do not include the impact of inflation. In the mining industry, it's been pretty persistent. We've seen inflation of about 5% across the board. We operate in Canada where there's competition for labor and there's costs associated with that. So we're seeing about a $60 per ounce impact there. The other component is around labor and contractors. This isn't the inflationary piece. This is -- we've recognized in order to hit ultimately 2,400 tonnes per day, but then to move beyond to 3,000 tonnes per day, we need to ramp up in terms of people, and we're getting ahead of that. We want to make sure that we're very successful in this ramp-up.

So we're hiring the headcount now. We're incurring the cost from an all-in sustaining cost perspective, but we're going to see dividends down the road by doing that. And that's a little bit on the contractor side as well. So that's the other main piece with respect to the increase on our all-in sustaining costs. But ultimately, we're still at $1,550 all-in sustaining cost for 2026, which is first quartile. But as we move into '27 and '28, we're going to start to see that decline.

From a capital perspective, pretty straightforward in what's driving our capital increase from our previous guidance. We had previously guided to about $650 million in capital for 2026. We're now closer to $900 million. The majority of that increase relates to the fact that we're moving forward with this high-return Island Gold District expansion to 20,000 tonnes per day. That would be mill construction as well as accelerating development to reach those higher mining rates. And as we're going to point out throughout this presentation, this is a very high-return project that makes sense to move forward with every day of the week.

So looking at the next 2 years beyond 2026, I think it's pretty important and pretty clear that we're increasing our production in a stair-step fashion, and we're decreasing our costs in a stair-step fashion. So gold production in 2027 is going to increase to a range of between 650,000 and 730,000 ounces. And that's given the ramp-up of mining rates at Island Gold as we bring the shaft online and we move to 2,400 tonnes per day throughout 2027. We're going to continue to ramp that up through 2028 as we move towards the higher throughput -- ultimate throughput of 3,000 tonnes per day, and that's going to bring our production in 2028 up to a range of between 755,000 to 835,000 ounces. The benefit of bringing on all this low-cost, high-grade production from the underground is it's going to have a pretty significant impact on our costs. We'll see our costs moving from the $1,550 mark that we expect in 2026 down to about $1,375 in 2027 and then moving even further down to about $1,250 in 2028. That's also aided by the fact that we'll be bringing on PDA production in the second half of 2027, which is also lower cost.

From a capital perspective, in 2027, it will look very much the same from a gross number as our 2026 capital. We'll see the Phase 3 expansion coming off, but we're also going to be ramping up Lynn Lake to kind of peak construction periods in '27 and '28. So we'll be around that $850 million of capital in 2027. But as we move into 2028, we'll have the drop-off of capital at PDA, the drop-off of capital at this further Island Gold expansion. We'll be down around $650 million and then an even more profound drop into 2029 as the Lynn Lake project comes to completion in the first half of 2029.

So looking at the 3-year guidance in tabular form, I mean, this speaks to the stair step increases. We're basically going from a 600,000 ounce producer in '26 to 700,000 ounce producer in '27 to an 800,000 ounce producer in '28. And then by bringing on Lynn Lake in the first half of 2029, that adds about 200,000 ounces a year of production. So that's where we get to that 1 million ounces of annualized production before the end of this decade. And that's something that we can sustain for a long period of time because if you look at the mine lives of each of our operations, they're all well over 10 years. So this is something that's sustainable well into the future. And from a cost perspective, as we bring in that higher grade production, we're going to decrease our costs. And with Lynn Lake coming on, Lynn Lake has a cost profile below $1,250 an ounce that will bring down our cost profile even further beyond $1,250 as we move into the 2030s.

As I said, cash flow is quite important to the CFO, making sure that we're generating the cash flow that we need to drive this growth, and we're doing more than that. The growth that we're spending on is self-funded from the operations. But at the same time, it's pretty important to us, as I said, that we're generating that free cash flow. So if you look at 2025, $350 million in free cash flow. As we move into 2026 at a $4,500 gold price, we'll be generating close to $600 million in free cash flow given the increase in production. The further increase in production into 2028 and decrease in cost and capital is going to drive our free cash flow to north of $1.3 billion, and that's all after tax. And then in the long run, as we move to the 1 million-ounce producer, we're going to sustain free cash flow of closer to $2 billion after tax. And that's, again, something that we can sustain for a number of years moving forward.

Just a last thought on capital allocation. John touched on this in terms of our strategy or our approach to capital allocation. It is a very simple approach. We take the free cash flow that we generate and we redistribute it into 3 kind of main buckets, and we try to do that evenly over a long period of time. The 3 buckets would be reinvesting in our high-return growth projects. It would be strengthening our balance sheet, and it would be returning capital to our shareholders. Over the last couple of years and moving forward, we're very focused on that first bucket. As I said, we have 4 different development projects on the go as well as investing heavily in exploration. We have a budget of $100 million or close to $100 million in 2026, which Scott is going to speak to. But this is capital that we think is driving the best returns for the business right now by growing to that 1 million ounces, and that's what we're going to continue to focus on over the next couple of years. But it doesn't mean that we forget about the next 2 buckets.

Strengthening the balance sheet is obviously important to put us in a strong position. We've done that all through the last couple of years, especially in Q4, as I talked about through growing our cash position, retiring some of the debt, repurchasing some of those hedges that were at a lower gold price. That's improved our net cash position, and we have a lot of liquidity to be able to grow this business. And then obviously, we want to focus on returning capital to shareholders. As we see that cash flow grow, it's going to really support the ability to increase our shareholder returns. This is something we've been focused on since inception. Since we were a single asset producer back in 2010, that's when we put our dividend policy in.

We paid a dividend every year for the last 16 years. But last year alone, we returned $80 million to shareholders in the form of both share buybacks and that dividend. And we think as we move forward, we'll be in a position to grow those shareholder returns through a sustainably higher dividend as well as being more active on that share buyback.

With that, I will pass it over to our COO, Luc Guimond, to walk through some of the assets in a bit more detail.

Thanks, Greg. So I'll provide a bit of an outlook, I guess, on Q4 results as well as our outlook over the next couple of years and some of the improvements we're actually looking to implement over the course of 2026 to deliver on our business plans. So we'll start with Island. Island Gold District, we produced 60,000 ounces of gold in Q4. We had some impact with regards to mining rates in the quarter. Weather conditions were actually quite extreme through the December period, late December, affecting supply chain, road closures, getting people into the site and out of the site had some effect on the rates through the quarter. We also had a seismic event in October. So we really focused on a lot of rehabilitation through the November, December period to get the mine back on track, certainly where we're heading with regards to our growth profile moving forward, and we did achieve that through the November, December period.

With regards to milling, we had an unscheduled liner change. We were actually looking to do that liner change in January, it ended up getting moved up into December with the Magino mill, which affected our milling rates in the quarter and as well, the road closure aspect of what happened in late December also had some impact. We're relying on CNG, compressed natural gas for generation there for power for the Magino complex. So obviously, with the road closures that occur, we're not able to actually get supply into the operation to keep the mill running.

Moving forward, improvement initiatives for 2026. There's a couple of things that we've got on the go. Certainly, as I mentioned, we've completed the rehabilitation work with regards to the majority of the rehabilitation work required from that seismic event we had in October. We kind of focused on that through November, December period. So moving forward into the new year, we're kind of back on track with regards to mining rates. We continue to look at restructuring the maintenance and mill management of the Magino side as well. Greg kind of touched on that a bit with regards to the -- the expansion that we're going to be doing and then the amount of people that we're going to need to be able to run the business there.

We're looking to actually get ahead of that and start bringing more people in to be able to manage more effectively, certainly from a senior level oversight with regards to the maintenance and the mill complex. We're continuing to work with a third-party specialist. We've been doing that since the fall. They've been helping us working on operational improvements as well as best practices on the maintenance front, so we continue with that group. As I mentioned on the Magino side with regards to CNG, that will be a significant game changer for us when we're able to get to grid power. We expect to do that by the end of this year. So we're really looking forward to getting that online. It will be a much lower cost for us to be able to operate as well as much more reliability with regards to operating the plant.

And we're also looking to add a supplementary crusher feed to increase our capacity at the Magino mill, and I'll touch on that a bit as well. As far as the Magino milling rates for the district, we averaged 8,600 tonnes per day through the quarter. Excluding the weather issues that we had there in late December, we would have averaged over 9,000 tonnes a day. So we've continued to see an improvement quarter-over-quarter, certainly since we've acquired that mill complex. I touched on some of the restructuring we're doing with the mill management. We're actually expecting to see more consistent throughput through that plant starting in Q2.

We do have a liner change scheduled in May, both for the SAG mill and ball mill. But excluding that, we're looking to be running at 10,000 tonnes per day more consistently on a month-to-month basis. And as a function, obviously, of the ramp-up, that's going to be occurring over at Island. And we're continuing to run the island mill complex as well as the Magino complex over the course of 2026 and 2027 until the expansion is completed. All of the additional ore that's not fed through the Island mill will obviously get processed over at the Magino mill to make sure that we get all of that high-grade processed through the course of the business plan through the year.

So a bit of a 3-dimensional sketch here looking at the existing mill complex. So you can see the primary crusher, secondary crusher. This is the secondary feed that I'm talking about. We're looking to add actually a hopper conveyor feed arrangement past the cone crusher. So this is additional crush material that can get also inputed into the mill complex to make sure that we maintain that mill feed of running that complex at 10,000 tonnes per day. This is something that will get implemented in short order. We're looking to actually have this up and running by mid-February.

Looking at the 3-year outlook for Island, it's really about declining costs certainly and growing production. If you look at where we were in 2025, we did about 250,000 ounces of production. We're looking to increase that by about 100% come 2028. And this is really the ramp-up over the next couple of years as we continue to mine more underground high-grade ore from Island and eventually hitting that 3,000 tonne per day metric. We've got a long reserve life. It's going to generate strong free cash flow.

The cash flow generated over the course of 2025 paid for all of the expansion that we're currently undertaking at Island right now. It made in excess of USD 200 million over the course of 2025. And we expect to obviously continue with that strong free cash flow and even higher over the long term, but certainly funding our expansion of what we're doing over the next couple of years. And Scott will touch on the exploration package, so I won't highlight too much on that, but there is some significant exploration upside within that district for other targets, which really supports that higher grade -- the higher mill complex, the milling rates of 20,000 tonnes per day that we're talking about over the long term.

Moving into Young-Davidson. We produced 41,000 ounces of gold for the quarter, also affected by weather conditions late December. We had some shutdowns with the roads as well, which affected supply chain and labor being able to get into the site. We also had a temporary downtime with one of our ore pass systems. We currently run with 3 ore passes in the lower system. We're looking to actually bring a fourth one online, but we had to do some repairs to one of those passes which affected some muck movement availability through the quarter as a result. And we also had a small paste plug failure in one of our stopes, which also affected availability of stopes being online in the quarter to be able to generate more ounces.

Moving forward, a couple of key focuses for us. One is increasing our development rates with contractor support. So we're looking to step up a bit more on the development side of things, develop our footwalls a bit more on the east and west extremities of the ore body so that we can have a bit more flexibility with regards to mining rates and be consistent on that 8,000 tonne per day delivery moving forward. I mentioned the new ore pass that's going to be coming online in Q1. And the other thing that we've been looking at is really critical spares across the organization, not just focused with Young-Davidson, but long lead items making sure that we have those in our supply chain and have them as critical spare so that we can certainly keep the plants running and benefit from this high gold price environment that we're in.

Regarding the ore pass system that I touched on. So you can see in yellow here in the long section, general long section at Young-Davidson. The yellow lines that you see in here are the ore pass systems that are currently in place. The light blue is the fourth one that we're looking to bring online. So this is just normal function, normal course of business as we look to expand our mining horizons east and west is looking to centralize ore pass systems within those mining fronts as well to improve the overall efficiency of getting ore down to the 9025 grizzly station through our crushing plant and obviously hoisted. The one issue that we had with the pass system is if you look at the center ore pass systems with that V shape in it, the bottom east side of that raise system actually had a headwall -- some headwall damage that we had to correct and rehabilitate, which we did in the -- which we will be completing earlier this quarter.

Looking at the 3-year outlook, pretty consistent production from Young-Davidson over the next 3 years, averaging about 165,000 ounces a year, really grade driven. We kind of touched on this. It's really sequence driven with regards to the production. So the production profile based on that sequence, the grades are what we have in front of us. We do expect better grades as we move forward come 2029, 2030, but over the next 3 years, pretty consistent. Still got a long reserve life of over 14 years. So it'll continue to generate strong free cash flow for us. We generated over USD 200 million in 2025. And significant exploration upside as well that Scott will touch on his slide deck.

Upside potential for Young-Davidson, a few things there. One is mill expansion. I mean we're permitted to 12,000 tonnes per day. So we have an opportunity there to actually look at running at a higher throughput through that complex that's already permitted. We've been looking at potentially bringing it up to 10,000 tonnes per day. There's a modest expansion required to probably about $40 million or $50 million to be able to do that. It wouldn't necessarily be higher mining rates from Young-Davidson underground. It would be from supplemental feed sources within the region, likely open pit sources, one is Golden Arrow. It's about 90 kilometers from Young-Davidson currently. It's an acquisition we made a few years ago, something simply that we could bring online and provide additional mill feed into the mill complex. We've got some other local closer sources, the YD open pit potentially. This is part of the original pit mining that we did back in 2014, 2015. That was a Phase 1, Phase 2 that we mined. There's also a potential there for a Phase 3.

Otisse Lake, which is another target that Scott will touch on with regards to some of the regional exploration targets. And we do -- just Young-Davidson alone, we do have some significant exploration upside at depth east and west, and Scott will also touch on that with regards to his slide deck. Just to touch on a little bit on the Young-Davidson. This is the high-grade -- potential high-grade hanging wall zone that we've been talking about for a while. It's sitting in the sediments. Really, what I want to just depict here is that you can see that's a cross section you're looking at. So you can see the infrastructure as far as Young-Davidson. So we're vertically accessed with our ramp system. We're vertically accessed with our shaft system. The proximity of this zone based on what we know at this point could be anywhere from 100 to 300 meters from our existing infrastructure laterally. So it's quite close, quite easy to be able to bring online. We just need to understand it better from a point of view of certainly strike length vertical extent and then look to bring it into a mine plan.

Moving over to Mulatos, the Mulatos District itself. Mulatos had a good year. It generated about 142,000 ounces from the district. So we continued residual leaching from our historical Mulatos leach pad. That continued to perform quite well as well as La Yaqui Grande. So we're really looking for a pretty stable outlook here over the next 3 years. You can see in 2027, production dips a bit, but that's when we bring PDA online. So mid-2027, we're looking to actually start production from PDA and we'll continue with residual leaching over the course of 2027 with La Yaqui as well.

We've got a 9-year mineral reserve life. I think the big caveat here is certainly moving forward with regards to Mulatos is the fact that we're building a sulfide mill, and it's going to open up another lot of opportunities for us with regards to exploration and other sources that Scott will touch on in his exploration section to be able to bring other sulfide feeds into that mill complex for the long term, well beyond the 9-year reserve life that we currently have with PDA.

Looking at PDA. So this is a bar graph showing the production profile. You can see starting in 2027 ending in 2035. The first 4 years of production are going to average about 127,000 ounces, all-in sustaining cost of about $1,000 an ounce. It's a very low capital intensity, about $165 million. Most of that will be spent in the course of 2026. But to the point I just raised with regards to the back end of this production profile, again, just looking at PDA, you can see the production profile drops off, but we're pretty confident with some of the other exploration targets that we have at Halcon and Cerro Pelon that are sulfide deposits will be able to actually bring those into the mix and sustain a higher rate of production there for the longer term.

A bit of a 3-dimensional view of what we're looking to build with regards to PDA. So you can see it's fully permitted. First off, we did receive our permit in January. So that's positive full speed ahead. As I mentioned, the capital investment is primarily in 2026. So we're looking to spend about $140 million this year of the $165 million. So we did spend a little bit in '25 and the remaining will be in 2027. Easy access. So it's coming out of the Mulatos pit, one of the bench elevations. We'll be driving 2 portals into the underground. So you can see a picture of it on the left there with regards to the deposits themselves, PDA 1 and PDA 2.

So it will be ramp access production hauled out of the mine and then trucked over to the mill itself. Mining method will be a mixture of primarily drift and fill, but there'll be some long-haul opportunities as well within the mining methods that we'll utilize there. Crushing and processing. So it's 3-stage crushing. This is -- the crushing plant is actually our existing crushing plant that we had at Cerro Pelon. So we've sent it out, had it refurbished and then we'll reinstall it. And it will be single-stage grinding, which will be one primary ball mill to handle the 2,000 tonne per day processing rate that we're looking to design there. It will be a float con that we generate. So we'll market the flow can off site.

So on that basis, there's no cyanide usage at the plant itself and no tailings storage. It will be a dry stack product that will actually store based on the milling process. Schedule time line to production. You can see '25, '26 and '27. So Q2 2027 is when we expect to be fully commissioned and wrapping up with regards to the production from PDA. The heavy lifting really over the course of 2026 will occur with regards to the mill complex processing plant, well advanced foundations, concrete work, structural steel. It's obviously, very simple bills in Mexico relative to certainly building anything in Canada. Nothing has to be enclosed. So it's quite cheap to build. And we've undertaken a number of these projects over the years actually with regards to certainly other pit operations that we brought online and developed some crushing and stacking plants with regards to those projects. So we've got a good team in Mexico that are very accustomed to building these smaller-scale capital projects and bringing them online and on schedule.

As far as exploration upside. So in this drawing, it's a planned view of the district. Basically, you can see PDA, Puerto Del Aire in the middle. I've touched on a couple of the other ones. Scott will provide a bit more detail on that, but certainly Cerro Pelon and Halcon are 2 targets where we've got some interesting intercepts already. And as I mentioned, they're sulfide deposits. So we expect to be able to bring those online at some point and also feed into that PDA mill complex over the long term. So really, the -- what we've embarked on with regards to the sulfide plant really opens ourselves up from a bigger opportunity with regards to a lot of these targets in the region and keeping us in the game in Mexico for a lot longer than just the 9-year reserve life that we have with PDA.

Moving over to Lynn Lake, looking at projects. So this is a snowy day and emerged with the groundbreaking ceremony. It snows like that in July and August in Lynn Lake. With regards to the highlights. So we've updated the economics on Lynn Lake. You can see the map there, which is outlined with our land package in orange, the orange border. So we've got about 80 kilometers of strike length. And again, Scott will touch on this quiet a bit more with regards to some of the exploration potential. But we've got a larger mineral reserve that we've upgraded, and we've included Burnt Timber and Linkwood. So these are a couple of other targets that we had in the region. And we've also looked at actually expanding the mill complex from what we had previously communicated now to 9,000 tonnes per day. It makes sense longer term. We've got a real district here. And we think, obviously, bringing it to 9,000 tonnes per day is a better avenue than what we had previously put out there. It's got a long reserve life of plus 25 years, and Scott will touch on the basis of us being there much longer than the 25-year reserve life that we currently have.

First 10 years of production are going to average about 186,000 ounces of gold. All-in sustaining costs of about $829 per ounce, and the remaining initial capital, the remaining capital is about $871 million. The updated capital is about $937 million that I'll touch on in a bit more detail. Key changes really to the 2023 feasibility study, a 13% increase in the mill throughput. As I mentioned, we're going to take it to 9,000 tonnes a day. We've incorporated a couple of more of the satellite deposits. So these satellite deposits will be trucked to MacLellan mill complex. The mill will be located at the MacLellan mine itself, and these other satellite deposits will get trucked there within the region.

We've also had impact, obviously, with construction-related inflation over the last 3 years compared to the study that we put out in 2023. Permitting-wise, we're in pretty good shape. There are some amendments that we need to do there. There's a notice of change and notice of alteration, both federally and provincially, but normal course of business really and for the most part, what we're building the footprint has remained largely unchanged. So 3-dimensional view of the mill itself. So it's a larger mill building. So these are some of the key component changes to the 9,000 tonne per day plant that we're building. It's a larger mill building. It's got a SAG Ball mill arrangement. It always had a SAG Ball mill arrangement. It's just a larger SAG mill, larger Ball mill, a larger thickener. We've also added some additional leach tanks as a result of more tonnes going through the plant, higher gold content and more leach capacity required. And we've expanded the CIP and the ADR to be able to accommodate that higher gold content going in as well.

So looking at a waterfall chart here with the capital. So you can see on the left 2023 feasibility study had $632 million. If you look at the orange bar graph, it's $937 million based on the update with the changes that I've talked about. The key drivers there, as I mentioned, really are inflation over the last 3 years. The scope changes associated with a larger mill complex to bring it to 9,000 tonnes a day and a longer construction time line from what was originally estimated with the 2023 feasibility study. So that's really what's brought the capital from the $632 million to the $937 million based on the updated plans.

With regards to the breakdown of expenditures over the next couple of years. So we were a bit delayed in 2025. We were looking to get going. But obviously, with some of the forest fires that occurred in the province of Manitoba, we were evacuated for a period of time for the most of the summer construction season in 2025. So we've had to kind of reset ourselves with regards to the time line of the schedule and bringing it online. The heavy lifting will occur in 2027, where you'll see that we're looking to spend about $380 to $410 million. About $290 million to $310 million in 2028 and looking to bring Lynn Lake online into production in 2029.

So really, this spring, spring of 2026 is when things will really start to get going with regards to the construction activities at Lynn Lake. Schedule wise. So as I mentioned '26, '27, '28 is our construction period. Q2 of 2029 is when we would look to actually have our first gold pour commission the mill and bring it online and that add that sustaining gold production for the long term out of the district into our overall consolidated production profile.

And that's about it from my section. I think we'll move into the Q&A.

Thanks, Luc. So we'll just ask the rest of the team to come up now and address any of your questions related to the 3-year guidance. We will be getting into the expansion study into the afternoon. So if we can keep the focus on the guidance for now. We'll address questions with respect to the study into the latter part of the presentation. And a reminder for those of you viewing through the webcast, you can submit questions through the Q&A button.

And Cosmos, if you could please just introduce yourself and mention who you work for, for the benefit of those online.

Great. Thanks, Scott. It's Cosmos Chiu here, research analyst at CIBC. So just one quick question. I noticed that in the 3-year guidance, you increased compared to your previous guidance 2026 costs by over $300 an ounce, lower in terms of the quantum of increase for 2027. I think you only increased it when compared to previous guidance by $200 an ounce. I guess my question is, have you factored in at least for 2026, some of the issues you had in 2025 rolling into at least the front part of 2026. That's it.

Yes. Yes, we have, Cosmos. Certainly with our Canadian operations, looking at both Young-Davidson and Island Gold, certainly from a development perspective, what we're doing with regards to our enhanced dynamic ground support with regards to managing and mitigating obviously seismic activity within those operations. So yes, we have certainly looked at that and factored that into our business plans.

Yes. I mean the other piece Cosmos would be that an example being the Magino mill. You saw the tonnage that we've put through, it's more conservative. That impacts the production, but it has a direct impact on the costs side as well and the more conservative ramp-up at Island Gold underground. That has an impact on production, but it also has an impact on costs. So we have factored those things in by being a little bit more conservative on those in terms of the ramp-up on each of them and therefore, have been built into the cost structure.

Bryce Adams from Desjardins. A quick question on capital allocation. You talked about strengthening the balance sheet and returns to shareholders. Just wondering if you have any targets on that like strengthening the balance sheet. What does that mean? What position do you want to get the balance sheet in? And when you talk about our returns to shareholders, do you have a percentage of residual cash flow that you would like to distribute?

So yes, I mean, John, feel free to jump in as well. From a strengthening balance sheet perspective, I mean, the first thing I want to do is pay down our $200 million of debt. That's something that we as a company over our history have typically had minimal to no debt. It's always created opportunities for us over the years, and that's the position we want to get back to. So in terms of what we're looking to strengthen the balance sheet, it would be absolutely paying down that debt.

On the dividend perspective, John, feel free to jump in. We don't have set targets based on cash flow. At the end of the day, what we want to do is look at what dividend we can set and we can sustain that over a period of time. We don't want dividends jumping around. And from a share buyback perspective, we will never targets to a share buyback. Our view is share buybacks are to be used opportunistically. If we see a dislocation in our share price, we're going to step in and we're going to step in hard to use that. We're never going to set a target because the mining industry in general and the gold price is so volatile. It doesn't make sense to set targets with respect to share buybacks. For us, it's step in when you need to. John?

I think we talked about this at one point. That's pretty much the policy. And for the very reason that we're in a cyclical business. And you get periods of time where the gold price is really fine shape, and you're generating really strong cash flows. You get times where your -- the focus is on maybe acquisition, so you're allocating more money in a weaker market. We have allocated a lot of effort into making acquisitions and then investing in those acquisitions through exploration and expansion. It's a priority for us. But the last time we had a really strong dividend yield was in those years from 2010 through 2013. We had close to a 2% dividend yield. I more or less have a view in mind of the kind of dividend yield I'd like to sustain. It's higher than what it is now. The reason why it's relatively -- low right now, first of all, the gold price is running like a Jack rabbit. It's really hard to keep up with that in terms of a dividend policy per se.

But you can see that where we're really focused is on building the business and sustaining production levels at very low costs. And what that does is you can assume the gold price is going to be volatile, but it's not going back to $1,200 or anything like that. It would be a massive shock if it did. So if you look forward and assume that you're going to have higher gold prices in the future, the way we seem to have seen gold go like over time it bases, -- and then it grows from that base. So cyclical, yes, but ever-growing price. I think that the time is going to be not that far off when you can see the capital spend on this growth starts to come down, and you're going to see our dividend yield rise.

In the meantime, we can do what we did last year, which was spend almost as much on share buybacks as we did on dividends. And that we can do in a very opportunistic manner rather than setting yourself at a point where you're going to be spending pretty heavily on capital and you've got this big dividend to sustain. You've got to decide at one point what kind of company are you? Well, we're not Barrick and we're not Agnico Eagle. We're a growth company. We're, say, what Agnico was 15 years ago. And we're in a very, very strong growth trajectory right now, probably the fastest in the industry. And we're not just growing in one aspect. We're growing, as we pointed out earlier, in those 3 key ways, right? We're growing production. We're growing reserves, and we're investing capital so that we have -- we can do this at low cost, low sustainable costs. That gives you the impetus to -- that gives you the ability, if you will, to sustain a dividend for the longterm.

If I can just ask one more for Greg. But on the cost waterfall chart into 2026. I think it was Slide 17. One of the biggest categories there was other. What's in the other and if you would break that down?

There's lots of little things that go into it. Example would be G&A is a little bit higher just as support going from a 500,000 ounce a year producer to 1 million-ounce a year producer, you need to ramp up on the G&A side as well. That's falling into it. And another example would be we had not envisioned producing anything from the old Mulatos pit previously. We're now going to probably produce 10,000 ounces from that pit in our budget. That's higher cost. I mean it's residual leaching. It's above $2,000 an ounce, that's going to drive up your cost on a thing. So we probably could have had 15 different categories on there, but those are all kind of small things that are adding up to that $90 an ounce that we had in that other category.

This is Sathish from Bank of America. I have a couple of questions on Island Gold. So maybe if we can start about -- talk about the -- so currently, you're working with some of the third-party specialists and you're implementing some of the modifications that they have suggested, could you maybe give some color on what those modifications are? And have you factored it in into the guidance already? Or do you expect that to be implemented and that could have some upside as to the costs going forward? That's my first question.

Yes, I'll address that one. I mean we're using an outfit that we've used actually in the past. It's the outfit is called Jamieson Consulting. So we've -- we had them do some continuous improvement for us at Young-Davidson, when we were transitioning with the ramp-up after we had commissioned the lower mine expansion just to get it to that 8,000 tonne per day. So it's an outfit that we're quite familiar with. I mean what they bring to the table is operational experience of running processing plants as well as the best practices around planning and scheduling of maintenance, maintaining critical spares and understanding the specifics of the entire process.

And we're really focusing on the crushing and grinding circuits. It's not a full-scale mill review with regards to operational best practices and maintenance best practices. So we engage them in the fall and they continue to be with us. This is something that we do on an ongoing basis. I mean, in this case, it's been third-party review that we're doing it with. But as part of our normal business of running our operations, there's always continuous improvements to look at trying to reduce our overall cost profile. So on that basis, it's something that we will eventually continue to embark with ourselves as well.

I think some of the things will also become clear the next phase of the presentation when we start talking about how we're going to change the whole flow sheet, if you will, from the -- and address particularly on the front end and the back end, things that were problematic over the last 18 months where we're running that mill.

And maybe on the -- I mean, like -- so you expect the Magino mill to be connected to the grid by the end of 2026. Would you be able to like quantify what the cost savings could be once you're connected to the grid?

It's between $4 and $5 a tonne is the expected savings by connecting to the grid versus CNG for a year.

The other big benefit there really is reliable power, like generation, as I mentioned, with regards to the events that we had this year in the December period with regards to road closures. Compressed natural gas needs to get trucked into the facility to be able to keep the lights on, basically. In this case, once we've got grid power, we didn't have interruptions of our other operations with regards to the storms that occurred in December because they're on grid power. So that will be another big benefit for us.

John Goldsmith, Montrusco. So just with regards to the guidance, I wonder if you could provide a little bit more color there, specifically for '27 and '28 in terms of what you're embedding in terms of the base labor and contractor inflation, the base local market inflation, your expectations for currencies, Canadian dollar and peso? And then lastly, just what your assumption is on gold prices because that will obviously impact your royalties.

Yes. So the base case assumptions was basically a flat FX and gold price from where we are now. So $0.74, MXN 18, $4,000 gold. And then we make it clear in our disclosure that we do not include the impact of inflation in '27 and '28. So just we just don't know what it is. It could be 2%, it could be 5%. At this point, we just made it clear it's not included in that -- in the '27-'28 guidance. And when we get to the next year, we'll embed that.

Okay. So there's 0 inflation embedded in '27, '28 from your base of 2026?

Correct. Everything is based on 2026 costs.

Understood. And could you remind me if you looked at your '26 ASIC, what percentage of that would be labor and contractors?

I mean of our cost profile, it's about 50%. When you include capital, it's -- yes, it's probably between 45% and 50%.

We have a few questions from the webinar. I'll start with the first. Young-Davidson is running below reserve grade of about 2.25 grams per tonne. When do you expect to encounter higher grades?

Yes. Yes. So as I mentioned, we're sequence driven with regards to Young-Davidson. So over the next 3-year outlook, certainly, we're in that 215-gram per tonne range. But as we move through the mine plan over the next couple of years, starting in 2030, we should see more in line with reserve grades and higher at that point in time when we're in the sequence of the mining extraction.

This is Francesco from Scotiabank. I just want to start with a sort of high-level question maybe for John. You had a slide earlier on that showed Alamos compared to peers in terms of assets in Canada, production in Canada, production growth reserves, these sort of things. Can you just describe for us how you think that frames Alamos in terms of M&A, either as an acquirer or as a target? And then can you maybe just describe how you feel about the current environment for M&A, whether we're at top of cycle or mid-cycle, bottom cycle? Just your thoughts there.

That's a bit like asking the cow, how it's going to taste on the plate. We're trying to create a really attractive company for investors, our shareholders. But naturally, that creates a very attractive target for acquirers. And there's not very many companies positioned as well as Alamos' position. 90% of our valuation currently is Canadian. You can see it's growing. We're putting all the investment pretty much in Canada. We're sustaining our production in Mexico, but we're growing our production in Canada. There's just not a lot of really high-quality assets that are for sale in Canada. Our assets have they have a good track record, and they're permitted. They can be scaled up. We can scale up YD, we can scale up Island. Lynn Lake is going to grow over time, little doubt in my mind about that. So it's -- one of the things that I looked at, I was saying, what really is out there like Island. There really isn't anything. But what I -- I had to look back. I've been around a long time now.

And the closest analogy I could find to Lynn Lake, and some of you might remember this, it was a Golden Giant mine at Hemlo. It was just about 11 grams and The largest reserve Golden Giant ever achieved was just over 5 million ounces. I think in the beginning of the '90s, it was about 5.7 million ounces. That was its biggest reserve. It was a 3,000 tonne per day milling operation, generating around 400,000 ounces of gold a year. That was a massive story. That was the highest grade mine. And one of the real big stories, it was a Noranda operation. And Hemlo in the aggregate had about 15 million ounces, 3 mines, 3 different companies. It was a major story. Everybody -- I remember I was sort of new into the industry back then. This is the mid-80s. And all you ever heard about was -- we heard about Carlin and you heard about Hemlo. Those were the big, big stories. The biggest Canadian story, of course, was Hemlo.

And we're effectively on to something like that. I mean, you're going to see our update on reserves and resources shortly here. But if you look at what we've got now just between the lower-grade open pit and the high grade, we're up over 8 million ounces now. No -- not one of those mines got there. Collectively, they became bigger. But if you take a look at the reserves and resources, we're close to 11 million ounces now. This is a scale that it's world-class by any measure. And I think that we realize we've got something really valuable here. We realize in order to turn it into what it should be, we've got to effectively invest in it the way we're laying out today.

And what it becomes is something that we only have a very few examples of in Canada. Gold mines that generate over 500,000 ounces of gold a year and can do that for a long, long time at a low cost. I don't think that 500,000 ounces is the peak production for this mine. I think it's going to continue -- this is just another waste station. It's going to continue to grow. And it's being driven by that growth in reserves. And I think that will become clear as Scott goes through his portion of the presentation. So we're so focused on growing our assets. M&A isn't really top of mind for us right now. When it will be top of mind again, none of you will be interested in M&A. That's Alamos, right? 2015, '16, '17, we would have done probably another couple of transactions if the market didn't hate them so much.

The market doesn't like M&A at the bottom of the market. But here we are at $4,500 gold, there's going to be M&A. We're going to see more of it announced. We've just seen another deal announced in the last few days. But our sort of game plan is to -- just as we laid it out, it's to invest in exploration and capital in order to grow the existing suite of assets. We can add so many ounces near permitted infrastructure. That makes sense. That's the way to build value. We can double our production through our existing assets. We've got to compare anything we might acquire to that pipeline, and I just don't think it compares.

And then -- sorry, I've just got a couple more questions from Ovais, if I could. So for Luc, actually. In terms of 2026 guidance is second half weighted, I guess, largely driven by Phase 3 plus expansion plus maybe some operational challenges from '25 lingering into -- or the early part of '26. Can you just describe if the rehabilitation work at Island Gold is complete and whether you've returned to mining, I think you mentioned in the Island main zone and what your targeted mining rates are for Q1.

Yes. We're substantially complete, as I mentioned in the slide deck with regards to the rehabilitation to move forward into 2026 with regards to the ramp-up. There is one area that still needs to be addressed, which is our Island Gold. The -- we refer to you as the IG zone. There is an escapeway that we had mentioned that would still have to be reestablished. That will actually be reestablished in February, which will then open up that mining front again for us. But for the most part, yes, the rehabilitation is substantially complete, and it will not have any impact with regards to the ramp-up that we're looking to do over the course of 2026, 2027 and ultimately through 2028 as well.

And sorry, just on mining rates, we're looking around 1,400 tonnes per day for Q1.

And then with respect to that ramp-up at IG, are there anything that are concerning you with respect to development and increasing mining rates? Or is there any upside that you think you're keeping in your back pocket compared to the guidance numbers that were released?

No. I mean, we're obviously looking to ramp up. We're going to be doing more development as we move forward relative to what we've done in the previous years as we move into '26 and '27. We've got the equipment that's required in order to be able to sustain those sort of rates that we're looking at moving forward. And obviously, it's the labor aspect as well that we're looking to bring on board to be able to obviously, to continue to achieve the ramp-up as we move forward. So that's all built into our plan as we look to deliver on '26 and over the next couple of years with the ramp-up to ultimately 3,000 tonnes per day.

Actually, John -- Don, I'm going to jump in with a couple of questions online, if you don't mind. How should we think about the cadence of first half guidance in 2026, Q1 versus Q2? And then looking towards '27, what are the risks and opportunities at both Island Gold and Young-Davidson?

I'll answer the first part of that question. So the cadence in the first half is going to be a stronger second quarter than the first quarter. So our first quarter will be the lowest production quarter of the year. We'll ramp up into Q2 and then sustain that through Q3 and Q4. In terms of the second part of the question, on Island and Young-Davidson, do you want to handle that?

Yes, with the -- I mean, ultimately, our production will be stronger in the second half of the year at Island Gold because -- we're looking to ramp up the mining rates as we move through the course of 2026. So obviously, that's going to drive higher production. And the grade profile also at Island continues to get stronger as we move through the business plan in 2026, which will also help the gold production. YD, on the YD front, I kind of touched on that on the slide deck. I mean there's 2 drivers there certainly to getting back to sustaining the 8,000 tonnes per day relative to where we were in '25 and where we were delivering prior to 2025.

And there's 2 components. One is expanding the development there on the footwall drives east and west to be able to give us more mining fronts to be able to provide a bit more flexibility to deliver on the plan. And the other aspect is the pass system. As I mentioned, we had one pass that was decommissioned for a period of time late last year with some of the repairs that we had to do. And as I mentioned, with regards to normal course of business with regards to the production profile, it continues to expand out east and west with regards to the sequence. Having those new -- the new paths that we're putting in as well as the existing passes more centralized to the production profile, we'll ensure that we deliver on our key metrics for 2026.

Don DeMarco, National Bank. John and team, congratulations on the guidance and the expansion study. So with the guidance, we see that -- once again, you've reiterated the goalpost of achieving 1 million ounces by 2030. I mean in past years, it's almost a vision, but it's becoming clearer now. And with this guidance, you're kind of incrementally stepping toward that goal post. Is -- John, you're talking about the exploration and growth and the trajectory you're on, what do you consider to be the ideal size? Is that a 1 million-ounce threshold, okay, we've achieved that. We're done. Let's try to sustain this. And so what do you think is that optimal size for a gold company in this environment where it's hard to find new assets, hard to transact on M&A for both the magnitude of production and the number of mines.

Yes. It's a good question, and it's surprising how frequently that question comes up. Why not be a mining company with one mine? Well, perhaps if you were a private company and you had one mine, that's fine. But if you're a public company and your share price goes up and down depending on how you did in any given quarter, one mine is risky. Something can go wrong and then your quarter is blown. And we've seen -- we had 14 straight quarters without a blip in any of our operations. And suddenly, last year, we had sort of back-to-back one-offs that dogged us for 3 quarters. And I mean that was a head scratcher, how things go so well for so long. And then suddenly, you're dealing with crazy weather issues, a seismic event, we got hit by lightning. I think it was one thing after the other last year.

And if you were ever going to have a year where the gods were going to throw everything at you, probably 2025 was it because we still managed to have record cash flows. And we still did very, very well from a financial perspective. That said, the beauty of having multiple operations is if anything goes wrong at one of those operations, you've got others that can kind of carry the ball. And if we've -- if you have 2 mines, you've obviously cut your risks in half to that one. If you have 3, you've now developed -- you divide it into third and so on, 4, 5. But at what point does it start getting unwieldly? And I look at it, I think with the management team of the size we're at, we can manage what we're doing quite well.

We have 2 mines effectively at Island Gold, but we treat it as effectively one concept, and we're going to continue to integrate those operations. So from that perspective, we're operating currently at 3 sites. Lynn Lake will give us a fourth. I think we could -- this management team could comfortably add one more mine. I think we could add -- I think we could operate 5 mines, especially if you kept them within the same time zone and in a safe jurisdiction like Canada. It gets difficult if you're operating in one mine in Australia, one in South Africa, one in South America and another one in Canada. That's a different management proposition. I think you've increased your risk just because of the logistical challenges of trying to operate all over the globe like that.

We are not trying to get big for the sake of getting big. I would rather have really high-quality operations, meaning low cost, long life with low political risk. That's been our objective. And there's a very short list of assets that fit our acquisition criteria. And from that perspective, you don't see us do a lot of M&A. But when the time is right and when the assets are available, we can be pretty aggressive. We did 3 acquisitions inside of 3 years between 2015 and 2018, all of which now are underpinning the growth and valuation of the company. So for everybody, it's going to be different.

If you look at Agnico Eagle, probably biggest gold company by market cap. I think they have something like 10, 11 operations, something like that. Anything can go wrong at 2 operations then, and you've got 8 others to carry the load. So you can argue that from that perspective, the scale at which they operate, they've kind of derisked things as about as far as you can go. But I think you just have to grow in stages. It's hard to -- we were a one-mine company up to 2015. And back in -- when we were getting started in the early 2000s, I think they've already been around for 40 years. We're still a new boy on the block. But we've come a long, long way in a very short period of time. And we've grown twice as big in half the time as Agnico did, if you want to look at it that way. We have a great suite of assets. We're only going to add to it if we can find quality, and it's got to be at the right price as well. It's got to be as good as what we're already developing. I think that's the way to answer that.

We have another question online. You had previously targeting ramping up Magino milling rates to 10,000 tonnes per day in 2025. You're now expecting that into the second half of 2026. What's been the limiting factor? And Luc, maybe you can reiterate some of the upgrades that we're expecting to implement this year to get us to that 10,000 tonne per day rate.

Yes. I mean we've seen certainly continuous improvement there with regards to the milling rates quarter-over-quarter. As I mentioned there in Q4, we would have averaged 9,000 if it hadn't been for the weather issues that occurred in December. As we move into the new year, I mean, some of that weather effect from late December also had some effect to the start of January with regards to the compressed natural gas availability to be able to deliver to the site to get the mill up and running. We also had a liner change scheduled in Q1 as well. So throughput rates will not be at 10,000 tonnes per day in the first quarter. But as we move forward into the second quarter, other than in May, as I mentioned, there's another liner change scheduled in May. We expect monthly to start hitting 10,000 tonnes per day.

And part of the changes that we're looking to make there, as I mentioned, is that we're going to add an auxiliary feed conveyor in there so that we can -- as we continue to work on the planned maintenance with regards to the crushing plant, as well as some unscheduled events that occur. We continue to maintain feed into the grinding circuit. So I mean, the bigger challenge for us has been more so around the crushers. And I think we've talked about this in previous communication. We did make some changes there with regards to changing both the cone crusher and the jaw crusher to improve the overall availability. The crushers themselves have been working well.

It's -- part of the bottleneck has been just the feed aspect of it with regards to the grizzly dump arrangement that we've made some modifications to as well, but it's not the longer-term solution, and we will talk about that a little bit more in the expansion study that we're looking to actually go to a larger gyratory crusher that will actually feed -- will provide the primary crushing for the feeding both cone crushers, which will ultimately feed both the new mill as well as the existing mill for the longer term. But I'll touch on that a bit more in the afternoon session.

Sorry, John Goldsmith, Montrusco, once again. So first question for Greg and then a follow-up for John. Just with regards to the guidance, once again, corporate G&A. Could you provide a little color on what that looks like for the next 3 years? And once again, if that is included in ASIC? And well, maybe I'll just start with that, and then I'll ask John after.

Yes. Our corporate G&A is going to be between $45 million and $50 million, and that's what we've incorporated over the next 3 years because that's built upon -- sorry, we expect to increase our G&A this year to support that ramp up longer term. So that's what we feel is the next 3-year G&A.

That is in ASIC?

That is included in ASIC, yes, along with the baseline share-based compensation that gets included. So there's about $25 million of baseline share-based compensation that gets included in all-in sustaining costs each year as well.

Perfect. And then for John, we're talking about the opportunistic share buybacks and the answer to Don before with regards to potentially a fifth project. It looks like at $4,500 gold and your guidance for the next couple of years you'll be definitely throwing off over $1 billion in free cash. You talked about opportunistically looking to buy back stock. Could you provide any type of kind of guideposts in terms of whether it's price to NAV or EV to 2P ounce? Like what are you looking at opportunistic? And then just with regards to geography, I think one of the great strategies with Alamos, obviously, is being in lower risk jurisdictions. If you could also help us understand how does the U.S. BC or Yukon potentially fall in your ranking of geographies that you're currently not in?

So I'll take that. It's a broad, broad question. With respect to political risk, it really depends on where you are in those countries. U.S. is -- we're not going to build a mine in Hawaii or Rhode Island anytime soon. U.S. really, you're talking about -- frankly, you're talking about Nevada and Alaska primarily outside of that, maybe Utah, Idaho. I mean there's more jurisdictions that are kind of opening up. And I would say under this Trump administration and this renewed focus on mining, it might be on "critical minerals" which might mean something to the U.S. government and something else to the Canadian government. But the attitude towards mining is changing one way or the other. And that's mining broadly.

They may be focused on copper and lithium or whatever. But ultimately, miners are not working for lithium companies. I mean the very little lithium production in North America. They're working for gold companies. And that's why they're actually talking to the CEOs of the gold mining companies about how you grow that industry because nobody knows better. That's the kind of mining that largely we're doing. I think that political risk in BC and the Yukon, you mentioned, it's higher than Ontario and Quebec. That's just a reality. I think Ontario and Quebec represent 2 of the best mining jurisdictions in the world. And there's a reason why we've focused so heavily on those provinces. I think Manitoba is playing catch-up right now. They've got -- it's an NDP government. It's very pro-development. Why? Well, they want to grow their economy. Northern Manitoba needs investment. It needs jobs.

Nobody knows better than Premier Kinew. He's extremely supportive of investment and development. He knows that that's going to be better for all those people in Northern Manitoba. So I kind of -- we're not in business where we are for any reason. I mean we're there because there was specifically encouragement from the government to be there. We've got to consider Mexico. We've been operating in Mexico for a long, long time, but we haven't grown outside of Mulatos. We've done a lot of work within it, but there really hasn't been much opportunity to grow outside of it. And I don't think the Mexican government has fully come around to "encouraging the mining industry to invest."

And at some point, they will, I think, because I think they have to. There's just -- it's a very difficult thing if you're Mexico and Canada right now to go into these negotiations for CUSMA, how is that going to look? I don't think anybody really knows. But one thing we do know is Mexico is a mineral-rich country with a very long tradition of mining as is Canada. And we do that probably -- I think Canadians do mining better than virtually any other country in the world. I know Australia would put up their hand and say, just a minute. But I think we are among the very best in the world. And this country has such vast, vast potential that you've got to know if you focus here, you're going to -- one of these days, you're going to stick in a thumb, your thumb and pulled out a plum. And that's effectively what we did with Island Gold.

We saw long term, there was some fantastic potential there. It wasn't obvious to everybody necessarily when we acquired it. But look what it's developed into over time. Where is it going? I think it's one of those stories that just gets way better, way quicker than anybody ever imagined, including me. I think there's amazing opportunities. And I think for the time being, we're just going to prioritize our business just the way you see it laid out in the presentation here. M&A, it's -- I think we do it very, very well. But we also know there's a time when it works better. I think that you're going to see lots of M&A activity just as you always do when gold prices run, it will be a relative value game. Lots of these transactions will be driven by -- there'll be share transactions. And it kind of works.

But at some point in time, the shares are worth money and you're paying with shares, you're kind of paying with money. And it's very hard to justify these multibillion-dollar acquisitions of relatively small assets that were worth hundreds of millions not that long ago, they're now going for billions. And you need to have this long-term view that metal prices are going to be where they are or quite a bit higher in order to make those work. And I'm not that comfortable in growing our asset base that way. I think in that market, we can do much better drilling and developing ounces that way as opposed to acquiring.

I think in that market, we can do much better drilling and developing ounces that way as opposed to acquiring.

Lauren McConnell, analyst at Paradigm Capital. I was just looking through your in Lynn Lake numbers? And just kind of wondering how did the 9,000 tonnes per day come as the throughput number now, especially when you look at the reserves at 25 years, should we be thinking about an expansion a couple of years down the road? Or what's sort of driving that as a throughput number from the near term?

Yes. When we looked at it, I mean, really relative to the time line that we're trying to meet with regards to the construction schedule and from a whole permitting aspect. With regards to that whole process of going from 8,000 to 9,000 tonnes a day, there was very little effect to that. So it made the simplest aspect of us trying to actually deliver on that ramp-up that we're looking to achieve to bring that online by mid-2029. But that's not to say longer term, there's always going to be a longer-term vision there, to your point. It's got a 25-year reserve life.

Scott will touch on that. There's a lot of other exploration targets there in that district. So it will be -- it will be something that we'll continue to look at over time to actually look at potentially even expanding it beyond the 9,000 tonnes per day.

Yes. I think a future expansion is -- would make a lot of sense. If you look at the production profile, -- it's very high grade from the Gordon pit in the first 5 years. And then after that, if the production comes down, that's where we would look to do the permitting, which is a bigger exercise if you go to something bigger, that's where we look to do that. So ultimately, we want to bring down the 25-year life for sure. It's just going to be in stages.

Okay. Well, I think we'll take one more question online before pausing for a short break. Are there any takeaways or read-throughs from the postmortem analysis of the seismic event at Island Gold in October that inform future mine plan sequencing at both Island Gold and Young-Davidson, as you look to expand underground development to access some of the higher-grade areas of the deposit?

Yes. Look, I mean, we've touched on this before, seismicity as a normal course of business when we're operating these underground mines. So it's not new. We always have some level of seismicity within our operations as we're running through the extraction sequence with our stope cycle and mining phase that we're undertaking. So we continue to develop and understand that. I mean over time, if I look at the transition of -- where Young-Davidson started from a point of view, what the ground support standard was when it started compared to where it is today. It's a continuous evolution really of the ground control management plan for that operation, and it would be very similar for Island Gold as well.

So we've continued to -- as we get deeper and higher mining rates, certainly with what's going to be happening in Island Gold, we've changed ground support standards to be able to adapt to that and manage it effectively. The other aspects that we've looked at in the Island case is just in relation to the infrastructure that we have in place, the permitted infrastructure that's going to be there for the life of the mine. I'm referring to the ramp systems, shops other things that are being developed over the long term to be able to support the long-term mining rates that will be occurring there.

We look to enhance the ground support in those areas as well. We've looked to actually stand off a bit of the infrastructure from the ore body as well to provide better management of the overall ground control management plan as well for the long term. So it's a continuous evolution as we continue to mine and lessons learned certainly and adapt and incorporate those into the mine plan as we move forward.

Thank you, Luc. We'll pause there for about 10 minutes. We'll stay on track and restart the presentation at 10:15.

[Break]

Welcome back to the presentation. So if I can just get everybody to get back in the room. Welcome back, everybody. We're going to continue with the presentation. So I'm going to look at -- moving forward, we're going to get more so into the expansion aspect of the Island Gold District. So I'll start with a few slides to kick it off. First of all, overview with regards to the expansion study that we've now released. If you look at our gold production over the first 10 years of this expansion study, we're going to be generating about 534,000 ounces of gold, all-in sustaining costs of about $1,025 ASIC over that 10-year period, which will be one of the lowest cost gold mines in -- certainly in Canada.

Annual -- average annual mine site cash flow at $3,200 gold price of about $821 million and after-tax NPV of $3,200 as well would be about $8.2 billion. So specific changes, I guess, from the base case that we put out earlier to this expansion study. Underground rates, we're looking to take those from 2,400 tonnes a day to 3,000 tonnes a day, Open pit operations will go from 10,000 tonnes per day to 17,000 tonnes per day. Magino mill expansion in the base case, we added at 12,400 tonnes per day.

We're looking to basically twin the existing mill complex and bring it up to a full capacity of 20,000 tonnes per day. So the big driver there really has been the mineral reserve. There's been a lot of drilling going on over the last while certainly that Scott will touch on as part of his presentation. But in the base case, we had about 6.3 million ounces in reserves for that study.

We've grown that by about 30% now. We brought it to 8.3 million ounces, which are now in the expansion study as of February of 2026. So significant upscale ever in our reserve base. Looking at it in a bit more detail. You can see the Island Gold Mine. Looking at the June numbers versus December, so year-end reserve numbers. We've gained about 1 million ounces on the reserve base. And on the Magino side, similar level, about 900,000 ounces of gold has now reported into our reserve base from where we were in June to the December 2025 statement.

So overall, combined for the district, about 1.9 million ounces. So we've had a really successful reserve conversion over the last certainly year. And we've got -- as Scott will touch on this, there's some tremendous ongoing exploration opportunities and success that we expect to drive growth even further in this district for the long term. And we're looking to spend a record amount of money actually on exploration in the district in 2026.

So a life of mine looking at the expansion study here, as I mentioned, 534,000 ounces on average for the first 10 years. You can see in gray, which would have been the base case in the bar graph with regards to the production profile versus the expansion study now in orange. So significant improvement. Overall, all-in sustaining costs similar to the base case, running at about $1,025 per ounce and the reserve life of 19 years.

So similar to the life of mine, despite the higher production rates. And again, obviously, the growth in the reserve base helps that. But I think what I really want to point out here is the back end of this production profile, when you start to look at 2037 beyond to 2044, as production starts to drop off, we would expect to actually fill that with other targets.

And Scott will touch on that with regards to his presentation. We see -- we certainly see this asset carrying well beyond the 19 years that we currently have in our reserve base just based on the exploration targets and certainly, the growth potential and the growth that we've seen at Island since we acquired that operation in 2017. So just looking at the reserve resource growth, as I touched on, we acquired the Island asset in 2017. So you can see the significant growth that's occurred basically from 2017 to where we are in 2025.

If you look at the Phase III study that we put out in 2022, which would have been based on the mineral reserves at the end of 2021, we've seen about a 284% growth in our reserve base over that period of time. And we certainly don't expect that to stop as we continue to drill. We expect to continue to convert, obviously, our resource base into reserves, but also find new resources that will eventually end up in our reserve inventory. Our conversion rate over that history has been greater than 90%. So it's been a very, very high conversion rate, and we would expect that to continue as well. And certainly, from a discovery point of view, it's costing us about $14 per ounce to discover those ounces. So Scott and his team have done a fantastic job on that front.

So this is one of the main areas of the growth that's occurred with regards to the reserve base. So this is the Island East that we referred to. You can see the grade there running at about 15 grams, about 1.6 million ounces. So this has been a big part of our growth with regards to the reserve inventory that we've taken from where we were in the base case to the expansion study.

And some of the highest-grade intercepts that Scott will also touch on as part of his presentation. So -- the one big benefit certainly within this region is where we've seen a significant amount of growth from an ounces and grade point of view is really well centralized to the production shaft that we're putting in place and will be as we continue -- to continue to expand on this because it's still open at depth, open to the east, and we expect this to continue to grow over the longer term as we continue to drill it.

But from a production point of view, it will be very efficient for us to be able to mine in this district, bring it into the mine plan and use our hoisting infrastructure to be able to generate the ounces on an annualized basis. A bit of a chart here that kind of shows Canadian mines throughout the country. But I mean, really, the story here that I'm trying to demonstrate, if you look at the Island Gold December 2025, that's boxed out over on the right side of this slide. Really, what we're demonstrating here is that it's been there. Island has been there for a while and continues to be and continues to grow, but looking at it on the basis of being one of the highest reserves and one of the highest reserve grades for any underground gold mine in Canada.

And we've been there for a few years, and we expect, obviously, with our continued exploration success that we will certainly continue to demonstrate this, if not even continue to grow or even higher over the long term.

From a valuation point of view, it's a growing valuation. John has touched on this a little bit in some of the comments. But since we acquired it in 2017, had a valuation of $551 million to where we are today with this expansion study that we've now released at a $3,200 gold price, you're looking at $8.1 billion.

Take that to a spot price depending on what the spot price is today because it's very volatile. But at a $4,500 gold price, it's got a valuation of $12.2 million. So it continues to grow. It's been a great story, certainly, for the company.

And with the exploration that we continue to develop within this region and look to explore and looking to bring other sources of feed into this larger mill complex that I'll touch on in a minute, will be a big benefit for the long term with the opportunity to continue to grow that valuation for the Island district.

Regarding GHG emissions. So the graph here kind of shows what the sector average is at about 0.79. Currently, we sit at 0.55. So we're about 30% below the industry average. With the expansion that we're undertaking here, and looking to bring that online, there's a couple of key drivers there that are going to lower our overall GHG emissions intensity actually down to about 0.24. So a further decrease of about 56% and really driven by 2 things. One is the completion of the shaft. So we're getting the production shaft online. We will eliminate the usage of the majority of the haul trucks that we have currently in our fleet. So we're reducing the overall truck fleet, which reduces our diesel footprint.

And the other side of it certainly is grid power by the end of 2026. So getting off of that CNG compressed natural gas and going to grid power starting at the end of 2026, we'll also have obviously a big benefit on the emissions intensity.

So with that, I'll turn it over now to Chris Bostwick, our Senior Vice President of Technical Services, to walk us through a bit more detail on the expansion study.

Okay. I'm going to reiterate a couple of things here that Luc's already covered. So what we're showing here is the base case like the mine that we presented to the public in June of 2025 compared to the expansion study on a bunch of key financial metrics. The first one I want to look at is as Luc mentioned, we'll be at 534,000 ounces a year from -- for the next -- for the 10 years beyond 2028. If we look back to the base case, we would have been at 419,000 ounces a year. We'll be doing about 534,000 ounces a year at $1,025 ASIC.

And life of mine will have an average all-in cost of capital, and that's growth capital, sustaining capital and operating expenses of $11.55 an ounce. And looking at our decision price of $3,200 gold, that's a $2,000 pretax margin.

Some other key things that Luc talked about is the $8.2 billion, NPV at $3,200 gold and $12.2 billion in NPV at $4,500 gold. Some of the key assumptions in the life of mine plan are obviously the reserves. We've had a significant reserve increase, a 25% increase at Island Gold and a 40% increase at Magino over what we presented midyear last year.

Long-term throughput of 20,000 tonnes a day and a long-term gold price of $3,200. Key changes. Obviously, the increase in reserve underground going from 2,400 to 3,000 tonnes a day, nominal ore mining rates at Magino going from 14,000 to 17,000 tonnes a day. With that increased underground reserve, that we saw that 30% increase in the underground reserve, we're going to require additional underground development. About 40 kilometers of development over the previous plan. About 4 kilometers of that development of that 40 meters is attributable to geotechnical reasons we are -- has been mentioned earlier, we're going to offset the critical infrastructure a little bit further from the ore body.

That side a little bit to development. So we've increased outside of that development by about 27% for a 30% larger mineral reserve. Obviously, expanding the mill to 20,000 tonnes a day from current levels and 12,400 expected in the previous plan. To do all this increased mining rates for both the underground, we'll be adding equipment, both underground and in the Open pit. As well, we need additional tailings capacity over and above what we previously had. So we'll be adding 2 more lifts during the life of mine. That's for a 45% increase in ore tonnage. Two additional things that we'll be doing that are new to this study is we plan on adding an airstrip at the mine site. This will cut down travel time for employees getting to the site and also increase our availability of the ability to get our employees to site and some of the bad weather that we experienced in the Wawa Airport.

And we'll be adding a water treatment plant that's combined to process and treat water on the entire site. Much of the components of the -- this expansion -- planned expansion are already derisked key permits, federal permits are already in place. The were permitted to mill up to 35,000 tonnes a day and construct a tailings dam up to 150 million tonnes in capacity. Our phase -- the first portion of the overall expansion is obviously our completion of our Phase 3+ expansion, and it's well on track to be completed in Q4 of this year. Shaft sink is at 98% of planned depth. So right now, we're at the 1,350 shaft station, concluding some off-site -- off-shaft development there. And we've got about 30 meters more to sync in the actual shaft.

We'll be completing that this quarter in 2026, and then we'll move on to equipping the shaft and converting over the head frame from syncing to production mode. We'll be completing the shaft infrastructure. The paste plant will be commissioned or completed in Q2 of this year and commissioned in the fourth quarter as the shaft comes online. And then the existing mill expansion is well underway towards the completion of the 20,000 tonne a day mill. So you see actually here in this photo, we've got a number of the tanks already constructed. We've got the steel up for the mill. This is a few weeks old, we're progressing on the clouding on the mill.

So we're well on the way there. From a risk perspective, we're out of the ground. That's a key area where some projects go over on time and budget is on Earthworks were well out of the ground, and we've got all the steel up. The shaft infrastructure and the paste plant that we're installing is sized -- well sized for 3,000 tonnes a day or target mining rate at the end of the expansion. And the other thing we're doing and putting into derisk the project is 115 kV power line, which will be finished by the end of the year. That will give us more than enough power for the expansion and anything else that comes along after that.

Permitting. We've got all the required permits in for the current operation. We are fully permitted for that. We've done a number of both Magino and Island on a number of ECAs or environmental compliance approvals over the years as well as a number of closure plan amendments. And then at Magino, as I mentioned, we've got the federal permits in place for a bigger mill and a bigger tailings dam. So to get the overall project permitted to our expansion plans.

There's just a number of normal course permits required a couple of ECAs and another closure plan amendment. We're well versed of those. We've done numerous permitting procedures and applications in Ontario, both YD and Island Gold. With respect to the Shaft infrastructure, you've talked about the shaft sinking is 98% complete. All the electrical infrastructure is in place. Hoist house has been completed. Warehouse completed. Paste plant will be completed in Q2, and the admin building and dry complex will be completed this summer.

Paste plant, just touch on that, does have a capacity for 3,000 tonnes a day. One of the things that the employing pace on the ground enables us to do is to increase our overall mining recovery underground. Over the life of mine, we anticipate being able to get about 230,000 ounces more recovered than we would have without a paste plant. And the biggest thing is another big thing is it allows the faster stope cycling times, which will support our higher mining rates of 3,000 tonnes per day. And it obviously increases our geotechnical stability underground.

And other thing to note with respect to tailings is about 65% of the tailings at Island underground will produce will go back underground as paste fill. Shaft is designed for the future. So we've got overall at 1,379 meter depth. We've got a 5,500 tonne per day capacity of ore and waste. We only require life of mine average of about 4,700 tonnes per day ore waste that's not considering any co-disposal of waste within pace fill stopes. It's got the ability to -- we have the ability to think that shaft deeper up to the 2,000 meters, the hoisting plant can accommodate that. 2,000 meters are overall hoisting rate will drop a little bit. We've got other options.

Looking at this long section, we can see the deposits open both at depth and laterally. So if we were to find significantly more in the future, that depth and not early, we'd look at our options for accessing that it could be deepening the existing shaft, adding a wins to go deeper.

From a power perspective, where our site currently needs about 30.5 megawatts, and that's being supplied for the -- through the CNG plant and an existing grid power. Yes. Going forward, we're going to require with the expansion, we're going to require 55 megawatts of capacity. We have the existing grid power. We're putting the new line in that will be commissioned at the end of this year, and we'll get 47 megawatts off of that. One thing to note is that line is capable -- new line is capable of supplying up to 85 megawatts for future considerations at Island Gold.

As was mentioned earlier, when we put that new power line in, we'll be able to drop our processing costs by about $5 a ton due to being on grid power. And we'll have the CNG plant at site as a backup. Tailings, as mentioned, we are permitted up to 150 million tonnes at a federal level. We will only require, I think, about 115 million or 117 million tonnes with this expansion. We're currently running the Island mill, and we will be running the Island mill in 2026 and 2027. We plan on starting to put the tailings from the Island mill into the Magino tailings dam later this year and then shutting down and decommissioning the current island tailings dam.

Yes, as mentioned earlier, we've added a couple of additional lift to the Magino dam to cater for this increase in reserves.

Looking -- just focusing on the Phase 3 expansion in the capital committed to date. Our estimate for completion is $835 million. If we look at what's been spent and committed, we're -- 91% of that is spent and committed. So there's not a lot of room there for increases or overruns and capital. We've already spent most of it.

With respect to the overall schedule, we've got a shaft sinking completing in this quarter, equipping for the remainder of the year. Shaft will be operational in Q4 of this year. And the underground ore waste handling system will also be in place at that point in time. We've got a little bit more work to do on the crushing side of things that will go into Q2 of 2027. But we will be hoisting ore in Q1 through the waste side of the system.

Power grade, as mentioned, will be completed at the end of the year. Paste plant, mid year. And then the actual Magino expansion to 20,000 tonnes a day will be completed in Q1 of 2028. We'll be ramping up through Q1 to full production for the remainder of 2028.

With that, I'd like to hand it over to Austin Hemphill, our General Manager at Island Gold.

Well, thank you for that, Chris. I appreciate it. I want to start off and cover a little bit on the mining processes we're going to be using during this expansion phase, since we put the base case out last year, the biggest change we've seen is a bit of growth in our reserve base, both at the Magino open pit as well as the Island Gold underground. As you can see in that long section, the brown area is the reserve pit. So this is what we're planning in part of our expansion studies currently, with the purple and gray being our resource bid. So there's still some future growth potential there.

Bringing your attention to those gray areas you see as well, those are the historic workings from the old Magino underground.

As you can see they're kind of centrally located, but a significant portion of the pit is below those existing areas. So the majority of the expansion from Magino is more of an incremental approach. We're going from a 14,000 tonne per day production rate we saw in the previous study up to 17,000, with the big difference being that our peak is now reaching about 100,000 tonnes per day ex pit with an average around 80,000. It's a little bit of an incremental increase versus what you saw last time.

But the big thing here is, is just more, like I said, an incremental growth. We're adding more trucks and additional shopper and some more bench drills just to support our increase in production. Again, it's very much very similar to what you've seen previously. I go to the next slide here. Island Gold, is we wanted to cover a little bit as we've known we're going deeper, we knew we're going to be increasing our production intensity. We were changing how we're approaching our stoping fronts. So historically, in the upper minds, those of you who are there, probably familiar, we entered the ore body on a given horizon in the center.

We develop our way out to the periphery and then what we call we treated towards the center. Now while that's very effective in the upper areas, in lower mining intensities that historically in gold experienced. The problem is it does concentrate the stress towards the center of the ore body near central access.

Over time, we've transitioned to a more common approach, a bit more practical approach where we actually are developing from the ends of the resource on a given horizon, then developing ourselves towards the middle and then we're treating our way outward. But that gives us the benefit of actually shedding the stresses outward. So we keep them away from the production area. The vast majority of our production in 2026 onward is under the new methodology and the new regime, where we're better able to handle the stresses.

So this has already been an approach. It's well understood. It's very common throughout the industry. And we'd already adopted these changes. And just as we continue to develop, we'll continue to explore these new options or exploit these new options. And again, this is part and parcel to our expansion of the 3,000 tonnes from existing 2,400 very similar to what we had in the 2,400 case, albeit just more of it. Just kind of show you a bit of the long section here.

As you can see the shaft and the central point, and this is going to be very common to what we talk forward here. I just want to bring that as a point of reference. As Luc touched on, we have a lot of potential down to the east on the kind of the right side of that drawing. And that's a big area we're going to be focusing on is right now, we've only got the development around the shaft and the specific infrastructure. And we're going to continue to develop ourselves outward. And that's really the key to how we're increasing our production rate from the previous 2,400 tonnes a day to the 3,000 is to accelerate our development rate, provide ourselves access to the larger and expanded reserve base. And then once we complete that development rate, we now have more developed inventory, we can then start to produce from those areas.

And again, much like we talked on the Magino, it's more of an incremental approach. We're adding additional fleet. What we're looking at here mainly is to handle the material. So you can see there's 4 scoops or LHD's, 3 bolters again to support the accelerated development rate, one additional haul truck for a period of time, one jumbo and one additional stope drill. So again, it's just an addition to our existing fleet to handle the additional tons. And the ramp-up we're looking at doing is basically by the end of 2028, we'll be at the 3,000 tonne per day rate. As I'll cover on future slides, I'll show you and explain you how we get there.

Now this is a bit of a complicated one, talk to the drawing on the right. As you can see the orange development, that's our existing development with the gray being the plan development. As I mentioned on the right-hand side, you can see the vertical shaft, you can see we have very little production development around that area right now. This has always been our plan was to develop that area and part of our expansion case from the 2,400 to 3,000 tonne a day rate is to increase that development rate, as I mentioned before, to provide us access to the inventory there and then support the increased production.

To put some numbers to it, when we saw the case last year, it was about 4.1 million tonnes -- 4.1 million ounces in underground reserves. We're requiring about 129 kilometers over the remaining life of the mine -- or from 2026 onwards to provide access to and support the production. Since then, we've increased that reserve by 25% to over 5 million ounces. And it's only requiring an additional 40 kilometers to provide ourselves access to that additional inventory, which, as I mentioned, we'll be spending about $166 million on increasing our development rate just to provide ourselves access to it sooner and only about $23 million, and that's a slight increase in equipment fleeting.

As we talked on here, this is kind of the ramp up schedule you see. We talked before there. We've taken a bit of a conservative approach on '26, but then we go back into 2027, we're right back on target of the 2,400 tonnes per day as we continue to focus on the infrastructure, specifically around the ore and waste handling. As Chris touched on at the end of this year, we'll have the shaft, which will be -- allow us to start skipping ore. And then towards the middle of 2027, we'll complete the ore and waste handling, which gives us the next incremental increase to now hoist all of our material.

And once we do that, as you can imagine, that then drops the intensity on our haulage fleet allows ourselves to allocate that fleet deeper into the mine to focus more on the development side. And then that's what will be the cornerstone for us in 2028, we begin to ramp up. It's a very steep ramp-up from the 2,400 tonnes per day to 3,000 tonnes per day, which will reach in the latter part of '28, and we'll be able to maintain for the rest of the reserve life, as you can see all the way up until 2040, where we basically reached the end of what we have in the reserve books. And again, this is assuming 0 conversion of any of our inferred resources, which was covered earlier, we've had quite the opposite history on, we've had a very high level of success in the conversion.

So we take a look at this. And also, as you can see, we have a very -- we maintain our at least reserve average for the first 10 years of this, including this year. And we're able to maintain that all the way to the latter part of the year, and we're averaging about 10.6 grams per tonne ex underground. And again, this is all based upon ourselves being able to basically hold ourselves to reserve average.

Now the big thing we take a look at as we go over to Magino. You see it's a bit more of a gradual ramp up. The big issue we have is we want to make sure that we basically liberate the ore tons once we have the ability to process them. Once we get the expanded mill, you can see that we can satisfy the need and we continue ourselves in a ramp-up. And again, much like an incremental stage, you can see is a gradual increase over time as we started the pit is bigger. We start going deeper into the pit. Haulage intensity picks up. We just start allocating the additional fleet to it on an as-needed basis to support our increase in production, which, again, we're able to maintain all the way into basically into the reserve life.

Big important thing I want to bring your attention to is we only hit that -- we hold that 100,000 tonnes a day ex pit for a number of years. And again, it's all just basically based upon incremental fleet increases. Last a little bit here on the Magino side, as you can see, we hold ourselves much around the reserve average. There's a little bit of bump around there, but we hold about that 0.87 grams per tonne. I just want to remind everybody that this is a combined ore grade. As you remember, we bias ourselves. We process the highest grade first. So any of the stuff coming ex pit, whether it be our high grade or mid grade, we process that first, we stockpile the lower grade material.

So you'll see some of the differences in change and you'll see that's how the grades will vary a little bit over time.

The important thing, as you can see, we maintain ourselves a pretty steady-state production rate. Also, a bit from the blending perspective. As you can see on the left-hand side, where we're under much our existing scenario, running the 2 mills, both the Island Gold mill as well as the Magino mill. And as we complete the expansion case in 2028, you see we basically fill that mill and we maintain that production rate until we've exhausted our inventories.

Last bit here, take a look for the expansion of the cost profile, the big thing you look at is the 10-year in the middle of it when we're kind of at peak production. We're producing about a little over 500,000 ounces, and we're maintaining all-in sustaining costs for the site just over $1,000 to $1,025. If you look at the 15-year average, while we're running basically both mines, again, is 490,000 ounces, and it's about a $1,032 for an ASIC. So again, it's a very attractive cost profile and you can see it's a stable production profile as well.

I want to touch on the milling side. It's just kind of a quick synopsis of how we're going to go step by step through the expansion in the mill cases. Our current case right now, as we've touched on before, we're running both mills, both at the historic Island Gold mill, which right now is limited through permits to 1,265 tonnes per day. Again, that's an annual average. So we have some flexibility on that within specific periods with the balance going to Magino. Right now, we are mining at a higher rate than what the Island Gold mill can process.

So the surplus we're doing, we're cumulating and Island and we're transferring over to Magino processing and batches, much like can we did for a number of months last year. In 2027, the mine will -- the underground mine will ramp up to 2,400 tonnes per day. Again, we'll still continue to blend them both through the existing Island Gold mill as well as the surplus from Island going to Magino.

And then finally, in 2028, and the completion of the expanded mill, we started transitioning all ores to a single milling facility. And over time, we'll ramp up until 2029, we achieved our 20,000 tonne per day processing rate, which will hold, as I mentioned before, for basically the balance of the reserve life.

Okay. That's it for me, I will turn it to Chris.

So I'm just going to quickly go over operating costs for the expansion plan. What we're showing here is we have 2026 anticipated unit operating costs at Island. The base case from last year what we were anticipating for operating costs, unit operating costs and then the expansion. What we're seeing is that we expect cost to decreased substantially from what we're experiencing and expect in 2026. I've got a few slides we can go through each of the individual ones here in a moment.

One of the things -- the other one thing that's immediately noticeable here is that our costs have increased slightly over what we were expressing last year in most of the areas, except one. And that's attributable to reflecting inflation and some of the other things that Luc and Greg talked about adding to personnel critical spares. All of that sets us up for success to go through the expansion.

So the one area where you see a decrease in our study over study in 2026 is the admin and that's a result of us increasing tonnage, more tonnes over what are more or less fixed cost.

So we see on a unit cost basis, those costs going down. If we look at on our underground mining costs, we see a significant or very large drop going from 2026 to 2027 in our underground mining costs, and that's all attributable to the shaft. And it's attributable for a number of different reasons. The shaft allows us to get more air underground, which allows us to operate more equipment, which in turn allows us to produce more. The shaft also allows us to get that extra material out of the mine. The shaft also greatly reduces our haulage requirements, which is our single biggest unit operating cost underground is hauling -- currently hauling from underground to surface we'll be hoisting.

So we're running about 18 trucks now will more than have that with the shaft in place. And another very critical or key aspect of the shaft is travel time to the [ workface]. A bunch of you who have been to Island have experience that 1-hour drive down the ramp to the bottom of the mine, while every month is getting even longer as we get deeper. So -- but it's -- we're going to be reducing probably 2 hours off the travel time of every single employee that goes underground when we put the shaft and they'll be at their workface in 15 minutes, which greatly enhances productivity and allows us to get to those -- both the mining levels in production and the development levels that we're anticipating.

On the open pit, we see another dramatic reduction in going to 2027. We're currently operating in kind of a hybrid mode with respect to maintenance in the Magino open pit due to a lack of previously a lag of a truck shop. We did not have a large maintenance crew there. We're relying on vendor maintenance from our various equipment vendors, which is substantially more expensive than doing owner maintenance.

We -- by the summer, we'll have that truck shop in. We're already in the process of ramping up -- the hiring of our mechanics and electricians to work on the mobile fleet. So we'll see a reduction in there.

Over time, we see the mining cost in the open pit further reducing. In that sense, we do the expansion -- or the ramp-up in mining, it becomes [ economies ] of scale gets cheaper and cheaper as we increased our mining rate. Beyond 2033, we can see some slight increases there. As has been mentioned, we're going to be -- we've got about 40% more reserves at the Magino pit, at the same strip ratio of 40% more waste. To place that waste we've got to go further out away from the open pit and our cost will slightly increase over time at that point.

On the milling side, we see a substantial reduction through to 2028. That's due to a number of factors. The first factor is bringing the end of this year, bringing the 115 KV line online, which will reduce our processing cost by $5 a tonne. At the end of '27, we will shut down the high-cost Island Gold mill and be exclusively processing through the expanded Magino mill, further bringing costs down. We go out to 2039, 2040, '41, is when we currently anticipate with the current reserve Island closing based on current reserves. And we will stop having to haul or from the island shaft or the Magino, which incurs about an $8 a ton transport cost for the island or over Magino.

I'll hand it over to Luc there to talk about capital.

Thanks, Chris. Okay. So I'll just review a few of the slides with regards to the expansion study and the capital associated with that. So site layout, the -- what you're seeing there in yellow is the reserve pit for the Magino side and over to the right is the Island Gold deposit, the reserve base projected to surface. So you can see close proximity of the 2 reserve basis.

With regards to the expansion itself, we're basically twinning the mill complex. So the existing mill -- as you can see, it's labeled in the orange box this year, which references the primary crusher, secondary crusher in the existing mill itself.

The blue boxes that are labeled in there are the new components that we're adding as part of the expansion. So the new circuit will have a capacity of 10,000 tonnes a day. We'll be looking to blend the high-grade underground ore coming across from Ireland as well as about 7,000 tonnes once it's at full capacity from open pit operations to run the plant at 10,000 tonnes per day.

And then the existing mill will continue at 10,000 tonnes a day to process strictly the open pit ore. So just to provide a bit more detail here with regards to the progress to date. You can see the -- on the left -- the foot on the left, which is a photo from January 2026. So that's a new mill building Scott -- sorry, Chris touched on this. So the Earthworks are completed. The foundation works has been completed. So a lot of that's been derisked from a capital perspective. As we touched on, you can also see the new leach tanks, and that left photo as well. There are 6 of them currently install. There's a couple more to complete to get that the full capacity we're looking for.

And the bottom photo on the bottom right is the truck shop. So that's something that we'll look to bring online mid this year, and we'll be able to service more properly all of our fleet of equipment for open pit operations on site with a truck shop to be able to maintain the fleet. The -- so this is a flow sheet of the expansion itself. So it's 2-stage crushing. We're going to have a primary crushing will be gyratory followed by a cone crusher. 2-stage grindings, so we'll have a SAG mill, Ball mill, very similar to what the existing mill is currently followed by leach, CIP elution, electrowinning and gold ore.

So some of the key changes to include, as I mentioned, the crusher. We're looking to add 2 fine ore bins. We currently have a 10 arrangement on the existing bin in this new complex, we're going to actually add fine ore bins -- 2 fine ore bins to provide mill feed into the mill. As I mentioned, 8 tanks solution and a larger gold refinery to handle the higher gold content coming into that mill complex with the high-grade ore coming from Island.

With regards to the existing circuit, there are some benefits that will occur as a result of this expansion as well. We've talked about that. Some of the questions in relation to consistently delivering the 10,000 tonnes per day through the existing plant. We've got that modification that we're making with that secondary conveyor feed to make sure that we continue to keep that mill fed on a continuous basis when we have scheduled maintenance, both with the primary and secondary crusher. So that will certainly be the fix in the short term.

In the longer term, really, what we're looking to do is the benefit of this gyratory crusher will actually be feeding from a primary crushing point of view, feeding both the existing mill as well as the new mill. So we would look to -- in the photo on the right, you can see the truck dump for the open pit feed. So that's open pit feed coming out of the operation dumping directly into that gyratory crusher, handling all of the crushing requirements. And then from that point, there's a split on the conveyor system. If you look at the photo on the left, you can see a gray conveyor gallery as well as an orange conveyor gallery. So the orange conveyor gallery is going to the new cone crusher, which will then feed into the new mill. The gray conveyor gallery will be feeding into the existing conveyor structure, which will go into the cone crusher and then into the existing mill.

And you can also see in that photo on the right, the underground feed coming from Island will have a separate tipping point. So it's not going through the gyratory crusher. It will be just fed at that point because it's already sized and crushed underground from the underground operations over at the Island side. So when it arrives here, it's already had its primary crushing completed. It will feed into a joint stream, commingling stream with the open pit ore as well as the underground ore to feed into the new mill. So we'll get the benefit of a better setup really than what we currently have right now with the existing setup for the primary crushing. So this will be a longer-term solution to be able to consistently deliver 10,000 tonnes a day out of both streams.

The other aspect of it will be new ore bins. So in the photo on the left, you can see where it's labeled new ore bins. Those are new ore bins that will be dedicated to the existing mill complex. So again, this is another area that we've seen, with our operation practices that we've been running this complex over the last 18 months, some deficiencies with regards to that feed arrangement with the tent arrangement, feeding into the grinding circuit, creating some issues with consistent feed.

Adding the bins will provide a more consistent delivery. From a maintenance perspective as well, it will allow us actually to be able to take one bin online, work on the apron feeders when scheduled maintenance is required or the other bin, vice versa, versus the current arrangement that we have with the tent facility where they're in series. So you basically have to take them both down if you need to do some maintenance. So it will give us more longer-term operational flexibility as well to maintain the 10,000 tonnes per day through the existing plant for the long term.

Schedule-wise, so we've touched on this a bit, but really, we've -- you can see in the photos, that's the new mill complex itself. And as we've already mentioned, earthworks are done. Foundation work's been done. So we've progressed it quite a bit and de-risked it quite a bit from a point of view of being able to meet the schedule. So the big heavy lifting certainly is through the '26, '27 period, with the intent of bringing the expanded 20,000 tonne per day mill complex online in Q1 of 2028.

So looking at the financials a bit on the capital. So this is looking at total capital. So this is in comparison to the base case, which would have been the June tech report versus what the expansion study shows now currently. Our total growth capital is about $704 million. Adding the life of mine sustaining capital in there brings it to a total of about $3 billion for a total production base of about almost 8 million ounces. So what's really driving that increase in capital is the mineral reserve, obviously, has increased by 45%. We're doubling the milling capacity with the expansion, obviously, with the second mill at Magino, accelerated underground development that the teams touched on as well as adding additional fleet, equipment fleet for both underground and mobile support for the open pit operations as well and the aspect of ongoing inflation, obviously, from the base case numbers that would have been put out. But from a capital intensity point of view, you can see extremely low at $393 per ounce, with the all-in sustaining cost of $1,155 per ounce.

Looking at it on the basis of growth capital alone. So you've got the Phase 3 up on the first line item there. So the expansion is pretty well in line with about $162 million based on the expansion study. It's really around the Island Gold District expansion, which is primarily the mill, the accelerated development and equipment required for both open pit and underground ramp-up.

So about 70% of that is related to the mill expansion, mobile equipment and infrastructure. The other 30% is related to accelerated development to support the mining rates getting to 3,000 tonnes per day. On a capital intensity point of view, about $91 per ounce.

And then looking at sustaining capital relative to the base case. So it's gone from about $1.6 billion to $2.2 billion on a sustaining capital aspect. Driver there, obviously, is the mineral reserve, largely mineral reserve and underground development increasing by about 25%. As I mentioned, we've added some equipment to the fleet, the tailings lifts that are required to support the larger reserve base, and we also touched on this airstrip for construction that will be part of this expansion study.

And this is really to get us away from Lake Superior. The lake effect has a lot of challenges for flights to be able to get in and out in the winter months as well as the summer months. Getting away from Lake Superior, having an airstrip closer to the mine site will eliminate a lot of that -- a lot of the challenges that we have for air service and provide more reliability for getting people in and out of the site on a continuous basis for the long term.

If you add reclamation and capital leases in there, it brings the total to about $2.3 billion over the life of the project. And again, from a capital intensity point of view, pretty well aligned with the base case at about $302 per ounce, so consistent with that base case life of mine.

I think with that, I will turn it over to Mr. Fisher.

Thank you, Luc. Just a couple of slides to wrap up the economics around this expansion project that we've been speaking to. This slide has been shown on a couple of different slides throughout the deck. Really, what we're trying to show here is the comparison of the base case of the expansion study, and you can see the economics are quite superior. At a -- I won't focus on the production and cost metrics because those have been discussed on a number of different occasions.

But if you look at the NPV and the IRR, which is what we're focused on when we're making investment decisions, the NPV of this project is $8.2 billion at a pretty conservative gold price of $3,200 per ounce. And at a gold price closer to where we are now of $4,500 per ounce, it has an NPV of $12.2 billion. And if you put that into perspective, stepping back in 2017, we acquired the Island Gold Mine from Richmont. 2024, we acquired Magino from Argonaut. I said Richmont previously, Argonaut with the Magino acquisition. Total acquisition cost was $1.4 billion.

So we've put money into the ground every year to grow that resource. We've been expanding the asset. And all of that money that we've been spending on expanding the asset and growing the asset from a resource perspective has all been paid for by the cash flows coming from the Island Gold District. We haven't put another dollar into the site from the corporate coffers perspective. So when you do the comparison of what we've spent to acquire this asset to where we are now, it's a growth of over $10 billion in value being generated given the exploration success and the growth of this asset.

And then from a return perspective, very attractive returns, IRR of 53% at $3,200 gold and an IRR of close to 70% at $4,500 gold. And the way we looked at IRR on this project was comparing the expansion study where we have the 8 million ounces ramping up to 20,000 tonnes per day, comparing that to the scenario where it's status quo, where we have 8 million ounces of reserves, and we run that out using our existing infrastructure of a 10,000 tonne per day mill -- or sorry, 12,400 tonnes per day. So it's really looking at what's the benefit of bringing that revenue forward from both the open pit and the underground, and you can see the returns are pretty significant.

Looking at the cash flows at a $3,200 gold price environment, we are generating positive free cash flow over the next 2 years as we ramp up this asset and continue on this Island Gold District expansion to 20,000 tonnes per day. But then when we hit that run rate in 2028, we see about $800 million in free cash flow every year for the next 10 years and cumulative free cash flow over that period of $12 billion. And then when we look at the $4,500 scenario, again, a ramp-up in the cash flow in '26 and '27, but we hit that sustained rate of $1.3 billion in after-tax cash flow coming from this asset and cumulative cash flow of $18 billion over the life of the asset.

So like any gold project, the biggest sensitivity is going to be to the gold price. We have all the different scenarios listed here. I'm not going to go through them. I think what's important to note is this is a project that you would build in any gold price environment. It's attractive returns at the $2,800 gold price environment and even more so at a $5,500 gold price scenario. I think the -- and with the payback being less than 2 years.

I think the other thing that's important to note is when we were analyzing this, we first looked at does the expansion of the open pit -- is that paid for by the open pit alone -- sorry, the expansion of the mill, is that paid for by the open pit alone? Because what -- we know that we could expand that underground to 3,000 tonnes per day regardless if we expanded the pit. We wanted to make sure that the pit expansion itself made sense to do, and it obviously did. And then you layer on the value of bringing forward revenues with expanding the underground rates, and you can see that the returns are quite significant.

I think maybe the other point to show here is at a $4,500 gold price scenario, we have a value of $12.2 billion, right? If you look at our market cap right now, we're about USD 16 billion. So more than 75% of our market cap right now is supported by the Island Gold District, and that's based on what we know now, and we know it's continuing to grow.

So what are we trying to turn the Island Gold District into? I think it's pretty clear we're trying to make it one of the largest, lowest cost and longest life assets in Canada. If you look from when we get to that steady run rate in 2028, we'll be producing 530,000 ounces a year. That makes it the third largest operation in Canada. From a cost perspective, it would -- at just over $1,000 per ounce, it would be the third lowest cost asset in Canada. And then from a profitability metric, which is obviously important to us, it would be the second most profitable asset in Canada. And therefore, we're really putting this on par as a top 3 asset in Canada along with Detour and Malartic.

And as we look to expand our Canadian production with the completion of the Island Gold District expansion to 20,000 tonnes per day, that will bring our production in Canada to 700,000 ounces a year. You layer on Lynn Lake completed in the first half of 2029, and we're closer to 900,000 ounces a year. So it's close to 90% of our annualized production is in Canada, which is the jurisdiction that we want to be in, so that firmly cements us as the second largest gold producer in Canada and quickly closing the ground on Agnico. I was hoping for some chuckles there at least.

So I mean, in closing, before we get into the exploration, we're talking about the Island Gold District, the new Island Gold District. We had the base case that we put out in the midyear. We said that was a placeholder. We knew when we acquired Argonaut that there was something bigger here. This is what we see now. We see that we can grow this asset to 530,000 ounces a year. It's an all-in sustaining cost. That's $1,000 an ounce and a big valuation. It's a Tier 1 asset by anyone's definition.

But John made the point earlier, this is base -- this is the waste station. As we start to look at the exploration upside that this district still has, a very under-explored district, we're going to see a lot more success as time comes. And I wouldn't be surprised if, a number of years from now, we're doing another expansion study where we're talking about where this is growing from here.

With that, I will pass it on to Scott to talk about some of that exciting exploration.

Thank you, Greg. Just an overview of what I'll walk through today. I'll start with a high-level exploration strategy. I'll touch on our '26 budget. Then, I'll walk through an update by asset across the company with a focus, obviously, on Island Gold and building off of what we just communicated, fed into that Island expansion study.

Lots on this slide, but bottom line, what's our strategy for exploration at Alamos. We obviously want to maintain and extend our mine life by replacing depletion. It's great to do. We obviously want to grow our mineral inventory as well, to grow mineral reserves and resources, and we want to do that with higher quality ounces. How do we do that? We have a strong team of people leading this and executing this across our sites, all levels of the company, contributing to the success that we've had.

One big differentiator for Alamos and our assets in terms of our exploration strategy, if you look at whether it's Island Gold, you look at Young-Davidson, Mulatos, Lynn Lake, these are all amazing districts that have great deposits that have just been overlooked. They haven't seen the exploration that you've seen in Kirkland Lake, Val-d'Or, Timmins, Red Lake. So the exploration maturity of these districts are decades old, not centuries old for the most -- in most cases, and that's the opportunity. So when we focus on mine exploration, we're expanding on amazing deposits that are well endowed that just haven't seen the exploration investment go into them.

And then we also look at expanding our land packages in the same geology. And just like those deposits haven't been explored, whether it's Island, Young-Davidson, Mulatos, Lynn Lake, these are districts now that we hold that we can step out on in similar geology and have the same opportunities. And that's really what feeds our strategy. And that is a big differentiator.

If you look at what the result of that has been, we've touched on this a few times, adding 8 million ounces of mineral resources over the last 7 years at $31 an ounce. That gives us operational flexibility in terms of organic growth projects. We've replaced over 2x what we've depleted out of our inventory over that period. And that's now feeding into what we're planning for 2026, which is a record exploration budget of $97 million, and I'll cover off what that -- we'll focus on by asset. Notably, 240,000 meters of drilling, that's a big increase from 180,000 meters in 2025.

Looking at the exploration budget by asset. You'll see probably why we're spending so much at Island or we're planning to spend so much at Island in '26, again, a big increase from '25. That's focused on now getting back to mineral resource expansion. That mineral resources that we intend on defining will feed into our future mineral reserves. '25 was a big year of mineral resource-to-reserve conversion with delineation drilling. So now getting back to focusing on exploration while continuing to convert that remaining inferred and measured, indicated mineral base.

At Young-Davidson, we're laser-focused on defining high grade that we can feed into that underground infrastructure to be really a real value add there; Mulatos transitioning to sulfide, where we've got a lot of exciting opportunities, which I'll touch on and continuing to expand on new discoveries and also testing other advanced targets. At Lynn Lake, we talked about the 9,000 tonne a day mill, what opportunities exist on that belt where we can see a potential to bring higher grade into that mine plan sooner. And that's what we're going to be focusing on in 2026. And Qiqavik is a very exciting greenfield project in Quebec, and I'll give you a highlight on that but another 8,000-meter drill program this year, following up on discoveries for 2025.

Here's an example of the results of the efforts of exploration. We've seen this slide before. But I think to point out here, this is 6 million ounces of growth that we've seen here, including what we've mined over the course of the last 8 years since the acquisition. And you can see it's -- these are just kind of checkpoints in time when we have our year-end reserves and resources. But really, this is a consistent, sustained exploration effort that's occurred since Alamos acquired this and even starting before that with Richmont, where we're now sitting at 6.7 million ounces of inventory. You can see '25 was a big focus on getting all of that large mineral resource inventory converted to reserves to feed into the expansion study. We're successful at doing that. Now the focus goes back to let's build out that mineral resource base that will be the future mineral reserves that we can convert.

Stepping through year-by-year, and I'll do this fairly quickly, but just to give you a sense of how the deposit has grown over time. This is what it looked like on a longitudinal we acquired in 2017 from Richmont, about 1.8 million ounces. They had just, at the time, started doing some deeper drilling below the 500-, 600-meter level, hitting high grades. The deposit was changing. It was getting higher, higher grade as they went deeper. And then Alamos took it on and ramped up that deep exploration effort. And you can see the results of that 3 years later. We're now sitting at 3.1 million ounces and really building out that deposit at depth. Now we're at 3 years later, 2022, 5.1 million ounces, continues to grow. We're now defining high-grade reserves in the mid-mine where we had resources. You see that block at 12.5 grams per tonne, midyear this year, continuing to now focus on getting that resource converted to reserve, and you can see the change there and still expanding on mineralization.

And then the current reserve and resource, you can see very successful in converting that high-grade inferred resource into high-grade reserves. And this is where we sit now at 6.7 million ounces. I think the takeaway I want you to have today is this is a starting point for us, and I think there's so much opportunity here for this to grow. And I'll walk through a few slides showing what our exploration focus will be going forward.

So there's a lot on this. This is a kind of 3D view looking at Island, looking to the north. This is every single drill hole, 9,000 drill holes that crossed the Island Gold mineralization plane, and there's 18,000 points on here that define the actual mineralization. Some drill holes hit 2 zones. But the point here is look at the extent of the reserves and resources relative to the drilling.

Really, I mean, the point to take away from this, this is defined by the extent of the drilling, and that's the exploration opportunity here given that we just have not seen the exploration efforts that other systems of this scale have seen over what could be a century. This has only been a couple of decades at Island Gold. So the extent of the orebody is currently defined by the extent of our drilling. It's open to the east, which I'll touch on, open to the west and open at depth, which we're really excited about.

In addition to that main Island zone, as it was drilled over the years, you saw the growth in the deposit. We were hitting intersections in the hanging wall and footwall of the deposit. And at the time, not knowing what they were and they're pretty widely spaced, we called them unknown zones. All those now are developing into hanging wall, footwall zones that now sit in our reserves and resources and feed into the mine plan that you see with the expansion study.

So those are close to existing infrastructure. They don't require a lot of development to get to them, and they add more ounces per vertical meter to the deposits, just adding value with finding those continuity within those zones and getting closer to them with underground platforms to be able to drill them off to effectively put shapes around them and get confident with the geometry and extent.

But I'll highlight, we have 2,000 more of those unknown zones from historic drilling sitting out there that are part of our exploration strategy. As we get platforms established underground, we'll start following up on those 2,000 composites and look to see if we can continue adding ounces in the hanging wall and footwall.

This is stepping back pretty far from the last image I showed you, but I'm going to touch on 3 opportunities. If you look at Island Gold and where we can find more of this high-grade mineralization within the structure, the obvious one is what I'm highlighting here. You can see the drill results at depth. So we -- the bottom of our current reserves and resources is 1,500 meters. Below that, we've done some deeper drilling in the past, and we intersected same style of mineralization. You can see the grades and widths there but haven't followed up on them as we were focusing on the hanging wall and footwall zones and then conversion of resources to reserves. So now we're currently back on as part of our late '25 budget and now going into 2026, following up on those high-grade intersections at depth to try to extend the deposit below 1,500 meters.

The other opportunity to touch on is to the east. We did some deep step-out holes just to test to see what was there because it was a blank space on the canvas, and we hit the structure exactly where we predicted at 1,700 meters vertical. You can see some of the grades there. That's a 500-meter step out, and it's a meaningful step out from the deposit.

And then to the west, I'll touch on that opportunity, which is something that hasn't really been highlighted previously because of the land tenure boundary that existed before. But now that that's removed between the Magino deposit and Island, we have a good opportunity to extend Island to the west.

So getting your eye into this, this is a 3D oblique image kind of looking off to the northeast, if you were moving topography and looking from the sky into the ground, you can see Island in the distance there, dipping to the south. You can see the Magino reserve pit within the Webb Lake stock, which is the host rock of Magino, dipping to the north. And what the opportunity here that I'm going to walk you through is the extension of Island to the west, south of the Webb Lake stock and the fact that it has not been tested, and that's something we'll be working on.

So now in cross-section, looking to the east, you can see a cross-section through the Magino reserve pit. You can see all the drilling that's been done in this area through the center of Magino. And you can see Island sitting off in the distance, and you see the strike and dip of Island outlined by that red line.

So if you actually project that on to the section, this is where you'd expect to see that Island main structure to the west of Island Gold deposit. And it sits south of the Webb Lake stock, dipping to the south. And you can see none of the drilling ever tested that area. It's always focused on defining the Webb Lake stock mineralization, not testing to the south of it. So this is now an opportunity where we have the ground to the south, and we'll be able to set up and test for the potential for Island to extend to the west.

I think Luc showed this area earlier, and I'll kind of reiterate why we're excited about it. That area in the red box, 1.6 million ounces at 15 grams per tonne. You can see that it's open below that. It's really defined by the extent of where we focus our drilling. Some of those deeper exploration holes hitting some pretty amazing grades that look very similar to what we're seeing above. So we're excited to get -- start drilling in this area and work on expanding mineral resources below the 1,500-meter mark.

The other point I'll make from this slide is those 2 intersections off to the right of the image, 9 grams over 2.7 meters and 4 over 5, 50 meters apart. Those were 2 kilometers downhole, 1,700 meters vertical. We hit the projected interpretation of that Island structure, 500 meters to the east. And there's absolutely no drilling you can see beyond the extent of what I'm showing here. So the opportunity for additional ore shoots to the east is something that we're very focused on exploring for as well.

Stepping away from Island and those opportunities that exist that we're focusing on for mine exploration is what else exists nearby that could be potential sources of ore for the expanded mill complex. And one of the opportunities we see is a potential bulk mining underground opportunity. It's called the North Shear. So it's the -- this is north of Island, east of the Magino reserve pit. This was actually discovered before Island Gold was in the '90s. And there's quite a bit of drilling on it, but the ore shoots weren't quite as continuous as what they eventually ended up discovering at Island to the south. So it really hasn't been looked at for a couple of decades until we went back in, in 2024 and did some drilling.

So we're going to continue advancing this and looking at it as is there a potential here for 3 to 4 gram per tonne underground orebody that we can mine for additional mill feed to that 20,000 tonne a day mill that would offset potential open pit ore. So we'll move this forward over the next little while and see if we can define some areas of good grade continuity that can define 3 to 4 gram per tonne underground reserve.

Now looking -- kind of stepping a bit further away but not too far away from Island in that -- the mill complex, Cline and Edwards. And you saw some results come out on this a couple of days ago. And this is 9 kilometers by road, about 7 kilometers away from Island Gold and 2 past producing mines. This was held by a variety of different ownerships basically from the 1920s through to present day. We consolidated this ground as part of our strategy that I was referring to where we picked it up by acquiring a large -- a land package in 2020, and these came with it. So now we've removed land tenure boundaries. We can look at this as a gold system and having a lot of success here. We're quite excited about it.

Zooming in the 2 historic past producers. The Cline mine operated in the '30s, produced 64,000 ounces, and I'll show you why that's important in a second, at just under 7 grams; and then Edwards initially in the '30s and then as recently as the 1990s, producing 140,000 ounces at 11 grams, so both high-grade mines, both very limited by their fractured land tenure boundaries in terms of exploration. And now we've removed all that. We can explore this as one system, and that's exciting.

This is a long section through Cline, Pick. This is an area that we started revisiting in 2023 and looking at the opportunity that existed around, all those high-grade zones that hadn't been mined to the west of the Cline mine, which you can see there in the gray outline, that -- what are the controls on mineralization? What can we do to test them and step out on them?

And we started drilling. And you can see other than having a lot of labels on here, labels are good things because every highlight is labeled. But there's a lot of high grade here, and we're working now on defining the controls. And some of that is starting to pay off. We had ideas in mind, testing a big gap in about 400 meters depth, and we drilled a hole, testing an idea. And sure enough, we've got 180 grams over 3.5 meters in the vein, which actually the core's out the door here if you want to take a look at it after.

And then below that -- and this is wide open. It hasn't been tested below 500 meters. So understanding the controls near surface, we'll work towards an initial resource estimate here. And then we'll start stepping out and testing controls along strike and at depth to try to expand the system. So this is really exciting as a potential opportunity for additional mill feed for that Magino mill.

The last point I'll leave you with here is if you look at that gray area that's outlined, those are the underground stopes that were mined at the Cline mine. So those gray areas on this longitudinal represent the footprint of 63,000 ounces. So you can put a lot of those 63,000 ounce footprints on this longitudinal, and that's what we're excited about.

This is a picture of the core that's outside. It's impressive grades, consistent throughout the vein. You can see 219 grams, 310 all the way through. So it's -- I encourage you to go take a look after the presentation.

Now stepping way back and the last few slides on Island, but let's look at a 9-kilometer long section, connecting Cline, Edwards to the east with Island and Magino and just looking at the extent of all the drilling that's ever occurred along this section. You can see the 450-meter mark that I put in place here gives an idea of the depth. So Island Gold was a completely different deposit from 400 meters to surface, and everything changed below 500 meters what we know of it now.

When you look over at Cline, Edwards, it's only been drilled to 450 meters, and there's -- sorry, 500 meters, and none drilling below that. So the opportunity is if we can understand the controls of Cline and Edwards and then start testing deeper, these systems are typically vertically extensive. What is the opportunity there? We don't know, but we're certainly excited about it.

The other thing that it highlights, I think, if you look at Island Gold, every drill hole that's ever been drilled on it, you can see how much space there is at depth. Even to get down to some, say, 3 kilometers, if you were to double the extent of that, that's another 8 million ounces essentially within that Island Gold footprint. If you were to take the same footprint of an orebody, same grades and be able to extend it down to 3 kilometers, it's another 8 million ounces, plus the opportunity to the east and west along strike. I mean you can see the extent of the drilling, not a lot of it. So we're excited about that as well.

And with the 3-kilometer number in mind that I mentioned, I mean, this isn't a number I'm throwing out there. You look across Ontario and Quebec. We have Campbell-Red Lake operating well below 3 kilometers. La Ronde's another one. I think they have resources now down almost 4 kilometers, mining down just over 3. So these deposits are vertically extensive on the down plunge orientation. Island is the same thing, very strong down plunge control on mineralization. So we're excited about the potential down plunge, and we're excited about the potential along strike to find additional ore shoots.

This is a view of our consolidation of the belt initially with Richmont having a 10,000-hectare property and then over time, acquiring a number of players in the belt to be able to now hold 60,000 hectares of very prospective geology. We're applying a systematic district scale targeting approach to understanding what controls Magino, understanding what controls Island, Cline, Edwards and then taking that out and looking to see if we can define other opportunities within that 60,000 hectare land package that looks similar to those or other styles of mineralization. Really excited about the long-term opportunity there.

Our 2026 budget, just to give you a sense of where we're drilling from underground. This is really leveraging our underground infrastructure, tugging on the extent of the deposit from where we have underground drill platforms, so opportunities to the east to the west. We're excited about that Island West zone up plunge towards Magino, filling in around the down plunge extension of Island West, where we see 18,000 meters. That's a really big focus. There's a lot of opportunity there that we see. And then even closer to surface, where we see the 3,000-meter boxes, that was explored 10 years ago and never really looked back on and as the deposit continue to depth. So we see opportunities in there for potential resources that could come into reserves.

And then our surface program, big program, 48,000 meters, very focused at depth, as I was showing you, with almost 40,000 meters drilling at depth. And then also, I spoke about to the west and then testing that Island Gold structure to the south of Magino, so starting closer to surface and obviously working our way down. So good opportunity for ramp access ore in the future from those near-surface targets as we hoist 3,000 tonnes a day up the shaft, also focusing on defining potential ramp access reserves that we could perhaps supplement into the production profile up the ramp.

Jumping to Mulatos. This is a very exciting stage in Mulatos' history from an exploration and operations perspective. This is operated as an oxide heap leach operation for the last 20 years. We're now transitioning to sulfide with the construction of the PDA underground project and the 2,000 tonne a day sulfide mill. Our exploration team has -- with a very strong understanding of the geology of this region, has gone out and looked at the other opportunities that could exist, and those are sulfide opportunities. So the historic sulfide intersections across the district that previous explorers and Alamos have intersected but with a focus at the time on oxide, they're kind of just put on the back burner until this point in time. We're now going in with our reinterpreted geology, pulling them off the shelf and having a lot of success.

PDA, this is some of the highlights for 2025. Really, 2025 focused on drilling and drilling in areas in the wire frame where we felt we could extend mineralization, and that was very successful. At PDA, we're now sitting at 1 million ounces, and that's the basis of our PDA underground development project. There's great opportunity here for further sulfide mineralization. You can see from -- basically off from PDA to PDA extension, that's a couple of kilometers of strike where we know from the limited drilling that's been done, there's sulfide that exists. So that's future exploration potential, which we'll be able to more effectively target from underground once we have the underground drill platforms in place instead of drilling from surface.

Cerro Pelon, this was an oxide -- a small oxide mine that we had operated from 2019 to 2021. Revisited all sulfide intersections below that pit, and sure enough, we're having a lot of success there, came up with 100,000 ounce resource last year, stepping out from that this year. And you can see the results of that, I mean, some pretty good grades, pretty good widths. And I will note as well that as you step away from Cerro Pelon, 2 kilometers to the north, we're drilling the same level of stratigraphy and hitting sulfide mineralization there as well. So I think it highlights the potential of the district but also the potential of the Cerro Pelon area in terms of that system. And that -- a little bit of oxide that was mined may have been the tip of an iceberg of a larger epithermal system. The cross-section, just giving a sense of what the geometry of the zones look like at Cerro Pelon.

This is an exciting new discovery at Mulatos that we made in 2025. The team reinterpreted the geology in this area. Halcon was an area that had been explored for at least 3 decades. This area, in particular, hadn't seen any historic exploration. But going back in here and drilling below unmineralized rock, we intersected very high grades, and you can see the grades there.

So the wide, moderate grade sulfide-hosted gold mineralization with high grades within it. So this is early days, but exciting, this has got a good footprint. It's 500 meters in strike, open in all directions and something we'll aggressively move forward in 2025 -- 2026, sorry.

Jumping to Young-Davidson. You can see on here, the red is the mineralization wire frame. That's 95% of the reserves and resources in the syenite. It's open at depth, and we are confident we can continue expanding at depth, but we have a 13-year mine life. So our focus is improving what we can bring into that underground infrastructure in terms of grade. And there's a good opportunity here that we're already recognizing for potential higher-grade ore to come into the underground, and that's in the hanging wall.

So in 2024, we discovered a zone sitting to the south of the conglomerate -- south of the syenite in conglomerates. So a brand-new style of mineralization for Young-Davidson. In 2025, we pushed the hanging wall drift out to be able to better drill it and I have a slide showing the results of that.

As you step to the east, cross section B, I'll show the south syenite. This sits 300 meters south of the Northgate shaft in an area way off in the hanging wall that just hadn't been drilled. So we were doing some true exploration holes out there earlier this year from the mid and lower mine and sure enough, hit another syenite with some pretty good grades. Still early days there, but we're actively drilling and trying to understand what the opportunity could be there. But both of these are close to existing infrastructure.

This is a cross-section through that conglomerate zone. You can see the 920 hanging wall drift. It's a 450-meter drift we pushed out to the south. The drill holes to drill back and confirmatory of what we're drilling from the footwall, working now on an interpretation to define the geometry continuity, but it's open up and down dip and plunges off -- the high grades associated with the folding conglomerate that plunges off to the west, and that's what we'll be focusing on as we step down lower in the mine.

And then this is the south syenite target I touched on off to the east. And again, you can see the drilling we did here in the dark lines in 2025. Again, pretty good grades and off to the south, not much drilling beyond the extent of that. So we'll continue following this zone up and down dip, but also trying to understand what's controlling some of those really high grades you see there that are open along strike and up and down plunge.

We talked about the opportunity for additional mill feed at Young-Davidson. We talked about Golden Arrow, which is about 90 kilometers away. We see good potential for open pit sources of ore nearby Young-Davidson. And that's something we've been working on and are currently drilling on right now, Otisse Northeast. You can see where Young-Davidson is in the image. You can drive easily to Otisse Northeast. It's about 3 kilometers away.

This was discovered in 1998, drilled to 2003, then the focus shifted to Young-Davidson and nobody ever went back to Otisse Northeast until recently. And certainly, good open pit grades there that have potential for additional sources of ore for that mill. And that's what we're focused on. You can see the grades. We've drilled it from surface down to 120 meters, open at depth and open along strike. And right now, we're working on filling in between that historic drilling to define an initial resource that we can start looking at from a potential open pit reserve perspective.

Lynn Lake, this is again a district-scale opportunity that's been consolidated. The 2 main deposits that we're building right now are Gordon and MacLellan in the North Belt. 2.3 million ounces of reserves. They're 50 kilometers apart along a major crystal structure. I guarantee you that's not only 2.3 million ounces that exist in that Northern belt, and that's exploration upside regionally.

To the south, it's another major structure, the Johnson shear zone. Currently, we have 1 million ounces of reserves there between 2 satellite deposits, Burnt Timber and Linkwood, and we see good opportunities to continue expanding that as well. But at Lynn Lake, as we talked about, we have a long mine life, 25-year mine life and 9,000 tonnes a day. It's what are the opportunities that we can bring higher grade into that mine plan sooner. And that's what we're focused on in '26. And those opportunities exist below the Gordon pit and below the MacLellan pit.

Touching on the drilling we did in 2025 at Burnt Timber and Linkwood, stepping out on the reserve pits that were defined in 2024. We were successful to the west. We're successful below the pits and highlights the potential opportunity, I think, in the area. Also, interestingly, the East Foster target to the south. We don't know what exactly the extent of that is yet, but again, getting some pretty good grades there, south of the Johnson shear zone that were an area that hadn't really been explored.

I think this is one of the more exciting opportunities for high grade at Lynn Lake that can come into a mine plan sooner. This is the Gordon deposit. So this is an iron information hosted deposit. You can see the depth scale there. The black outline is our reserve pit and then the 2 darker areas are 2 historic pits that were mined there. So between our reserves and what was mined historically within the first 200 meters, there's 900,000 ounces in that iron information.

And you can see that iron information is open at depth. Some of the deeper drilling was intersecting iron information-hosted gold at depth. And that's what we're focused on now is stepping out on that historic drilling and seeing if we can start defining opportunities for underground mining below that Gordon pit. And why that is relevant is because the Gordon pit is mined out in the first 5 years of the Lynn Lake life of mine right currently. And if we can supplement that with high-grade underground mill feed, even 1,000 tonnes a day that could have a big impact to the overall project.

Same opportunity exists at MacLellan. MacLellan was operated as an underground mine historically. Those grades and widths speak for themselves that I'm highlighting below the reserve pit. And again, this is open for exploration at depth. But however, we're working right now on infilling between these historic drill intersections to come up with an initial resource below the MacLellan pit. And this could come in after the MacLellan pits mined out by year 10 of the project.

And I'll end on Qiqavik, which is exciting long-term greenfields project. You talk about areas in Canada that are underexplored, but have phenomenal geologic potential. This is one of them. It's a greenstone belt. Nobody ever looked for gold here until 2018, when Orford Mining was up doing prospecting and finding a tremendous amount of boulders at surface with gold in them. And it's a good indication that the source was somewhere proximal. We acquired this project in 2024. We got our geologists and team up there at that field season, didn't do any drilling, but just focused on figuring out where the targets were, where we wanted to drill in 2025, which led into the 2025 program.

I'll highlight the scale here, 50 kilometers. It's in Nunavik in Northern Quebec, so it's just west of the Raglan Mine. So it's remote, but I certainly think there's potential here for a significant discovery. Out of those 5 target areas that I highlighted, we hit gold at all of them on that map, which again speaks to the fact if you go into a greenfield project, building off the field work that's happened to come up with results like that across the various target areas, I think, speaks to the endowment of the belt. But what I really like to see here is off of a first program in the southern part of this target area, 55 grams over 2.5 meters in a quartz vein in a shear zone. So it's got the grades and it's got the gram meters you want to see. What that means, we're going to go back next year to start stepping out on it. We're going to follow up on some of our other intersections that we had in 2025 and start testing targets elsewhere in the property that are in the pipeline that are high priority.

And the last slide, this is an example of what those boulders look like. In this boulder in particular, you can see the size of it relative to that hammer. It had an unbelievable amount of visible gold in it, and it was very similar to hundreds of other boulders that exist in the 700-meter long, 50-meter wide boulder dispersal train and has a lot of visible gold that lead back to a major crystal structure that's under a river valley. We did some drilling there and hit similar looking quartz veins with arsenopyrite invisible gold. They were narrower.

You can see some of the grades, 11 grams over 1.2 meters, but not the scale of that boulder. But what that tells me is the similar characteristics of what we intersected in that drill hole to those boulders is that there's -- we're in the system where we weren't in the highest grade part of the system. There's a significant source there to have boulders of that size over that dispersal distance. So we're going to go back there next year and continue testing that the deformation corridor and hopefully find the high-grade sources of those large boulders.

And to end, you can see what this is showing is over time, we've increased our exploration spend. And every year, that was based on the success of the previous year and building off of all those results. And as we've done that, we've not only replaced our reserves, we've grown our reserves. We've grown them 65%, and we've grown the quality. The grade has gone up as well. And then the focus for us is continuing to replenish our mineral reserve -- resource inventory as we convert those resources to reserves. And I think the $97 million budget for 2026 is going to be an exciting year to continue on that trajectory.

Thank you. And with that, I'll hand it over to John for some closing remarks.

We certainly had no shortage of slides to take in. I know there's like 130-odd slides in that deck, and I appreciate everyone's time and attention this morning. With respect to the way we define our company, I think we've provided sort of ample evidence this morning that we certainly have the bit between our teeth where it comes to continuing to build this company. We're putting the dollars where they count. We're putting them into exploration. We're putting them into development, and that's going to underpin this definition of a company with a leading growth profile. It's not a question of just sustaining what we've created so far. It's proposition for growing what we've established. And I think we've got a fantastic team. It's -- I think the quality of the information that we have provided today more or less speaks for itself.

I think we have some exciting years ahead. And I'm just as excited about what I'm doing here at Alamos today as I was 20-odd years ago when I was trying to get the company off the ground. I would say that we've never had a better opportunity in terms of the way we're growing this company. It's -- we've largely derisked the story that we presented today and from the point of view of permitting, from the point of view of the infrastructure we've already established. We're growing on what we already know.

Much of the exciting exploration potential, for example, that really -- that exploration story, I think, is so key to what we're doing and who we are. And the way it will continue to underpin our growth, I think, is just a really exciting part of what we do and who we are. So we're growing. We're growing production. We're declining costs. That's going to grow our ability to generate free cash flow. And that's what it's all about. And I know investors are looking forward to returns on capital.

We're going to definitely get there. But right now, the way we're going to grow our value, which essentially will underpin a stronger stock price. I think that's equally important. I mean a lot of investors that own Alamo stock own us for the growth. I think we're one of those few stories that answer that side of investor focus. But you can also own it with looking to the point where the capital spend starts to come down and the free cash flow generation continues to climb. And then you're absolutely going to see an increase in dividends and share buybacks off the back of it.

So I'll just wind up there. I think we're going to have another Q&A to address this next portion. So I'll turn it over to Scott Parsons to take charge of that. Thank you very much.

Thank you, John. We'll invite the rest of the management team up on to the stage and open the floor up to Q&A. And for those of you online, please submit any questions you have through the Q&A function.

The 2 million ounces that you added in the last 6 months at Island District, can you separate that out? How much of it is from exploration drilling versus economies of scale and maybe gold price assumptions? And if it was more resource conversion, can you talk to like the drill cutoff dates?

Drill, sorry?

The drilling cutoff dates for the June one versus the December one?

Yes, I'll address that. So with respect to Magino, we added about 0.9 million ounces to reserves. About $200,000 of that is attributable to the gold price. So you may be aware, we've gone from our reserve gold price of $1,600 last year to $1,800 this year. So about 200,000 of that 0.9 million is from gold price. The remainder is from the drilling program, conversion of inferred to M&I and just probably a very minor amount that's attributable to the expansion itself or the economies of scale of the expansion itself. You probably saw from the unit operating costs, there wasn't a tremendous difference in unit operating costs. So it's mostly gold price and drilling.

Over at Island, there was no real impact from the gold price. The nature of the ore body there is just pretty hard contacts between -- relatively hard contacts between ore and waste. So a reduction in the cutoff grade doesn't get you much more. That was all basically drilling, drilling out the inferred that we had and then also the conversion of a significant portion of M&I into proven and probable as a result of putting a development plan around it.

The only thing I'll add is, if you look at our 2022 study, a considerable amount of what underpins that our assumptions was actually inferred resources, which you had to use. I mean we've got a high-grade underground mine and trying to define reserves there. It's time consuming and it's expensive. And our resource to reserve conversion rate was so high over such a long period of time, we had a high degree of confidence in doing that.

But the OSC looked at that and said, no, we don't allow that, no exceptions. We don't care how solid your resource to reserve conversion rate is. You can only use reserves in your economic assumptions. So we had to allocate a big portion of our 2025 exploration budget to converting resource to reserve at Island Underground. And we did that, and we were very successful. But that's the reason why we hit that part of the drill program so hard.

Yes. With respect to drill cutoff dates, so the prior reserve that we had in June of last year, the drill cutoff date for that, the majority of it was actually previous October. And then this year's reserve update, the reserve -- the drill cutoff date would have been October as well.

Okay. Lots of successful drilling. Second question, if I can, is maybe a hypothetical one. Just imagining all of the growth that's happened at Island Underground. Hypothetically, if the Argonaut deal was never done and they were separate, Island had undergone the same growth trajectory that it has done. Where do you think that the all-in sustaining cost for a stand-alone Underground operation would be today if that was the scenario?

Yes. I mean when we model out what the costs are, we have a pretty good understanding of what the open pit cost us versus the underground. So I mean, on a blended basis, it's $1,025 per ounce. The open pit ounces probably cost us about $1,700 -- between $1,650 and $1,700 all-in sustaining cost life of mine. So the underground is somewhere in and around $750, AISC.

Pretty special asset.

Steve Green, TD Securities. As you're building out the second line, is there any impact on the Magino mill? And when you're completing it, is there any kind of downtime to tie it in?

No. I mean they're pretty well independent, Steve. I mean the construction we're doing right now with the main mill complex is all separate from what we're doing. So the only tie-in that will really happen at the end would be the gyratory crusher when we need to do the final tie-ins for the conveyor systems to be able to have one stream going into the existing mill and the new blended stream with the Island Underground ore with the open pit feed feeding into the new mill. But that's very short order, like the gyratory crusher installation, everything can happen independent of that. It will be just the final tie-ins with the conveyor. So it's -- from a point of view of interruption, it's pretty minimal.

As opposed to weeks or months.

Yes, very short.

And that's in 2028.

Correct. Correct.

I got a question, Don DeMarco, National Bank. My question has to do with the unit costs. They're summarized on Page 86. On this slide, it shows some of the reasons why the costs are declining relative to 2026. I'm sure it's not an exhaustive list, but it talks about connecting to grid power, the expansion up to 20,000 tonnes per year and so on. But I'm looking at the open pit mining unit costs. In '26, you're CAD 681 per tonne. But then over the life of the mine expansion, they're CAD 485. Can you explain why -- what was it that led to the reduction in the open pit mining cost? Similar reduction in underground mining, too. Maybe comment on both of those, your confidence in those.

Yes, I'll do the open pit first. We're in 2026, we're somewhere over $6 a tonne. We would be going to the life of mine to the high $4 a tonne. The big thing at the open pit in 2026, as I mentioned earlier, is we're operating under a hybrid maintenance scheme right now with vendor maintenance doing a significant amount of the maintenance on our mobile fleet of equipment in the open pit, which is much more expensive than having an owner team doing it. And the reason why we had to go down that route is we didn't have a truck shop as a center for our mine maintenance team. So we'll have that in place midyear. We're ramping up on mechanics and electricians through the year to be able to fully take -- by the end of 2026 to be able to fully take on that function. That's the biggest things there.

And then as well as the economies of scale of increasing from a nominal of 60,000 tonnes a day up to upwards of 100,000 tonnes a day contributes to that reduction in open pit mining costs. And over at the Underground, it's all to do with the shaft going where we are now to where we'll be at the end of this year and going further on. It's increasing the tonnes per day. It's increasing the time at the face and the productivity of the employees, the amount of equipment we can run and reducing the amount of haulage that we're doing to surface, which is a very significant cost currently. And going forward, we'll see further economies of scale going to 3,000 tonnes a day. There's other reductions in there, later in -- actually increases later in the life as we get a bit deeper. We're capitalizing less of our development, so we get more operating development hitting the mining cost per tonne.

Okay. That's really helpful. And specifically on the open pit mining unit cost, what assumptions did you use for the cost of fuel?

I think we're using $1 a gallon.

A liter.

Sorry, a liter.

Francesco Costanzo from Scotiabank. I just have a question on the expansion CapEx. So I think for the mill expansion itself, you're budgeting $199 million. I think under Argonaut ownership, I mean, the Magino project, I think, was a bit notorious for CapEx blowouts and overruns, ultimately ending up somewhere in the neighborhood of $1 billion to build the whole thing.

What's your level of confidence that you can build effectively the same plant for $199 million? I appreciate that there's minimal incremental equipment, no pre-strip. You're not duplicating the secondary crushers and conveyance system earthworks are done. But regardless, can you just describe your level of confidence in achieving that CapEx target of $199 million?

Yes, I'd say very high, to be honest with you. I mean we've -- as we kind of described there, we've completed a lot of the main areas that have potential cost overruns when you look at those capital projects with regards to earthworks and foundation work. And you can see from the photos, the majority of that has been completed certainly with the main mill building complex that's been already founded as far as the foundation work, and we're actually erecting the steel now as we speak. So then it's just a question of starting to service the inside of the building with the equipment.

The leach tanks also follow that as well. We've got all of the foundation work done for the eventual 8 tanks. We had 6 currently with the photo that we showed with regards to what's been erected at this point. But we've got a real good detail on the vendor list equipment pricing and everything else that goes into that estimate that we've put forward, because this is something that we've been working on for quite a while. I mean you've got to step back for a minute and remember that we were actually doing an Island Gold mill expansion prior to the Argonaut acquisition, right? So we were already dealing with vendors, understanding pricing and everything else that was going to be required for the input of a mill. This is a larger complex that we're looking to build now from what we were doing. But we were well embarked with regards to pricing for equipment and components, both on the mechanical, electrical, fixed plant equipment as well as the construction labor and units of work with regards to having to do that build.

Yes. And just it's an important distinction that that's $200 million going forward starting January 1. What Luc has just been talking to is we've been working on this mill expansion for -- throughout 2025. So all the engineering has been done, or majority of the engineering has been done. The mill building, the structural steel is up. So we've spent money during 2025. So you can't look at the whole expansion as $200 million. We've incurred some capital in 2025 as well.

Just the other point on the Argonaut experience was that the bulk of their overruns were actually in dirt work. It was the tailings dam and the water storage dams that are on site that they were required to put in as a result of the EIA. That was where the bulk of their overspend came. They had actually had a fixed price contract on their mill. That wasn't where the overage was.

Great. My one more follow-up here, specifically on the open pit equipment, adding trucks and a shovel. Is that going to be identical equipment to what's already at site? Or is it going to be a little bit larger?

That's a good question. That's what we priced in there and the units that we put in there are identical equipment to what we're running now. We've got a number of years. I think there's probably 3, almost 4 years before we need to actually start buying that equipment. We'll make some -- do some studies in the meantime to determine if it's appropriate to upsize that equipment when we actually buy it.

One for me. Brian Quast, BMO Capital Markets. Maybe building a bit off of Bryce's questions there. You've set your underground tonnage at 3,000 tonnes a day. What are some of those key constraints? Obviously, that drives a lot of the production profile and economics as more tonnes from Underground seems to be better, and there seems to be plenty of exploration upside to extend that Underground. What were key constraints to get to the 3,000 tonnes a day?

Well, the key constraints there would be, one is the development. We've got to accelerate our development meters per day than where we have been, and we built that into our expansion study to be able to obviously procure the equipment, have the equipment to be able to deliver on that as well as the labor.

The other big aspect of it is the production shaft. Getting that production shaft online at the end of the year is going to be really the game changer. The efficiency of being able to move ore and waste to the infrastructure to be able to get it out of the mine in order to be able to support the development rates as well as the production rates are going to be the two -- that's going to be the real key to us. So it will simplify the aspect of what we do from a material handling point of view today, immensely, with the amount of trucks and everything having to be trucked to surface as opposed to moving it through the shaft. So there'll be a significant productivity improvement just on the basis of the upgrade of the infrastructure that we'll have in place.

So if we were to think of this as a snapshot in time, we would probably have to think about either another shaft or some other egress method to raise that tonnage above where it is today?

Yes. Longer term, I mean, the infrastructure that we've put in place now with the hoisting plant that we'll have on surface will be able to take us to a depth of 2 kilometers, certainly. But longer term, bigger vision, certainly, you're potentially, yes, looking at a second shaft mine, or a wins depending on how the exploration process plays out over the longer term.

One of the aspects of the exploration will be to define reserves up plunge to the west. That wouldn't go to the shaft. That would be ore that would come up through the ramp system. That could be incremental to the 3,000 tonnes per day.

We have a couple of questions online. Just back to the Magino open pit. Lower strip ratio through 2030 to 2020 -- or 2035. Did the expansion plan allow you to rework the open pit schedule? And what were the considerations that went into that?

Well, the expansion plan includes an extra push back into that. So we had to redo the schedule to cater for that and the additional reserves. I mean the same -- I mean we use the same kind of philosophy in developing the mine plan for the expansion as in the previous case and our pushback with and our productivity assumptions and our pushback vertical advance per month, all those same kind of things were used, albeit with additional units added to the fleet to achieve the tonnage.

We -- in the previous plan, we were developing a very substantial low-grade stockpile. In the new plan for the expansion, the size of that stockpile is a little bit smaller, obviously, because we're putting more through the mill.

All right. We have additional questions online. Greg, this could be one for you. Can you provide a bit of history on the hedges inherited from Argonaut Gold, the size of the hedges, how much we've retired to date? And how much is remaining and any plans for the remaining 100,000 ounces?

Yes. So when we completed the deal in July of 2024, the hedge book at that point, like the day prior to close was 380,000 -- sorry, 330,000 ounces of hedges, all at about that [ $1,821 ] mark. When we closed the deal, the first day, we basically took out a prepayment to pay off the hedges. So we bought out the first 150,000 ounces of hedges, which were the 6 months of 2024, and the 12 months of 2025.

As we move through this year, knowing that the hedges were still in place for 2026. As I said, we bought out the hedges for the first 6 months of 2026. So we haven't delivered 1 ounce into that hedge book yet. And there's another 100,000 ounces to go. So big picture, there was 330,000 ounces. We retired 230,000 ounces of those without delivering into an ounce of that hedge book. We have 100,000 ounces to go, which is 50,000 ounces in the second half of '26, and 50,000 ounces in the first half of '27. And we -- just as we did with the hedges that we took out in December, we'll look to be opportunistic when it becomes available.

Thank you. And sticking with you, Greg, one more question. With all the talk of tariffs, do we foresee any challenges in terms of operating our business?

No, we don't. I mean, there's been talk about tariffs for quite a while now since the presidential change, and we haven't seen that significant impact on our business. It's changed, and Luc can touch on this and potentially John Fitzgerald at the back. It's changed some of the approaches that we have to sourcing some of the materials for our construction projects, but it hasn't changed the cost structure.

Yes. And just to add to that, maybe just on the equipment side of things with -- if you look at Lynn Lake, for example, with the fleet of equipment that we're looking to procure for that operation, I mean, that's -- with the supplier that we're dealing with, tariffs are not something that's part of that agreement, or an issue with regards to sourcing the fleet of equipment that we're looking to operate Lynn Lake with and similar equipment suppliers that we use with our other operations underground as well.

Maybe one question on the revised CapEx for Lynn Lake that you have shown on Slide 45. So you have seen $120 million increase in CapEx just from inflation over the last 3 years. Given that you have 3 more years of construction, how should we look at the potential for increase in CapEx given that you have $871 million of spending left?

Yes. No, it's a fair point. This is a point in time. There is risk of further inflation. The one thing I'll say is that we have upped or increased our contingency to potentially capture some of that, but there is inflationary risk moving forward on this capital.

The reason why we leave it that way is everybody will have a different assumption as to what that will be, and you can build that into your own models.

Maybe one bigger picture question. So obviously, you're having tremendous success in terms of exploration results near -- in the near mine targets that is Cline, Pick and Edwards at Island Gold. Like look -- how do you look -- I mean, bigger picture, how do you look at those targets? I mean, like eventually, do you see it just to supplement ore for the Magino mill? Or do you see it developing like a potential for an expansion at Island Gold down the line?

In terms of the targets, I mean, we're still fairly early days in Cline and Edwards having put together the land package, understanding what's controlling the high grade there because there is quite a bit of high grade, and we need to understand what's controlling it. We'll need to define, I think, the extent of the system and what that initial mineral resource will be, what the opportunity could be if we continue stepping out to understand what impact it could have overall for the district for us.

And at the point that we define higher-grade sources, which Scott and his team are focused on, we'll run the economics at that point. Does it make sense to displace lower-grade Magino material or does it make sense to expand the mill further when we have the -- when we understand what's out there from a regional perspective, we'll run the numbers at that point. Every decision we're going to make is always going to be the best economic decision.

It's nice to have -- we have complete flexibility on that. And I see great opportunity out there. We presented it as exploration upside. In terms of immediately what might impact that displacement of Magino ore, it's conversion of another 1.5 million to 2 million ounces of near-mine resources we're having nearly -- it's over a 90% conversion rate. It's inevitable that they're going to come in. The ore body, it is going to grow. There's absolutely no doubt about that. And ultimately, it's likely that as it grows to the west, as I mentioned earlier, it's likely we're going to be bringing some of that high-grade material up through the ramp system, and that inevitably will displace some of the lower-grade material coming out of the pit.

I think that's it for questions. I'd like to thank you, everybody, for joining today. For those of you online, we'll talk to you soon. And for those of you here in person, please do join us for lunch. Thank you.

Good morning, ladies and gentlemen. I would now like to turn the meeting over to Scott Parsons, Alamos' Senior Vice President of Corporate Development and Investor Relations. Please go ahead, sir.

Thank you, operator, and thanks to everybody for attending Alamos' Third Quarter 2025 Conference Call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer; Greg Fisher, Chief Financial Officer; and Luc Guimond, Chief Operating Officer. We will be referring to a presentation during the conference call that is available through the webcast and on our website.

I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release and MD&A as well as the risk factors set out in our annual information form. Technical information in this presentation has been reviewed and approved by Chris Bostwick, our Senior VP, Technical Services and a qualified person. Also please bear in mind that all of the dollar amounts mentioned in this conference call are in U.S. dollars unless otherwise noted.

Now I'll turn it over to John to provide you with an overview.

Thank Scott. Starting with Slide 3. Before we go into the report for the quarter, I want to acknowledge this has been far from a typical production year for Alamos. We experienced production downtime and lower production in the first half of the year, which we are on pace to make up in the second half. Unfortunately, in recent weeks, downtime at the Magino mill and the seismic event at Island Gold will not give us the time to do so. As a result of these recent events, we've taken the prudent course and lowered guidance for the year by 6% from the midpoint of our original guidance. We have a reputation for taking a conservative approach to guiding the market, and we pride ourselves on providing consistently accurate guidance. Suffice to say, we will continue to make operational improvements to raise the accuracy of our forecasting, recognizing that occasionally, mining can be unpredictable.

There remains to be said that while these recent events have a short-term impact, they in no way take away from the quality of our mines and what is without question, 1 of the strongest outlooks in the gold sector. We are already seeing significant improvements this month with better grades at Young-Davidson and throughput from the mines. This will ultimately support lower costs than an 18% production increase, leading to record production in the fourth quarter.

Production in the third quarter totaled 141,700 ounces, a 3% increase from the second quarter, driven by stronger performances from Mulatos and Island Gold District. This was slightly below the low end of quarterly guidance, reflecting 1 week of an unplanned downtime within the Magino mill during the last week of September. Reflecting lower costs from the Mulatos district, total cash costs decreased 9% from the second quarter, and all-in sustaining costs decreased 7%, both consistent with guidance. With higher production, a record gold price and lower costs, we delivered record revenue, cash flow from operations and record free cash flow of $130 million in the quarter. We expect a significant improvement in both our fourth quarter production and costs to drive new financial records at critical prices.

Turning to Slide 4. Through the majority of the third quarter, we were on track to achieve our full year production guidance. Given the unplanned downtime of the Magino mill in the last week of September and the seismic event at our Island Gold operation in October, we're decreasing our 2025 production guidance to between 560,000 and 580,000 ounces. This represents a 6% decrease from our original guidance released in January. Late in September, a capacitor failure within the Magino mill impacted the electrical drive for the SAG and ball mills. This led to 1 week of downtime and lower third quarter production than originally expected. The mill was restarted by the end of September and continues to demonstrate improvement in October. Due to the unplanned downtime, Island Gold's mill was restarted in late September to focus on processing higher grade underground ore. Given the record gold price environment, we will continue running both mills through the remainder of the year with the increased combined milling capacity supporting additional gold production, higher cash flow and increased profitability. In mid-October, the Island Gold mine experienced a seismic event, which is a normal part of operating an underground mine, no personnel or equipment were impacted and mining rates are expected to continue within budgeted levels. However, it does delayed access to higher grades within one of our mining fronts. As a result, mine grades are expected to be lower than budgeted for the fourth quarter. Even with the lower-than-planned underground grades in fourth quarter, we expect a substantial increase in production from Island Gold District driven by higher combined milling rates. We expect similar increases at Young-Davidson driven by higher mining rates and grades and at Mulatos with the recovery of higher grade ore stacked over the previous 2 quarters. All 3 operations are expected to contribute to an 18% increase in the fourth quarter production at lower cost, driving a further increase in free cash flow at current gold prices.

Turning to Slide 5. Short-term challenges we experienced this year have no impact on our strong long-term outlook, which remains firmly intact. The Phase 3+ expansion at Island Gold will be a key driver of our growing production and declining costs over the next several years. The expansion is progressing well and with expected completion in the second half of 2026. The Lynn Lake project is another important part of our organic growth. Forest fires in Northern Manitoba limited our progress on this project this year, but we expect to ramp construction entities in the spring of next year, and initial production is now expected in 2029. This puts us on track to reach 900,000 ounces of lower-cost annual production by the end of this decade. The Island Gold District expansion study currently underway is expected to outline further upside with the potential to increase consolidated production to 1 million ounces per year within a similar time frame. We generated year-to-date free cash flow of nearly $200 million in 2025 and expect to generate growing free cash flow as we execute on this growth. Following the start-up of Lynn Lake, we expect to generate more than $1 billion of free cash flow annually at current gold prices.

Now looking at Slide 6. In addition to delivering on our organic growth plans, we continue to surface value from our portfolio of assets. This included announcing the sale of our Turkish development project for a total cash consideration of $470 million. The transaction closed earlier this week and marks a positive outcome, realizing significant value for assets we had written off in 2021. We received $160 million on closing and the remainder, $310 million will be received over the next 2 years.

With our strong free cash flow during the third quarter and initial proceeds from the sale of our Turkish assets, our current cash balance has increased to over $600 million. We'll be using the proceeds from the transaction and growing cash position reduced our small debt position, and we expect to be active on our share buyback. We were also recognized for the second consecutive year as a TSX30 winner by the Toronto Stock Exchange for our strong share price performance of 310% over the trailing 3 years. The award is a testament to our long-term track record of outperformance, something we expect to continue to build upon as we deliver on our upcoming catalysts and organic growth times.

I'll now turn the call over to our CFO, Greg Fisher, to review our financial performance.

Thank you, John. On to Slide 7, we sold approximately 136,500 ounces of gold in the third quarter at an average realized price of $3,359 per ounce for record revenues of $462 million. The average realized price was below the London PM Fix for the quarter, primarily due to the delivery of over 12,300 ounces into the gold prepaid facility at a fixed price of $2,524 per ounce. We will deliver the same number of ounces in the fourth quarter, after which the prepay obligation will be completed. As a reminder, the prepaid facility was executed in July 2024 with the proceeds utilized to retire 180,000 ounces of forward sale contracts inherited from Argonaut Gold across 2024 and 2025 with an average price of $1,840 per ounce. Based on an average gold price of almost $3,000 per ounce since July 2024, the company increased cash flow by approximately $40 million over that period. given the decision to buy out the 180,000 ounces of hedges 15 months ago through the execution of that prepaid facility.

Quarter-over-quarter, total cash costs and all-in sustaining costs decreased 9% and 7%, respectively, and both were in line with quarterly guidance. We expect total cash costs and all-in sustaining costs to decrease a further 5% in the fourth quarter, driven by higher production across all operations. We remain on track to achieve full year cost guidance, which was revised earlier in the year. We are now reporting total cash costs and all-in sustaining costs, excluding the impact of mark-to-market adjustments for the revaluation of previously issued share-based instruments. This methodology provides a better representation of our total costs associated with producing an ounce of gold and eliminates volatility associated with mark-to-market adjustments. These mark-to-market adjustments to long-term instruments impact both total cash costs and all-in sustaining costs, given the company allocates these costs to mining and processing costs and share-based compensation expense on the income statement.

Our reported net earnings were $276 million in the third quarter or $0.66 per share. This included $193 million reversal of a previously recognized impairment related to the Turkish projects as well as unrealized losses on hedge derivatives, foreign exchange impacts and other adjustments totaling $72 million. Excluding these items, adjusted net earnings were $156 million or $0.37 per share.

Operating cash flow before changes in noncash working capital was a record $275 million in the third quarter or $0.65 per share. Capital spending totaled $135 million and included $35 million of sustaining capital, $83 million of growth capital and $17 million of capitalized exploration. Our consolidated 2025 capital guidance has been updated to between $539 million and $599 million, a 10% decrease from previous guidance, primarily reflecting lower spending at Lynn Lake with the ramp of construction activities shifting to 2026.

Free cash flow for the quarter totaled a record $130 million, a 54% increase from the second quarter, driven by record contributions from all 3 operations. This includes $73 million from the Mulatos District, $72 million from the Island Gold District and $62 million from Young-Davidson. Our cash balance grew 34% from the end of the second quarter to $463 million. Subsequent to quarter end, we received initial cash payments totaling $163 million from the sale of both our noncore Turkish development projects and the Quartz Mountain project, bringing our total cash position to over $600 million currently. Combined with the undrawn balance on the credit facility, our total liquidity is over $1.1 billion. We expect growing production and declining costs to drive increasing free cash flow over the next several years while continuing to fund our organic growth plans. With a growing cash position, we expect to reduce our $250 million of debt currently outstanding while also evaluating opportunities to buy back shares and eliminate a portion of the remaining legacy Argonaut hedges.

I will now turn the call over to our COO, Luc Guimond, to provide an overview of our operations. Luc?

Thank you, Greg. Over to Slide 8. Third quarter production from the Island Gold District totaled 66,800 ounces, a 4% increase from the previous quarter. A more substantial increase is expected in the fourth quarter, driven by an increase in combined milling rates from the Island Gold and Magino mills. Magino's milling rates continued to increase through the third quarter until the last week of September, when a capacitor failure within the electrical house impacted the electrical drive for the SAG and ball mills. This resulted in 1 week of unplanned downtime. The capacitor and electrical drive module were replaced by the end of the quarter, following which milling rates have increased to average a new high in October. Quarter-over-quarter, underground mining rate increased 7% to 1,325 tonnes per day. Open pit mining rates increased 4% to 59,000 tonnes per day, including a 28% increase in ore mined to 17,600 tonnes per day. Grades mined from underground and the open pit were consistent with annual guidance. In mid-October, a seismic event occurred within the underground operation of Island Gold that has delayed access to higher-grade stopes to fill within 1 mining front. Seismic events are not uncommon for underground operations and mining rates are expected to remain within guided levels. However, rates mined in the fourth quarter are now expected to be lower than previously planned. We continue to expect a significant increase in production and decrease in costs in the fourth quarter. However, given the lower expected underground grades and unplanned downtime at the end of the third quarter, production guidance for the full year has been revised lower to between 260,000 from 270,000 ounces.

Moving to Slide 9. A number of optimization initiatives have been implemented within the Magino mill over the past year that continue to drive improvements quarter-over-quarter. This included the installation of a redesigned liner and bolt configuration within the SAG mill in July, such that following a liner change and excluding the 1 week of unplanned downtime at the end of September, milling rates increased nearly 10%. With the mill up and running by the end of the third quarter, milling rates have continued to improve in October, approaching 10,000 tonnes per day, a new monthly high for the operation. To minimize potential unplanned downtime in the future and ensure increasing consistency of the operation further review of electrical components was completed to ensure all critical spares have been identified and are on site.

Moving to Slide 10. Given the unplanned downtime at the Magino mill, the decision was made to restart the Island Gold mill in the last week of September to focus on processing higher-grade underground ore. Operating the 2 mills will provide additional operational flexibility with increased milling capacity and allow us to capitalize on the higher gold price environment with stronger gold production. The restart of the Island mill provides an additional 1,200 tonnes per day of milling capacity. This is expected to support approximately 3,000 ounces of additional gold production on a quarterly basis, driving increased cash flow and profitability. At current gold prices, this represents nearly $50 million of additional annualized revenue with significantly higher gold prices, more than offsetting the higher processing costs associated with operating the Island Gold mill. We will operate the 2 mills through the end of this year, and we'll evaluate its ongoing operation into 2026 as part of the expansion study.

Over to Slide 11. The Phase 3+ expansion continues to progress with the shaft sink now at the 1,350-meter level, 98% of the ultimate depth of 1,379 meters. Work also commenced on the 1,350 level shaft station. The Magino mill expansion to 12,400 tonnes per day is progressing well and is on track for completion in the second half of 2026. Base plant construction is advancing and expected to be completed in the first quarter of 2026. Mechanical and electrical outfitting for the water handling facility and shaft in-house is ongoing and concrete foundation work for the new administrative complex is underway.

Over to Slide 12. As of quarter end, we have spent and committed 84% of the total Phase 3+ capital of $835 million. The photos on the right highlight the progress on the shaft sink and 1,350 level shaft station. We expect to be skipping ore from this station in the latter part of next year with the expansion on track for completion in the second half of 2026.

Over to Slide 13. We continue to advance the expansion study for the Island Gold District, which includes the evaluation of a larger mill expansion of up to 20,000 tonnes per day. The study is expected to include a larger mineral reserve through ongoing mineral resource conversion with encouraging results from our delineation drilling program supporting a strong rate of conversion and reserve growth. Work currently underway as part of the Phase 3+ expansion to 12,400 tonnes per day is being completed with a larger expansion in mind. This includes sizing the footprint of the new mill building to accommodate additional equipment for a further expansion of up to 20,000 tonnes per day. To ensure all the assays from the recently completed delineation drilling program are incorporated into the expansion study, we have shifted the completion of the expansion study from late this year to the first quarter of 2026. With the larger mineral reserve and higher combined mining and milling rates, we expect the expansion study will demonstrate significant upside to the base case plan released earlier this year.

Over to Slide 14. Young-Davidson produced 37,900 ounces in the quarter, similar to the second quarter, reflecting the planned shutdown of the Northgate shaft in the first week of July to change the head ropes. Reflecting the downtime, mining rates averaged 7,300 tonnes per day in the quarter. Given the lower mining rates earlier in the quarter, excess mill capacity and higher grade prices -- sorry, higher gold prices, the low-grade stockpile ore was processed. Mill throughput rates averaged 7,800 tonnes per day in the quarter, a 12% increase over the previous quarter, reflecting the contribution of lower-grade stockpile ore, process grades of 1.79 grams per tonne was 7% lower than mine grades. Reflecting lower mining and milling rates for the first 9 months of the year, production guidance has been revised lower to between 160,000 and 165,000 ounces. Mining rates have returned to targeted levels, averaging 8,000 tonnes per day in September and October and are expected to remain at similar levels for the remainder of the year.

Grades mined also increased towards the upper end of guidance in October at 2.25 gram per tonne and are expected to remain at similar levels for the rest of the quarter. Higher mining rates and grades, Young-Davidson is expected to have a much stronger fourth quarter with higher production and lower costs. Mine site all-in sustaining costs decreased in the third quarter, with a further decrease expected in the fourth quarter, the operation remains on track to achieve the full year cost guidance that was revised earlier in the year. Young-Davidson continues delivering strong mine site free cash flow with $62 million generated in the quarter and $160 million in the first 9 months of the year, already surpassing the previous year record of $141 million in 2024. With strong ongoing free cash flow, the operation is on track to deliver well over $200 million for the full year at current gold prices.

Over to Slide 15. I Production from the Mulatos District totaled 37,000 ounces in the third quarter, a 9% increase quarter-over-quarter with the operation benefiting from strong ongoing stacking rates and grades and the recovery of previously stacked ounces. This trend is expected to continue with a further increase in production in the fourth quarter as the operation benefits from the recovery of higher grade ore stock in the previous 2 quarters. With higher production expected in the fourth quarter, we are increasing full year product guidance to between 140,000 and 145,000 ounces. Reflecting the stronger production, cost declined in the third quarter and with a further decrease expected in the fourth quarter, the operation is well positioned to meet its full year guidance. The PDA project continued advancing during the quarter. the focus on procurement of long lead items and detailed engineering. Expenditures are expected to increase in the fourth quarter and more significantly into 2026 with the ramp-up of construction activities. Project remains on budget and on track to achieve initial production mid-2027. The Mulatos District generated mine site free cash flow of $73 million in the quarter and $129 million in the first 9 months of the year. It remains well positioned to continue generating strong free cash flow while fully funding construction of PDA.

With that, I will turn the call to John.

Thank you, Luc. I want to reiterate that this has not been a typical year for Alamos and not reflective of our long-term record of meeting or exceeding expectations. Our near-term and long-term outlook remains bright, and with one of the strongest growth [indiscernible] in the sector, we remain confident in our ability to deliver on our guidance. We expect to demonstrate this strong outlook, starting with significant increase in production and decrease in costs in the fourth quarter.

I'll now turn the call back to the operator who will open up for your questions.

We'd like to open up the call for Q&A now, please.

[Operator Instructions] Our first question is from Cosmos Chiu from CIBC.

Great. Thanks, John and team. Maybe my first question is on Q4. John, as you mentioned, we're expecting increases to production in Q4. You've given us a range, 157,000 to 177,000 ounces, fairly sizable range, especially for quarterly production. Could you maybe just touch on some of the factors that could lead you to the higher end of that guidance versus, say, the lower end?

Cosmos, it's Luc here. I mean just across the operations, as we've touched on, I mean, we're consistently delivering on the higher mining rates with Young-Davidson at 8,000 tonnes per day. The big driver really for the higher gold production also coming out of Young-Davidson in the fourth quarter is related to grade. Based on the mine plan that we have put forward for the fourth quarter, we're expecting to be at the high end of our guided grades of 205,000 to 225,000. So we're at the higher end of that 225,000 area.

With regards to Mulatos, it's really a function of -- we've stacked a lot of gold in the first couple of quarters, Q1, Q2 and certainly Q3, and we'll start to see more of that gold production coming off the leach pad in the fourth quarter, which will drive higher production for Mulatos.

Island Gold, we continue with similar guided levels of mining rates and certainly, great performance as well through the fourth quarter as expected from Island. So when you combine those 3 catalysts from those operations, that's what's really driving the higher gold production in the fourth quarter.

Okay. And Luc, since I have you here, maybe -- could you maybe elaborate a little bit on that seismic activity that happened at Island Gold in mid-October. It sounds like it's not a permanent issue. it doesn't seem like it has longer-term impacts but But could you give us a bit more granularity in terms of sort of what happened? Was it in a higher risk area?

Yes. I can touch on that a bit. So let me just to emphasize, seismicity is just -- is a natural aspect of occurrence that occurs with underground mining operations. As we extract the ore body through development and production blasting, we're changing the stress regime within the mining environment. In this case, the 1 mining front that was affected with this seismic event, really, the reason that we've been -- that we've had to stop production from that 1 area is due to the fact that from a legislative perspective, we need to have 2 means of egress of the Mine, one being the ramp system and in Island's case, the second 1 is an escapeway between the levels. And with this seismic event that happened within this 1 area, the escape was compromised, meaning it needed some rehabilitation in order to bring it back online. So we're just in the process of doing that. It's not a long-term delay. We would expect to be back in that mining front area early December to continue production in there. So it's not a long-term residual effect as a result of the seismicity. But it is normal course of business. We always have seismic events. Some can be lower levels and some can be higher levels. In this case, it just resulted in some damage to the escapeway, which we're addressing.

And Luc, these escapeways, more permanent infrastructures. I would have thought that they are built to a standard that can certainly withstand some of these stress regimes. But again, there's other factors as well. I guess my question is, was that unexpected? Has this happened before? And what do you now have in place in terms of -- again, I understand that these seismic activity happens, but what do you have in place now to hopefully mitigate the risk on a go-forward basis?

Yes. Look, I mean, I kind of referenced with regards to our ground control management plan and our seismic management plan that we have in place for all of our underground operations. In this case, the ground support continues to develop and change as we get into different mining areas and maybe different elevations of stress that are being seen within the mining operations. So we adjust accordingly with that. We do have a lot of dynamics support in place to mitigate these sort of environments that happen when we do have an elevated stress environment. And in this case, for the most part, I'd say the ground support actually worked as per expected. But just keep in mind, rehabilitation is just kind of also a natural function of an underground operation residually, the scaling activities that occur and some additional ground support requirements as a result of some of these openings being open for a longer term. And in this case, the escapeway being one of those. So it's not uncommon to actually have to go back in and do some rehabilitation. In this case, again, because of the fact that the escapeway has been compromised, we just had to go in and repair that escapeway to be able to resume mining activities within that mining front.

Great. Maybe 1 last question. As you mentioned, the expansion study for Island Gold is now expected in Q1 2026 versus Q4 2025, in part to incorporate potentially including the Island Gold mill in terms of running it into 2026. But I guess, in the maybe bigger picture. Gold prices are certainly much higher now compared to when you put out the Island Gold, the first phase case study. Is there a bit of a shift in terms of thinking here, in terms of lower grade material can actually now be profitable. So maybe running Island Gold for longer, could increase the overall throughput. And in the end, some of that lower grade ore could still generate cash and overall cash flow is higher. Is there that kind of thinking going on right now, John, in terms of how you're looking at the Island Gold and maybe even broader picture as well as the other operations? And then how would that be incorporated into the year-end sort of reserve resource statement that's coming out? Like what kind of gold price would you look at?

That's got to go down as one of the longest questions in history, Cosmos. Look, just looking at Island Gold. We envisioned at the time we acquired Argonaut with the idea of integrating both mines, we envision that, that would ultimately evolve into something like a 20,000 tonne per day operation. And we're doing the work right now in order to bring that in front of the market, probably January, early February of next year. That's the time we're aiming for. That's just the optimal rate that mine ought to run at. It means -- it gets to part of your question. For example, right now, we're milling about 1 gram material coming out of the open pit, and we're stockpiling lower-grade material. It's an absolute fact that with the lower cost and the higher throughput rate, I'm not putting anything into stockpile, just putting it all through the mill, that's a much more profitable way to go about it. We'll be able to demonstrate that with the numbers that we'll provide early next year. But the -- you're not double handling or on a combined grade. In other words, mixing in that lower grade material, it's basically running around 0.5 gram, mixing that in with the 1 gram material. We're still running a pretty decent head grade. But you're just doing it all at a greater scale, you're benefiting from the economies of scale and absolutely doing it at a lower cost because there's no double handling anymore. So from the point of view of this bigger mine that we envision at Island Gold, it also envisions roughly 3,000 tons of underground throughput from the Island mine itself. That takes production up over 0.5 million ounces a year, brings costs down closer to that $1,100, $1,200 ASICs, somewhere in that range. The study will define it more precisely. But you can see that -- we're sitting on roughly somewhere between 11 million and 12 million ounces of reserves and resources. That's a really sensible approach to take for development of that mine. We can get there with relatively as I put it, bite-size capital cost. It's not a real stretch for us to get it there. And it's sort of the next step in our evolution at that project site. We're not thinking about that at either Young-Davidson or Mulatos. Young-Davidson, it's not really that sensitive to the gold price, to be honest. It's just the way that ore body is. We're mining it in a very profitable way. Obviously, we're generating phenomenal cash flows. And now we've got that mill running very, very well, consistently hitting 8,000 tonnes a day. You're going to see Young-Davidson have a great year next year. Long term at Mulatos, the game changer is going to be going underground and mining a high-grade underground sulfide material and processing it through the mill that we're going to build. That really is the future for Mulatos. I mean it's not like we've run out of targets for finding additional oxide material. It's a big district, and we're still poking around doing greenfields exploration in various areas and actually getting some interesting results. But the main thrust of what we're doing at Mulatos is to transition from heap leach -- low-grade heap leach production to higher grade underground production. So that would -- in the grand scheme of things, that's where we're going. It's not like we're taking this 1 concept driven by a higher gold price and trying to apply it across every operation.

The only other thing I'd add there, Cosmos, is just with regards to the 20,000 tonne per day planned for the Island Gold District, but that hasn't unchanged. I mean we're still looking to put that obviously out. We've changed the guidance on that to put it out early in Q1. But it will outline a plan of running the about 17,000 tonnes per day coming from open pit operations, 3,000 tonnes per day coming from underground operations. So that still is the plan. As far as the Island mill, that we're still continuing to run at this point, which we started in September. We'll evaluate that as part of our business plans for 2026. But given this high gold price environment, giving us more gold production, certainly and more cash flow, it may make sense to continue to run that in 2026, but we're still evaluating that.

Great. Sorry for my extra long question. I just haven't thank Scott Parsons were putting out earnings during Game 5 of the World Series. It certainly has not impacted my performance.

Sure.

A following question is from Ovais Habib from Scotiabank.

John and Alamos team, a couple of questions from me as well. Cosmos did ask a couple of questions that I had. But just a follow-up to Cosmos' question on the seismic activity at Island Gold. Again, really glad to hear no personnel or equipment were impacted by this event. So that was really good to hear. But in terms of -- and maybe this question is for Luc, in terms of active mining fronts. How many active mining fronts do you have access to at Island Gold as well as how does this impact mine sequencing going into 2026?

I mean we typically carry about 3 to 4 mining fronts with the mining rates that we're currently running at right now, Ovais. But I mean, obviously, with the ramp-up as we continue to head towards 2,400 tonnes a day through the course of next year, we will be -- our development will put us into a place where we'll be developing more mining fronts. As I mentioned in this case, we've just basically shifted our focus from this 1 mining front that's been put on hold until we get that escapeway in place and look to generate production from some of the other areas of the mine in the interim. But as I mentioned, it's a short-term issue with regards to the seismic event that happened there, and we're looking to resume the mining in that specific mining front early in December.

And just also in terms of when you do get access to additional money fronts, I mean in terms of -- isn't that a mitigating factor on itself going into 2026 then?

Sorry, can you repeat that question, Ovais, I didn't quite get it.

I'm basically trying to figure out is when you do start increasing the number of mining fronts as we go into 2026 and into the expansion, Isn't that a mitigating factor on itself?

With regards to the production profile, it certainly gives us more flexibility. I think is what you're getting at. Yes, it will give us more flexibility as far as maintaining the mining, the rates that we're looking at. But Again, in this case, we haven't changed our guided levels for Q4 for mining rates. It's just that we've had to refocus some of the activity as far as our production for the fourth quarter because of the fact that we've got about a 6-week interruption from this 1 mining front until we get the escapeway we reestablished.

Perfect. And just moving on to Magino. With the unplanned downtime at Magino mill, that was, I believe, late September. Were you also able to take advantage of this downtime to do any sort of additional maintenance on the mill as well?

We did. But through the quarter, I think we spoke about this with the last quarter release that there was a liner bolt configuration redesign that we actioned in the quarter. So we did that in July. We also had some scheduled maintenance in August for the ball mill. But certainly, with that week interruption with regards to the capacitor failing, which led to the drive module also failing that we had to get replaced. We did take the opportunity to do some other plant maintenance within the Magino mill facility as well.

Okay. And just then moving towards exploration. I don't know if the other Scott is online. So can you give us a brief kind of overview of where you are currently focused on the exploration side and especially if you continue to have success on Island Gold West as well as in close proximity to the Magino?

Yes, I can provide an overview year-to-date. If you look at Island Gold, I mean, we really did shift our strategy from the start of the year from exploration into delineation and that delineation program now has been completed successfully in the third quarter, both in Magino and in Island Gold, and that really was focusing on converting that inferred mineral base that remains our June update for the expansion study, converting that into reserves. So that process now of the reserve calculation underway with the delineation results coming in or have been received. At Island as well, I mean we'll continue now shifting in the fourth quarter to exploration. So we're drilling Island down plunge. We're drilling the upper portions of Island to the West between Island and Magino. I would say that main Island Gold structure. So that's ongoing. We've also started a Phase 2 drill program at Cline and Edwards, which is building off the success of the first part of the year. That's the [indiscernible] producing mines that are 7 kilometers from the Magino mill. And we're excited about the results that we put out in the first half of the year, and that exploration is ongoing. At Young-Davidson, the hanging wall exploration drift at 9620 has been developed, and we're drilling from that now, and that's focused on defining that high-grade zone in the conglomerate. So we drilled 15 holes there. Our assays are just starting to come in. Drilling is ongoing, and we'll continue stepping out from the zone that we've defined looking to expand on that mineralization. And we're also starting a regional program in the fourth quarter at Young-Davidson focused on our Otisse target, which is only 3 kilometers from the Young-Davidson mill, and we see that as a potential for future open pit ore that could come into the mill at some point in the future. At Mulatos, as John touched on, really focused this year on sulfide exploration across the district and having success in several targets. Building on from the first half of the year, drilling a PDA, continue to expand mineralization at Cerro Pelon, testing a number of other Sulfide targets in that district that the team has worked up, and we're excited by some of the results that we're seeing at Mulatos. And I think that really points to the transition, as John said, from shifting from looking for oxide, which we're still doing, it's still target but really focusing in on building out the sulfide inventory, the high-grade underground components of what could be the future of that district. I guess the last point I'll shift to is Qiqavik, which was the greenfield project in Nunavik in Northern Quebec that we acquired with Orford Mining. That exploration on Qiqavik was executed in the third quarter. We planned on doing 7,000 meters. We did 9,000 meters and really, the objective there was trying to find the source of these high-grade boulders that have been defined across that belt. So we drilled in 5 target areas. Assays are just coming in. But certainly happy that we got -- we accomplished more drilling than we anticipated based on the execution of the program and what we're seeing in some of that core.

Our following question is from Fahad Tariq from Jefferies.

Just on the Magino mill, can you maybe provide some more color on how you're thinking about the targeted throughput maybe by the end of this year. I believe it was previously 11,200 tonnes per day and then 12,400 tonnes per day next year. How should we be thinking about that given some of the ramp-up issues so far?

Yes. It's Luc here. So similar line of sight. As I mentioned through the third quarter there, certainly, we had some changes to make to the SAG mill with regards to the liner bolt configuration, which we did. Scheduled ball mill liner change and then with obviously the failure with the capacitor in September that put us back a bit. But really starting in mid-July up until that capacitor issue that we had at the end of September, the mill was on a path, that was consistently delivering above 10,000 tonnes per day to that period. And since we've prepared the capacitor figure that we had at the end of September and resume milling activities through the month of October. We've been consistently averaging just above 10,000 tonnes per day as well. So our goal hitting that 11,200 by the end of the year still is intact. Just some more fine-tuning that we need to do between now and the end of the quarter to be able to consistently deliver on that. On the 12,400 scenario longer term, we're obviously working on some of that expansion already. We need more additional equipment at the back end of the mill with regards to the CIP, the leach circuit. The refinery in elution in order to be able to handle the higher gold content coming into the plant. So we're working through that. The other aspect of it is also upfront. The crushing capacity is there, and it's just -- we're still evaluating on the grinding capacity requires potentially a third, third grinding circuit in that circuit to be able to support the [indiscernible]. But we're still evaluating that as part of the overall mill expansion, to be honest with you, and that's part of what will come out early in the new year.

Okay. That's helpful. And then maybe just as a follow-up. So if the Magino mill is able to get to [ 11,200 ] tonnes per day by the end of this year, things are improving. Would that be reason enough not to keep running the island Gold mill?

I think at these gold prices, Fahad, it's -- I mean, we're evaluating this. But I would think we want as much throughput as we can through and running those 2 mills at these gold prices probably makes sense.

A following question is from Sathish Kasinathan from Bank of America.

Most of my questions have been asked and answered. So maybe a question for Greg. So with over $600 million in cash balance, you indicated that you will be more active in buybacks. How should we think about the cadence of buybacks on a quarterly or an annual basis? Do you have a target run rate in mind? And also, given your growth projects, how should we think about like a minimum cash balance?

Yes. Thank you. I mean from a share buyback perspective, we've never put targets in place. I mean, what we always want to do is be opportunistic with respect to that. And we also look at our other needs of capital, whether it's growing the business, whether it's paying down debt. So we're looking at all of those. So I don't want to point to a specific target in terms of the buybacks. But based on the pullback in the share price -- in the gold price that we've seen over the last week to 2 weeks plus the reaction today, we expect to be active on the share buyback.

And then in terms of a minimum cash balance. Again, we have lots of liquidity. We have $1.1 billion of liquidity currently. In terms of the current cash balance of $600 million, we want to be active on the share buyback. We want to pay down some debt. We want to evaluate whether we're going to buy back some of the legacy Argonaut hedges. All of those will be sources of capital. But we are ultimately growing the business from 600,000 ounces to upwards of 1 million ounces by the end of the year. So we do need to make sure that we have sufficient capital. But we do have free cash flow as we speak right now. So from a minimum cash balance, I'd say, we probably want to always have at least $300 million -- $250 million to $300 million on the balance sheet.

Okay. Maybe a question on Young-Davidson. So it seems the mill has been operating at 8,000 tonnes per day for a couple of months now. Do you think the mill's performance has reached a level that it can continue to consistently operate at this level? And given the current gold prices, is there potential for maybe push -- pushing the mill to a higher run rate?

The mill has been performing quite well at Young-Davidson. I mean, obviously, our -- the overall ore production that's come out through Q3 and some of the previous quarters has been more related to giving all of the [ fee ] that we can from the mining operations. And certainly, in Q3, it was related to the [indiscernible] change that we had to make with regards to the head ropes. But the mill has been performing quite well. It's no issues there. On the aspect of actually looking to see if it can do more, that's something that we've been looking at and seeing with other opportunities to be able to increase the overall throughput through that mill complex. It would not necessarily come from more underground ore. The mine is designed and the infrastructure is designed to support 8,000 tonnes per day. But there's other opportunities with some of the smaller satellite open pit deposits within the region of Young-Davidson that we could look to bring into a mine plan and provide additional mill feed to the YD mill complex with some minor capital requirements to be able to do that. The potential would be to probably get it up to probably 9,000 tonnes per day consistently.

[Operator Instructions] The following question is from Don DeMarco from National Bank.

John and team. Maybe just a quick question on the capacitor incident. What were the root cause of that? And is there a risk of a repeat?

The capacitor failure, we're still actually having that analyzed. So I don't have a firm answer on that, but it's not something that you would typically see, to be honest with you. So there could have been a defect within that part itself. I mean we've been running our Island Gold mill complex and our Young-Davidson mill complex for years and have never experienced that sort of failure with a capacitor, but it wasn't just a capacitor. The capacitor failing was part of it, but that led to us some residual damage within the drive unit of the power modules that operates the SAG mill and the ball mill. So we had some other component failure there like resistors and a bus bar and some other electrical components that resulted in some additional Repairs. But this is not a normal course of business. We've never seen this with any of our other operations. So I'd say at this point, it's a one-off, but we still need to do further diagnosis to understand exactly what happened with that capacitor.

Okay. look forward to that. And it sounds like the timing of mining...

Just the other thing I would add to that is that from a inventory aspects and just making sure that we have all of the parts. We have done another through -- further thorough review of our electrical components for running that plant to sure that we have all of the critical spares that we need just to prevent any sort of significant downtime moving forward.

Okay. Then just to my next question, with regard to the Magino mill and combining the 2 ore streams back into that mill, it sounds like it's potentially 2026, maybe later. Seems like there's good reason at this gold price to keep the 1,200 tonne per day Island mill running. But since you've done it before, you've done it once already in July, would the second time round be somewhat routine just with a quicker ramp up?

Yes, it's pretty seamless, to be honest with you, to put the both ore streams into the one plant. I think I'd mentioned before, we did a couple of batch tests just to confirm the metallurgy back in Q2, Q3, and that all was validated. And frankly, running that combined ore stream into the Magino mill from really mid-July until we did have that capacitor failure at the end of September. Metallurgically cleared everything was performing quite well, both from a gravity recovery point of view as well as overall recovery. The expectations were as per what we were expecting as far as what we modeled to what we were seeing in the plant. So it's a pretty easy simple transition to just provide that ore feed back into the stream and combine the the 2 streams into 1 feeding into the 1 mill complex.

Okay. And then just as a final question. Turning to Lynn Lake development. We see that the time line has been impacted by the wildfires. How about CapEx? Can you give any more granularity on the implications to the CapEx estimates to develop that project?

Well, yes, I mean, CapEx-wise, I guess you'll have the inflation component there over the next -- because of the fact that it's been delayed a bit. I think what we've -- we basically lost all of the construction season this summer which is the most productive period that you can have certainly in Northern Manitoba or Northern Ontario, depending on where we're building these operations. So as a result of that, our original time line was mid-2028 now we're moving that out to early 2029. So you're going to have a bit of an inflation factor that gets factored into that.

Yes. I mean, just adding to that. We put a study a couple of years ago. So you have 3 years of inflation since we put out that study with this additional year that Luc just commented on moving it out to 2029. And inflation on capital projects is run around 5% to 6%. So we can expect a 15% increase in our capital that we put out in the feasibility study for Lynn Lake.

There are no further questions registered at this time. This concludes this morning's call. If you have any other questions that have not been answered, please feel free to contact Mr. Scott Parsons at 416-368-9932, extension 5439.