Precious metals miner Alamos Gold on Tuesday unveiled plans to expand its Island Gold District (IGD) operation in Ontario to 20 000 t/d, creating one of Canada’s largest and lowest-cost gold mines, with an after-tax internal rate of return (IRR) of 69% and a net present value (NPV) of $12.2-billion at a gold price of $4 500/oz.

The IGD expansion study builds on the base case life-of-mine (LoM) plan published in June 2025 and incorporates a 30% increase in mineral reserves to 8.3-million ounces.

The expansion includes the enlargement of the Magino mill to 20 000 t/d, supporting processing rates of 3 000 t/d of high-grade underground ore from Island Gold and 17 000 t/d from the Magino openpit operation.

This is expected to lift average production to more than 530 000 oz/y and extend the mine life to 19 years, while positioning the operation among the lowest-cost producers in the industry.

Average mine-site all-in sustaining costs (AISC) are expected to decline to $1 025/oz over the first ten years, about 31% lower than in 2025. Average total cash costs are projected at $682/oz over the same period.

Over 15 years, AISC is forecast at $1 032/oz, broadly in line with the base case LoM and about 30% below 2025 levels.

“The evolution and growth of Island Gold continues with another substantial increase in mineral reserves supporting another high-return expansion of the operation,” said president and CEO John McCluskey.

“The IGD expansion has driven the value of the operation to over $12-billion at gold prices of $4 500/oz, up from a combined acquisition cost for Island Gold and Magino of $1.4-billion.”

He added that ongoing exploration success and high-grade results from the nearby Cline-Pick targets supported confidence in further growth.

Growth capital for the IGD expansion is estimated at $542-million, mainly for the Magino mill expansion and accelerated underground development.

Including remaining spending on the Phase 3+ Expansion, total growth capital is forecast at $704-million, with most expenditure expected over the next three years.

Sustaining capital over the LoM is estimated at $2.34-billion, equivalent to $302/oz sold, bringing total capital intensity to $393/oz.

Construction of the expanded mill is under way, while the Phase 3+ Expansion, including shaft and paste plant infrastructure, remains on track for completion in late 2026.

The full IGD Expansion is expected to be completed in 2028.

Alamos said the IGD is expected to self-finance all growth capital while generating increasing free cash flow.

After-tax free cash flow is forecast to average $0.8-billion a year over ten years from 2028 at $3 200/oz gold, rising to $1.3-billion a year at $4 500/oz.