Operator: Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Kinross Gold Third Quarter 2026 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to David Shaver, Executive Vice-President. Please go ahead.
David Shaver: Thank you and good morning. In the room with us today on the call, we have Paul Rollinson, CEO, and from the Kinross senior leadership team, Andrea Freeborough, Bernard Wessels, Will Dunford, and Geoff Gold. For a complete discussion of the risks and uncertainties which may lead to actual results differing from estimates contained in our forward-looking information, please refer to page 3 of this presentation, our news release dated 28 October 2026, the MD&A for the period ended 30 September 2026, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.
Paul Rollinson: Thank you, David, and thank you all for joining us. This morning, I will discuss our Q3 results, provide high-level updates from across our portfolio, comment on our sustainability achievements, and confirm our outlook. I will then hand the call over to the team to provide further details. Before we begin discussing the quarter, in keeping with our first priorities, I would like to address a very important matter with regards to safety. We are deeply saddened by the tragic loss of 2 employees of business partners of our Bald Mountain operations in Nevada. We extend our sincere condolences to their families, friends, and colleagues. The safety of every individual at our sites is our highest priority, and we are committed to learning from these incidents and reinforcing our safety controls across our operations. Turning now to our results.
Paul Rollinson: Following a strong H1, our portfolio delivered on our updated commitments for the Q3. Both Tasiast and Paracatu, our 2 top-tier low-cost assets, were key contributors and together accounted for more than half of our production at attractive operating costs. In La Coipa and Round Mountain, the 2 smaller assets behind the near-term guidance update delivered in line with our updated expectations. In terms of cost, we continued to hold the line on total operating costs and delivered strong operating margins. All this translated to free cash flow of over $1.8 billion through the first 9 months, and we ended the quarter with significant financial strength, including $2.6 billion in cash. This enabled us to increase our shareholder returns from 40% to 50% of our free cash flow, and we have now returned over $950 million to our shareholders year to date.
Paul Rollinson: I am pleased to report that over the last six quarters, we have now repurchased approximately 5% of our outstanding shares. Turning now to our growth projects. Our project pipeline is advancing as we continue to make strong progress across our mine life extensions and growth opportunities. In the US, the team continued to progress our three high-quality projects, Phase X, Redbird, and Fennec. At Great Bear, both the advanced exploration and the main project are advancing well. In terms of AEX, we continue to make strong progress advancing the North and South exploration declines for a combined total of over 500 meters of underground development completed to date. With respect to the main project, both detailed engineering and permitting are advancing well, and we remain on track for first production in late 2029.
Paul Rollinson: In terms of permitting, we continue to work closely with the authorities and are significantly advanced on the federal and provincial permitting process. In parallel, we are actively engaging with the local communities and Indigenous partners through regular community meetings, ongoing collaboration, and transparent communication, which Geoff will comment on later. Moving across to growth in Chile. Last quarter, we provided an updated view of Lobo-Marte, highlighting its strong production profile, low cost structure, and attractive economics. In Q3, we continued to advance permitting, detailed engineering, and execution planning towards targeted first production in the early 2030s. Turning now to a few remarks on sustainability. In Q3, we continued to make meaningful impact across our regions. Three highlights include our work with Trout Unlimited on the Cripple Creek Restoration Project in Alaska, which focused on restoring waterways and fish habitat impacted by non-Kinross historic mining.
Paul Rollinson: We also supported recovery efforts following the Tok Wildfire in Alaska, including emergency assistance for families whose homes were rendered uninhabitable. In Chile, we were proud to receive the Mining Foundation of Chile's award for commitment to territories and education, for recognizing our support for education, training, and opportunities in the Atacama region. Turning now to our outlook. The broader portfolio continues to perform well. Operations at La Coipa and Round Mountain have stabilized, and we are firmly on track to deliver our updated production guidance of 1.84 million to 1.86 million ounces. Looking ahead, we remain focused on the following. Safe operational execution, cost management through productivity initiatives, delivering our grade enhancement strategy, maintaining our strong financial position, disciplined capital allocation, and advancement of our high-quality resource base and project pipeline. With that, I will now turn the call over to Andrea.
Andrea Freeborough: Thanks, Carl. I will review our financial highlights from the quarter, provide an overview of our balance sheet and return of capital, and comment on our outlook. We delivered Q3 as per our updated plan, with production and cost in line and a significant amount of capital returned to shareholders through our dividend and increased share buyback plan. We produced 425,000 ounces and sold 410,000 ounces, with the difference a function of timing of ounces sold. Cost of sales was $1,485 per ounce, and all-in sustaining cost was $1,947 per ounce. Through the first nine months, our production cost of sales was $1,396 per ounce, and our all-in sustaining cost was $1,827 per ounce, both tracking well towards our updated full-year guidance. Q3 margins were strong at approximately $2,750 per ounce.
Andrea Freeborough: Our adjusted earnings were $0.50 per share in the quarter, and our adjusted operating cash flow was $831 million in the quarter and over $3 billion through the first nine months. Attributable adjusted free cash flow was $391 million when excluding the impact of working capital outflows. Working capital outflows primarily reflected an increase in short-term stockpile balances at Manh Choh, along with lower payables and higher prepaids, all of which are a function of timing. Free cash flow was also impacted by the timing of ounces sold, given the bank holiday on 30 September. The unsold ounces at the end of the quarter were sold in early October. Turning now to our balance sheet and return of capital. We ended the quarter with $2.6 billion in cash and $1.9 billion in net cash.
Andrea Freeborough: During the quarter, S&P upgraded our credit rating to triple B flat with stable outlook, consistent with our ratings at both Moody's and Fitch. With respect to our return of capital, in September, we increased our commitment from 40% to 50% of our full-year free cash flow through both dividends and share repurchases. We believe our shares continue to represent a strong return on invested capital, considering our even more attractive valuation and free cash flow yield. In Q3, we accelerated our buyback program and repurchased a total of 8.6 million shares for $230 million. We also continued to pay our quarterly dividend of approximately $50 million. Combined, our total return of capital in the first nine months represented approximately 46% of our attributable free cash flow, an increase from 37% in the H1 of the year.
Andrea Freeborough: Subsequent quarter end, we repurchased an additional $100 million in shares, and we remain on track to achieve our 50% commitment by the end of this year. Since resuming our share buybacks in April 2025, we have repurchased over $1.4 billion in shares, representing approximately 5% of our outstanding share count. Including our dividends, we have returned over $950 million to date in 2026 and over $1.7 billion since the start of 2025. These results reflect the strength of our cash flow generation and our ongoing commitment to delivering meaningful returns to shareholders, while continuing to invest in our business and further strengthening our balance sheet. Turning now to our guidance. We remain on track to deliver our updated production, cost of sales, and all-in sustaining cost guidance.
Andrea Freeborough: Production is expected to be between 430,000 and 450,000 ounces in the Q4 to deliver 1.84 to 1.86 million ounces for the year. We are on track to meet our updated cost of sales guidance of $1,420 to $1,460 per ounce, and all-in sustaining cost guidance of $1,850 to $1,900 per ounce. We are also on track with our original capital guidance range of $1.5 billion ±5%. Looking ahead to 2027, as noted in our September update, we also expect production in the range of 1.84 to 1.86 million ounces. In terms of 2027 capital, as previously noted, our $1.5 billion guidance range remains subject to inflation and incremental project additions to support production in the 2030s. We are actively evaluating incremental investment opportunities to unlock value from our significant resource inventory.
Andrea Freeborough: This includes the Fort Knox Phase 11 extension and other targeted opportunities across the portfolio to add ounces and extend mine life. Will is going to discuss these later in the call. Our annual budgeting process is underway, and we will provide detailed 2027 production costs and capital guidance with our year-end results. Looking forward to 2028, our grade enhancement strategy is expected to drive higher production relative to 2027 and provide an organic offset to inflation with the addition of higher-grade ounces from Phase X, Curlew, and Taskers. With that, I will now turn the call over to Bernard.
Bernard Wessels: Thank you, Andrea. I would like to begin by acknowledging the tragic loss of two business partner employees at our Bald Mountain operation in Nevada. We are deeply saddened by these incidents, and our thoughts remain with their families, friends, and colleagues. As Paul noted, safety of everyone at our sites is our highest priority. Following these incidents, we held company-wide safety stand-downs to reflect, reinforce, and share learnings across the business. Going forward, we will maintain our relentless focus on fatality prevention and reinforce our risk management programs. We continue to be committed to visible leadership, disciplined execution, and the active management of everyone working through our guidance. Turning now to our operations. Starting with Paracatu, the mine continued to perform exceptionally well, with increasing ore tons mined and stronger throughput driving significant free cash flow.
Bernard Wessels: The production of 146,000 ounces at a cost sales of $1,202 per ounce was on plan. Paracatu remains on track to meet its guidance of 600,000 ounces at a target cost of sales of $1,240 per ounce. Tasiast, our lowest cost operation, has delivered another excellent quarter with strong throughput and mining performance. Production of 120,000 ounces at a cost of sales of $1,072 per ounce was on plan. Tasiast remains on track to meet its guidance of 505,000 ounces at a target cost of sales of $1,050 per ounce. At La Coipa, we produced 29,000 ounces at a cost of sales of $2,194 per ounce. As highlighted in the September update, La Coipa was one of the two assets impacting our near-term production in 2026 and 2027.
Bernard Wessels: Production was lower quarter-over-quarter, primarily due to unprecedented winter weather, which restricted access to the ore needed to maintain our targeted mill feed length. This reduced mining rates and ultimately impacted mill throughput. Simultaneously, we encountered higher than expected copper grades in portions of the sulfide ore, which added blending complexity. Operations have since recovered from the weather disruptions, and both mining and milling activities have stabilized. To manage the higher copper grades and improve recoveries, we are rebuilding ore stockpiles while strengthening our ore control to maintain the right blend through the mill. As part of continuous improvement program, we increased oxygen and lead nitrate usage and are advancing mill optimization. These actions have started to deliver results with mill throughput stabilizing.
Bernard Wessels: More importantly, the impact is on the near term as the copper provides transition to low 1 market, which remains the key long-term value driver for us in Chile. Turning to our US operations, combined, the US sites delivered production of 129,000 ounces at a cost of sales of $1,996 per ounce. At Fort Knox, production was 72,000 ounces at a cost of sales of $1,938 per ounce. Production reflected more maintenance activities and planned lower grades during the quarter, partially offset by improved ore recoveries. At Bald Mountain, production was 29,000 ounces at a cost of sales of $1,616 per ounce. Production reflected higher tons placed on the heap leach pads, partially offset by lower grades due to planned mine sequencing.
Bernard Wessels: I am pleased to report that we poured our first gold from Redbird-1 in early October, which combined with Redbird-2 extends lives into the early 2030s. At Round Mountain, as planned, we started to see higher mill grades and incremental improvement in recoveries, resulting in higher production quarter-over-quarter. Production of 27,000 ounces was higher, and cost of sales, $2,557 per ounce was lower. Despite higher production, it was below our original expectation, and Round Mountain was the second of the two smaller assets impacting our near-term production profile. This was a result of lower-than-planned mill grades, recoveries, and slower mining rates driven by increased selective mining. Operations have started to stabilize as we continue to implement initiatives to improve performance at Round Mountain.
Bernard Wessels: We are noticing improvement in mill reconciliation and recovery, with 60% recovery in the Q3 compared to 44% recovery in the prior quarter. Before I hand over to Will, I would like to touch on a few other updates. In terms of weather events, we are closely monitoring the potential impacts of El Niño and preparing for different weather conditions across our South American assets. In Chile, our focus is on managing increased snowfall and maintaining safe site access. While at Paracatu, we are preparing for both heavy rainfall and potential drought conditions. Our teams have detailed plans in place to support safe and reliable operations. With regards to productivity improvements, we continue to see strong results from our continuous improvement programs focused on productivity and cost discipline.
Bernard Wessels: Building on that work, we have launched our Critical Success Factors initiative, which focuses each operation on the few priorities that matter most to deliver against plan, clear ownership, measurable targets, and disciplined execution. With that, I will now pass the call over to Will.
Will Dunford: Thanks, Bernard. Turning to the depth of our resource. With more than 27 million ounces of M&I and an additional 17 million ounces inferred, we continue to have a strong resource inventory for future development across our portfolio. Building on that depth, our technical teams are advancing studies for several mine life extension opportunities. Similar to what we saw with the three US growth projects announced earlier this year, these internal projects provide significant optionality to invest further capital in our business at our existing assets, strengthen our production profile, extend mine lives in the 2030s, and create value for our shareholders. We are focused on completing robust technical work on these projects to support our capital allocation decisions, and will continue to assess margins, risks, and returns as we make investment decisions. Turning now to our three US growth projects.
Will Dunford: These projects represent an important next phase for our portfolio, adding higher-grade, lower-cost production, significantly extending mine lives, and adding value to shareholders by reinvesting in our existing operating footprint and resource base. We are pleased to report that execution is progressing well across all three projects, with development, engineering, and construction activities advancing significantly over the last quarter. Starting with our Curlew project in Washington, we are making significant progress across both the mill refurbishment and tailings dewatering plant construction. At the tailings dewatering plant, work outside the building on tanks and the thickener is nearing completion ahead of winter, and work inside the building is progressing well on installation of structural steel and mechanical equipment. The mill refurbishment contractor ramped up work substantially this quarter. Demolition work progressing well and installation of the new CIL tanks underway.
Will Dunford: Work at the mine is also progressing well, with underground development ahead of schedule, initial reaming of the main ventilation raise now complete, and construction of a new dry and maintenance facility largely complete. Overall, these activities are on track for first production at Curlew in 2028. Moving to Redbird at Bald Mountain. We saw first production from Redbird-1 earlier this month, and pre-stripping and construction activities for Redbird-2 are progressing well. Engineering and procurement for the SART plant has also progressed well, with detailed engineering now 30% complete and early procurement of long lead items underway. Additionally, permitting for the Redbird-2 satellite pits was completed this quarter, putting us on track to begin mining those pits in 2027 as planned.
Will Dunford: At the Phase X project at Round Mountain, we are approximately 8% ahead of schedule on underground development, over 9,600 meters completed to date, further de-risking our path to first production in 2028. In parallel, engineering, procurement, and early works for both surface and underground infrastructure continue to progress on plan. We continue to ramp up operations readiness, positioning the team for a smooth transition into operations as we move towards initial production. Infill drilling has also progressed for the early stoping horizons at Phase X, and we have seen positive results indicating higher tonnes and ounces contained in our first stopes than what was modeled in our resource. This is driven by improved continuity of mineralization as we drill in tighter spacing, allowing us to take a bulkier stope and more ounces than planned.
Will Dunford: You can see here some impressive intercepts, including 80 meters at 10 grams per tonne, that show potential to increase both the grade and tonnes delivered from this stope versus the resource model, which showed around 40,000 tonnes of 4 grams per tonne for this particular stope. While still early, these results are encouraging, adding confidence to the initial mining inventory and supporting the planned production ramp-up. We also continued extensional drilling in Q2 and intersected an impressive zone of mineralization, 11.7 grams per tonne over 27 meters above the 300 meters down dip of our initial resource at Pay-Ax. Aligned with our thesis for this deposit, this drilling continues to show potential for mineralization to continue down dip, extending the resource base and mine life.
Will Dunford: Here you can see some highlights on a few of the additional potential investment opportunities for our next phase of projects from within our resource base. First, at Fort Knox, we are continuing to advance work on the next potential open pit layback, Phase 11. This layback of the existing pit contains approximately 2 million ounces and has the potential to meaningfully extend our long-standing tenure in Alaska. We view this as a lower risk project, given that the majority of CapEx would be for routine work for our Fort Knox team, including waste stripping and heap leach pad expansions. Study work is progressing well, and we are expecting to release a project update in H1 2027, and could start pre-stripping as early as next year.
Will Dunford: At Tasiast, studies are continuing to progress on both open pit and underground extensions at West Branch, where the high-grade core of the deposit continues at depth. We are also continuing to explore and study satellite pit optionality to bring additional ounces into the profile from opportunities such as Fennec, which was added last year. At Bald Mountain, work continues to unlock the resource base across our largest land. Our current focus is on the Top area, where the larger Top open pit pushback and the smaller Top condo satellite pit are being studied. These opportunities could potentially further extend mine life beyond Redbird in the 2030s. Lastly, at Lobo-Marte, we are pleased with permitting progress to date, which is on track after our EIA was accepted for review by Chile's environmental authority in early Q2 2026.
Will Dunford: We are starting to progress detailed engineering and are in the process of project execution planning to target first production in the early 2030s. Lobo-Marte is a strategic focus for us alongside Great Bear and a key piece of our grade enhancement strategy, given the strong potential production profile and margins driven by the high grade and low strip ratio of this heap leach asset. La Coipa is another area that we have significant optionality, both in our resource base and in our exploration projects. The first phase of the optionality is the oxide extensions that sit in our resource and are currently in permitting and under study. These are laybacks of existing pits, and they have the potential to start contributing in 2028 after we complete mining of the current pits, Puren 2 and Phase 7, in 2027.
Will Dunford: Bernard spoke about some higher than expected copper grades that we saw at La Coipa this quarter. Although this negatively affected near-term production, these high-grade sulfides at the bottom of the existing oxide pits represent our second phase of optionality. On that front, we are undertaking exploration to define an inventory and a PFS to explore potential for a flotation plant to add on to the existing circuit to process high-grade sulfides. This is early stage, with potential for the mid-2030s post-oxide extensions. The third phase of optionality at La Coipa is the potential for a large copper porphyry deposit deeper on the property that is feeding the large number of surface deposits that we have mined historically.
Will Dunford: This is longer-term optionality and would be a different scale of operations at La Coipa, and is only in the early exploration stage right now, with deep drilling underway to try to find a copper porphyry. Turning now to Great Bear. We continue to advance the AEX program in parallel with permitting, detailed engineering, and procurement for the main project. Surface construction is now substantially complete, with all infrastructure in place to support underground development. Both declines are advancing well, with over 500 meters completed to date on a combined basis. For the main project, manufacturing is underway on several long lead equipment packages, including the mill motors, transformers, and power plant generators. We have also awarded the construction contract for the administration and camp facility. Detailed engineering is progressing well and is now over 55% complete.
Will Dunford: We expect to substantially complete detailed engineering in the first half of next year, and we will provide a CapEx update on the back of that. We do expect capital to be higher than the PEA, as it will reflect approximately 3 years of inflation, competitive contractor and skilled labor market, and scope changes and enhancements we make as we move through detailed engineering. However, given the high grade, significant production scale, and low anticipated costs at Great Bear, we expect a high return and quick payback on the capital. We are focused on building a robust, reliable, top-tier mine given the quality of the resource base and the multiple decades of production potential. We are excited to now be progressing underground with AEX, seeing the future of Great Bear taking shape.
Paul Rollinson: I will now hand it over to Geoff for an update on permitting at Great Bear.
Geoff Gold: Thanks, Will. As Paul noted, our permitting timeline for the main project continues to remain on track. We continue to work closely with the authorities and are significantly advanced on main project federal and provincial permitting, which I will speak a little further about. Federally, we are progressing the impact assessment process and have formally responded to the information requests received to date. As previously noted, a final decision on our impact statement is required by the late spring of 2027 in order to facilitate the early works and construction permits needed from the federal and provincial authorities to commence construction of the mine during the summer of 2027. Provincially, the integrated One Project, One Process, also known as 1P1P permitting, continues to proceed in accordance with our overall project permitting timeline.
Geoff Gold: We have submitted most of our key early works permitting applications and expect to receive our final indigenous consultation plan shortly, another milestone under the provincial permitting process. We believe that signing an impact benefits agreement, also known as an IBA, with Lac Seul and Wabauskang First Nations will benefit the overall permitting process and is important to maintaining our project permitting timeline. In that regard, we continue to make good progress on our IBA agreement. As previously disclosed, we signed a memorandum of understanding detailing the key financial arrangements and First Nations accommodations for the IBA, and we are currently in the process of advancing the non-financial aspects of the agreement, including the results of our First Nations independent impact assessment work. Lastly, and as previously noted, we have already signed a collective benefits agreement with the Northwestern Ontario Métis Community.
Geoff Gold: Overall, we have made meaningful progress with our indigenous communities. With that, I will now turn the call over to Paul for closing remarks.
Paul Rollinson: Thanks, Geoff. To conclude, Q3 demonstrated the resilience of our portfolio, and we remain on track for our 2026 updated guidance. Looking forward, we are excited about our future. We have a resilient production base with a clear path to higher grade production starting in 2028. We have a competitive relative cost position. We have an excellent balance sheet. We have an attractive return of capital. We have an exciting pipeline of both exploration and development opportunities. We are very proud of our commitment to responsible mining that continues to make us a leader in sustainability. In closing, when we look at the strength of our portfolio, our strong free cash flow generation, and our financial position against our valuation today, we believe our shares offer an even more exceptional investment opportunity. With that, operator, I would like to open up the line for questions.
Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question is from the line of Matt Murphy with BMO Capital Markets.
Matt Murphy: Morning. Thanks for all the updates, and good to hear that projects are going well. First question just on the trajectory for CapEx. Is it fair to say you will be sort of at the upper end of CapEx guide this year just based on the pace so far? Is there anything you can say about the pace in 2027? I know you have the $1.5 billion, but still the subject to inflation and project advancement. Any thoughts around, is the 440 rate, should we be continuing to run with that as sort of a quarterly cadence, or could it be higher?
Andrea Freeborough: Hi, Matt. It is Andrea. I will take that to start anyway. For this year, for Q4, probably a bit of an increase in Q4 on both sustaining and growth. On sustaining, I think H2 will end up being about equal to H1, and it has kind of been a bit up and down through the quarters. On the growth side, we have seen that ramp up a bit through the year just as the growth projects are ramping up. So that probably takes us somewhere in the midpoint to upper end of the guidance by the time we close out this year, but still within that guidance range. As we look to next year, we have the $1.5 billion range again out there, but we have always said that is subject to inflation and ongoing project approvals.
Andrea Freeborough: We are just in the budget process now, and we will see where we come out on that. Some examples of things we are looking at that are still in the assessment process are Fort Knox Phase 11. If we do approve that, we will start spending on that next year. Then there are some other potential incremental opportunities that we continue to look at that are really to address production in the 2030s.
Matt Murphy: Okay, thanks. I will look forward to a post-budgeting update. Anything you can share on working capital, a bit of a drag in Q3. Does that reverse in Q4?
Andrea Freeborough: Call it temporary. I think some of it likely reverses in Q4. It will probably swing the other way in Q4. It is kind of typical for us. One of the big pieces in Q3 was short-term stockpiles. So that was at Man Choh, and some of that will come out in Q4. But we might see that continuing just because we stopped mining before we stopped processing. So we would mine through the end of next year, and there will be some stockpiles throughout that time period because we do continue processing beyond that. But things like the payables and prepaids, those will reverse as we go through Q4.
Matt Murphy: Okay. Thank you.
Andrea Freeborough: Then I guess last, we did have a bit of additional finished goods just at the end of the quarter, and that was the sales lag behind production, and that all got sold in early October.
Operator: Your next question is from the line of Fahad Tariq with Jefferies.
Fahad Tariq: Hi, thanks for taking my question. On Round Mountain, it looked like it was quite a bit better than the second quarter. Mill grades were 0.73 grams per tonne. Recovery was 60%. I think the throughput was a five-quarter high. I am just trying to reconcile that with the September update, and I guess the answer is it is lower relative to the mine plan. Maybe if you could just touch on what the expected, I guess, operating metrics were according to the original mine plan, that would be helpful. Thanks.
Bernard Wessels: Thank you. It is Bernard speaking here. Certainly, we have seen the improvements, as we have mentioned in our press release. We are starting to see improvements both on the grades that we are seeing from Phase S coming through, as well as some of the recoveries through our improvement initiatives. I think ultimately, we saw quarter-on-quarter improvements as indicated there, but we still need to get back to around 80% on recovery, and we are well on our target on achieving that. As I said recently, we are definitely seeing the updated improvements coming through and certainly the grade recovery probably closer to 80% in the second part of the year.
Fahad Tariq: Okay, great. Just switching gears to Great Bear on the AEX. Can you talk a little bit about any risk to the, I guess, any First Nations pushback or permitting there, and if that does have any impact on the main project? Thanks.
Geoff Gold: Yeah, sure. I will take that one. Just context is important here. I would say that we have really kind of got two separate permitting processes, one for AEX and one for the main project. AEX is not critical to the main project. I would also say that AEX is not under 1P1P, which the main project is, and that has been making a huge difference to us in terms of what we are kind of seeing. What I would say on overall timing, main project permitting still remains on time at this date based on our project schedule, which we have shared with both the provincial and federal authorities. On the AEX side, I would say, as you know, those permits have been appealed by Grassy Narrows First Nation. They are seeking a leave to appeal.
Geoff Gold: We would not expect to see a decision on that until later next year, potentially in H1. In the meantime, it has been full steam ahead. We have been able to significantly complete our AEX activity, and we are certainly not anticipating any delays at this point to our main project permitting, given they are two separate processes. We would expect the provincial authorities to assess those main project permits under their own merits. I would also say that in that regard, we have worked very closely with the authorities to ensure that we are addressing the concerns of Grassy Narrows in those permits. Last but not least, there has sort of been a lot of media about Grassy, but I would say that the bigger voice here is our traditional territory rights owners, Lac Seul and Wabauskang, on whose territory our project is located.
Geoff Gold: They have been very supportive of AEX and further in support of our project overall. We have made significant progress on our IBA agreement negotiations. We see that, and once we have sort of completed those negotiations, as being a big catalyst to facilitate the remaining permits that we require on the project. On the IBA, as we have disclosed previously, we have sort of landed on the key financial metrics and compensatory elements for nations, and now we are sort of just focused on some of the softer issues or the non-financial provisions. So we are making excellent progress there. We would expect to get that agreement signed before we receive the final IAAC permit. Again, see that as a potential facilitator for the remainder of the permitting on the project.
Fahad Tariq: Great, very clear. Thank you.
Operator: Your next question is from the line of Daniel Major with UBS.
Daniel Major: Hi there. Can you hear me okay?
Geoff Gold: Yep.
Will Dunford: Yep.
Daniel Major: Hello. Great. Hey, thanks for the questions. Yeah, I guess first one, thinking about the trajectory of unit costs into 2027, you got essentially flat production and certainly external variables, energy, et cetera, look like they will be a consistent cost pressure. Would it be fair to assume that those unit costs are moving higher in the, say, $50 to $100 an ounce sort of range based on current external variables?
Andrea Freeborough: I will take that one. It is Andrea. We typically provide costs kind of one year out. It is pretty difficult to make the call, in particular on inflation longer than that. I think it maybe important to note structurally, production is similar in 2027 to 2026. There is a bit more production coming from the US and some offsets elsewhere, but I do not think that will have a significant impact on overall cost in 2027 versus 2026. We are just in the budget process right now, but expect inflation to probably be similar to where it was this year, which was about a 5% factor that we had on our cost. With the one caveat that we are continuing to watch where diesel prices go, oil price as well as the crack spread.
Andrea Freeborough: We do not think that currently has a big impact on this year, but we are continuing to look at it as we go through the budget process.
Paul Rollinson: Yeah, I would just pile on there and just say, completely support everything Andrea has just said, but we do also look through the windshield a little bit. One of the things we are working on or are executing is what we call our grade enhancement strategy. As we look through 2027 into 2028, 2029, that is when the grade enhancement strategy starts to kick in. So we expect we will start to get the benefit of the underground grades at Phase X, the benefit of Curlew, where we have higher grades underground. Of course, our mine plan has us approaching the bottom of the pit at Tasiast, where we get back into the high grades. So to Andrea's point, operationally 2027 is a lot like 2026. We will keep going with efficiencies and everything we can do to manage that inflation.
Paul Rollinson: But looking through the windshield, we should have an organic offset.
Andrea Freeborough: Maybe I will just add, too, back to 2027. We do also have hedges in place against the oil cost component of the diesel price in 2027. So we are about 50% hedged for 2027.
Daniel Major: Okay. So you are 50% hedged. At what sort of level relative to this year's trending diesel cost?
Andrea Freeborough: In the low $60 a barrel.
Daniel Major: Okay.
Andrea Freeborough: $60 to $65 a barrel.
Daniel Major: Okay. That is very helpful. Thank you. Second one, maybe just touch on Matt Murphy's questions on CapEx. You guided $260 million, I think, in Great Bear this year. What should we be expecting for a run rate of CapEx into next year, assuming the FID comes through in line with your expected timelines? A similar question on Lobo-Marte. Is that going to be incurring pre-approval spend in 2027?
Will Dunford: Yeah, if you look back at what we disclosed at the PEA time, it has got a bit of a profile there. So, obviously, 2027, upon receipt of our federal permits, we go into significant construction. So, we do expect that it ramps up meaningfully. It was in the $500 million range in that original PEA. Obviously, that is a few years dated now in terms of the value date for some of those quotes. So, we expect that will be higher when we work in inflation. But next year starts to be a meaningful spend year at Great Bear if all goes well with permitting.
Daniel Major: Got it. Okay. So, the $500 million is, from a timeline standpoint, still valid, and then we should just apply an inflation factor onto that. Is that the right way of thinking about it?
Will Dunford: Yeah. That is what we are thinking right now. Lobo-Marte is not in full construction next year. That is more still early spend. So, we are still doing our budgeting work. But that is not in the same scale next year. Really, we will get into full construction later in 2028 into 2029. So, it is a little bit staggered behind Great Bear.
Daniel Major: Okay. Thanks. The final one. The lift in the free cash flow payout in terms of cash returns, I think is supportive. But you are still accruing 50% of the free cash flow on the balance sheet if you stick to that policy. We have seen some
Daniel Major: Decline in asset values in the sector more broadly. What are you seeing in the M&A landscape? Are there any irons in the fire that look more attractive as some equity values in the sector are coming down?
Paul Rollinson: Look, again, our standard sort of response on that is we keep an awareness of what is out there. We feel we are in a pretty good position with our organic internal optionality. We have over 40 million ounces of resource. You recall last year, one of the things we did is we brought a number of our US brownfield projects out of that resource category through further drilling, further study, and we basically moved things out of resource into reserve. So we have lots of depth in the portfolio to keep advancing internally. Yes, we do keep an awareness of and an eye on what is out there. Again, we have a fabulous balance sheet. We have very strong cash flow. We have a great internal resource optionality. So we do not feel under pressure.
Paul Rollinson: We do look, particularly if there is a process or something is going on, we will take a look at it. If you look in the rearview mirror, we have been pretty disciplined in terms of when we decide to move forward with M&A, and that will continue. We are in a good position where we do not need to do anything, but we can look and, if we saw value creation opportunities, we would look a little closer.
Daniel Major: Great. Thanks so much.
Paul Rollinson: Thank you.
Operator: Your next question is from Carey MacRury with Canaccord Genuity.
Carey MacRury: Good morning. Just a question on La Coipa. Just wondering in terms of the mine plan, how long you expect to be mining in this area with high copper grades and just maybe more broadly, how much of the mine plan contains that sort of ore?
Will Dunford: Yeah. These really high copper sulfides are at bottom of Phase 7, which we are planning to finish next year. Our current permitted pit is there. We do have resource out there in the future. Given the grades that we are seeing, as we mentioned in September, we are looking at optionality really for the 2030s. This is stuff that would come in after Lobo-Marte on the back of flotation circuit or something like that for those resources and high copper grade sulfides that are below the pit. The current plan pit is just through 2027. That is why it has had a limited impact on us.
Carey MacRury: Okay. I guess that's why your 2028 guidance is still 2 million ounces more or less.
Will Dunford: Sorry, we didn't hear you, Paulie. That's why what?
Carey MacRury: Yeah, your 2028 guidance still shows 2 million ounces. I guess you're expecting not much of an impact then in 2028 from either Round Mountain or La Coipa.
Will Dunford: Yeah, there's no impact from Phase 7 or sulfides in 2028 because we were planning to be done that next year anyways.
Carey MacRury: Okay. Just switching to Great Bear, just wondering, you have the decline progressing. Just wondering when you expect to be drilling from underground there.
Will Dunford: Yeah. We think that will be early next year. If everything stays on target right now, we will start to get some early opportunities at the top end of the ore body to drill off in a couple of areas. We are on track for doing that early next year.
Carey MacRury: Okay, great. That is it for me. Thanks.
Operator: Your next question is from Tanya Jakusconek with Scotiabank.
Tanya Jakusconek: Good morning. Thank you for taking my question. Just wanted to circle back on costs, if I could. Just looking at your input costs as you think about your 2027 guidance. Paul, you mentioned a tight labor market. Can you comment on what you are seeing in terms of your labor inflation and turnover? I think it was at about 10% for the company. I am just trying to understand what that component is looking like and what your consumable inflation is looking like as well.
Andrea Freeborough: I can start, Tanya. I think on labor specifically, again, all of this is with the caveat that we are just in the budget process right now. The average labor inflation, we are thinking around 5% to 6%, but it is not equal everywhere. As always, it is typically higher in the US and in Nevada, but we are roughly seeing about on average in that 5% to 6% range. As I said, overall inflation around 5%.
Paul Rollinson: Generally, just to add on. As we have said many times annually, Nevada tends to be our hottest market. There is competition for everything, competition for people, competition for spares. There is no currency benefit that we get in other places in the world. As it turns out for us, it is, again, given the region, we tend to have a bit higher turnovers in Nevada. All that keeps, I guess I would say, the Nevada market hot relative to some of the other markets that we are dealing with around the world.
Andrea Freeborough: We have signed labor agreements for our assets outside of the US.
Paul Rollinson: Yeah.
Tanya Jakusconek: And what about-
Paul Rollinson: On the consumable side.
Tanya Jakusconek: Yeah, go ahead.
Paul Rollinson: Yeah, I was going to say again, we break it down into our component parts. Again, you can sort of pick your rule of thumb, but when you think about energy, labor, and consumables, we've touched on energy, our hedge strategy, what we've been doing there, that's been quite successful. That continues. Again, consumables, there's a bit of ebb and flow, but nothing right now that we're seeing that's too dramatic that's concerning us.
Tanya Jakusconek: Okay. I can play around with the oil price assumption, but from a consumable side, there's nothing for us to focus on. Maybe just on the capital side, then, you mentioned again for Great Bear that we'll have an update on capital with inflation plus this tightness in the labor market. Should I be thinking high level, what we've seen historically for CapEx increases, which have been up to 20% or 30% from previous numbers? Would that be something I'd be off from your $1.4 billion you put out in 2024?
Paul Rollinson: Yeah. I'll start and we'll compile it. Obviously, the biggest component of all of this would just be the true upward inflation. You can kind of do the math from starting back in 2023. As you go beyond inflation, the next category would be, I would say, discretionary changes of scope or approach. Discretionary generally means we're doing it for a good reason. We see a value creation opportunity. We see an efficiency. We see a longer-term benefit. So inflation, discretionary. I guess the last bucket I would say is more at the market today. Definitely, it is a hotter market in terms of attracting labor right now. We're anticipating that, and some of it goes back and forth. For example, one of the things we're thinking about as we look forward to Red Lake is our housing strategy.
Paul Rollinson: In attracting the best people to a new project, part of the equation will be what's our plan, what's our housing strategy, what will we offer in terms of, and those can impact your scope change. In the case of Red Lake, we're looking at a balance of residential community within Red Lake, as well as maintaining a camp to attract people that still would prefer that rotation. So there's all kinds of things that go in there in terms of tweaking adjustments. It will be up. I'm not going to sugarcoat that. That's important, and we'll always keep a sharp eye on that. As well, I do want to say, as you know, when you look at the production, the margin, and the cash flow, the payback on this project has always been pretty incredible in terms of months, really.
Paul Rollinson: Even with some additional capital, this isn't what I would call a particularly capital-sensitive project given production margins and cash flow.
Will Dunford: Yeah, given the long-term potential we see there, we really are focused on building this right. Started doing all the things Paul spoke about to make sure we have the talent to achieve it. You have seen the numbers, but it is a 500,000 ounce a year producer. So the cash flow on that would be significant and gives us a really strong payback. We do not have a definitive number yet because we are only 55% of the way through our detailed engineering. We are only now starting the procurement process for our major contractors. So we will be able to answer the question specifically much better in H1 of next year. But again, we are just focused on getting the detailed engineering done and making sure we are building a resilient asset given the multi-decade potential we see there.
Tanya Jakusconek: Yeah. It was just more like to try and get a sense. I am not going to wake up to a doubling of capital versus something that has been more in the industry in that 20% to 30%.
Will Dunford: Yeah. When we did the PEA, we were at $1.4 billion plus $400 million on the AEX, so we are not expecting a full double of that. But it is early in the process, so we really need to get to next year to give you a better sense then.
Tanya Jakusconek: Okay. My final question is, how are you thinking about your reserve and resource pricing and your cutoff grades as we get closer to year-end and you are looking at your life of mine plans in 2027?
Paul Rollinson: Yeah, sure. Maybe you want to take that one, Will, and I can
Will Dunford: Yeah. We are doing the process right now, so we have not finalized yet. But for us, we tend to look a lot at three-year trailing. We think that is a pretty relevant piece of information that we like to track and follow. So obviously, that is up. So we are now considering on kind of a relative ratio, increasing our reserve and resource price. We have not picked a final number yet, but we do expect it should raise up to be realistic in this environment and the gold prices that we have seen.
Paul Rollinson: Yeah. Again, just for context, the three-year average is still significantly below spot.
Will Dunford: Yeah.
Paul Rollinson: I think as you have seen the pattern as being a drag up over time with some significant discount to where we are at spot. I would not expect any material changes from there. The bigger point, though, which is really important that we want to stress, is around cutoff grades. As we have said many times, we have no intention to drop our cutoff grades. We are looking at cutoff grades in long-term stockpiles for something that we might put in at the end of the mine life, mill life, that sort of thing. But generally speaking, our mills are full. We have got all the grade we need, and we have no requirement or need, if you will, to drop our cutoff grades to keep our mills full.
Paul Rollinson: You will see a kind of a lagging revenue line adjustment with reserve resource pricing, which is, I would say, in line with the trend in the last few years. As Will says, think along the lines of a three-year rolling average. Do not expect us to be doing anything dramatic with cutoff grades.
Tanya Jakusconek: Okay. The three-year rolling average is over 3,000, so that would be a big move from 2,000 to 3,000. Okay.
Will Dunford: Yeah. We do not go right at the three-year trailing. The point is to stay consistent. We were at a historic discount to the three-year trailing last year with our reserve price. We will probably still be at a historic discount to the three-year trailing this year. But the point is to try and incrementally move up in a ratio
Tanya Jakusconek: Yes
Will Dunford: that is similar to what the gold price is doing. It does not mean
Tanya Jakusconek: Okay
Will Dunford: we go right to it.
Tanya Jakusconek: Understood. Thank you for taking my questions.
Paul Rollinson: Thank you.
Operator: Our next question is from Lawson Winder with Bank of America.
Lawson Winder: Thank you very much, operator. Good morning, Paul and team. I appreciate you fitting me in, and I recognize we are running a little bit over time here, so I will just keep it to two maybe questions. One is just the cost sensitivity on the Chilean peso. Should we read anything into that change? It is now a $60 BRL sensitivity for a 10% FX move, which is a bit surprising given the less production from Chile this year. Then I would just ask a follow-up on the capital return.
Andrea Freeborough: I think that it is really just the denominator impact that we are seeing there. The cost mix is similar. That was really what was behind that.
Lawson Winder: Okay. Fair enough. Nothing major to read into.
Andrea Freeborough: No.
Lawson Winder: Then just on the dividend. Last year at this time, and in February of this year, the dividend was bumped up quite materially. Do you consider further dividend increases as a sensible path to return of capital? Or perhaps does the preference now lie with using the buyback as a preferred method for capital return? Thank you.
Paul Rollinson: Yeah, look, I don't think our narrative has changed around the return of capital philosophy, as it relates to buyback versus dividend. You're quite right. We believe the dividend should be a kind of a forever commitment, if I can call it that. We have moved it up twice, to your point. I think we're up probably over 30% since last year. But we're careful. As we move the dividend up, we expect it to stay up. We see more opportunity to lean in and out, and do more substantial amounts with the buyback. If you look at our trend, we've had this baseline dividend. We have increased that baseline dividend. But where we've really taken advantage is to lean into the buyback by increasing the buyback. We think that's the right policy, right philosophy for us today. We think that's what our shareholders prefer today.
Paul Rollinson: I would guide you to expect we'll continue to think about it in that way going forward.
Lawson Winder: Okay. Thank you very much.
Paul Rollinson: Thank you.
Operator: Again, if you would like to ask a question, press star one on your telephone keypad. There are no further questions at this time. I will now turn the call back to Paul Rollinson for any closing remarks.
Paul Rollinson: Thank you, operator. Thanks, everyone for joining us. I will look forward to catching up with you in person in the coming weeks. Thanks very much.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for joining. You may now disconnect.
