Q2 2026 Coeur Mining Inc Earnings Call

August 6, 2026

Operator 2: Good morning, and welcome to the conference call to discuss Coeur's second quarter results. All participants will be in a listen-only mode for the duration of the call. Should you need any assistance today, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, you may press star, then two. Please note that this event is being recorded today. I would now like to turn the call over to Mitch Krebs, President and CEO. Please go ahead.

Operator: Good morning, and welcome to the conference call to discuss Coeur's second quarter results. All participants will be in a listen-only mode for the duration of the call. Should you need any assistance today, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, you may press star, then two. Please note that this event is being recorded today. I would now like to turn the call over to Mitch Krebs, President and CEO. Please go ahead.

Speaker #1: discuss Coeur's second quarter results. All participants will be in a listen-only mode for the duration of the call. And should you need any assistance today, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on your telephone keypad.

Speaker #1: To withdraw your question, you may press star, then two. Please note that this event is being recorded today. I would now like to turn the call over to Mitch Krebs, President and CEO.

Speaker #1: Please go ahead.

Speaker #2: Hello, everyone, and thanks for joining our call to discuss Coeur's second quarter results. Before we start, please note our cautionary language regarding forward-looking statements, and refer to our SEC filings on our website.

Mitch Krebs: Hello, everyone, thanks for joining our call to discuss Coeur's second quarter results. Before we start, please note our cautionary language regarding forward-looking statements and refer to our SEC filings on our website. Starting off on slide three, Coeur's record second quarter results were driven in large part by the first full quarter of contributions from the recently acquired New Afton and Rainy River operations. Quarterly revenue passed the $1 billion mark for the first time in the company's history on the way to record quarterly adjusted EBITDA and free cash flow. Lower prices, inflationary pressures, below plan grades at three of our operations, and the pace of production ramp-ups at Rainy River and New Afton were all headwinds during the quarter.

Speaker #2: Starting off on slide three, Coeur's record second-quarter results were driven in large part by the first full quarter of contributions from the recently acquired New Afton and Rainy River operations.

Speaker #2: Quarterly revenue passed the $1 billion mark for the first time in the company's history on the way to record quarterly adjusted EBITDA and free cash flow.

Speaker #2: Lower prices, inflationary pressures below planned grades at three of our operations, and the pace of production ramp-ups at Rainy River and New Afton were all headwinds during the quarter.

Speaker #2: There was also a $140 million or 10 cent per share non-cash impact to second quarter EPS and EBITDA from the acquisition accounting driven by Rainy River's stockpile inventory that's worth highlighting.

Mitch Krebs: There was also $140 million, or $0.10 per share non-cash impact to second quarter EPS and EBITDA from the acquisition accounting, driven by Rainy River's stockpile inventory that is worth highlighting. Off the back of nearly $400 million of quarterly free cash flow, our ending cash balance exceeded $1 billion for the first time in history and is expected to continue increasing rapidly, turning the balance sheet into a significant source of strength. We intend to continue deploying this cash into record levels of exploration investment and into our organic growth projects to help us deliver peer-leading ROIC. We also showed in the second quarter our commitment to returning capital to shareholders as we began to more actively repurchase shares under the expanded $750 million buyback program in the second half of the quarter. We paid the company's first dividend in 30 years.

Speaker #2: Off the back of nearly $400 million of quarterly free cash flow, our ending cash balance exceeded $1 billion for the first time in history, and is expected to continue increasing rapidly turning the balance sheet into a significant source of strength.

Speaker #2: We intend to continue deploying this cash into record levels of exploration investment and into our organic growth projects to help us deliver peer-leading ROIC.

Speaker #2: We also showed in the second quarter our commitment to returning capital to shareholders as we began to more actively repurchase shares under the expanded $750 million buyback program in the second half of the quarter, and we paid the company's first dividend in 30 years.

Speaker #2: The company's growing financial strength leaves us well-positioned which is expected to further increase with a significantly second half weighted production and cash flow profile.

Mitch Krebs: The company's growing financial strength leaves us well-positioned, which is expected to further increase with a significantly second half-weighted production and cash flow profile. Hitting on a couple of second quarter highlights, Rochester out in Nevada achieved an important milestone with a new quarterly record of 6.8 million metric tons crushed, a 15% increase over the prior quarter. This progress in establishing crusher consistency and predictability has been a true team effort that deserves acknowledgment. As Mick will walk you through, the team also completed the phase 2A leach pad expansion during the quarter, leaving Rochester poised for very strong second half silver production, given the significant number of ounces placed close to liner. It was also great to see Wharf bounce back with a strong quarter as they return to more normal operations after recovering from damages to the crusher last November.

Speaker #2: Hitting on a couple of second quarter highlights, Rochester out of Nevada achieved an important milestone with a new quarterly record of $6.8 million metric tons crushed a 15% increase over the prior quarter.

Speaker #2: This progress in establishing crusher consistency and predictability has been a true team effort that deserves acknowledgment. As Mick will walk you through the team also completed the phase 2A leach pad expansion during the quarter, leaving Rochester poised for very strong second half silver production given the significant number of ounces placed close to liner.

Speaker #2: It was also great to see Wharf bounce back with a strong quarter, as they returned to more normal operations after recovering from damages to the crusher last November.

Speaker #2: We issued an exploration update last month highlighting the ongoing success we're having at our two Mexican operations. Recent results at Palmerio with the continued emergence off to the east and at Las Chispas with drilling in the gap zone and at other new targets underscores the continued impact of our brownfield exploration investments on our efforts to drive higher returns on invested capital.

Mitch Krebs: We issued an exploration update last month highlighting the ongoing success we're having at our two Mexican operations. Recent results at Palmarejo with the continued emergence off to the east, and at Las Chispas with drilling in the gap zone and at other new targets underscores the continued impact of our brownfield exploration investments on our efforts to drive higher returns on invested capital. While our five legacy operations remain on track to deliver their full year guidance, we recalibrated New Afton's and Rainy River's guidance ranges for the nine months of Coeur's ownership in 2026. The Rainy River adjustments reflect a more gradual expected ramp-up in underground production rates this year than previously assumed, and the New Afton modifications reflect the rate of cave growth we're seeing since the C-Zone development was completed in April.

Speaker #2: While our five legacy operations remain on track to deliver their full year guidance, we recalibrated New Afton's and Rainy River's guidance ranges for the nine months of Coeur's ownership in 2026.

Speaker #2: The Rainy River adjustments reflect a more gradual expected ramp-up in underground production rates this year than previously assumed, and the New Afton modifications reflect the rate of cave growth we're seeing since the sea-zone development was completed in April.

Speaker #2: Mick will provide additional details on the great work being done to safely and sustainably deliver the performance that we expect from these two new assets.

Mitch Krebs: Thanks, Mitch. Mick will provide additional details on the great work being done to safely and sustainably deliver the performance that we expect from these two new assets. Meanwhile, I'm pleased to report that our post-acquisition integration efforts are advancing according to schedule. Before turning it over to Mick, our addition to the S&P MidCap 400 Index announced on 8 June was another example of how our US-based North American platform of seven well-balanced operations offers investors liquid, high-quality exposure to the positive long-term outlook for gold, silver, and copper. Mick, over to you.

Speaker #2: Meanwhile, I'm pleased to report that our post-acquisition integration efforts are advancing according to schedule. Before turning it over to Mick, our addition to the S&P 400 mid-cap index announced on June 8th was another example of how our US-based North American platform of seven well-balanced operations offers investors liquid, high-quality exposure to the positive long-term outlook for gold, silver, and copper.

Speaker #2: Mick, over to you.

Speaker #3: Thanks, Mitch. Coeur's operating results in the second quarter included several important developments that bode well for the strength of our enhanced portfolio as we look forward to the second half of 2026 and beyond.

Michael Routledge: Thanks, Mitch. Coeur's operating results in Q2 included several important developments that bode well for the strength of our enhanced portfolio as we look forward to H2 2026 and beyond. As Mitch mentioned, we saw lower-than-planned grades at Kensington, Rochester, and Palmarejo, which are expected to rebound in H2, consistent with our guidance. A strong H2 tailwind at Rochester, aside from the higher planned grades, is the impressive progress of the crushing circuit, which continues to deliver strong, more consistent performance. Of the record 6.8 million tons crushed in Q2 that Mitch mentioned, approximately 97% ran through all three stages of crushing, highlighting the enhanced efficiency and flexibility of the operation as the crushing train moves further into a consistent operating rhythm. The pace of construction for phase 2A of leach pad 6 accelerated during the quarter.

Mick Routledge: Thanks, Mitch. Coeur's operating results in Q2 included several important developments that bode well for the strength of our enhanced portfolio as we look forward to H2 2026 and beyond. As Mitch mentioned, we saw lower-than-planned grades at Kensington, Rochester, and Palmarejo, which are expected to rebound in H2, consistent with our guidance. A strong H2 tailwind at Rochester, aside from the higher planned grades, is the impressive progress of the crushing circuit, which continues to deliver strong, more consistent performance. Of the record 6.8 million tons crushed in Q2 that Mitch mentioned, approximately 97% ran through all three stages of crushing, highlighting the enhanced efficiency and flexibility of the operation as the crushing train moves further into a consistent operating rhythm. The pace of construction for phase 2A of leach pad 6 accelerated during the quarter.

Speaker #3: As Mitch mentioned, we saw lower-than-planned grades at Kensington, Rochester, and Palmerio, which are expected to rebound in the second half consistent with our guidance.

Speaker #3: A strong second half tailwind at Rochester, aside from the higher planned grades, is the impressive progress of the crushing circuit. Which continues to deliver strong, more consistent performance.

Speaker #3: Of the record 6.8 million tons crushed in Q2 that Mitch mentioned, approximately 97% ran through all three stages of crushing, highlighting the enhanced efficiency and flexibility of the operation as the crushing train moves further into a consistent operating rhythm.

Speaker #3: The pace of construction for phase 2A of leach pad 6 accelerated during the quarter. Some of you may recall the initial flush of silver and gold production in 2023 following placement and irrigation of first ore close to liner on pad 6 phase 1.

Michael Routledge: Some of you may recall the initial flush of silver and gold production in 2023 following placement and irrigation of first ore close to liner on pad 6 phase I. With phase 2A ore placed exceeding four million tons through July and growing, we expect a similar spike to underpin strong H2 2026 production at Rochester. Phase 2B of pad 6 is well on schedule, and we expect it to be completed in Q4 of this year, providing additional capacity close to liner. Turning briefly to Wharf, the team continued to exceed expectations and complete all repairs ahead of schedule following the fire incident in the crusher building last November. Two contract crushing units augmented ore placement rates on the pads as the repaired Wharf crusher achieved full capacity in May. Contract crushing has been fully demobilized, and normal operations have now resumed.

Mick Routledge: Some of you may recall the initial flush of silver and gold production in 2023 following placement and irrigation of first ore close to liner on pad 6 phase I. With phase 2A ore placed exceeding four million tons through July and growing, we expect a similar spike to underpin strong H2 2026 production at Rochester. Phase 2B of pad 6 is well on schedule, and we expect it to be completed in Q4 of this year, providing additional capacity close to liner. Turning briefly to Wharf, the team continued to exceed expectations and complete all repairs ahead of schedule following the fire incident in the crusher building last November. Two contract crushing units augmented ore placement rates on the pads as the repaired Wharf crusher achieved full capacity in May. Contract crushing has been fully demobilized, and normal operations have now resumed.

Speaker #3: With phase 2A ore placed exceeding $4 million tons through July and growing, we expect a similar spike to underpin strong second half 2026 production at Rochester.

Speaker #3: Phase 2B of pad 6 is well on schedule and we expect it to be completed in Q4 this year providing additional capacity close to liner.

Speaker #3: Turning briefly to Wharf, the team continued to exceed expectations and complete all repairs ahead of schedule following the fire incident in the crusher building last November.

Speaker #3: Two contract crushing units augmented ore placement rates on the pads as the repaired Wharf crusher achieved full capacity in May. Contract crushing has been fully demobilized and normal operations have now resumed.

Speaker #3: Moving to the Canadian assets, we have continued to work closely with the New Afton and Rainy River teams over the last four months on integration and mine plan optimization.

Michael Routledge: Moving to the Canadian assets, we have continued to work closely with the New Afton and Rainy River teams over the last four months on integration and mine plan optimization. At New Afton, the primary focus remains on prioritizing healthy cave draw. Executing disciplined cave draw management in these early days is the most important factor we control to protect the long-term health and productivity of C-Zone. We increased tonnage draw from the western portion of the cave at similar grades to the north draw points. We are still limiting tonnage from the higher-grade eastern portion of the cave following completion of its construction in April. Daily mining rates during the quarter averaged approximately 12,000 tons per day.

Mick Routledge: Moving to the Canadian assets, we have continued to work closely with the New Afton and Rainy River teams over the last four months on integration and mine plan optimization. At New Afton, the primary focus remains on prioritizing healthy cave draw. Executing disciplined cave draw management in these early days is the most important factor we control to protect the long-term health and productivity of C-Zone. We increased tonnage draw from the western portion of the cave at similar grades to the north draw points. We are still limiting tonnage from the higher-grade eastern portion of the cave following completion of its construction in April. Daily mining rates during the quarter averaged approximately 12,000 tons per day.

Speaker #3: At New Afton, the primary focus remains on prioritizing healthy cave growth. Executing disciplined cave draw management in these early days is the most important factor we control to protect the long-term health and productivity of sea zone.

Speaker #3: We increased tonnage draw from the western portion of the cave at similar grades to the north draw points and we are still limiting tonnage from the higher grade eastern portion of the cave following completion of its construction in April.

Speaker #3: Daily mining rates during the quarter averaged approximately 12,000 tons per day. We are pleased to report that we saw mining rates tick up further in July including reaching 14,000 tons per day during the last week of the month as we've begun to increase draw rates in the west.

Michael Routledge: We are pleased to report that we saw mining rates tick up further in July, including reaching 14,000 tons per day during the last week of the month, as we've begun to increase draw rates in the west. We expect to achieve targeted throughput of 16,000 tons per day early in Q4 compared to the end of Q2, as assumed in the original New Gold 2026 budget we approved late last year. As a result, we have refined New Afton's partial year guidance to reflect this prudent approach, which is summarized on slide 12. At Rainy River, solid production from phase 4 of the open pit drove free cash flow of $123 million, the highest free cash flow of any mine in Coeur's long history.

Mick Routledge: We are pleased to report that we saw mining rates tick up further in July, including reaching 14,000 tons per day during the last week of the month, as we've begun to increase draw rates in the west. We expect to achieve targeted throughput of 16,000 tons per day early in Q4 compared to the end of Q2, as assumed in the original New Gold 2026 budget we approved late last year. As a result, we have refined New Afton's partial year guidance to reflect this prudent approach, which is summarized on slide 12. At Rainy River, solid production from phase 4 of the open pit drove free cash flow of $123 million, the highest free cash flow of any mine in Coeur's long history.

Speaker #3: We expect to achieve targeted throughput of 16,000 tons per day early in the fourth quarter compared to the end of the second quarter as assumed in the original new gold 2026 budget they approved late last year.

Speaker #3: As a result, we have refined New Afton's partial year guidance to reflect this prudent approach which is summarized on slide 12. At Rainy River, solid production from phase 4 of the open pit drove free cash flow of $123 million the highest free cash flow of any mine in Coeur's long history.

Speaker #3: Open pit mining processing and underground development all performed well during the initial full quarter of Coeur's ownership while waste stripping activities on phase 5 of the open pit remained ahead of schedule.

Michael Routledge: Open pit mining, processing, and underground development all performed well during the initial full quarter of Coeur's ownership, while waste stripping activities on phase 5 of the open pit remained ahead of schedule. It is important to note, we kept the mill full all quarter via the operation's significant stockpile inventory. We expect the acquired high and medium grade stockpiles to be depleted by the end of Q3. We will be building up a new stockpile to provide that important level of flexibility with a goal of keeping the mill full at all times. Q2 production was affected by lower-than-planned underground mining rates, which reflected some short-term execution challenges with the underground mining contractor.

Mick Routledge: Open pit mining, processing, and underground development all performed well during the initial full quarter of Coeur's ownership, while waste stripping activities on phase 5 of the open pit remained ahead of schedule. It is important to note, we kept the mill full all quarter via the operation's significant stockpile inventory. We expect the acquired high and medium grade stockpiles to be depleted by the end of Q3. We will be building up a new stockpile to provide that important level of flexibility with a goal of keeping the mill full at all times. Q2 production was affected by lower-than-planned underground mining rates, which reflected some short-term execution challenges with the underground mining contractor.

Speaker #3: It is important to note we kept the mill full all quarter via the operations significant stockpile inventory. We expect the acquired high and medium grade stockpiles to be depleted by the end of the third quarter but we will be building up a new stockpile to provide that important level of flexibility with a goal of keeping the mill full at all times.

Speaker #3: Second quarter production was affected by lower-than-planned underground mining rates. Which reflected some short-term execution challenges with the underground mining contractor. I'm pleased to report that after assuming control of the operation and addressing the gaps we observed, underground mining rates are now on the rise as evidenced in the performance improvements we saw in July.

Michael Routledge: I'm pleased to report that after assuming control of the operation and addressing the gaps we observed, underground mining rates are now on the rise, as evidenced in the performance improvements we saw in July. The gaps did require a relatively modest amount of additional capital and operating costs that Tom will highlight. However, we are expecting a very quick payback. Just to give you a sense, after averaging 2,300 tons per day in Q2, underground production rates jumped over 40% to approximately 3,300 tons per day in July. We now expect to achieve our target of 5,000 tons per day by year-end versus Q3, as assumed in the original New Gold 2026 budget that we approved late last year. Revised partial year 2026 production guidance at Rainy River is shown on slide 13, which reflects the slightly slower assumed ramp-up of underground mining rates.

Mick Routledge: I'm pleased to report that after assuming control of the operation and addressing the gaps we observed, underground mining rates are now on the rise, as evidenced in the performance improvements we saw in July. The gaps did require a relatively modest amount of additional capital and operating costs that Tom will highlight. However, we are expecting a very quick payback. Just to give you a sense, after averaging 2,300 tons per day in Q2, underground production rates jumped over 40% to approximately 3,300 tons per day in July. We now expect to achieve our target of 5,000 tons per day by year-end versus Q3, as assumed in the original New Gold 2026 budget that we approved late last year. Revised partial year 2026 production guidance at Rainy River is shown on slide 13, which reflects the slightly slower assumed ramp-up of underground mining rates.

Speaker #3: The gaps did require a relatively modest amount of additional capital and operating costs. That Tom will highlight. However, we are expecting a very quick payback.

Speaker #3: Just to give you a sense, after averaging $2,300 tons per day in the second quarter, underground production rates jumped over 40% to approximately $3,300 tons per day in July and we now expect to achieve our target of $5,000 tons per day by year-end versus the third quarter as assumed in the original new gold 2026 budget that they approved late last year.

Speaker #3: Revised partial year 2026 production guidance at Rainy River is shown on slide 13 which reflects this slightly slower assumed ramp-up of underground mining rates.

Speaker #3: With that, I'll turn the call over to Tom.

Michael Routledge: With that, I'll turn the call over to Tom.

Mick Routledge: With that, I'll turn the call over to Tom.

Speaker #2: Thanks, Mick. Turning to slide 9, I'll briefly run through our consolidated financial results. Despite being our second lightest expected production quarter this year, our balance seven asset portfolio produced quarterly record financial results off the back of the inclusion of our first quarter of our Canadian assets.

Thomas Whelan: Thanks, Mick. Turning to slide nine, I'll briefly run through our consolidated financial results. Despite being our second-lightest expected production quarter this year, our balanced seven-asset portfolio produced quarterly record financial results off the back of the inclusion of our first quarter of our Canadian assets. Some of the many quarterly records included record quarterly revenue of $1.1 billion, a 27% increase quarter over quarter. Record EBITDA of $478 million, despite the $141 million non-cash expense related to Rainy River's fair value uplift of the short-term stockpile, which must flow through EBITDA, the P&L, and our reported CAS number. Record free cash flow of $388 million, or more than $4 million per day, an increase of 45% versus last quarter. Our Canadian assets delivered 45% of overall quarterly free cash flow, or approximately $175 million, despite both assets being in ramp-up mode.

Tom Whelan: Thanks, Mick. Turning to slide nine, I'll briefly run through our consolidated financial results. Despite being our second-lightest expected production quarter this year, our balanced seven-asset portfolio produced quarterly record financial results off the back of the inclusion of our first quarter of our Canadian assets. Some of the many quarterly records included record quarterly revenue of $1.1 billion, a 27% increase quarter over quarter. Record EBITDA of $478 million, despite the $141 million non-cash expense related to Rainy River's fair value uplift of the short-term stockpile, which must flow through EBITDA, the P&L, and our reported CAS number. Record free cash flow of $388 million, or more than $4 million per day, an increase of 45% versus last quarter. Our Canadian assets delivered 45% of overall quarterly free cash flow, or approximately $175 million, despite both assets being in ramp-up mode.

Speaker #2: Some of the many quarterly records included record quarterly revenue of $1.1 billion at 27% increase quarter over quarter. Record EBITDA of $478 million despite the $141 million non-cash expense related to Rainy River's fair value uplift of the short-term stockpile which must flow through EBITDA the P&L and our reported CAS number.

Speaker #2: And record free cash flow of $388 million or more than $4 million per day an increase of 45% versus last quarter. Our Canadian assets delivered 45% of overall quarterly free cash flow or approximately $175 million despite both assets being in ramp-up mode.

Speaker #2: Our Q2 results did see lower realized gold and silver prices than Q1 particularly in June. We are also seeing some signs of cost inflation specifically diesel costs as shown on slide 11.

Thomas Whelan: Our Q2 results did see lower realized gold and silver prices than Q1, particularly in June. We are also seeing some signs of cost inflation, specifically diesel costs, as shown on slide 11. Slide eight illustrates the tremendous impact of these accelerating cash flows on our balance sheet. Cash of $1.1 billion at June 30 represents a doubling of the balance versus year-end 2025. We paid out approximately 45% of our Q2 quarterly free cash flow, with $110 million of buybacks through June 30, the payment of an inaugural $0.02 dividend, and the elimination of $39 million of our higher-cost capital lease debt. We exited Q2 with liquidity of over $2 billion, leaving no doubt about our balance sheet strength. With expectations for significantly higher production during H2 2026, Coeur is poised to deliver even higher quarterly free cash flow for the remainder of the year.

Tom Whelan: Our Q2 results did see lower realized gold and silver prices than Q1, particularly in June. We are also seeing some signs of cost inflation, specifically diesel costs, as shown on slide 11. Slide eight illustrates the tremendous impact of these accelerating cash flows on our balance sheet. Cash of $1.1 billion at June 30 represents a doubling of the balance versus year-end 2025. We paid out approximately 45% of our Q2 quarterly free cash flow, with $110 million of buybacks through June 30, the payment of an inaugural $0.02 dividend, and the elimination of $39 million of our higher-cost capital lease debt. We exited Q2 with liquidity of over $2 billion, leaving no doubt about our balance sheet strength. With expectations for significantly higher production during H2 2026, Coeur is poised to deliver even higher quarterly free cash flow for the remainder of the year.

Speaker #2: Slide 8 illustrates the tremendous impact of these accelerating cash flows on our balance sheet. Cash of $1.1 billion at June 30 represents a doubling of the balance versus year-end 2025.

Speaker #2: We paid out approximately 45% of our Q2 quarterly free cash flow with $110 million of buybacks through June 30th. The payment of an inaugural $0.02 dividend and the elimination of $39 million of our higher cost capital lease debt.

Speaker #2: We exited Q2 with liquidity of over $2 billion leaving no doubt about our balance sheet strength. With expectations for significantly higher production during the second half of 2026 Coeur is poised to deliver even higher quarterly free cash flow for the remainder of the year.

Speaker #2: Based on revised guidance and our updated forecast pricing a $4,000 per ounce of gold $60 per ounce of silver and $6 per pound of copper we expect to generate 2026 EBITDA of approximately $2.3 billion and free cash flow of approximately $1.5 billion.

Thomas Whelan: Based on revised guidance and our updated forecast pricing of $4,000 per ounce of gold, $60 per ounce of silver, and $6 per pound of copper, we expect to generate 2026 EBITDA of approximately $2.3 billion and free cash flow of approximately $1.5 billion, despite significantly lower assumed metals prices in H2 2026 and only nine months of lower than originally planned contribution from New Afton and Rainy River. What an amazing story. I wanted to highlight the key changes in our updated guidance on slide 21. We have tweaked our overall 2026 CapEx guidance at Rainy River to reflect $45 million of phase 5 capitalized stripping costs, previously guided as an operating cost, and $25 million of expenditures related to underground development, equipment, and infrastructure to assist with the gaps Mick and his team identified.

Tom Whelan: Based on revised guidance and our updated forecast pricing of $4,000 per ounce of gold, $60 per ounce of silver, and $6 per pound of copper, we expect to generate 2026 EBITDA of approximately $2.3 billion and free cash flow of approximately $1.5 billion, despite significantly lower assumed metals prices in H2 2026 and only nine months of lower than originally planned contribution from New Afton and Rainy River. What an amazing story. I wanted to highlight the key changes in our updated guidance on slide 21. We have tweaked our overall 2026 CapEx guidance at Rainy River to reflect $45 million of phase 5 capitalized stripping costs, previously guided as an operating cost, and $25 million of expenditures related to underground development, equipment, and infrastructure to assist with the gaps Mick and his team identified.

Speaker #2: Despite significantly lower assumed metals prices in the second half of 2026 and only nine months of lower than originally planned contribution from New Afton and Rainy River.

Speaker #2: What an amazing story. I wanted to highlight the key changes in our updated guidance on slide 21. We have tweaked our overall 2026 capex guidance at Rainy River to reflect 45 million of phase 5 capitalized stripping costs previously guided as an operating cost and 25 million of expenditures related to underground development equipment and infrastructure to assist with the gaps Mick and his team identified.

Speaker #2: Revised capex guidance also includes an additional $15 million at silver tip for 2026 pre-feasibility study and related costs. Cash taxes were guided downwards to reflect lower assumed metals prices and lower Canadian taxes.

Thomas Whelan: Revised CapEx guidance also includes an additional $15 million at Silvertip for 2026 pre-feasibility study and related costs. Cash taxes were guided downwards to reflect lower assumed metals prices and lower Canadian taxes. Amortization guidance was also reduced as we completed our initial purchase price allocation for the newly acquired Canadian assets. Adjusted CAS guidance for gold and copper at New Afton increased as a result of the lower expected production. However, it is important to note that we did not see an overall increase in total operating costs at New Afton. Adjusted gold CAS guidance at Rainy River also increased as a result of the lower expected production. We are also expecting a 10% increase in total operating costs, or approximately $30 million during 2026 for additional labor, rental equipment, and maintenance to address the gaps Mick and his team identified.

Tom Whelan: Revised CapEx guidance also includes an additional $15 million at Silvertip for 2026 pre-feasibility study and related costs. Cash taxes were guided downwards to reflect lower assumed metals prices and lower Canadian taxes. Amortization guidance was also reduced as we completed our initial purchase price allocation for the newly acquired Canadian assets. Adjusted CAS guidance for gold and copper at New Afton increased as a result of the lower expected production. However, it is important to note that we did not see an overall increase in total operating costs at New Afton. Adjusted gold CAS guidance at Rainy River also increased as a result of the lower expected production. We are also expecting a 10% increase in total operating costs, or approximately $30 million during 2026 for additional labor, rental equipment, and maintenance to address the gaps Mick and his team identified.

Speaker #2: Amortization guidance was also reduced as we completed our initial purchase price allocation for the newly acquired Canadian assets. Adjusted CAS guidance for gold and copper at New Afton increased as a result of the lower expected production.

Speaker #2: However, it is important to note that we did not see an overall increase in total operating costs at New Afton. Adjusted gold CAS guidance at Rainy River also increased as a result of the lower expected production.

Speaker #2: We are also expecting a 10% increase in total operating costs, or approximately $30 million, during 2026 for additional labor, rental equipment, and maintenance to address the gaps Mick and his team identified.

Speaker #2: I did want to spend a minute on the acquisition accounting related to the short-term inventory including the significant short-term stockpile at Rainy River. That we acquired at the transaction closing.

Thomas Whelan: I did want to spend a minute on the acquisition accounting related to the short-term inventory, including the significant short-term stockpile at Rainy River that we acquired at the transaction closing. The fair value uplift of the acquired inventory, as required under U.S. GAAP, is an important pointy-headed accounting matter to clearly understand, given the magnitude and the pervasive impact it has on our financial results. While the impact is non-cash, the full year total will be $244 million at Rainy River and $20 million at New Afton. We want to emphasize this non-cash amount must be included in our EBITDA net income and CAS. During Q1, approximately $85 million of the fair value uplift hit our EBITDA net income and CAS.

Tom Whelan: I did want to spend a minute on the acquisition accounting related to the short-term inventory, including the significant short-term stockpile at Rainy River that we acquired at the transaction closing. The fair value uplift of the acquired inventory, as required under U.S. GAAP, is an important pointy-headed accounting matter to clearly understand, given the magnitude and the pervasive impact it has on our financial results. While the impact is non-cash, the full year total will be $244 million at Rainy River and $20 million at New Afton. We want to emphasize this non-cash amount must be included in our EBITDA net income and CAS. During Q1, approximately $85 million of the fair value uplift hit our EBITDA net income and CAS.

Speaker #2: The fair value uplift of the acquired inventory as required under US GAAP is an important pointy-headed accounting matter to clearly understand given the magnitude and the pervasive impact it has on our financial results.

Speaker #2: While the impact is non-cash the full year total will be $244 million at Rainy River and $20 million at New Afton. We want to emphasize this non-cash amount must be included in our EBITDA net income and CAS.

Speaker #2: During the first quarter approximately $85 million of the fair value uplift hit our EBITDA net income and CAS. The Q2 impact was a further $140 million or approximately $0.10 per share and the remaining $38 million is anticipated to flow through during Q3 as we expect to have depleted the remaining acquired short-term stockpile at Rainy River by the end of the quarter as Mick mentioned.

Thomas Whelan: The Q2 impact was a further $140 million, or approximately $0.10 per share, and the remaining $35 million is anticipated to flow through during Q3, as we expect to have depleted the remaining acquired short-term stockpile at Rainy River by the end of the quarter, as Mick mentioned. To give a better sense of the order of magnitude of this non-cash impact on our CAS, the Q2 impact at Rainy River was $2,036 per ounce of the total $3,788 CAS per ounce. On a consolidated basis, it represented $834 per ounce of the total $2,442 in CAS per ounce. I hope that made sense, and I'll get off the accounting soapbox. We remain extremely excited and proud of this platform we've created as a unique North America-only precious metals producer with a heart of silver.

Tom Whelan: The Q2 impact was a further $140 million, or approximately $0.10 per share, and the remaining $35 million is anticipated to flow through during Q3, as we expect to have depleted the remaining acquired short-term stockpile at Rainy River by the end of the quarter, as Mick mentioned. To give a better sense of the order of magnitude of this non-cash impact on our CAS, the Q2 impact at Rainy River was $2,036 per ounce of the total $3,788 CAS per ounce. On a consolidated basis, it represented $834 per ounce of the total $2,442 in CAS per ounce. I hope that made sense, and I'll get off the accounting soapbox. We remain extremely excited and proud of this platform we've created as a unique North America-only precious metals producer with a heart of silver.

Speaker #2: To give a better sense of the order of magnitude of this non-cash impact on our CAS the Q2 impact at Rainy River was $2,036 per ounce of the total $3,788 CAS per ounce.

Speaker #2: And on a consolidated basis it represented $834 per ounce of the total $2,442 in CAS per ounce. I hope that made sense. And I'll get off the accounting soapbox.

Speaker #2: We remain extremely excited and proud of this platform we have created as a unique North America only precious metals producer with a heart of silver.

Speaker #2: We are set up for a strong second half of free cash flow continued capital returns and cash accumulation on the balance sheet as we continue to deliver on our strategic plan.

Thomas Whelan: We are set up for a strong H2 of free cash flow, continued capital returns, and cash accumulation on the balance sheet as we continue to deliver on our strategic plan. I'll now turn the call back to Mitch.

Tom Whelan: We are set up for a strong H2 of free cash flow, continued capital returns, and cash accumulation on the balance sheet as we continue to deliver on our strategic plan. I'll now turn the call back to Mitch.

Speaker #2: I'll now turn the call back to Mitch.

Speaker #1: Thanks Tom. Before opening it up for Q&A our key strategic priorities for the remainder of the year are shown on slide 20. We're looking forward to delivering sharp increases in production and cash flow during the second half that are expected to lead to record full year 2026 results leaving us well positioned to deliver another record year in 2027.

Mitch Krebs: Thanks, Tom. Before opening it up for Q&A, our key strategic priorities for the remainder of the year are shown on slide 20. We're looking forward to delivering sharp increases in production and cash flow during H2 that are expected to lead to record full year 2026 results, leaving us well positioned to deliver another record year in 2027. With that, let's go ahead and open it up for questions.

Speaker #1: With that let's go ahead and open it up for questions.

Speaker #3: We will now begin the question and answer session. To ask a question you may press star then one. On your telephone keypad. If you're using a speakerphone please pick up your headset before pressing the keys.

Operator 2: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, you may press star then two. At this time, we will pause just momentarily to assemble our roster. Our first question here will come from Wayne Lam with TD Securities. Please go ahead.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, you may press star then two. At this time, we will pause just momentarily to assemble our roster. Our first question here will come from Wayne Lam with TD Securities. Please go ahead.

Speaker #3: And to withdraw a question, you may press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Wayne Lamb with TD Securities.

Speaker #3: Please go ahead.

Speaker #4: Yeah thanks. Morning guys. I just want to hey how's it going? Just want to understand the reset and the expectations for the new gold assets.

Wayne Lam: Yeah, thanks. Morning, guys.

Mitch Krebs: Hi, Wayne.

Wayne Lam: Hey, how's it going? Just wanted to understand the reset in the expectations for the New Gold assets, after just the Q1 of operation, post the combined guidance. Maybe starting with New Afton, what was the previously budgeted timeline to get to the 16,000 tons per day? Was the revision here also largely grade driven? Because I think most had baked in a ramp up to reach the run rate capacity, it also seems like a second haircut, taken at New Afton now from what New Gold management had previously guided to what was outlined in the combined guidance a few months ago to now.

Speaker #4: After just the first quarter of operation post the combined guidance maybe starting with New Afton what was the previously budgeted timeline to get to the $16,000 tons per day?

Speaker #4: Or was the revision here also largely grade driven? Because I think most had baked in a ramp up to reach the run rate capacity but also seems like a second haircut taken at New Afton now from what new gold management had previously guided to what was outlined in the combined guidance a few months ago to now.

Speaker #1: Yeah well we'll start there with with New Afton. Thanks for the for the question. The the original plan for New Afton coming into this year was for them to be at $16,000 tons a day by the end of the second quarter.

Mitch Krebs: Well, we'll start there with New Afton. Thanks for the question. The original plan for New Afton coming into this year was for them to be at 16,000 tons a day by the end of the Q2. I think what we're seeing now is hitting that level early in the Q4. Roughly 3 months slower than what they came into the year assuming. The reset in the guidance ranges there is driven more by that timing. There's a little bit of a grade differential just as we draw from different parts of the cave in response to how the cave is propagating since the construction was completed in April. Maybe, Mick, you can go a layer deeper than that.

Speaker #1: And I think what we're we're seeing now is hitting that level early in the fourth quarter. So you know roughly three months. Slower than what they came into the year assuming.

Speaker #1: And so the reset in in the guidance ranges there is driven more by by that timing. There's a little bit of a grade differential just as we draw from from different parts of the cave in response to kind of how the gate the cave is propagating since the construction was completed in in April but maybe Mick you can go a layer deeper than than that.

Speaker #3: Yeah yeah thanks for the question. It's it's really about that healthy cave propagation. And with respect to the grades we're really trying to chop the the cave up into six main areas.

Michael Routledge: Yeah. Thanks for the question, Wayne. It's really about that healthy cave propagation. With respect to the grades, we really try and chop the cave up into six main areas. That's north and south, split up into the east and west zones. That's different grades across the cave, the key to the start of the cave is really about drawing it and getting it balanced and flat so that it comes down as a block. Where our high grades are really in the south and the east, we have to draw more on the west and the north at the moment to get the cave to propagate in a flat manner.

Mick Routledge: Yeah. Thanks for the question, Wayne. It's really about that healthy cave propagation. With respect to the grades, we really try and chop the cave up into six main areas. That's north and south, split up into the east and west zones. That's different grades across the cave, the key to the start of the cave is really about drawing it and getting it balanced and flat so that it comes down as a block. Where our high grades are really in the south and the east, we have to draw more on the west and the north at the moment to get the cave to propagate in a flat manner.

Speaker #3: That's north and south and then split up into the the east and west zones. And that's different grades across the cave. But the key to the start of the cave is really about drawing it and getting it balanced and flat so that it it comes down as a block.

Speaker #3: And where were high grades are really in the south and the east. And we have to draw more on the the west and the north at the moment to get the cave to propagate in a flat manner so as we see that coming to bear over this next quarter then we'll see the draw rates increase and we should see the the grades improve.

Michael Routledge: As we see that coming to bear over this next quarter, we'll see the draw rates increase, we should see the grades improve over that period between now and the end of the year.

Mick Routledge: As we see that coming to bear over this next quarter, we'll see the draw rates increase, we should see the grades improve over that period between now and the end of the year.

Speaker #3: Over that period between now and the the end of the year.

Speaker #1: Does that help Wayne?

Mitch Krebs: Does that help, Wayne?

Speaker #4: Yeah, that's great. And then maybe just at Rainy River, can you give us a bit more detail on the challenges with the underground contractor this quarter, and again on the prior timeline on the ramp-up to 5,100 per day, and maybe some color on the underground grades as well?

Wayne Lam: Yeah, that's great. Maybe just at Rainy River, can you give us a bit more detail on the challenges with the underground contractor this quarter, and again, on the prior timeline on the ramp up to 5,000 tons a day, and maybe some color on the underground grades as well. Just wondering, maybe for Tom, if you're chewing through more of the stockpiles at a faster rate, resulting in a greater non-cash impact near term on the purchase price adjustment, does that mean that non-cash impact to CAS goes away at some point soon? Just not sure if I'm thinking about that correctly.

Speaker #4: And then just wondering maybe for Tom if you're chewing through more of the stockpiles at a faster rate resulting in a greater non-cash impact near term on the on the purchase price adjustment does that mean that that non-cash impact the CAS goes away at some point soon or just not sure from thinking about that correctly?

Speaker #1: Well maybe I could Tom I'll try and answer that second question first because it's I think a pretty quick answer which is yes it should go away with the third quarter.

Mitch Krebs: Well, maybe I could, Tom, I'll try and answer that second question first, because it's, I think, a pretty quick answer, which is yes, it should go away with Q3. I think, Tom, in your comments, you mentioned thirty-

Speaker #1: I think Tom and your comments you mentioned 30. 38 million or so is expected to to roll through the the P&L in Q3 and then we should be done.

Michael Routledge: 38 million

Tom Whelan: 38 million

Mitch Krebs: 38 million or so is expected to roll through the P&L in Q3. We should be done, thankfully. That's on that, Wayne. Is that good on the accounting question?

Speaker #1: Thankfully. So on that that that's on that Wayne. Is that good on the accounting question?

Speaker #4: Yeah yeah that's good color. Yeah.

Wayne Lam: Yeah. That's good color. Yeah.

Speaker #1: Yeah. Okay. Good. And then just on the Rainy River front I'll say a couple things and then Mick you can you can cover more detail.

Mitch Krebs: Yeah. Okay, good. Just on the Rainy River front, I'll say a couple of things. Then Mick, you can cover more detail. I'd say that those short-term execution challenges were more in the tactical realm. As those throughput rates started to climb, you could see some gaps start to surface in things like trucks, personnel, availability, and some infrastructure related constraints that will be covered by the CapEx increase that Tom flagged. We got in there in April and May. Mick and the team, and the team at Rainy River, did, I think, a really good job of identifying some of these gaps as they started ramping up to that next level, and put a good plan in place pretty quickly.

Speaker #1: I'd say that those short-term execution challenges were were were more in the kind of in the tactical realm you know as as those throughput rates started to climb you could see some some gaps start to surface in things like trucks personnel availability and some infrastructure related constraints that will be covered by the CapEx increase that Tom that Tom flagged.

Speaker #1: But you know we got in there in in April and May you know Mick and the team and the team at Rainy River did a I think a really good job of identifying some of these gaps as they started you know ramping up to that next next level.

Speaker #1: And put a good plan in place pretty quickly and and it's really nice to be able to see in July the the effects of that work as the rates started to climb up pretty quickly and that's continued here into the early days of of August.

Mitch Krebs: It's really nice to be able to see in July the effects of that work as the rates started to climb up pretty quickly, and that's continued here into the early days of August. That has us feeling really good about the H2 ramp up to that 5,000 tons a day by year-end. Just quickly on the underground grade, open pit grade mix, I think, in Q2, the underground contributed something like 9% of total tons, and that should be almost twice that in the H2. Those underground grades are almost three times higher than the surface grades, the open pit grades. As we see that tonnage come up to 5,000 tons a day with that higher grade impact from those tons, that's going to be the nice tailwind in terms of the H2 production levels there at Rainy River.

Speaker #1: So that has us feeling really good about the second half ramp up to that $5,000 tons a day by by year end. And just quickly on the underground grade open pit grade mix I think in the second quarter the underground contributed like something like 9% of total tons.

Speaker #1: And that should be almost twice that in the second half. And those underground grades are almost three times higher than than the than the surface grades.

Speaker #1: The open pit grades. So as we see that tonnage come up to $5,000 tons a day with that higher grade impact from those tons you know that's going to be the nice tailwind in terms of the the second half production levels there at at Rainy River.

Speaker #1: Mick did I leave anything there for you to cover?

Mitch Krebs: Mick, did I leave anything there for you to cover?

Michael Routledge: Cover a couple of bits and pieces, really just to say we're actually really happy with the response of our underground mining contractor and working really well with them hand in glove. The early part of the development of the underground was really focused on those development rates, and the contract structure focused on that. Once we addressed that and we ramped up hard on the development, that outpaced the mining rates, which then effectively exposed the other bottlenecks that we had to address. We got after those with our contractor, with a great response, and we're seeing already the uptick in that performance with the contractor, focused now on mining rates to balance that against the development rates. Yeah, really happy about how that's improving.

Mick Routledge: Cover a couple of bits and pieces, really just to say we're actually really happy with the response of our underground mining contractor and working really well with them hand in glove. The early part of the development of the underground was really focused on those development rates, and the contract structure focused on that. Once we addressed that and we ramped up hard on the development, that outpaced the mining rates, which then effectively exposed the other bottlenecks that we had to address. We got after those with our contractor, with a great response, and we're seeing already the uptick in that performance with the contractor, focused now on mining rates to balance that against the development rates. Yeah, really happy about how that's improving.

Speaker #3: Yeah a couple of bits and pieces. Really just to say well actually really happy with the response of what underground mining contractor working really well with them hand in a glove.

Speaker #3: The the early part of the development of the underground was really focused on those development rates and the contract structure focused on that. Once we addressed that and we ramped up hard on the development that that outpaced the mining rates which then effectively exposed the other bottlenecks that we had to address.

Speaker #3: So we've got we've got after those with with what contractor with a great response and we're seeing already that the uptake in that performance with the contractor focused now on mining rates to balance that against the development rates.

Speaker #3: And yeah really really happy about how that's improving.

Speaker #4: Okay great. Yeah looking forward to the operational improvements in the back half of the year. Maybe just last one at Rochester. Can you just walk us through the expectations into the second half on the on the grades and recoveries?

Wayne Lam: Okay, great. Yeah, looking forward to the operational improvements in H2 of the year. Maybe just last one, at Rochester. Can you just walk us through the expectations into H2, on the grades and recoveries? I know the quarterly guidance had accounted for some of the lower grade this quarter, and a pretty big step change on silver into Q4. Just given the longer cycle for silver recoveries that we've seen in the past, is that still realistic to expect those ounces to come out that quickly as per the guided expectations?

Speaker #4: I know the quarterly guidance had accounted for some of the lower grade this quarter. And a pretty big step change on silver into Q4.

Speaker #4: But just given the longer cycle for silver recoveries that we've seen in the past is that still realistic to expect those ounces to come out that quickly as per the guided expectations?

Speaker #1: Yeah I'd say the three three biggies there Wayne consistent crusher performance that we're now demonstrating assume that continues higher. And then you've got the nice mix of of of higher grades and then close to fresh liner.

Mitch Krebs: Yeah, I'd say the three biggies there, Wayne. Consistent crusher performance that we're now demonstrating. Assume that continues higher. Then you've got the nice mix of higher grades and then close to fresh liner. Those are the ingredients for what should be a pretty dramatic H2 compared to H1. Mick, you want to cover that?

Speaker #1: And those are the ingredients for what should be a you know a pretty dramatic second half compared to compared to the first half. But Mick you want to cover that?

Speaker #3: Yeah. And and you know during this first part of the year Wayne we had a lot of material that we had to produce as overlainer for the construction of those new parts.

Michael Routledge: Yeah. During this first part of the year, we had a lot of material that we had to produce as overliner for the construction of those new parts. That's at a higher size fraction and it slows our crusher performance down. We got through that a lot. We're still producing a little bit of that for the next phase of the expansion, but overall, we're in good shape for that uptick in the H2. There's a lot of tons sitting on that new liner that has not even been started to irrigate yet. I'm looking forward to that.

Mick Routledge: Yeah. During this first part of the year, we had a lot of material that we had to produce as overliner for the construction of those new parts. That's at a higher size fraction and it slows our crusher performance down. We got through that a lot. We're still producing a little bit of that for the next phase of the expansion, but overall, we're in good shape for that uptick in the H2. There's a lot of tons sitting on that new liner that has not even been started to irrigate yet. I'm looking forward to that.

Speaker #3: And that's at a higher size fraction and it slows what what crusher performance down. And so we got through that a lot. We're still producing a little bit of that for the next phase of the expansion but but overall we're in good shape for that uptake in the second half.

Speaker #3: There's a lot of tons sitting on that on that new liner that has not even been started to irrigate yet. So I'm looking forward to that.

Speaker #4: Okay perfect. Nice to see a lot of free cash flow coming through despite the slow ramp up. And look forward to the catch up operationally.

Wayne Lam: Okay, perfect. Nice to see a lot of free cash flow coming through despite the slow ramp-up and look forward to the catch-up operationally. Best of luck in the months ahead.

Speaker #4: Best of luck in the months ahead.

Mitch Krebs: Yeah. Thanks, Wayne.

Speaker #1: Yeah yeah. Thanks Wayne.

Speaker #2: And our next question will come from Cosmos Q with CIBC. Please go ahead.

Operator 2: Our next question will come from Cosmos Chiu with CIBC. Please go ahead.

Operator: Our next question will come from Cosmos Chiu with CIBC. Please go ahead.

Speaker #5: Thanks, Mitch, Mick, and Tom, for the presentation. Maybe my first question is going back to New Afton here. I noticed that recovery was slightly lower quarter over quarter—85.1% for gold and 90.6% for copper.

Cosmos Chiu: Thanks, Mitch, Mick, and Tom for the presentation. My first question is going back to New Afton here. I noticed that recovery was slightly lower quarter-over-quarter, 85.1% for gold and 90.6% for copper. I guess two parts to my question. Number one, as you talked about grades potentially coming back up later on during the year, is that going to help in terms of recovery? Number two, as you had recalibrated your guidance for the year, what kind of recovery rate are you assuming for the rest of 2026?

Speaker #5: I guess two parts to my question. Number one you know as you talked about grades potentially coming back up later on during the year is that going to help in terms of recovery?

Speaker #5: And then number two you know as you had recalibrated your guidance for the year what kind of recovery rate are you assuming for the rest of 2026?

Speaker #1: Yeah. Thanks Cosmos for the question. I'll as we go into the second half of the year and as Mick Mick alluded to you know we'll not only see a a throughput put uptick but we'll see a a grade uptick as well as they start drawing on some of those other areas of of the season and that should flow through to to higher recoveries on both gold and and copper relative to what we saw in the first first half of of the year.

Mitch Krebs: Yeah. Thanks, Cosmos, for the question. As we go into H2, and as Mick alluded to, we'll not only see a throughput uptick, but we'll see a grade uptick as well as they start drawing on some of those other areas of the C-Zone. That should flow through to higher recoveries on both gold and copper relative to what we saw in H1. Mick, do you want to cover that as well?

Speaker #1: But Mick do you want to cover that as well?

Speaker #3: Yeah you nailed it actually. So those lower grades and it's all really about the case draw management as those grades come up we should see some appreciation in the in the recovery rates.

Michael Routledge: Yeah. You nailed it, actually. Those lower grades, it's all really about the cave draw management. As those grades come up, we should see some appreciation in the recovery rates.

Mick Routledge: Yeah. You nailed it, actually. Those lower grades, it's all really about the cave draw management. As those grades come up, we should see some appreciation in the recovery rates.

Speaker #5: Great. And then so is like what we saw in Q1 is that a better sort of run rate? I forget in terms of you know based on the technical report what kind of recovery rates you know is expected sort of life of mine for copper and gold?

Cosmos Chiu: Great. Is what we saw in Q1, is that a better sort of run rate? I forget based on the technical report, what kind of recovery rates is expected sort of life of mine for copper and gold?

Speaker #1: Yeah that first quarter was for us in our world was 11 days. So I can't even remember what those those recoveries looked like for that little snapshot of time.

Mitch Krebs: Yeah, that Q1 for us in our world was 11 days.

David Brown: Yeah.

Cosmos Chiu: Yeah.

Mitch Krebs: I can't even remember what those recoveries looked like for that little snapshot of time. Mick, do you want to answer Cosmos' question?

Speaker #1: But Mick, do you want to answer Cosmos's question?

Speaker #3: Yeah based on the material that we pulled from the cave the the recoveries actually just did better than what that model in fact. So it's tracking well based on recoveries compared to the tech report.

Michael Routledge: Yeah. Based on the material that we pulled from the cave, the recoveries actually just did better than what Matt modeled, in fact. It's tracking well based on recoveries compared to the tech report.

Mick Routledge: Yeah. Based on the material that we pulled from the cave, the recoveries actually just did better than what Matt modeled, in fact. It's tracking well based on recoveries compared to the tech report.

Speaker #5: Mm-hmm. Great. I guess going to Rainy River here you know as you mentioned as underground development caught up mining rates are now you know now catching up to those development rates.

Cosmos Chiu: Great. I guess, going to Rainy River here. As you mentioned, as underground development caught up, mining rates are now catching up to those development rates. I guess my question is, you did 2,300 tons per day in Q2. Is there any kind of internal targets that you can share with us? What were you expecting in Q2 for mining rates to have hit? Second part is, you're getting to 5,000 tons per day or targeting 5,000 tons per day by year-end. That's almost double. That's more than double what you did in Q2. What's kind of like that cadence of that increase? You did 3,300 now. Is that a good number to use for Q3? How should we think of how that increase is going to be? Is it a straight line or is it more parabolic? How should we look at it?

Speaker #5: I guess my question is you did 2300 tons per day in Q2. Is there any kind of internal targets I can share with us?

Speaker #5: Like what were you expecting in Q2 for mining rates to have hit? And then second part is you know you're getting to 5000 tons per day or targeting 5000 tons per day by year end.

Speaker #5: That's almost double. That's yeah. More than double. What you did in Q2. What's kind of like that cadence or that increase? You know you did 3300 kind of now.

Speaker #5: Is that a good number to use for Q3 or how should we think of how that increase is going to be? Is it a straight line or is it going more parabolic?

Speaker #5: How how should we look at it?

Speaker #1: Wayne you're asking for some pretty pretty good precision there Cosmos. But I'd say the the the rates of underground production between now and the end of the year is fairly linear and gradual.

Cosmos Chiu: Man, you're asking for some pretty good precision there, Cosmos. I'd say the rates of underground production between now and the end of the year is fairly linear and gradual. That 5,000 tons a day is not an average for Q4. It's sort of at the end of the year is where we plan to be. As you think about building that into your model, it's a pretty steady ramp assumed from where we saw July, to where we see December.

Mitch Krebs: Man, you're asking for some pretty good precision there, Cosmos. I'd say the rates of underground production between now and the end of the year is fairly linear and gradual. That 5,000 tons a day is not an average for Q4. It's sort of at the end of the year is where we plan to be. As you think about building that into your model, it's a pretty steady ramp assumed from where we saw July, to where we see December.

Speaker #1: And you know that 5,000 tons a day is not an average for the fourth quarter. It's sort of at the end, you know, at the end of the year is where we plan to be.

Speaker #1: So you know as you think about building that into your model you know it's a pretty steady ramp assumed from where we saw July to where we see December.

Speaker #5: Great. Yeah it doesn't hurt to ask right Mitch. You can always.

Cosmos Chiu: Great. Yeah, it doesn't hurt to ask, right, Mitch?

Speaker #1: Hey you know you've got a model to to update. I get it.

Mitch Krebs: Hey, you've got a model to update. I get it.

Speaker #5: And then maybe in terms of the pre-stripping of phase five how's that going?

Cosmos Chiu: Maybe in terms of the pre-stripping of phase V, how's that going?

Speaker #1: Yeah, that's a good news story. I mean, you know, at Rainy we talk a lot about these underground mining rates, but let's not forget the open pit is doing great.

Mitch Krebs: Yeah, that's a good news story. At Rainy, we talk a lot about these underground mining rates, but let's not forget the open pit is doing great. The mill is doing great. They're really hitting their stride on the underground development. Now, chasing that next bottleneck down into the underground mining rates now that we're on top of. In terms of phase 5, pre-strip, that's a good story, right, Mick?

Speaker #1: The mill is doing great. They're really hitting their stride on the underground development. And now you know chasing that next bottleneck down into the the underground mining rates now that we're we're on top of.

Speaker #1: But in terms of phase five pre-strip that's a good good story right Mick?

Speaker #3: Yeah the the the expect to get a fair amount of material in the second half from five now which is great as we finish off four and then we we we manage coming out of the the four pushback we'll get into five before the end of the year and and pull some material.

Michael Routledge: Yeah. The strip is ahead of the game, we expect to get a fair amount of material in H2 from 5 now, which is great. As we finish off 4 and then we manage coming out of the 4 pushback, we'll get into 5 before the end of the year and pull some material. Yeah, really happy about the progress there. The mill is full. We have stockpiles that allowed us to keep the mill full continuously. Yeah, we're in good shape.

Mick Routledge: Yeah. The strip is ahead of the game, we expect to get a fair amount of material in H2 from 5 now, which is great. As we finish off 4 and then we manage coming out of the 4 pushback, we'll get into 5 before the end of the year and pull some material. Yeah, really happy about the progress there. The mill is full. We have stockpiles that allowed us to keep the mill full continuously. Yeah, we're in good shape.

Speaker #3: Yeah really happy about the progress there. And the mill I mean the mill is full. We have we have stockpiles that allowed us to keep the mill full continuously.

Speaker #3: So yeah we're in good shape. Heading up the case.

Cosmos Chiu: Great.

Michael Routledge: Heading over the cliff.

Mick Routledge: Heading over the cliff.

Speaker #5: Cool. And maybe one last question: I see that in your CapEx discussion in your MD&A, you have allocated an additional $15 million in CapEx to Silvertip.

Cosmos Chiu: Cool. Maybe one last question. I see that in your CapEx discussion in your MD&A, you have allocated additional $15 million in CapEx to Silvertip. Any updates there you can provide to us? What should we be looking for?

Speaker #5: Any updates there you can provide to us and you know what should we be looking for?

Speaker #1: Yeah yeah no good good catch. Good question. Since we talked after the first quarter in early May we wrapped up the initial assessment and we've now progressed into a pre-feasibility study and that was a decision that we made together with our board in in mid-May and so that extra capital that you've flagged there Cosmos is really a a reflection of of of us you know funding that additional work to wrap up a PFS hopefully you know early 2027.

Mitch Krebs: Yeah. Good catch. Good question. Since we talked after the Q1, in early May, we wrapped up the initial assessment, and we've now progressed into a pre-feasibility study. That was a decision that we made together with our board in mid-May. That extra capital that you've flagged there, Cosmos, is really a reflection of us funding that additional work to wrap up a PFS, hopefully early 2027. Meantime, exploration is fully funded for the year to continue to try and expand the resource that's really hitting its peak right now here in this Q3. That extra capital for Silvertip is really to fund the studies that we're proceeding with.

Speaker #1: Mean time exploration you know is is is fully funded for the year to continue to try and expand the resource. That's really hitting its peak right now here in this in this third third quarter.

Speaker #1: So so that extra capital for silver tip is really to fund the studies that we're proceeding with.

Speaker #5: Great. Thanks Mitch Mick and and Tom for answering all my questions and enjoy the rest of your summer.

Cosmos Chiu: Great. Thanks, Mitch, Mick, and Tom, for answering all my questions, and enjoy the rest of your summer.

Speaker #1: Yeah thanks you too Cosmos.

Mitch Krebs: Yeah. Thanks. You too, Cosmos.

Speaker #4: Our next question will come from Josh Wipsen with RBC Capital Markets. Please go ahead.

Operator 2: Our next question will come from Josh Wolfson with RBC Capital Markets. Please go ahead.

Operator: Our next question will come from Josh Wolfson with RBC Capital Markets. Please go ahead.

Speaker #2: Yeah thank you very much. I appreciate all the disclosures on this call and and some of the details for the new gold assets. It's been it's been helpful.

Josh Wolfson: Yeah. Thank you very much. Appreciate all the disclosures on this call and some of the details for the New Gold assets. It's been helpful. Just sort of going into some of the details there further and looking at maybe some of the impacts on 2027. The company was talking about changing, I guess, the draw of the cave for New Afton, maybe balancing things out a bit more. Would it be reasonable to think, if you're balancing things out more, the grades that were previously expected in 2027 and 2028 that were quite high, might be a little bit more smoothed out versus the rest of the mine plan? Or is the cave sort of changes more limited to 2026?

Speaker #2: Just sort of going into some of the details there further in in in looking at maybe some of the impacts on 2027. You know the company was talking about changing I guess the the draw of the cave for New Afton.

Speaker #2: Maybe balancing things out a bit more. Would it be reasonable to think you know if you're balancing things out more the grades that were previously expected in in 27 and 28 that were that were quite high you know might be a little bit more smoothed out versus the rest of the mine plan or is that is the cave sort of changes more limited to 2026?

Speaker #1: Yeah Mick do you want to cover that?

Mitch Krebs: Yeah. Mick, do you want to cover that?

Speaker #3: Yeah yeah. So at the moment we're busy re-running those plans. We'll really know that through Q3 and into Q4 as we set the budget for 27 and beyond.

Michael Routledge: Yeah. At the moment, we're busy rerunning those plans. We'll really know that through Q3 and into Q4, as we set the budget for 2027 and beyond. For the moment, there hasn't been any ore sterilized. We're really just making sure that we balance the cave, and we draw from the right points to get that balance. My expectation is that we'll see that grade at some point over the next period.

Mick Routledge: Yeah. At the moment, we're busy rerunning those plans. We'll really know that through Q3 and into Q4, as we set the budget for 2027 and beyond. For the moment, there hasn't been any ore sterilized. We're really just making sure that we balance the cave, and we draw from the right points to get that balance. My expectation is that we'll see that grade at some point over the next period.

Speaker #3: But for the moment there hasn't been any ore sterilized. We're really just making sure that we balance the cave and we draw from the right points to get that balance.

Speaker #3: So my expectation is that we'll see that grade at some point over the next period.

Speaker #2: Right. Thank you. And then similarly at Rainy I believe the underground throughput or mining rate was closer to about 6000 over the next two years.

Josh Wolfson: All right. Thank you. Similarly at Rainy, I believe the underground throughput or mining rate was closer to about 6,000 over the next 2 years. Is that still a reasonable ultimate target? Maybe is there some slight ramp-up period we should be forecasting in 2027?

Speaker #2: Is that still a reasonable ultimate target and and and maybe is there some slight ramp up here that we should be forecasting in 27?

Speaker #1: Yeah no good good question. I I I'd say you know that that technical report some good piece of work obviously it was new gold's technical report not ours.

Mitch Krebs: Yeah. No, good question. I'd say that technical report, it's a good piece of work. Obviously, it was New Gold's technical report, not ours. There's still some work that we'll want to do here as we get closer to 2027 on how we see that mix of underground versus open pit going forward. For now, getting up to that 5,000 ton per day from the underground by year-end and carrying that into 2027 is the near-term plan. There's still a lot of good work to do there in terms of figuring out what that future looks like at Rainy River, because there's a lot of optionality there with the open pit that we want to make sure we're factoring into our thinking as we go forward.

Speaker #1: And there's still some some work that we'll want to do here as we get closer to 2027 on on how we see that mix of underground versus open pit going forward.

Speaker #1: You know for now getting up to that 5000 ton per day from the underground by year end and carrying that into 2027 is the the near term plan.

Speaker #1: But there's still a lot of good work to do there in terms of figuring out what that future looks like at Rainy River, because there's a lot of optionality there with the open pit that we want to make sure we're factoring into our thinking as we go forward.

Josh Wolfson: Got it. Last question, just on the capital allocation side. Good work with the initial buybacks. Noted the high cash balance projected for year-end. In that context, I'm wondering, how is the company thinking about the cadence of the buyback through the approved period? Should we forecast similar levels or rates, or will it change based on share prices? When you think about the cash position and the growth expected, where would the company look to invest in growth that could start to be spent in 2027? Thanks.

Speaker #2: Right. And then last question just on the capital allocation side. I mean good work with the initial buybacks you know noted the high cash balance projected for year end.

Speaker #2: In that context I'm wondering you know how's the company thinking about the cadence of the buyback through you know the the approved period. You know should we we should we forecast similar levels or rates or will it change based on share prices?

Speaker #2: And then when you think about the cash position and the growth expected you know where where would the company look to invest in growth that could start to be spent in in 2027?

Speaker #2: Thanks.

Speaker #1: Yeah no great capital allocation question. I'll start and then Tom you can you can certainly chime in. You know the the I think we set up a a well-designed buyback program with you know a portion of it just automatically chewing away you know during blackouts you know no matter what.

Mitch Krebs: Yeah. No, great capital allocation question. I'll start, Tom, you can certainly chime in. I think we set up a well-designed buyback program with a portion of it just automatically chewing away during blackouts, no matter what. We can step in during non-blackout periods and be opportunistic when we see the stock at a point where we think it's undervalued. It's going to be driven by that. We don't feel like we have a gun to our head to get through $750 million by a certain date. Certainly, when the stock's weak or is underperforming, or on a relative basis seems undervalued, we're going to step in and be aggressive. As we go through the rest of the year, that's really going to be the driver for the pace of that buyback program.

Speaker #1: And then we can step in during non-blackout periods and and be opportunistic when we see the stock you know at a at a point where we think it's undervalued.

Speaker #1: And so you know it's going to be driven by that. You know we don't feel like we have a gun to our head to get through 750 million by a certain date.

Speaker #1: But certainly when the stock's weak or is underperforming or on a relative basis seems undervalued you know we're going to step in and and be aggressive and so as we go through the rest of the year you know that's really going to be the driver for the pace of of that buyback buyback program.

Speaker #1: But we feel good about, you know, coming out of the gate strong since mid-May and the progress that we've made so far, and it remains a key focus for us as we go forward.

Mitch Krebs: We feel good about coming out of the gate strong since mid-May and the progress that we've made so far, and it remains a key focus for us as we go forward. As far as that building cash, Yeah, it gives us a lot of great financial flexibility to pursue high return growth. Starting with exploration on the brownfields exploration side, we'll keep investing as much as we efficiently can deploy at some of those high priority sites. That's right up there, high on our capital allocation framework. The big chunky growth really is driven by C-Zone out there at New Afton. Advancing the studies and seeing if Silvertip is a potential new source of, not that long term or not that far off, primary silver production, Canadian production, silver growth.

Speaker #1: And as far as that building cash yeah it gives us a lot of great financial flexibility to pursue high return growth you know starting with exploration on the brownfields exploration side.

Speaker #1: We'll keep investing as much as we efficiently can deploy at some of those high priority sites. So that's a right up there high on our capital allocation framework.

Speaker #1: The big chunky growth really is is driven by K zone out there at New Afton. Advancing the studies and seeing if silver tip is a potential new source of of you know not not that long term or not that far off primary silver production you know Canadian production silver growth.

Speaker #1: You look out at East Rochester a little bit longer term and you think about what what could we do over there to take advantage of the exploration success outside of the Franco Nevada area of interest.

Mitch Krebs: You look out at East Rochester, a little bit longer term. You think about what could we do over there to take advantage of the exploration success outside of the Franco-Nevada area of interest there at Palmarejo. Back to Rainy River. What does the future look like there in terms of potential mine life extensions that could require some additional infrastructure to support a longer mine life? Those are some of the big chunks that come to mind. Tom, what did I forget?

Speaker #1: There at at Palmario. And then back to Rainy River. You know what does the future look like there in terms of potential mine life extensions that could require some additional infrastructure to support a you know a longer mine life.

Speaker #1: So those some of those are some of the big chunks that come to mind. Tom what did I forget?

Speaker #2: I nailed it. We're we're really happy with the design program. We'll be coming out of blackout here on Friday. And if we see opportunities where the share price is at versus our expectations of value we'll be aggressive.

Thomas Whelan: Hi, Neil. We're really happy with the design program. We'll be coming out of blackout here on Friday, and if we see opportunities with where the share price is at versus our expectations of value, we'll be aggressive.

Tom Whelan: Hi, Neil. We're really happy with the design program. We'll be coming out of blackout here on Friday, and if we see opportunities with where the share price is at versus our expectations of value, we'll be aggressive.

Josh Wolfson: All right. Thank you very much.

Speaker #2: All right. Thank you very much.

Speaker #1: Yeah thanks Josh.

Mitch Krebs: Yeah. Thanks, Josh.

Speaker #4: And our next question will come from Kevin O'Halloran with BMO Capital Markets. Please go ahead.

Operator 2: Our next question will come from Kevin O'Halloran with BMO Capital Markets. Please go ahead.

Operator: Our next question will come from Kevin O'Halloran with BMO Capital Markets. Please go ahead.

Speaker #5: Hey Mitch and team. Thanks for taking my questions.

Kevin O'Halloran: Hey, Mitch and team. Thanks for taking my questions.

Speaker #1: Yeah hi Kevin.

Mitch Krebs: Yeah. Hi, Kevin.

Speaker #5: Hey at at Palmario can you just remind us what your goal is in terms of building out that resource inventory outside the area of influence and then how much production do you expect to shift outside that stream area over the next say few years?

Kevin O'Halloran: Hey. At Palmarejo, can you just remind us what your goal is in terms of building out that resource inventory outside the area of influence? How much production do you expect to shift outside that stream area over the next, say, few years?

Speaker #1: Yeah great question. Been a topic of discussion here. A lot. Especially on the heels of that exploration release that we put out a couple weeks ago.

Mitch Krebs: Yeah. Great question. It's been a topic of discussion here a lot, especially on the heels of that exploration release that we put out a couple of weeks ago that shows continued success over there, both further to the east at that San Miguel La Unión, we call it Guazapares area, which is the furthest to the north and east from where our current operations are. That's a longer term gain. That needs to have additional drilling, additional resource growth, and then Mick and the team are going to start doing their studies around trade-offs of how much mineralization do we need to consider a potential standalone opportunity there longer term? Or in the interim, is there an opportunity to haul material from that Guazapares area back to the Palmarejo processing facility?

Speaker #1: That shows continued you know success over there both further to the east at that San Miguel La Union kind of we call it the Guazapares area which is the furthest kind of to the north and east from where you know our current operations are.

Speaker #1: You know that's that's a longer term game. You know that needs to have additional drilling additional resource growth and then making the team you know we're going to start doing their studies around trade-offs of you know how much mineralization do we need to consider a potential standalone opportunity there longer term or in the interim is there an opportunity to haul material from from that Guazapares area back to the to the Palmario processing facility.

Speaker #1: So that's you know that's a work stream that we'll we'll go on for for a while and with additional drilling in the meantime. The nearer term stuff that's the Independencia Sur the the southern southeastern extension of Independencia that extends off the Franco Nevada Franco Nevada area of interest that's the nearer term opportunity and I think in the second quarter we saw something like 50% of our gold production subject to the Franco Nevada terms you know the the goal is to look at that Independencia Sur in the next two or three years as the the nearer term opportunity to start bringing in some some gold where we can actually sell it for for the market price rather than to Franco Nevada for $800 an ounce.

Mitch Krebs: That's a work stream that will go on for a while and with additional drilling in the meantime. The nearer term stuff, that's the Independencia Sur, the southeastern extension of Independencia that extends off the Franco-Nevada area of interest. That's the nearer term opportunity, and I think in Q2, we saw something like 50% of our gold production subject to the Franco-Nevada terms. The goal is to look at that Independencia Sur in the next two or three years as the nearer term opportunity to start bringing in some gold, where we can actually sell it for the market price rather than to Franco-Nevada for $800 an ounce. There's a near-term play there, to the south and east at Independencia. There's the medium-term play further off to the east in that Guazapares area.

Speaker #1: So there's a near term play there. To the south and east at Independencia there's the kind of medium term play further off to the east in that Guazapares area and then in between those two areas there's a lot of exploration potential and and excitement that will continue to fund and that's that in my mind is then the longer term play even further beyond the Guazapares.

Mitch Krebs: In between those two areas, there's a lot of exploration potential and excitement that we'll continue to fund. That in my mind, is the longer-term play even further beyond the Guazapares. It's like a whole new chapter to the Palmarejo story over there to the east with some near-term, medium-term, and longer-term opportunities.

Speaker #1: So it's like a whole new chapter to the Palmario story over there to the east with some near term medium term and longer term opportunities.

Speaker #5: Great. Yeah. Lots of potential there. Appreciate that. My other question was just at Lost Chispa. So you had higher throughput in Q2 and slightly lower grades although grades were still quite strong.

Kevin O'Halloran: Great. Yeah, lots of potential there. Appreciate that.

Mitch Krebs: Yeah.

Kevin O'Halloran: My other question was just at Las Chispas. You had higher throughput in Q2 and slightly lower grades, although grades were still quite strong. How should we be thinking about the production there going forward? Is there a bit of a trend towards higher throughput and a little bit lower grades, or was this just kind of typical quarter-to-quarter fluctuations?

Speaker #5: How how should we be thinking about the production there going forward? Is there a bit of a trend towards higher throughput and a little bit lower grades or was this just kind of typical quarter to quarter fluctuations?

Speaker #1: Yeah I I thanks for the question. They are doing a tremendous job there of being very predictable and consistent and steady and you look at first half performance versus second half expectations it's a nice equal balance between the two and that's kind of the way we see it continuing you know into the into the future.

Mitch Krebs: Yeah. Thanks for the question. They are doing a tremendous job there of being very predictable, consistent, and steady. You look at H1 performance versus H2 expectations, it's a nice equal balance between the two, and that's kind of the way we see it continuing into the future. Anything, Mick, you want to add to that?

Speaker #1: Anything Mick you want to add to that?

Speaker #4: Just we have a very healthy inventory stockpile and that helps us to just balance what we get from the the main and balance the grades and the production rates out so that the mill sees what we need it to to see and we just continue to take along there.

Michael Routledge: Just we have a very healthy inventory stockpile, and that helps us to just balance what we get from the mine, and balance the grades and the production rates out so that the mill sees what we need it to see, and we just continue to tick along there.

Mick Routledge: Just we have a very healthy inventory stockpile, and that helps us to just balance what we get from the mine, and balance the grades and the production rates out so that the mill sees what we need it to see, and we just continue to tick along there.

Speaker #5: Okay. Makes sense. And then on the on the mining unit cost there at Lost Chispas I noticed they were up a little bit in Q2.

Kevin O'Halloran: Okay. Makes sense. On the mining unit cost there at Las Chispas, I noticed they were up a little bit in Q2. Was that driven by royalties and the peso, or are there other factors going on there?

Speaker #5: Was that driven by royalties and and the peso or are there other factors going on there?

Speaker #1: Yeah that's a good one. I don't have a good answer to off the top of my head. I know there was some stockpile management that was taking place building on onto the stockpile Mick is there anything that comes to mind?

Mitch Krebs: Yeah, that's a good one I don't have a good answer to off the top of my head. I know there was some stockpile management that was taking place, building onto the stockpile. Mick, is there anything that comes to mind?

Speaker #4: Yeah, it was just with that little bit lower grades, we pushed a little bit more material to keep hitting the plan, but we expect to be on budget by the end of the year.

Michael Routledge: Yeah, it was just with that little bit lower grade, we pushed a little bit more material to keep hitting the plan. We expect to be on budget by the end of the year, so it's just really quarterly fluctuations.

Mick Routledge: Yeah, it was just with that little bit lower grade, we pushed a little bit more material to keep hitting the plan. We expect to be on budget by the end of the year, so it's just really quarterly fluctuations.

Speaker #4: So it's just really quarterly fluctuations.

Speaker #5: Okay. Great. That's it for me. Thanks for taking my questions.

Kevin O'Halloran: Okay, great. That's it for me. Thanks for taking my question.

Speaker #1: Okay. Thanks Kevin.

Mitch Krebs: Okay. Thanks, Kevin.

Speaker #4: And our next question will come from Eric Widmill with Scotiabank. Please go ahead.

Operator 2: Our next question will come from Eric Winmill with Scotiabank. Please go ahead.

Operator: Our next question will come from Eric Winmill with Scotiabank. Please go ahead.

Speaker #6: Oh hi good morning Mitch and team. Thanks for taking my question. I think a lot of my questions have been answered but maybe just one on New Afton and the quay zone any updates there in terms of what's happening?

Eric Winmill: Oh, hi, good morning, Mitch and team. Thanks for taking my question. I think a lot of my question has been answered. Maybe just one on New Afton and the K-zone. Any updates there in terms of what's happening? I know you said study's ongoing. Are we likely to see an update, you think, later this year or next year?

Speaker #6: I know you said studies ongoing but are we likely to see an update you think later this year or next year?

Mitch Krebs: Are you talking K-zone, Eric?

Speaker #1: And are you talking quay zone Eric?

Mitch Krebs: Are you talking K-zone, Eric?

Speaker #6: Yeah, that's correct. Yeah, New Afton.

Eric Winmill: Yeah. That's correct, yeah. New Afton.

Speaker #1: Yeah. Yeah. Yeah. Yeah. There's an exploration piece there and then you know a study piece Mick do you want to take the the study piece where we are on on that work and then Ifa maybe you could chime in with a couple comments on the drilling that we're doing there?

Mitch Krebs: Yeah. There's an exploration piece there, then a study piece. Mick, do you want to take the study piece, where we are on that work? Aoife, maybe you could chime in with a couple comments on the drilling that we're doing there.

Speaker #4: Yeah. What we're doing the preparations for an FS which we're getting ready we're having an exact date when we'll kick that off yet but it'll be soon because the engineer and the development and Ifa will talk about the drilling in a second that's that's ongoing.

Eric Winmill: Yeah.

Michael Routledge: Yeah. We're doing the preparations for an FS, which we're getting ready. We haven't got an exact date when we'll kick that off yet, but it'll be soon, because the engineer and the development, Aoife will talk about the drilling in a second, that's ongoing. We're resourced and moving forward with that. We have time to do that well, and we're already looked at how we'll do that development to get in the right spot to do the drilling and characterize that ready for the engineer requirements of an FS.

Mick Routledge: Yeah. We're doing the preparations for an FS, which we're getting ready. We haven't got an exact date when we'll kick that off yet, but it'll be soon, because the engineer and the development, Aoife will talk about the drilling in a second, that's ongoing. We're resourced and moving forward with that. We have time to do that well, and we're already looked at how we'll do that development to get in the right spot to do the drilling and characterize that ready for the engineer requirements of an FS.

Speaker #4: So we're resourced and moving forward with that. We have time to do that well and we're already looked at how we'll do that development to get in the right spot to do the drilling and characterize that ready for the engineering requirements of an FS.

Speaker #1: Ifa?

Aoife McGrath: Aoife?

Speaker #3: Yeah. Yeah. And on the exploration side there we are we're having great results from the quay zone we've expanded the footprint by just over 300 meters this year on a base of somewhere around 600 meters initially from the Maiden Resource Shape that was outlined in in Q1.

Aoife McGrath: Yeah.

Aoife McGrath: Yeah. On the exploration side there, we're having great results from the K-zone. We've expanded the footprint by just over 300 meters this year on a base of somewhere around 600 meters initially from the maiden resource shape that was outlined in Q1. The grades are holding up very well. We're seeing some nice wide, juicy intercepts in K-zone, so we're very excited to see what comes out here in the next resource update.

Speaker #3: So and the grades are holding up very well. We're seeing some nice wide juicy intercepts in quay zone so we're we're very we're very excited to see what comes out here in the next resource update.

Speaker #6: Okay.

Eric Winmill: Okay.

Speaker #1: Does that help, Eric? Oh yeah. Okay, yeah.

Mitch Krebs: Does that help, Eric?

Eric Winmill: Yeah.

Mitch Krebs: Okay. Yeah.

Speaker #6: Yeah. Appreciate the update. And then just point of clarity did I hear correctly you said you're expecting a PFS at Silvertip probably early next year?

Eric Winmill: Yeah, appreciate the update. Just point of clarity, did I hear correctly, you said you're expecting a PFS at Silvertip probably early next year to release something?

Speaker #6: You'd release something?

Speaker #1: Well we'll we'll complete it as to whether we'll release it or not that's probably something we'll just keep internal and and whether there's a thumbs up or a thumbs down at that sort of off ramp.

Mitch Krebs: Well, we'll complete it. As to whether we'll release it or not, that's probably something we'll just keep internal, and whether there's a thumbs up or a thumbs down at that sort of off-ramp. We'll see what it looks like. Is it worth continuing onto an FS? Probably, and if it is, and we make that transition into a feasibility study, maybe on the back of that work, that's something we would look to release. That gives us a little more time as well for the drilling to keep going and catching up and adding to that resource so that we could put together a really economically attractive project in that kind of a final study.

Speaker #1: You know we'll we'll see what what it looks like is it worth continuing on to an FS you know probably if if if and if it is and and we make that that transition into a feasibility study maybe on the back of of that work that's something we we would look to to release.

Speaker #1: That gives us a little more time as well for the drilling to to keep going and and catching up and adding to that resource so that we could you know put together a a really economically attractive project in in that kind of a a final study.

Speaker #6: Okay. Great. Thank you very much. And last one from me I know you're still busy integrating the new gold acquisition but in terms of overall portfolio composition are you happy with the assets any thoughts on divestitures or things you you might want to add down the road?

Eric Winmill: Okay, great. Thank you very much. The last one from me, I know you're still busy integrating the New Gold acquisition, but in terms of overall portfolio composition, are you happy with the assets? Any thoughts on divestitures or things you might want to add down the road?

Speaker #1: No. Appreciate the question. We're happy with the portfolio everybody's doing great everybody every asset's contributing the second half is going to be a lot of fun and on the integration front you know the the people are great the infrastructure these assets are you know are terrific we couldn't be more pleased with everything obviously we've got a little bit of a timing on the on the ramp ups that we've we've made an adjustment for but you know as far as the overall portfolio no we like everything we have we like the North America only we've got good balance across the seven assets and so we're we're pleased with what we have.

Mitch Krebs: No, appreciate the question. We're happy with the portfolio. Everybody's doing great. Every asset's contributing. The H2 is going to be a lot of fun. On the integration front, the people are great. The infrastructure, these assets are terrific. We couldn't be more pleased with everything. Obviously, we've got a little bit of a timing on the ramp-ups that we've made an adjustment for. As far as the overall portfolio, no, we like everything we have. We like the North America only. We've got good balance across the seven assets, so we're pleased with what we have.

Speaker #6: All right. Fantastic. Thank you very much. Really appreciate it and I'll hop back in the queue. Cheers.

Eric Winmill: All right. Fantastic. Thank you very much. Really appreciate it, I'll hop back in the queue. Cheers.

Speaker #1: Okay. Yep. Thanks Eric.

Mitch Krebs: Okay. Yeah. Thanks, Eric.

Speaker #2: Thank you again. If you have a question, you may press star one to join the queue. Our next question will come from Brian MacArthur with Raymond James.

Operator 2: Again, if you have a question, you may press star then one to join the queue. Our next question will come from Brian MacArthur with Raymond James. Please go ahead.

Operator: Again, if you have a question, you may press star then one to join the queue. Our next question will come from Brian MacArthur with Raymond James. Please go ahead.

Speaker #2: Please go ahead.

Speaker #6: Good morning, and thank you for taking my question. Thank you for all the guidance. Can I just ask a bigger, philosophical question? Obviously, this is all about free cash flow.

Brian MacArthur: Good morning. Thank you for taking my question, and thank you for all the guidance. Can I just ask a bigger philosophical question? Obviously, this is all about free cash flow. You've given good guidance for the rest of the year. I kind of want to break it up into Q3, Q4, if I can. If I think about this going forward for EBITDA, you're sort of saying under your forecast, you need $1.3 billion over the H2 of the year. With the non-cash stuff coming off into Q4, you've got ramp-ups going on. I assume costs are coming down. Should I think of this as 40/60 between Q3, Q4? Is that reasonable?

Speaker #6: You've given good guidance for the rest of the year but I kind of want to break it up into Q3, Q4 if I can.

Speaker #6: If I think about this going forward for EBITDA you're sort of saying you need a under your forecast you need a billions tree over the back half of the year.

Speaker #6: With you know the non-cash stuff coming off in the Q4 you've got ramp ups going on I assume costs are coming down. Should I think of this as 40/60 between Q3, Q4?

Speaker #6: Is that reasonable? And then maybe the more important part of the question is, when I go to free cash flow for your capex in the back half of the year, is it evenly weighted or is it heavily weighted to Q3 or something, so that when we get the Q3 free cash flow number, it ends up being, you know, 25% or 30% of your expected back half cash flow?

Brian MacArthur: Maybe the more important part of the question is when I go to free cash flow for your CapEx in the H2 of the year, is it evenly weighted or is it heavily weighted to Q3 or something so that when we get the Q3 free cash flow number, it ends up being 25% or 30% of your expected H2 cash flow? I know it's a detailed question, but I think it is about leads into how much free cash flow the market's expecting and how much you have available to buy back shares and do everything else. Thanks.

Speaker #6: I know it's a detailed question but I think it is about leads into you know how much free cash flow the market's expecting and you know how much you have available to buy back shares and do everything else.

Speaker #6: Thanks.

Speaker #1: Yeah, no, great—great philosophical question. I was going to just hand over the call to Tom, thinking it was going to be a tax question that you were going to ask Brian.

Mitch Krebs: Yeah. No, great philosophical question. I was going to just hand over the call to Tom thinking it was going to be a tax question that you were going to ask, Brian. On the weighting, your weighting is probably pretty good between Q3, Q4 on the free cash flow, and typically, CapEx is a little higher in Q3 during the better summer season, or weather versus Q4. Tom?

Speaker #1: But on the the the weighting it your weighting is probably pretty good between Q3, Q4 on the free cash flow and typically capex is a little higher in Q3 during the better summer season.

Speaker #1: Then on weather versus Q4. Tom?

Speaker #7: Yeah. No. Yeah. Q3 is definitely higher capex than Q4 and don't forget Ifa has a gazillion drills going in in the third quarter so it it will be the heaviest heaviest impact quarter for expiration but you know just look at the production profile that that we guided right.

Thomas Whelan: Yeah. Q3 is definitely higher CapEx than Q4. Don't forget, Aoife has a gazillion drills going in Q3, so it will be the heaviest impact quarter for exploration. Just look at the production profile that we guided. You do see the production-

Tom Whelan: Yeah. Q3 is definitely higher CapEx than Q4. Don't forget, Aoife has a gazillion drills going in Q3, so it will be the heaviest impact quarter for exploration. Just look at the production profile that we guided. You do see the production-

Speaker #7: You do see the production steps up pretty nicely in Q3 and then steps up even nicer in Q4. So that should help help figure out the geography of the the free cash flow growth by quarter as well.

Mitch Krebs: Yeah

Thomas Whelan: steps up pretty nicely in Q3 and then steps up even nicer in Q4. That should help figure out the geography of the free cash flow growth by quarter as well.

Tom Whelan: steps up pretty nicely in Q3 and then steps up even nicer in Q4. That should help figure out the geography of the free cash flow growth by quarter as well.

Speaker #1: And back to Wayne's question on timing of silver at Rochester. You know that gold comes out a lot faster in Q3 but Q4 then on the silver at Rochester is where you'll really start to see the the hockey stick in the second half of the year out there.

Mitch Krebs: Back to Wayne's question on timing of silver at Rochester. That gold comes out a lot faster in Q3, but Q4 on the silver at Rochester is where you'll really start to see the hockey stick in the H2 of the year out there.

Speaker #6: Yeah, that's what I was trying to work out, because you get all these moving parts and you set up and down there and a couple, and then I guess the other thing—just for EBITDA—we get rid of the $38 million, as you said, from Q3 to Q4 as well, right?

Brian MacArthur: Yeah, that's what I was trying to work out, because you got all these moving parts and you set up and down there, and a couple. I guess the other thing, just brief. We get rid of the $38 million, as you said, from Q3 to Q4 as well, right? That'll be income statement Q3, but non-cash in Q3.

Speaker #6: So that'll be you know in income statement Q3 but non-cash in Q3.

Speaker #1: That's right. Yeah. It'll be nice to get past that purchase price allocation noise in the third quarter, and a cleaner, simpler fourth quarter.

Mitch Krebs: That's right. Yeah. It'll be nice to get past that purchase price allocation noise in the Q3 and a cleaner, simpler Q4.

Speaker #7: Yeah, offset by—like, let's—I know it's accounting noise, but this is great operational flexibility for us to have. I mean, at last, Chief Specs has proven to be—it’s been great to have that stockpile, and at Rainey it’s been great to have that stockpile. Just apologies for the accounting.

Thomas Whelan: Yeah. Upset by like, I know it's accounting noise, but this is great operational flexibility for us to have. Las Chispas has proven to be, it's been great to have that stockpile, and at Rainy it's been great to have that stockpile. Just apologies for the accounting, this is what has been forced upon us to. So the pain's almost done and thanks for everyone's understanding. All of the analysts did a really good job of understanding this, and thank you.

Tom Whelan: Yeah. Upset by like, I know it's accounting noise, but this is great operational flexibility for us to have. Las Chispas has proven to be, it's been great to have that stockpile, and at Rainy it's been great to have that stockpile. Just apologies for the accounting, this is what has been forced upon us to. So the pain's almost done and thanks for everyone's understanding. All of the analysts did a really good job of understanding this, and thank you.

Speaker #7: We we're just this is what what has been forced upon us to and so hope the pain's almost done and thanks for everyone's understanding it.

Speaker #7: All of the analysts did a really good job of understanding this, and thank you.

Speaker #6: Great. Thanks very much. I was just more concerned about the free cash flow. I think that's what's really important. So thank you.

Brian MacArthur: Great. Thanks very much. I was just more concerned about the free cash flow. I think that's what's really important, so thank you.

Speaker #1: Yeah. No. Thanks Brian.

Mitch Krebs: Yeah. No, thanks, Brian.

Speaker #2: And this concludes our question and answer session. I'd like to turn the conference back over to Mitch Krebs for any closing remarks.

Operator 2: This concludes our question and answer session. I'd like to turn the conference back over to Mitch Krebs for any closing remarks.

Operator: This concludes our question and answer session. I'd like to turn the conference back over to Mitch Krebs for any closing remarks.

Speaker #1: Okay. Well we appreciate all the great questions and everybody's time today and we look forward to talking with you all again later in the fall after our third quarter results.

Mitch Krebs: Okay. Well, we appreciate all the great questions and everybody's time today, and we look forward to talking with you all again later in the fall after our Q3 results. Have a great rest of the day and rest of the summer.

Speaker #1: Have a great rest of the day and rest of the summer.

Operator 2: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Q2 2026 Coeur Mining Inc Earnings Call

Request DemoDemo

Coeur Mining

Earnings