Q3 2025 Centerra Gold Inc Earnings Call
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Speaker #4: Thank you for standing by . This is the conference operator . Welcome to the Centerra Gold . Third quarter 2025 conference call . As a reminder , all participants are in a listen only mode and the conference is being recorded .
Operator: Thank you for standing by. This is the conference operator. Welcome to the Centerra Gold Inc. third quarter 2025 conference call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I would now like to turn the conference over to Lisa Wilkinson, Vice President, Investor Relations and Corporate Communications with Centerra Gold Inc. Please go ahead, ma'am.
I would now like to turn the conference over to Lisa Wilkinson, Vice President Investor Relations and corporate Communications with Sentara Gold. Please go ahead ma'am.
Speaker #4: After the presentation , there will be an opportunity to ask questions . To join the question queue , you may press star , then one on your telephone keypad .
Thank you operator, and good morning, everyone welcome to <unk> Gold's third quarter 2025 results conference call.
Joining me on the call today are policy Mowry, President and Chief Executive Officer, David Hendry, Chief Operating Officer, and Ryan Schneider Chief Financial Officer.
Are you published yesterday outlines our third quarter 2025 results and is complemented by our MD&A and financial statements, which are available on SEDAR Edgar and our website.
Lisa Wilkinson: Thank you, Operator, and good morning, everyone. Welcome to Centerra Gold Inc.'s third quarter 2025 results conference call. Joining me on the call today are Paul Tomory, President and Chief Executive Officer; David Hendriks, Chief Operating Officer; and Ryan Snyder, Chief Financial Officer. Our news published yesterday outlines our third quarter 2025 results and is complemented by our MD&A and financial statements, which are available on SEDAR, EDGAR, and our website. All figures are in US dollars unless otherwise noted. Presentation slides accompanying this webcast are available on Centerra's website. Following the prepared remarks, we will open the call for questions. Before we begin, I would like to remind everyone that today's discussion may include forward-looking statements, which are subject to risks that could cause our actual results to differ from those expressed or implied.
All figures are in U S dollars unless otherwise noted presentation slides accompanying this webcast are available on <unk> web site. Following the prepared remarks, we will open the call for questions.
Before we begin I would like to remind everyone that today's discussion may include forward looking statements, which are subject to risks that could cause our actual results to differ from those expressed or implied.
For more information please refer to the cautionary statements in our presentation and the risk factors outlined in our annual information form.
We will also be referring to certain non-GAAP measures during today's discussion.
A detailed description of these measures. Please see our news release and MD&A issued last night I will now turn the call over to Baltimore.
Lisa Wilkinson: For more information, please refer to the cautionary statements in our presentation and the risk factors outlined in our annual information form. We will also be referring to certain non-GAAP measures during today's discussion. For a detailed description of these measures, please see our news release and MD&A issued last night. I will now turn the call over to Paul Tomory.
Thank you Lisa and good morning, everyone.
In the third quarter, we sustained robust margins and generated nearly $100 million of free cash flow driven by strong operational performance and.
<unk> middle phases.
Golden copper production in the quarter was almost 82000 ounces and $13 4 million pounds, respectively.
Paul Tomory: Thank you, Lisa, and good morning, everyone. In the third quarter, we sustained robust margins and generated nearly $100 million of free cash flow, driven by strong operational performance at Öksüt Mine and elevated metal prices. Gold and copper production in the quarter was almost 82,000 ounces and 13.4 million pounds, respectively. Our cash balance increased to over $560 million in the quarter, demonstrating our ability to fund the Thompson Creek restart project while returning $32 million of capital to shareholders through disciplined share buybacks and our quarterly dividend. We also continue to deploy capital strategically through our equity investment in Liberty Gold, reflecting our balanced approach to growth and value creation. Our self-funded growth strategy continues to advance across multiple fronts.
Our cash balance increased over $560 million in the quarter.
Demonstrating our ability to fund the Thompson Creek resort project, while returning $32 million of capital.
To shareholders through disciplined share buybacks and our quarterly dividend.
We also continue to deploy capital strategically to our equity investment in Liberty gold, reflecting our balanced approach to growth and value creation.
Our self funded growth strategy continues to advance across multiple fronts.
We published the Mount Milligan pre feasibility study so I'll come back to you and we also expect to publish a preliminary economic assessment for <unk> in the first quarter of 2026.
Together these assets form a robust pipeline of long life gold and copper projects in British Columbia.
In Nevada development has advanced at the Goldfield project, which provides <unk> with additional exposure to future gold production.
Paul Tomory: We published the Mount Milligan pre-feasibility study, which I'll come back to, and we also expect to publish a preliminary economic assessment for Kemess Project in the first quarter of 2026. Together, these assets form a robust pipeline of long-life gold and copper projects in British Columbia. In Nevada, development has advanced at the Goldfield Project, which provides Centerra with additional exposure to future gold production. In the quarter, engineering progressed as planned, early mobilization efforts progressed on site, and we are building out a dedicated project execution team. These early actions mark important steps towards project readiness and position Goldfield for disciplined and efficient execution. Each of these growth opportunities, as well as the Thompson Creek restart project in Idaho, can be funded using our existing liquidity and cash flow from operations, positioning Centerra to deliver sustainable low-risk growth while maintaining our strategic approach to capital allocation.
In the quarter engineering progressed as planned early mobilization efforts progressed on site and we are building out a dedicated project execution team.
These early actions marked important steps towards project readiness and position goldfield for discipline and efficient execution.
Each of these growth opportunities as well as the Thompson Creek resort project in Idaho can be funded using our existing liquidity and cash flow from operations positioning <unk> to deliver sustainable low risk growth, while maintaining our strategic approach to capital allocation.
In September we announced the results of the PFS for Mount Milligan.
Extending the life of mine by approximately 10 years to 2045.
This is supported by an optimized mine plan delivering average annual production of 150000 ounces of gold and 69 million pounds of copper from 2000 26042.
Followed by the processing of low grade stockpiles from 23, 3% to 245.
Paul Tomory: In September, we announced the results of the PFS for Mount Milligan, extending the life of mine by approximately 10 years to 2045. This is supported by an optimized mine plan delivering average annual production of 150,000 ounces of gold and 69 million pounds of copper from 2026 to 2042, followed by the processing of low-grade stockpiles from 2043 to 2045. The study outlines disciplined non-sustaining capital expenditures of approximately $186 million, most of which are not required until the early to mid-2030s, all fully funded from available liquidity and future cash flow. Key investments include $114 million for a second tailings storage facility to be spent across 2032 and 2033, providing the potential for future raises, which could add multiple decades of storage capacity beyond the 2045 life of mine.
The study outlines disciplined non sustaining capital expenditures of approximately $186 million most of which are not required until the early to mid 2000, <unk> all fully funded from our available liquidity and future cash flow.
Key investments include $114 million for second tailing storage facility to be spent across 2032, and 2033 and providing the potential for future races.
Which could add multiple decades of storage capacity beyond the 2045 life of mine.
$36 million for ball mill motor upgrades and flotation cells in 2028 to increase process plant throughput by about 10% to 66000 tons per day and increase recovery by approximately 1%.
And lastly, $28 million for five new haul trucks to support longer haul distances higher material movement rates and stockpile development.
Paul Tomory: $36 million for ball mill motor upgrades and flotation cells in 2028 to increase process plant throughput by about 10% to 66,000 tons per day and increase recovery by approximately 1%. Lastly, $28 million for five new haul trucks to support longer haul distances, higher material movement rates, and stockpile development. Proven and probable reserves increased significantly to 4.4 million ounces of gold and 1.7 billion pounds of copper, representing a 56% and 52% increase, respectively, from year-end 2024. Recent drilling confirms mineralization remains open to the west of the current resource pit, and Centerra continues to advance exploration aimed at expanding the mineral resource and assessing opportunities to extend the mine life beyond the updated plan. The PFS reaffirms Mount Milligan's strong economics with an after-tax NPV of approximately $1.5 billion at $2,600 per ounce gold, which increases to over $2 billion at $3,500 per ounce of gold.
Proven and probable reserves increased significantly to $4 4 million ounces of gold and $1 7 billion pounds of copper, representing a 56 and 52% increase respectively from year end 2024.
Recent drilling confirmed mineralization remains open to the west of the current resource pit and <unk> continues to advance exploration aimed at expanding the mineral resource and assessing opportunities to extend the mine life beyond the updated plan.
The PFS reaffirms Mount Milligan strong economics with an after tax NPV of approximately $1 5 billion at.
At $2600 per ounce gold.
Which increases to over $2 billion.
At $3500 per ounce of gold.
Mount Milligan remains a strategic cornerstone asset in <unk> portfolio with 20 years of mine life.
Meaningful Golden top of production strong cash flow and a significant opportunity for future exploration potential.
In a top tier mining jurisdiction.
Now I'd like to share an update on our sustainability initiatives.
As part of our climate change strategy and commitment to sustainability and operational innovation, we're advancing our renewable diesel pilot project at Mount Milligan.
Paul Tomory: Mount Milligan remains a strategic cornerstone asset in Centerra's portfolio, with 20 years of mine life, meaningful gold and copper production, strong cash flow, and a significant opportunity for future exploration potential in a top-tier mining jurisdiction. Now I'd like to share an update on our sustainability initiatives. As part of our climate change strategy and commitment to sustainability and operational innovation, we're advancing a renewable diesel pilot project at Mount Milligan. This initiative will establish clear reliability metrics, account for seasonal variations, and evaluate performance analytics across our fleet. By exploring renewable diesel, we aim to meaningfully reduce greenhouse gas emissions at Mount Milligan and move towards lowering Centerra's overall carbon footprint. At the same time, Mount Milligan's life of mine extension marks a major milestone in advancing Centerra's gold growth strategy and reaffirms our commitment to social responsibility.
This initiative will establish clear reliability metrics.
Count for seasonal variations and evaluate performance analytics across our fleet.
By exploring renewable diesel we aimed to meaningfully reduce greenhouse gas emissions at Mount Milligan and move towards lowering <unk> overall carbon footprint.
At the same time my Milligan is life of mine extension marks a major milestone in advancing <unk> gold growth strategy.
And reaffirms our commitment to social responsibility.
This includes the launch of the <unk> pre employment training and education readiness program.
We're supports unemployed and underemployed first nations members in local communities through skills training.
By direct employment opportunities.
Between 23% and 2025, we've also achieved double digit growth in our local spend with first nation owned and affiliated businesses.
Paul Tomory: This includes the launch of the eighth pre-employment training and education readiness program, which supports unemployed and underemployed First Nations members in local communities through skills training, followed by direct employment opportunities. Between 2023 and 2025, we've also achieved double-digit growth in our local spend with First Nations-owned and affiliated businesses. That same commitment drives our work at Öksüt Mine, where our community initiatives indefinitely focus on education, sports, environment, and social development. Through these programs, we are proud to have supported more than 13,000 students, helping to build stronger, more resilient communities where we operate. I'll pass the call over to Dave to walk through our operational performance highlights.
That same commitment drives our work at <unk>.
We're a community initiatives and deadly.
Focus on education sports environment, and social development.
Through these programs we are proud to have supported more than 13000 students helping to build stronger more resilient communities, where we operate.
And with that I'll pass the call over to Dave to walk through our operational performance highlights.
Thanks, Paul Slide eight shows operating highlights at Mount Milligan for the third quarter.
Mount Milligan produced over 32500 ounces of gold and $13 4 million pounds of copper in the border.
In 2025 mining operations encountered zones with more complex mineralization the impact of which were incorporated in the recently published PFS.
David Hendriks: Thanks, Paul. Slide eight shows operating highlights at Mount Milligan for the third quarter. Mount Milligan produced over 32,500 ounces of gold and 13.4 million pounds of copper in the quarter. In 2025, mining operations encountered zones with more complex mineralization, the impact of which were incorporated in the recently published PFS. Year-to-date and full-year gold and copper production remains in line with the PFS. In the third quarter, all-in sustaining costs on a byproduct basis were $1,461 per ounce, 14% higher than last quarter due to an increase in sustaining CapEx and lower ounces sold in the quarter. Full-year 2025 costs are expected to be near the low end of the guidance ranges. Slide nine shows the quarterly operating highlights at Öksüt Mine, reflecting another period of strong performance. Third quarter production was 49,000 ounces, better than planned due to higher grades resulting from mine sequencing.
Year to date and full year gold and copper production remains in line with the PFS.
In the third quarter, all in sustaining cost on a byproduct basis were $1461 per ounce, 14% higher than last quarter due to an increase in sustaining capex and lower ounces sold in the quarter.
Full year 2025 costs are expected to be near the low end of the guidance ranges.
Slide nine shows the quarterly operating highlights at Oxford, reflecting another period of strong performance.
Third quarter production was 49000 ounces better than plan due to higher grades resulting from mine sequencing.
As a result, we have reaffirmed our 2025 production guidance without soup with production expected near the upper end of the guidance range.
In the third quarter, all in sustaining cost on a byproduct basis or one $473 per ounce, which is 16% lower compared to last quarter, driven by higher ounces sold and lower sustaining capex, partially offset by higher royalty expenses.
David Hendriks: As a result, we have reaffirmed our 2025 production guidance at Öksüt Mine, with production expected near the upper end of the guidance range. In the third quarter, all-in sustaining costs on a byproduct basis were $1,473 per ounce, which is 16% lower compared to last quarter, driven by higher ounces sold and lower sustaining CapEx, partially offset by higher royalty expenses due to elevated gold prices and new royalty rates in Turkey. Full-year 2025 cost guidance is expected to be near the low end of the range, benefiting from expected higher sales and continued strong operational performance. We have initiated a life of mine optimization study at Öksüt Mine to evaluate the asset's full potential, including the incremental production potential of residual leaching of the heap and expanding the pit to pursue additional mineralization.
Due to elevated gold prices and new royalty rates and trachea.
Full year 2025 cost guidance is expected to be near the low end of the range benefiting from expected higher sales and continued strong operational performance.
We have initiated a life of mine optimization study at Oxford to evaluate the assets full potential.
Including the incremental production potential of residual leaching of the heat and expanding the pit to pursue additional mineralization.
The study will explore auctions to extend gold recovery from existing leach pads through improved solution management, which will enhance residual metal extraction efficiency.
This study is expected to be completed by the end of 2026 and will support updates to the mine's long term reclamation and site management plans.
David Hendriks: The study will explore options to extend gold recovery from existing leach pads through improved solution management, which will enhance residual metal extraction efficiency. The study is expected to be completed by the end of 2026 and will support updates to the mine's long-term reclamation and site management plans, ensuring the operation continues to maximize metal recovery and cash flow in a safe and responsible manner. The restart of Thompson Creek Mine is advancing with approximately 29% of the total capital investment complete. In the third quarter, we invested $31 million in non-sustaining capital expenditures, bringing total investment spend since the September 2024 restart decision to $113 million. We have reaffirmed our 2025 guidance for non-sustaining CapEx at Thompson Creek Mine. The project remains on track, and first production is expected in the second half of 2027.
Ensuring the operation continues to maximize metal recovery and cash flow in a safe and responsible manner.
The restart of Thompson Creek is advancing with approximately 29% of the total capital investment completes.
In the third quarter, we invested $31 million in non sustaining capital expenditures, bringing total investment spend since the September 2020 for restart decision to $113 million.
We have reaffirmed our 2025 guidance for non sustaining Capex at Thompson Creek.
<unk> remains on track and first production is expected in the second half of 2020.
I'll now pass it to Ryan to walk through our financial highlights for the quarter.
Thanks, David.
Slide 11 details our third quarter financial results.
Adjusted net earnings for the third quarter were $66 million or <unk> 33 per share, which benefited from strong production from Oxford and elevated metal braces.
The adjustments to net earnings include a $194 million related to the noncash impairment reversal at goldfield.
David Hendriks: I'll now pass it to Ryan to walk through our financial highlights for the quarter.
Ryan Snyder: Thanks, David. Slide 11 details our third quarter financial results. Adjusted net earnings in the third quarter were $66 million or $0.33 per share, which benefited from strong production from Öksüt Mine and elevated metal prices. Key adjustments to net earnings include $194 million related to the non-cash impairment reversal at Goldfield Project, $27 million of unrealized gain net of taxes on the financial asset related to the additional agreement with Royal Gold, and $16 million of unrealized gain on the remeasurement of the sale of the Greenstone partnership in 2021, among other things. In the third quarter, sales were over 80,000 ounces of gold and 13 million pounds of copper. The average realized price was $3,178 per ounce of gold and $3.73 per pound of copper, which incorporates the existing streaming arrangements at Mount Milligan Mine.
$7 million of unrealized gain net of taxes on a financial asset related to the additional agreement with Royal gold and $16 million of unrealized gain on the Remeasurement of our sale of the greenstone partnership in 2021, among other things.
In the third quarter sales were over 80000 ounces of gold and 13 million pounds of carbon.
The average realized price was $3178 per ounce of gold and $3 73 per pound of copper, which incorporates the existing streaming arrangements at Mount Milligan.
At the molybdenum business unit, approximately $3 1 million pounds up more than it was sold in the third quarter at the <unk> facility at an average realized price of $24 42 per pound.
Consolidated all in sustaining cost on a byproduct basis in the third quarter were $1652 per ounce.
We expect consolidated all in sustaining cost on a byproduct basis to be near the low end of the guidance range for both Mount Milligan and Oxy in 2025.
Ryan Snyder: At the molybdenum business unit, approximately 3.1 million pounds of molybdenum was sold in the third quarter at the Langeloth Metallurgical Facility at an average realized price of $24.42 per pound. Consolidated all-in sustaining costs on a byproduct basis in the third quarter were $1,652 per ounce. We expect consolidated all-in sustaining costs on a byproduct basis to be near the low end of the guidance range for both Mount Milligan Mine and Öksüt Mine in 2025. Slide 12 shows our financial highlights for the quarter. In the third quarter, we generated robust cash flow from operations of $162 million and free cash flow of $99 million, driven by strong operational performance at Öksüt Mine and elevated metal prices. In the third quarter, Mount Milligan Mine generated $64 million in cash from operations and $45 million in free cash flow.
Slide 12 shows our financial highlights for the quarter.
In the third quarter, we generated robust cash flow from operations of 162 million and free cash flow of $99 million driven by strong operational performance at Oxford and elevated metal braces.
In the third quarter, Mount Milligan generated $64 million in cash from operations and $45 million in free cash burn.
Oxy generated $139 million in cash from operations and $134 million and free cash flow.
The molybdenum business unit used $16 million of cash in operations and had a free cash flow deficit of $54 million. This quarter, mainly related to spending on the Thompson Creek restart and a working capital increase at landmark partially due to high molybdenum prices.
Ryan Snyder: Öksüt Mine generated $139 million in cash from operations and $134 million in free cash flow. The molybdenum business unit used $16 million of cash in operations and had a free cash flow deficit of $54 million this quarter, mainly related to spending on the Thompson Creek Mine restart and a working capital increase at Langeloth, partially due to high molybdenum prices. Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation. In the third quarter, we repurchased 2.8 million shares for a total consideration of $22 million, and we continue to believe that repurchasing our shares is an accretive high-return use of cash. Our board has increased the approved level of share repurchases through the NCID in 2025 to $100 million, and we have repurchased $64 million year to date. We also declared a quarterly dividend of $0.07 per share.
Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation.
In the third quarter, we repurchased two 8 million shares for total consideration of $22 million and we continue to believe that repurchasing our shares is an accretive high return use of cash.
Our board has increased the approved level of share repurchases through the NCI D. In 2000 $25 million to $100 million, and we have repurchased $64 million year to date.
We also declared a quarterly dividend of <unk> 70 per share.
Year to date, we have returned over $95 million to shareholders through dividends and share buybacks.
As part of our commitment to returning capital to our shareholders. We expect to remain active on the share buybacks subject to market conditions.
At the end of the third quarter, our cash balance was $562 million, bringing total liquidity to over $960 million.
Ryan Snyder: Year to date, we have returned over $95 million to shareholders through dividends and share buybacks. As part of our commitment to returning capital to our shareholders, we expect to remain active on the share buybacks, subject to market conditions. At the end of the third quarter, our cash balance was $562 million, bringing total liquidity to over $960 million. We also hold an additional $85 million in equity investments. This strong financial position gives us the flexibility to fully fund our organic growth projects at Mount Milligan Mine, Goldfield Project, Kemess Project, and Thompson Creek Mine while continuing to return capital to shareholders. I'll pass it back to Paul for some closing remarks.
We also hold an additional $85 million and equity investments.
Strong financial position gives us the flexibility to fully fund our organic growth projects at Mount Milligan Goldfield.
And Thompson Creek, while continuing to return capital to shareholders I'll pass it back to Paul for some closing remarks. Thanks, Ryan we're proud of the continued progress in advancing our internal self funded growth strategy. The recently published Mount Milligan PFS represents a major step forward and unlocking additional value from this cornerstone asset.
It provides a clearer view of the mine's long term potential.
Alongside this we continue to advance the <unk> study, which is expected to be complete in the first quarter of 2026.
Paul Tomory: Thanks, Ryan. We're proud of the continued progress in advancing our internal self-funded growth strategy. The recently published Mount Milligan PFS represents a major step forward in unlocking additional value from this cornerstone asset and provides a clear view of the mine's long-term potential. Alongside this, we continue to advance the Kemess Project study, which is expected to be complete in the first quarter of 2026. These efforts reflect our disciplined approach to capital allocation and our commitment to enhancing shareholder value through a robust pipeline of self-funded growth opportunities supported by a strong balance sheet. Operator, I'll open the call to questions, please.
These efforts reflect our disciplined approach to capital allocation and our commitment to enhancing shareholder value through our robust pipeline of self funded growth opportunities supported by a strong balance sheet.
And with that operator, I'll open the call for questions. Please.
Thank you.
We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
Your tone acknowledging your request.
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Operator: Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. Your first question today will come from Luke Bertozzi with CIBC. Please go ahead.
And your first question today will come from Luke <unk> with CIBC. Please go ahead.
Hi, Paul and team congrats on the solid quarter, great to see higher commodity prices falling right into free cash flow.
Notice gold recovery at Mount Milligan was bit low compared to prior quarters and the recent technical report can you provide a bit of color on what drove the lower recovery in Q3 as well as your expectations for Q4.
Hi, Thanks very much for the question this is Dave.
On the recovery piece.
[Analyst 1]: Hi, Paul and team. Congrats on the solid quarter. It's great to see higher commodity prices flowing right into free cash flow. I noticed gold recovery at Mount Milligan was a bit low compared to prior quarters and the recent technical report. Can you provide a bit of color on what drove the low recovery in Q3 as well as your expectations for Q4?
We had remodeled the entire deposits and one of the things that we did when we put the PFS was looking at the ratio of the pie right. So the kalpoe pyrites and that ratio has been more pyrite in the last quarter than we had modeled in there and that has led to the low recoveries.
David Hendriks: Hi. Thanks very much for the question. This is Dave. On the recovery piece, we had remodeled the entire deposit, and one of the things that we did when we put the PFS out was looking at the ratio of the pyrite to the copper pyrites. That ratio has been more pyrite in the last quarter than we had modeled in there, and that has led to the low recoveries. What we have done through the end of the year is we will be able to get through to our ounces for guidance based on moving a little bit more higher material. We are able to satisfy ourselves that we understand the piece of the pyrite to copper pyrite ratio, which is impacting our recovery.
What we have done through the end of the year as we will be able to get through to our ounces for guidance based on moving a little bit more higher material and so we're able to satisfy ourselves that we understand the piece of the pie right to counsel pyrite ratio, which is impacting our recovery.
Okay awesome. Thanks for the details and congrats again on the solid quarter I'll pass it onto the next caller.
Excellent.
And your next question today will come from Don Demarco with National Bank. Please go ahead.
Hi, Paul Good morning, and congratulations on the strong quarter I'll start with oxide.
So I see that during the quarter, you had $1 5 million tonnes stacked at a grade of 182 grams per tonne.
[Analyst 1]: Awesome. Thanks for the details, and congrats again on the solid quarter. I'll pass it on to the next caller.
So considering heap leach residence times and so on does this suggest that we might see another strong great quarter in Q1 'twenty six.
Paul Tomory: Thanks, Luke.
Operator: Your next question today will come from Don DeMarco with National Bank. Please go ahead.
After production normalizes in Q4.
Yes, I think what we'll see going forward Theyre gone is that through the end of the year again, we reaffirmed our guidance number we're pretty confident that we'll get there and then we should see some good strong production going into next year as well, 100% that will impact us going into Q1 of 2020 as you've done this is a bit of.
[Analyst 2]: Oh, hi. Hi, Paul. Good morning and congratulations on the strong quarter. I'll start with Öksüt. I see that during the quarter, you had 1.5 million tons stacked at a grade of 1.82 grams per ton. Considering heap leach residence times and so on, does this suggest that we might see another strong grade quarter in Q1 2026 after the production normalizes in Q4?
Segway into the longer term study, we're launching at Oxford. This mine is reconciled positively since day one.
David Hendriks: Yeah, I think what we'll see going forward there, Don, is that through the end of the year, again, we reaffirmed our guidance number. We're pretty confident that we'll get there, and we should see some good strong production going into next year as well. 100% that will impact us going into Q1 of 2026. As you know, Don, this is a bit of a segue into the longer-term study we're launching at Öksüt Mine. This mine has reconciled positively since day one, and we're pretty confident that there's a lot more gold in those heaps than our previous metallurgical models showed. What we've kicked off here is looking at how we might be able to exploit those accumulated inventories in that heap.
And we're pretty confident that there is a lot more gold in those heaps than our previous metallurgical model showed and so what we've kicked off here is looking at how we might be able to exploit those accumulated inventories in that heat. So as we as we said in our.
In our release and in Dave's prepared remarks, we've initiated a study on how to access what we believe are significantly accumulated inventories are bold in those hubs.
But it is this asset continues to perform extremely well on reconciliation and Thats, what youre seeing in those stock down Susan and accumulated inventories.
Okay. Thank you.
David Hendriks: As we said in our release and in Dave's prepared remarks, we've initiated a study on how to access what we believe are significant accumulated inventories of gold in those heaps. This asset continues to perform extremely well on reconciliation, and that's what you're seeing in those stacked ounces and in accumulated inventories.
And for my next question U S based assets have been trending favorably under the current administration. So I've got two parts to this question.
Is there a read through to improving optics for the MDU.
And given that Molly is a critical mineral with applications in defense and aerospace and Colin is there potential for a strategic deal with the U S government.
Okay. So on your first question there is no doubt that the whole mining and metal space.
[Analyst 2]: Okay. Thank you. For my next question, U.S.-based assets have been trending favorably under the current administration. I have two parts to this question. Is there a read-through to improving optics for the MBU? Given that moly is a critical mineral, you know, with applications in defense and aerospace and so on, is there a potential for a strategic deal with the U.S. government?
Has become a more favorable place over the last year.
And particularly for molybdenum, we are a U S based mine feeding a U S based roaster, principally selling refined malignant products to domestic U S steel mills, and we've seen an increased confidence in that sector in the U S. Steelmaking sector molybdenum as you know goes into high performance steels that are you.
David Hendriks: Okay. On your first question, there is no doubt that the whole mining and metal space has become a more favorable place over the last year. Particularly for molybdenum, we are a U.S.-based mine feeding a U.S.-based roaster, principally selling refined molybdenum products to domestic U.S. steel mills. We've seen increased confidence in that sector, in the U.S. steelmaking sector. Molybdenum, as you know, goes into high-performance steels that are used in everything from pipelines to nuclear power to defense, aerospace, shipbuilding, all sectors that are seeing an uptick in potential in steel demand. Yes, the whole U.S. minerals and mining space, particularly what we have fully permitted in-flight project, certainly has become more attractive. In terms of a U.S. government deal, it's something that we monitor. We don't need funding. We're fully funded right through the bill. The project is on track, as we said in our prepared remarks.
And everything from pipelines too.
Nuclear power to defense Aerospace shipbuilding all sectors that are seeing an uptick in <unk>.
And potential.
<unk> demand so yes, the whole U S minerals and mining space, particularly what we have fully permitted.
In in flight projects, certainly has become more attractive in terms of a U S. Government deal. It's something that we monitor we don't need funding we were fully funded right through the build the project is on track as we said in our prepared remarks.
<unk>.
At this stage, we're continuing to monitor the situation with the government.
There is nothing to report other than to say that it's as I said in the previous comment that it's a very favorable environment right now.
Okay.
Okay, great well listen that's all for me good luck with the rest of the quarter. Thank you. Thank.
Thank you.
And your next question today will come from Frederic Bolton with BMO capital markets. Please go ahead.
David Hendriks: At this stage, we're going to continue to monitor the situation with the government. There's nothing to report, other than to say that it's, as I said in the previous comment, a very favorable environment right now.
Yeah.
Good morning, Paul and team. Thank you for.
Taking my questions just a couple of questions from me one just wanted to follow up on Nick's question.
[Analyst 2]: Okay. Great. That's all for me. Good luck with the rest of the quarter. Thank you.
Milligan.
You mentioned.
You mentioned that.
David Hendriks: Thank you.
Okay.
Operator: Your next question today will come from Frederick Bolton with BMO Capital Markets. Please go ahead.
Yes.
I mentioned of deep winding sockets Pat.
Pat.
During the quarter can be.
[Analyst 3]: Morning, Paul and team. Thank you for taking my questions. Just a couple of questions from me. I just want to follow up on Luke's first question about Mount Milligan. There was a mention of the winding circuit being impacted during the quarter. Can you just expand on that? That's an issue that's been resolved. My second question relates to Öksüt Mine. If the life of mine optimization study that concludes towards the end of 2026 results in an expansion of the pit, would that require additional permitting from the Turkish government, or would that require a new EIA? That's it. Thank you.
Can you just expand.
That initiative.
<unk>.
And my second question.
To switch.
Okay.
The mine optimization study.
Concludes.
Thanks.
Pat.
With health and an expansion of the pitch with that Macquarie additional permitting from the.
Patrick governmental without Macquarie.
Hi.
Alright, Okay. So let me take the auction question first so the mine life. The current reserve life ends in 2029, so that will be and we still anticipate at this point that that will be when the last time it comes out of the pit.
What this optimization study looks at is the accumulated inventories on the heaps because the mine has reconciled positive we believe and we're gonna be proving this up with Sonic drilling and other means over the next little while we believe that theres significant accumulated inventories. This can be done in the context of the current footprint there would have to be permanent.
David Hendriks: Sorry. Okay. Let me take the Öksüt Mine question first. The mine life, the current reserve life ends in 2029. That will be, and we still anticipate at this point that that will be when the last ton comes out of the pit. What this optimization study looks at is the accumulated inventories on the heaps. Because the mine has reconciled positive, we believe, and we're going to be proving this up with sonic drilling and other means over the next little while, we believe that there's significant accumulated inventories. This can be done in the context of the current footprint. There would have to be permit modifications for residual leaching, but there's broad understanding what that might look like. The principal focus of the study is how to manage what we believe are accumulated inventories, better solution management with the cyanide solution.
<unk> for residual leaching, but theres broad understanding.
What that might look like so the principal focus of this study is how to manage what we believe are accumulating inventories better solution management.
With the.
With the cyanide.
Cyanide solution and lastly, as part of the study we will also evaluate whether or not there might be a sulfide inventory below the current oxide beyond the current oxide boundary at depth. It's still very early to say what that might look like and of course, if there were more materially that will require permit modifications.
But it's early days and we're going to be.
Assessing the study as those principally residual leaching, but secondarily, whether or not there are potential extensions to the pit into the sulfide.
David Hendriks: Lastly, as part of the study, we will also evaluate whether or not there might be a sulfide inventory below the current oxide, beyond the current oxide boundary at depth. It's still very early to say what that might look like. Of course, if there were more material in the mine, that would require permit modifications. It's early days, and we're going to be assessing the study as it is principally residual leaching, but secondarily, whether or not there are potential extensions to the pit into the sulfides. That's the Öksüt Mine point. On Mount Milligan. As Dave said, the purpose of this pre-feasibility study, of course, was to extend mine life, but it was also to reset our understanding on grade recovery and throughput. Fundamentally, how do we mine a plan that has an optimal blend of the various characteristics so that we're not impacted on recovery?
So thats the <unk> point.
On Mount Milligan, So as Dave said the purpose of this PFS of course was to extend mine life, but it was also to reset our understanding on grade recovery and throughput fundamentally how do we how do we mine a plan that has an optimal blend of the various characteristics.
So there we're not impacted on a recovery. This year, we're still we're still dealing with in effect, having mined ourselves into a corner on some of this material as Dave described we've been impacted by high pyrite, Calicle, Tyro, which depresses recoveries in the PFS.
What we've done is we've created a mine plan that blends down to pyrite. So that we can get back up to the recoveries that we intend to be at and seen by the way goes for grade. So the PFS one of its major objectives was to create a mine plan that provides for a more optimal feed.
David Hendriks: This year, we're still dealing with, in effect, having mined ourselves into a corner on some of this material. As Dave described, we've been impacted by high pyrite to copper pyrite, which depresses recovery. In the pre-feasibility study, what we've done is we've created a mine plan that blends down the pyrite so that we can get back up to the recoveries that we intend to be at. The same, by the way, goes for grade. The pre-feasibility study, one of its major objectives, was to create a mine plan that provides for a more optimal feed source and feed blending into the mill. We expect to start working our way through that. It's not something you can turn around overnight, but it's something we expect to work our way through, certainly starting in the first quarter of next year. Did I answer your question?
Feed source and feed blending into the mill. So we expect to start working our way through that is not something you can turnaround overnight, but its something we expect to work our way through certainly starting.
In the first quarter of next year.
So did I answer your question. Thank you that's great.
Yes.
Thank you very much.
Was it for me congrats on a solid quarter.
Thanks Rod.
And your next question today will come from Brian Macarthur with Raymond James. Please go ahead.
Good morning, and thank you for taking my question, Paul just so I'm clear on this ox suite I think you've answered this.
But assuming we don't do the sulfides and we just did a residual leach.
[Analyst 3]: Yeah, that's great. Thank you very much. That's it for me. Congrats on the top of the quarter.
Or are we just talking about are we removing material again from leach pad to leach patter or are we just going to be able to.
David Hendriks: Thanks, Freddie.
Operator: Your next question today will come from Brian MacArthur with Raymond James. Please go ahead.
Reuse the current leach pads and get more mature so effectively my real question goes to this the capital for this is very very little and Theres no mining involved assuming we don't go to the sulfide is that is that right.
[Analyst 4]: Good morning, and thank you for taking my question. Paul, just so I'm clear on this Öksüt Mine, I think you've answered this. Assuming we don't do the sulfides and we just do the residual leach, are we just talking about, are we removing material again from leach pad to leach pad, or are we just going to be able to reuse the current leach pads and get more material out? Effectively, my real question goes to this. The capital for this is very, very little, and there's no mining involved, assuming we don't go to the sulfide. Is that right?
Yes, it would be a very low cap expansion, both Dave and I have a lot of experience with this type of stuff in Nevada day, William described what we're going to be looking at your scope on the residual work. Yes. There is a couple of different pieces. One of the studies will look at is certainly reshaping the heaps will be a big part of us.
Just those are time and everything else. So it takes a little bit of capital to get that done, but that gives us a big opportunity to be able to get in there and then we'll look at our solution flow and decided it is best to just go with a straight piece do we want to try and up the freight grades by going through the areas couple of different times and having some maybe an additional.
David Hendriks: Yeah, it would be a very low CapEx expansion. Both Dave and I have a lot of experience with this type of stuff in Nevada. Dave, why don't you describe what we're going to be looking at here, a scope on the residual work? There's a couple of different pieces. One of the studies we'll look at is certainly reshaping the heaps, which will be a big part of this. That's just dozer time and everything else. It takes a little bit of capital to get that done, but that gives us a big opportunity to be able to get in there. We'll look at our solution flow and decide, is it best to just go with a straight piece?
Pond or two to do things and so it's just a piece of what we'll look at is what's the best way to get the gold out in the.
An appropriate timeline and leaving us in a good position for closure, so whether that ends up being a little bit more capital it really be more capital from the standpoint that we'll be able to get a lot more ounces out and thats just something that we will plug away at and it will continue to evolve over the next few years, we'll have a study published at the end of next year that will give.
David Hendriks: Do we want to try and up the preg grades by going through the areas a couple of different times and having maybe an additional pond or two to do things? A piece of what we'll look at is what's the best way to get the gold out in an appropriate timeline and leaving us in a good position for closure. Whether that ends up being a little bit more capital, it would only be more capital from the standpoint that we'll be able to get a lot more ounces out. That's just something that we will plug away at, and it will continue to evolve over the next few years. We'll have a study published at the end of next year that will give us a good level of confidence, and whatever we put in there, I'm sure we'll beat that as well.
As a good level of confidence and whatever we put in there I'm sure we will beat that as well.
There is a lot of opportunity taking us available seats.
We've done it a bunch of times and we look forward to initiating that work in Turkey.
No. It makes great sense and great return on capital So just with that though as you get this information is there any opportunity.
Get better recoveries in the later part of the current mine life like obviously the studies during 2026, we start to get benefit even in 'twenty eight 'twenty nine or is it or do you just have to.
David Hendriks: There's a lot of opportunity taking ounces out of old heaps. We've done it a bunch of times, and we look forward to initiating that work in Turkey.
I haven't been there for a while just reconfiguring things how do you actually do this.
A lot of it comes down to how much solution that we have and how we're able to put it through the heat's. So are we going to just run it through one at a time do we try and build the pre great up by going through a couple of different areas and Thats. The study will look at so my expectation is that we would be able to increase the grades going through the plants and get more.
[Analyst 4]: It makes great sense and great return on capital. With that, as you get this information, is there any opportunity to get better recoveries in the later part of the current mine life? Obviously, the study is done in 2026. We start to get benefit even in 2028 or 2029, or do you just have to, I mean, I haven't been there for a while, just reconfiguring things, how you actually do this?
So as early but continue to get ounces late but that could take.
David Hendriks: A lot of it comes down to how much solution that we have and how we're able to put it through the heaps. Are we going to just run it through one at a time? Do we try and build the preg grade up by going through a couple of different areas? That's the study we'll look at. My expectation is that we would be able to increase the grades going through the plants and get more ounces early, but continue to get ounces late. That could take, you know, 18 months, two years to get that up and running because it would require probably some additional pumping. Therefore, we'd need to do some minor modifications to permitting and everything else. It's an iterative process and expect that we would be able to do very well with it over the next period of time. You are 100% correct.
18 months, two years to get that up and running because it would require probably some additional pumping. Therefore, we need to do some minor modifications to permitting and everything else. So it's an iterative process and expect that we would be able to do very well with it over the next period of time and you are 100% correct very low capital for the return that we would get out of it.
Yeah.
Great. Thank you very much that's very helpful.
Again, if you have a question. Please press star and then one.
And your next question today will come from Steven Green with TD Securities. Please go ahead.
Yeah morning, guys.
I think you answered my questions on <unk>.
David Hendriks: Very low capital for the return that we would get out of it.
But just just to finish that off do you have any oxide targets.
[Analyst 4]: Great. Thank you very much. That's very helpful.
On the project area and are potentially regional opportunities.
Operator: Again, if you have a question, please press star and then one. Your next question today will come from Stephen Green with TD Securities. Please go ahead.
Taking advantage of your position in Turkey.
At the end of the month one of the.
Sure one of the pieces of this optimization study is really a 360 around the site and explorations 360 around the site, bringing in some different people to take a look at what we've been doing there for the last 10 years can you give us an opportunity to make sure we're not leaving something behind and then also working with the <unk>.
[Analyst 5]: Yeah, morning, guys. I think you answered my questions on Öksüt. Just to finish that off, do you have any offsite targets in the project area or potentially regional opportunities to take advantage of your position in Turkey at the end of the mine?
Deposits in the area. So that is part of the work that we will continue to do and that will be a part of the life of mine optimization study.
David Hendriks: One of the pieces of this optimization study is really a 360 around the site, an exploration 360 around the site, bringing in some different people to take a look at what we've been doing there for the last 10 years and give us an opportunity to make sure we're not leaving something behind. Also, working with the deposits in the area is part of the work that we will continue to do, and that will be a part of the life of mine optimization study.
Okay, great. Thank you.
So again, if you have a question. Please press star and then one.
Please standby as we poll for questions.
Seeing no further questions. This will conclude our question and answer session as well as today's conference call. You May now disconnect. Your lines. Thank you for participating and have a pleasant day.
[Analyst 5]: Okay. Great. Thank you.
Operator: Again, if you have a question, please press star and then one. Please stand by as we poll for questions. Seeing no further questions, this will conclude our question and answer session as well as today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.