Climate Change

Alamos recognises climate change as a critical international concern to which the mining industry contributes through its carbon footprint. Like most large companies, Alamos faces climate-related risks, including physical (e.g., wildfires, floods, and storms) and transition risks (e.g., policy changes and market shifts). These risks are carefully considered at the highest level of our organisation. Members of Alamos senior management have been assigned climate-related responsibilities, and Committees of the Board consider climate-related issues when reviewing and guiding strategy. Each year, the Company’s Executive Officers develop a strategic plan for approval by the Board, with climate-related strategy embedded within it.

RISK ASSESSMENT METHODOLOGY

Alamos faces two types of climate-related risks: physical risks and transition risks. Physical risks represent the potential impacts of a warming climate system on the Company, such as the increased likelihood and severity of extreme weather events, sea-level rise, water stress, ecosystem change, and biodiversity loss. They can be event-driven (acute) or associated with longer term shifts in climate patterns (chronic), and are specific to the unique geographic circumstances of each site. Transition risks are the financial and reputational risks associated with regulatory, economic, and societal changes related to climate change, such as carbon taxes, cap-and-trade systems, abatement costs, and shareholder activism.  

Alamos completed an updated Climate Change Risk Assessment in early 2024, covering our three operating mines, the Lynn Lake Project, and the closed El Chanate mine (the Magino mine had not yet been acquired at the time). The assessment followed leading practices from ISO 14091 (climate change adaptation) and ISO 31000 (risk management), and revisited the broad list of physical and transition risks identified in Alamos’ 2020 assessment. Multiple climate scenarios and time horizons were considered, as outlined in the following sections.  

Top risks and accompanying metrics were those rated High or Moderate on Alamos’ Enterprise Risk Matrix (ERM), which assesses risk based on likelihood and severity across health & safety, environmental, operational and business impacts. For each top risk, the following actions were taken:

• Estimated the potential financial impacts, including potential effects on our financial position, performance and cash flow; 

• A mitigation plan was developed, including additional control measures; 

• Residual risk resiliency was assessed assuming implementation of these controls; and  

• Guidance was provided for integrating these risks into strategic planning, along with potential strategic response options.  

Alamos assessed a range of physical climate factors at each operation, project and closed site. These included mean temperature, total and monthly precipitation, fluvial flooding, very heavy precipitation days, water stress, consecutive drought days, cold and warm spell duration indices, wildfires, and wind. Over 80 physical climate risks were identified, with potential impacts on employee safety, local communities, the environment, and Company assets (particularly through possible disruptions to permitting, operations, and closure).

To assess these risks, Alamos applied two climate scenarios and two time horizons. The scenarios used the International Panel on Climate Change (IPCC) Shared Socio-Economic Pathways (SSPs) framework, which project changes in population, education, energy use, technology, and policy ambition^{1<a href="https://climatedata.ca/resource/understanding-shared-socio-economic-pathways-ssps/" target="_blank" rel="noopener">https://climatedata.ca/resource/understanding-shared-socio-economic-pathways-ssps/</a>}, and are built upon the IPCC’s Representative Concentration Pathways (RCP) that model atmospheric GHG concentrations over time. 

Alamos used the SSP2-4.5 scenario (projected warming of 2.7°C by end of century) as the Base Case, and the SSP5-8.5 scenario (projected warming of 4.4°C by end of century) as the High Emissions Stress Test. Each scenario was evaluated over a medium-term (2030) and long-term (2050) time horizon. As described in Table 7.1, the top physical risks were concentrated in the High Emissions Stress Test scenario at Lynn Lake (Alamos’ northernmost site) and the Mulatos District (its southernmost site).  

Transition risks were assessed for each of Alamos’ jurisdictions (Ontario and Manitoba in Canada, and Mexico) using the four categories defined by the Task Force on Climate-related Financial Disclosures (TCFD): Policy & Legal, Market, Technology, and Reputational. Key risk factors considered included: 

• GHG emission regulations, rising to CAD$170/tCO₂e by 2030 in Canada and $125/tCO₂e by 2040 in developing economies); 
• Renewable electricity generation shares, projected to increase to 64% in Canada, 88% in Mexico, and 56% in Türkiye^{2</span><i><span data-contrast="auto">Please refer to our </span></i><a href="https://esg2024.alamosgold.com/about/"><i><span data-contrast="auto">Cautionary Statement</span></i></a><i><span data-contrast="auto"> with respect to the Company’s projects in Türkiye.</span></i>} by 2040;  
• Renewable energy costs, estimated at $50/MWh for solar photovoltaics and $70/MWh for offshore wind by 2040;  
• Abatement costs, increasing to approximately $1,000/tCO₂e under Sustainable Development Scenario (SDS) conditions by 2040;  
• Fuel prices, with crude oil at $59/barrel and natural gas at $3.2/MBtu by 2040;  
• Fossil fuel subsidy phase-outs, ending by 2025 in net-importing countries and by 2035 in net-exporting countries, and; 
• Carbon reduction policies, including support for alternative fuels and technologies such as hydrogen, biogas, biomethane and carbon capture, use, and storage (CCUS).  

Alamos applied two climate scenarios based on the International Energy Agency (IEA) framework: the Announced Pledges Scenario (APS) as the Base Case, which assumes countries fully implement their climate pledges, and the Net Zero Emissions (NZE) scenario as the High Stringency Stress Test, which assumes more aggressive global policy action to achieve net zero emissions by 2050. Each scenario was assessed across short-term (2025), medium-term (2030), and long-term (2050) timeframes. As outlined in Table 7.2, the most significant transition risks were identified under the stress test scenario and primarily affect Alamos’ Canadian operations. 

The climate-related risks identified through Alamos’ assessment process are being addressed through targeted mitigation and resilience measures, which are integrated into Alamos’ strategic and financial planning. Mitigation refers to the implementation of controls that reduce the likelihood or consequence of a climate-related risk to levels deemed acceptable by Alamos. Resilience refers to the extent to which the Company’s strategy enables it to withstand, adapt to, and grow in in response to climate-related disruptions across various scenarios.  

For each of Alamos’ top physical and transition risks, existing controls were first identified. Additional potential controls were then proposed, and a theoretical residual risk rating – reflecting the remaining level of risk after all controls – was calculated. A high residual risk rating indicates lower resilience. 

Table 7.3 summarises Alamos’ climate resilience under the Stress Test scenarios – the most extreme climate projections (RCP8.5 for physical risks and NZE for transition risks) for the year 2030. The Proposed Additional Controls column describes how Alamos is financially and strategically preparing for these risks, including measures such as maintaining back-up ore stockpiles to withstand fire- or storm-related disruptions, and securing additional insurance coverage. 

In addition to the risks identified above, the climate risk assessment also highlighted several climate-related opportunities. These were categorised according to the TCFD framework of Resource Efficiency, Energy Source, Products and Services, Markets, and Resilience. The top four opportunities – ranked based on their cost reduction potential – are summarised in Table 7.4. 

SCOPE 1 AND 2

100% of air emissions at Alamos operating mines fall under emissions-limiting regulations, as both Canada and Mexico have implemented regulations to monitor, report and/or reduce emissions. Under these regulations, Scope 1 emissions are independently verified annually in Canada (Young-Davidson, Island Gold, and Magino) and every three years in Mexico (Mulatos District). 

Petroleum diesel used in heavy duty vehicles represents the largest share of Alamos’ direct (Scope 1) emissions. Other significant sources in 2024 include stationary diesel combustion (primary for electricity generation at Mulatos and for explosives and generators at all sites), compressed natural gas (for electricity generation at Magino, and for underground mine heating at Young-Davidson), gasoline combustion (for light vehicles at all sites), and propane (for mine air heating at Island Gold). Indirect (Scope 2) emissions are associated with purchased electricity from national grids. Alamos reports Scope 1 and 2 emissions only for its producing mines, as development projects, closed sites, and offices collectively account for less than 1% of total emissions. 

All gases covered by the Kyoto Protocol^{3<span class="TextRun SCXW197200450 BCX2" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun SCXW197200450 BCX2" data-ccp-parastyle="footnote text">Carbon dioxide (CO</span></span><span class="TextRun SCXW197200450 BCX2" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun Subscript SCXW197200450 BCX2" data-fontsize="9" data-ccp-parastyle="footnote text">₂</span></span><span class="TextRun SCXW197200450 BCX2" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun SCXW197200450 BCX2" data-ccp-parastyle="footnote text">), methane (CH</span></span><span class="TextRun SCXW197200450 BCX2" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun Subscript SCXW197200450 BCX2" data-fontsize="9" data-ccp-parastyle="footnote text">4</span></span><span class="TextRun SCXW197200450 BCX2" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun SCXW197200450 BCX2" data-ccp-parastyle="footnote text">), nitrous oxide (N</span></span><span class="TextRun SCXW197200450 BCX2" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun Subscript SCXW197200450 BCX2" data-fontsize="9" data-ccp-parastyle="footnote text">2</span></span><span class="TextRun SCXW197200450 BCX2" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun SCXW197200450 BCX2" data-ccp-parastyle="footnote text">O), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), and sulfur hexafluoride (SF6)</span></span>} are regularly monitored and reported to local authorities at each of our operating sites, and consolidated based on operational control. Alamos does not produce or export ozone-depleting substances (ODSs), and while a comprehensive assessment of purchased materials has not been conducted, no ODSs are knowingly imported. Emissions monitoring programs include sampling from stationary sources (e.g., generators, boilers, and furnaces) as well as continuous air monitoring in surrounding areas to mitigate impacts on local communities.  

In 2024, company-wide GHG emissions (scope 1 and 2 combined) totaled 8,818 tCO₂e (5%) higher than the prior year, despite the addition of the Magino mine in July 2024, which contributed 42,733 tCO₂e. As shown in Figure 7.2 above, this increase was largely offset by a 31% decrease in emissions at the Mulatos District. Island Gold also achieved a 2% reduction while increasing gold production by 18%. Following this reporting period, Island Gold and Magino will be reported on a consolidated basis as the Island Gold District. Once the District’s Phase 3+ underground expansion becomes operational (expected in 2027), the integrated operation is projected to have an emission intensity of 0.24 tCO₂e per ounce – less than one-third of the industry average of 0.79 tCO₂e/oz^{11<a href="https://www.spglobal.com/market-intelligence/en/news-insights/research/primary-gold-ghg-emissions-intensities-decline" target="_blank" rel="noopener">https://www.spglobal.com/market-intelligence/en/news-insights/research/primary-gold-ghg-emissions-intensities-decline</a>}.

SCOPE 3

Scope 3 emissions refer to indirect GHG emissions generated across our value chain, outside of Alamos’ direct operational control. These include upstream emissions from the extraction and production of purchased materials, downstream emissions from refining, and transportation-related emissions on both ends of the value chain. Scope 3 estimates cover all Alamos locations. 

In 2024, Alamos again worked with a third party to calculate our Scope 3 estimates, and continued our efforts to reduce reliance on spend-based methodologies by increasing the use of supplier-provided data. Our Scope 3 calculation tool, which applies Global Warming Potentials from the IPCC’s Fifth Assessment Report (AR5), supports a deeper understanding of the key drivers and trends shaping our value chain emissions. 

Alamos reported a 9% decrease in Scope 3 emissions in 2024. Although emissions rose by 37,919 tCO₂e from the addition of Magino and by approximately 30,000 tCO₂e at Island Gold (driven by a 25% increase in total spend), these were offset by a 100,000 tCO₂e decrease at the Mulatos District. This reduction was primarily due to the installation of new evaporators, which significantly reduced lime consumption in the site’s water treatment process.  

In 2022, Alamos announced a target to reduce absolute Scope 1 and 2 emissions by 30% by 2030, supported by a defined strategy. As part of our ongoing commitment to responsible growth, we are currently reviewing both the target and strategy in light of significant changes to our operating context during the 2024 reporting year.

In 2024, Alamos acquired the Magino mine, recognising the significant operational synergies with our adjacent Island Gold operation. This integration is expected to create one of Canada’s largest and lowest-cost gold mines, enhancing our ability to create long-term value for our people, host communities, and shareholders. At the same time, Magino’s profile as a large, open-pit operation is expected to increase our projected emissions. Similarly, in the Mulatos District, the discovery and planned development of the higher-grade Puerto Del Aire (PDA) underground deposit, announced in September 2024, introduces new growth that may further influence our emissions outlook.  

Given these developments, we are reassessing our Scope 1 and 2 emissions reduction target to ensure it continues to reflect our ambition, while remaining credible and aligned with our evolving operational footprint. 

Alamos remains strongly committed to reducing the carbon intensity of our operations and supporting Canada’s goals under the Paris Accord. We are actively working to define a revised target that is both ambitious and grounded in operational realities.  While this work is ongoing, a revised target is not yet available for inclusion in this year’s ESG Report.  

In keeping with our commitment to transparency, the Climate Strategy section below provides: 

• a status update on previously reported decarbonisation projects 

• an overview of our target reassessment process, including current emissions projections under business-as-usual and expected scenarios 

• an outline of new potential decarbonisation opportunities currently under evaluation 

Existing Projects: Status Report  

In developing our 30% reduction strategy in 2022, Alamos evaluated and costed over 30 different GHG emission reduction opportunities across the organisation. Working with an independent energy and carbon management expert, Alamos explored a range of initiatives including renewable energy and cleaner grid options, green fleet technologies (hybrid and battery electric vehicles), electrification of mining activities, and conversion to cleaner fuels. Each opportunity was assessed using a Marginal Abatement Cost Curve (MACC), which compares the Net Present Value (NPV) of each opportunity to their GHG abatement potential in kt CO₂e. This analysis allowed Alamos to prioritise decarbonisation and energy efficiency projects with the greatest impact and value. A status update on these prioritised projects is provided in Table 7.9 below  

Significant developments across our portfolio – most notably the discovery of the Puerto Del Aire deposit at the Mulatos District and the acquisition of the Magino mine – have reinforced the need to revisit and update Alamos’ emission reduction target and broader climate strategy. As the Company continues to grow, it is critical that our decarbonisation efforts evolve in step with our expanding operational footprint. 

With support from third-party experts, cross-functional teams at Alamos collaborated to forecast detailed energy requirements at each site over its life of mine (LOM). These forecasts informed projections of our annual Company-wide emissions through 2030, and were benchmarked against our original absolute emissions reduction target.  

In evaluating our ability to meet this target, Alamos followed best practices in emissions accounting. Under the GHG Protocol’s Base year recalculation methodologies for structural changes^{17<a href="https://ghgprotocol.org/sites/default/files/standards_supporting/Base%20Year%20Adjustments.pdf" target="_blank" rel="noopener">https://ghgprotocol.org/sites/default/files/standards_supporting/Base%20Year%20Adjustments.pdf</a>}, companies acquiring new facilities should revisit – and, where material, recalculate – their base year emissions to include those additions. Alamos’ original 30% reduction target was based on the average of 2020 and 2021, when Magino was still in early construction. As a result, the baseline did not increase proportionately to Magino’s operational emissions, which are expected to more than double our total projected emissions in 2030. 

The Magino mine is not connected to the Ontario electrical grid and relies on an on-site compressed natural gas (CNG) power plant and diesel generators to meet its energy needs. Shortly after acquisition, Alamos launched a project to establish grid connectivity. The 115kV transmission line, targeted for completion in 2026, is expected to reduce the mine’s annual emissions by 40,000 to 55,000 tCO₂e (Figure 7.6). 

Beyond Magino, additional decarbonisation and energy efficiency initiatives are underway across the Company. At Island Gold, efforts are focused on optimizing the compressed air systems and retrofitting lighting in the bunkhouse. At Young-Davidson, planned improvements include automating underground ventilation fans and introducing electric-drive scoops into the mobile-equipment fleet.  

Figure 7.7 depicts Alamos’ emissions projections, incorporating the reductions anticipated from these projects, along with the remaining gap to our original 2030 reduction target.  

While navigating these changes, Alamos continues to evaluate new decarbonisation opportunities. The feasibility of these initiatives depends on several factors, including technological readiness, market availability, and regulatory conditions.  

Our priorities remain unchanged. Alamos is committed to demonstrating leadership in climate performance, operating responsibly, and maintaining the trust of our stakeholders.