Dual-listed gold miner Alamos Gold will reward shareholders with a 50% increase in its dividend, starting in the first quarter of 2020, president and CEO John McCluskey announced on Wednesday, citing a “strong outlook”.

The mining company, which operates mines in Canada and Mexico, is on track to meet its 2019 production of 480 000 oz to 520 000 oz.

Construction of the lower mine expansion at Young-Davidson, in Ontario, Canada, is making progress and will be completed in June 2020.

Production in 2020 will be lower in a range of 425 000 oz to 465 000 oz, owing to the impact of completing the tie-in of the upper and lower mines at Young-Davidson during the first half of 2020. Next year, Young-Davidson is forecast to produce between 145 000 oz and 160 000 oz, Island Gold, also in Ontario, is slated to produce 130 000 oz to 145 000 oz and Mulatos, Mexico, is expected to produce 150 000 oz to 160 000 oz.

The tie-in of the lower mine at Young-Davidson is expected to start in March 2020 and will be completed in June. During this time, ore will be trucked to surface from the upper mine at a rate of about 2 500 t/d. Given the lower production rate and a full workforce to support ongoing development during this period, total cash costs and mine-site all-in sustaining costs were expected to increase significantly in the first half of the year, the company cautioned.

Following completion of the tie-in in June, underground mining rates were expected to increase from about 6 500 t/d to 7 500 t/d by the end of 2020.

The higher mining rates will drive up production to 500 000 oz/y in 2021.

“The lower mine expansion at Young-Davidson remains on track to be completed in June 2020 after which we expect to transition to a period of strong free cash flow growth. We intend to complete the Phase 3 expansion study at Island Gold [in Canada] during the first half of 2020, which will showcase a highly profitable long-life operation. Both initiatives support an improving operating and financial outlook for the company, which will, in turn, support growing returns to our shareholders,” said McCluskey.

The miner’s quarterly dividend will increase by 50% to a yearly rate of $0.06 a share.

Alamos expects to transition to positive free cash flow in the second half of 2020.