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 organization. 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 updated its Climate Change Risk Assessment in 2024, encompassing our three operating mines, the Lynn Lake Project, and the closed El Chanate mine. At the time of the assessment, the Magino Mine had not yet been acquired, and a development decision for the Puerto Del Aire (PDA) underground project within the Mulatos District had not been finalized. However, given that the Magino Mine is located immediately adjacent to the Island Gold Mine, and PDA is situated within the existing Mulatos Mine footprint, the completed risk assessment is considered to capture the majority of material climate-related risks applicable to these assets. An updated Climate Change Risk Assessment is planned within the next one to two years, which will include a comprehensive evaluation of all Alamos sites.

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’ previous 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 and safety, environmental, operational and business impacts. For each top risk, the following actions were taken:

• Potential financial impacts were estimated, 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 projects changes in population, education, energy use, technology, and policy ambition¹, 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, and 88% in Mexico 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 identified climate-related risks 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 our strategy enables Alamos to withstand, adapt to, and grow 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 categorized 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.

Emissions Reduction Approach 

Alamos is committed to responsibly growing our business while reducing the carbon intensity of our operations and supporting global climate objectives, including Canada’s commitments under the Paris Agreement.

In 2022, we established a target to reduce absolute Scope 1 and Scope 2 GHG emissions by 30% by 2030, based on a 2020/2021 baseline. Since that time, our business has evolved significantly. Most notably, the 2024 acquisition of the Magino mine and the discovery of the higher-grade PDA underground deposit in the Mulatos District have strengthened our long-term production outlook and enhanced our ability to deliver value to stakeholders.

These developments materially increase our projected emissions profile, by introducing additional energy demand that was not reflected in our original baseline or projections. As a result, our previously established absolute emissions reduction target no longer aligned with the Company’s growth trajectory or the principles of transparent and decision-useful reporting.

In line with our commitment to transparency, this Climate Strategy section provides:

• An overview of our target reassessment process and updated emissions outlook

• A progress update on previously identified decarbonisation initiatives

• A summary of new and emerging emissions reduction opportunities under evaluation

Scope 1 & 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 District, 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 2025 include stationary diesel combustion (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 Protocol² 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.

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 2025, 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 a combination of Global Warming Potentials from the IPCC’s Fifth Assessment Report (AR5) and Sixth Assessment Report (AR6), supports a deeper understanding of the key drivers and trends shaping our value chain emissions.

Alamos reported an overall 30% increase in Scope 3 emissions in 2025. The main driver of this increase was the Island Gold District due to accounting for a full year of operating the Magino Mine as well as the ongoing capital spend between both the Island Gold and Magino mining operations. There were smaller increases at Young-Davidson and Lynn Lake was in its first year of construction. Mulatos continued its downward trend of emissions due to a reduction in capital spend and reduction in fuel haulage to site with a full year of getting electricity from the national grid versus diesel generation.

There was a major update on emission factors in our Scope 3 model in 2025, with numerous factors updated from 2018 to 2024. This did not have a material impact on our Scope 3 emissions (<3% overall).