Mark Utting: Thanks very much, operator, and thanks everyone for joining us for our Q3 2026 conference call and webcast. Joining me today are many members of Discovery's senior executive team. Speakers for today's presentation will be Tony Makuch, our President, CEO, and Chairman; Alison White, our CFO; Duncan King, our Co-COO; Gord Leavoy, our Co-COO; Dawid Myburgh, our Senior Vice President of Timmins Operations; Eric Kallio, our Executive Vice President, Exploration and Growth; and José Jabalera, our Senior Vice President, Corporate Affairs and Sustainability for Mexico. After everyone here speaks, Tony will have some concluding remarks, and that will be followed by our Q&A. Before we begin, I'd like to remind you that during today's call, we will be making forward-looking statements. These statements are based on current expectations, assumptions, and projections about future events.
Mark Utting: These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those included in the FLI. For more information, please refer to the information on slide 2, as well as the cautionary language on our website. In addition, we will also be making reference to a number of non-GAAP measures during the presentation. These measures do not have standardized meaning prescribed under GAAP, and therefore may not be comparable to other issuers. I refer you to slide 3 in our slide deck for more information, as well as other cautionary language on our website. Finally, all amounts discussed today will be in USD unless otherwise specified. With that, I will turn the call over to Tony Makuch, President, CEO, and Chairman of Discovery Mining.
Tony Makuch: Hey, good morning, everyone. Thanks, Mark, and everyone, thanks for joining us today. I am going to start on slide 4. Q3, it was a quarter of significant accomplishments for Discovery. The quarter when 3 key strengths were clearly demonstrated. First, we have an exploration and development story emerging in Timmins that is unsurpassed, I think, in our industry in terms of value creation potential. Second, we have received key permits required for Cordero and are now in a position to advance it towards development. We believe Cordero is the world's leading silver development project, which has tremendous value creation potential. Jose on the line will provide more information on Cordero later in the presentation. Our third strength is that everything we are doing is supported by existing operations, which in Q3 2026 generated solid earnings and substantial cash flows.
Tony Makuch: Going to slide 5, focusing on Porcupine, this slide looks at two key emerging stories in Timmins. They involve our two open-pit projects, the Pamour and Dome. On last quarter's call, we talked about Pamour and the potential we see to transform it into one of Canada's largest open-pit gold mines. We have since released additional drill results that continue to demonstrate that potential. The other story, the more recent story, involves Dome. In October, we issued excellent drill results that suggest that Dome, like Pamour, has potential to become much larger and more valuable than previously envisioned.
Tony Makuch: Eric Kallio will get into the details of the recent results at both Dome and Pamour, but at Dome, we have identified new zones to the north, extended the mineralization to the 600 meters to the south, and determined that the new zones to the south follow the Dome fault, which extends through the Paymaster property. Remember, our resource we put out last year for this was already at 11 million ounces. Dome remains open to the north, to the south, to the west. We own 100% of Paymaster, which supports the very exciting potential that exists for Dome to grow much larger towards this area. Turning to slide 6, a very important competitive advantage for Discovery Mining is that we are pursuing growth with the benefit of profitable operations capable of generating solid cash flow.
Tony Makuch: Alison White will get into the details, but I will touch on a few key points. We had record production and sales in Q3. Unit costs were higher than the previous quarter, which largely related to inventory movements, but both our mining and milling costs per ton improved quarter over quarter. Going to slide 7, you can see that we reported solid earnings in Q3 2026. We generated $87 million of free cash flow in a quarter when cash used for capital expenditures increased and reached close to $120 million, an increase from the previous quarter. Our cash position increased 24% to $450 million as of 30 September.
Tony Makuch: When we talk about competitive strength, one that is critically important is that we are moving into a period of investment for growth with a very strong balance sheet and a business that is capable of generating significant cash flow and funding itself. With that, I will turn the call over to Alison White, our CFO.
Alison White: Thanks, Tony Makuch, and good morning, everyone. I will start on slide 8 with a few financial highlights that we are proud of and that will continue to propel the company forward through its period of investment and growth. It was another solid quarter, reflecting the continued momentum that we built in the H1 of the year, much of which has improved each and every period over the past year and a half of our operations. We had record revenues during Q3 of $371 million, an increase of 16% quarter over quarter, primarily reflecting 8% more ounces sold at our Porcupine operations and a full quarter impact of the Kidd operations since the 1 June acquisition of the site. This marked our fifth consecutive quarter of growth, driven by increased production from all of our operations.
Alison White: EBITDA continues on a positive trajectory with $181 million in EBITDA this quarter, also a record and an increase of 7% from Q2 and 49% higher than Q3 of last year. Compared to Q2, the increase was driven by our first full quarter of results from the Kidd operation, which contributed $72 million of revenue, combined with an 8% increase in gold ounces sold at Porcupine. Together, these more than offset the decrease in average realized gold price during the quarter. We have continued to carry strong EBITDA momentum from last year, with year-to-date EBITDA of $529 million, more than three times the $171 million compared to the same year-to-date period last year.
Alison White: The uplift in gold prices thus far through the year has increased royalty expense, and in turn, our cash costs were raised from the royalty increase as well as the processing of higher-cost tons through inventory, resulting in higher cash costs of $1,470 per ounce sold for the quarter. All-in sustaining costs averaged $2,293 per ounce sold, reflecting expected higher sustaining capital expenditures as we continue to reinvest in our business. The ramp-up of sustaining capital reflected mobile equipment purchases, further investment at the Dome Mill, and work to buttress the tailings facility. Free cash flow was $87 million, as higher operating cash flow was offset by the ramp-up of our capital program cash spend of $116 million in the quarter.
Alison White: Compared to the $11 million outflow in Q2, free cash flow improved by about $98 million from strong operational performance and sales throughout this quarter. This change mainly reflected a change in working capital as payables normalized following the accelerated payments process during Q2 that occurred in advance of the quarter-end ERP implementation, which was partially offset by higher receivables at Kidd, where concentrate sales are collected during the month following sale. We move to slide 9. Let us review our performance against guidance. We are on track to meet our key cost, production, and capital guidance ranges for the year. The item of note that we did have a modification to guidance for is Cordero capital, as that is lower than our initial anticipated guidance, and as a result, we are lowering the range of capital spend at Cordero to $20 to 30 million for the year.
Alison White: At Cordero, we paid the Change of Land Use permit fee of $12 million in the third quarter. This amount was well below the amount assumed in our original fees and growth capital guidance of $90 to 100 million due to a change in the rate for the fee. As a result, we have lowered 2026 Cordero guidance to $20 to 30 million as we completed Q3 with $18 million in year-to-date capital spend. As planned and communicated throughout 2026, our production profile is weighted to H2, and we anticipate that we will end the year within range for all key metrics, with capital and cash costs at Porcupine coming in towards the higher end of the range. We move on to slide 10. We will review adjusted net income.
Alison White: On an adjusted basis, earnings were $83 million, or $0.10 per share, compared to $92 million, or $0.11 per share in the prior quarter, and up 36% from $61 million, or $0.08 per share in Q3 2025. The primary differences between net income and adjusted net income in Q3 2026 included the exclusion of $19 million of share-based compensation costs related to the company's approximate 45% mark-to-market share price appreciation from $8.48 to $12.28 per share during the quarter. The remaining items are nominal impacts that combine to a penny for purchase price adjustments, foreign exchange loss, and transition service agreement fees. Let's turn to slide 11 to touch on our capital for the year as we continue to invest in our assets to drive future growth.
Alison White: At Porcupine, we've planned $195 to $235 million in growth capital, plus an additional $25 to $35 million in capitalized exploration spend. On top of that, we expect $120 to $165 million in sustaining capital. That spend is focused on three priorities: replacing equipment, expanding mill capacity, and building future production through exploration and conversion drilling work that continues at a rapid pace across the business and has picked up as the year has progressed. Second, we are strengthening our balance sheet. As we look to expand our operations and grow organically, our financial strength will be fundamental towards our future success. On the next slide, we'll look at our total liquidity and how that will serve as a base for those future plans. Discovery's total liquidity at the end of the quarter was $844 million.
Alison White: Our cash balance of $450.7 million at the end of the quarter was up $86 million from the end of Q2, with the remaining liquidity funded from the undrawn portion of the $400 million revolving credit facility. Our strong operating performance generated $203 million of operating cash flow, which more than funded our continued $116 million of cash capital as we advanced our investment program. This strong balance sheet provides the financial flexibility to fund our capital programs and advance our strategic priorities that underpin our vision with confidence as we look to the future. I'm now going to pass it over to Duncan King, our Co-Chief Operating Officer.
Duncan King: Thank you. I am on slide 13. I'll discuss our mining performance and then ask Gord Leavoy to review our processing and production numbers. Mining rates increased in the third quarter, reaching over 1.2 million tons. We ended the quarter with 1.7 million tons in stockpile. As Tony Makuch mentioned, mining cost per ton improved compared to both last quarter and Q3 2025. In fact, they improved by over 10% from Q2 this year and over 20% compared to the same period last year. The improvement came from lower mining costs per ton at both Pamour and Borden. Site-level operating cash costs averaged $1,470 per ounce versus $1,387 in Q2. Site-level all-in sustaining costs increased to $2,123 per ounce, somewhat higher than $2,028 per ounce last quarter.
Duncan King: The increase in all-in sustaining costs was largely related to the impact of inventory movements on operating cash costs and higher sustaining capital expenditures related to mobile equipment purchases at Borden, investments at the Dome Mill, and work to buttress the No. 6 Tailings Management Area. I'll now call on Gord Leavoy, Co-COO, to talk about the milling.
Gord Leavoy: Thanks, Duncan. Good morning. We milled 943,000 tons in Q3 2026. That was up 4% from the previous quarter. Compared to the same period in 2025, tons processed increased by 100, reflecting the progress we have made with the investments at the mill over the last year. We exceeded 11,000 tons per day on 48 days in Q3 and exceeded 12,000 tons per day on 16 days. Based on both mining and milling performance, we achieved record production of 70,564 ounces in Q3, 5% higher than the previous quarter. Gold poured and gold sold both increased 8% quarter over quarter. The higher tons processed mainly accounted for the increased production. There were also positive impact compared to last quarter from an increase in the average grade. As you have heard, our milling cost per ton improved.
Gord Leavoy: They averaged $20.10 per ton in Q3, better than both $21.50 per ton in Q2 and $21.20 per ton in Q3 2025. I'll now turn the call over to Dawid Myburgh, Senior Vice President, Timmins Operations, to discuss the Kidd operations.
Dawid Myburgh: Thanks, Gord. Good morning. I'll be speaking to slide 14. Overall, Kidd operations had a solid performance in Q3 of 2026. This is the first full quarter of results since its acquisition on 1 June. Revenue in Q3 2026 was $72.3 million versus $29.7 million for the month of June in Q2. Production costs totaled $45.1 million versus $18.9 million in the month of June in the previous quarter of 2026. We had a small loss from operations after depreciation. We did, however, generate positive cash flow. Looking at capital, sustaining capital mainly related to infrastructure upgrades and paste holes at the mine. Kidd's growth capital primarily related to tailings buttressing and mill plant modifications to support the processing of Borden ore, which is targeted to begin in 2027. Now I'd like to turn the call over to Eric Kallio, EVP Exploration and Growth.
Eric Kallio: Thank you, Dawid, and good morning, everyone. I am on slide 15. Happy to say it has been another good quarter for exploration. Excellent progress at all our projects, including the Pamour Dome, which is what I will focus on here today. Starting with Pamour, just quickly point out that the project is 18 kilometers east of Timmins and centered on the historic Pamour Mine. It is also in an ideal geologic position, covering a 6-kilometer strike length on a northeast-turning band of volcanics just north of the Destor-Porcupine Fault. In terms of the new drilling, what we have is a continuation of programs from 2025 being done in preparation for an updated resource in early 2027, focused on three main areas, including the main pit in the center of the image, Pamour West along strike to the west, and the north contact zone sitting to the north.
Eric Kallio: Results for each are shown on the image and are indicated extremely positive, with some of the best being from the east and west sides of the main pit, with holes to the east targeting the lower and east sides of the deposit, including multiple strong intercepts to extend it further to the east and to depth, and holes to the west targeting the west limit and extending mineralization here as well. Looking through the list of holes from these areas, there are quite a few highlights, but one of the main ones I would like to point out is from hole PAM-29, which intersected three solid intervals with 4.58 grams per ton over 20.7.39 over 18, and 1.8 over 29 meters on the north side of the phase one pit.
Eric Kallio: Not only does this show impressive grades and widths, but from our initial work, the intercepts are from new structures branching from the main trend, remaining open to the northwest. Additionally, we continued to see very strong results from the Pamour West and North contact areas, with holes at Pamour West obtaining multiple strong intercepts nearby the historic pit, as well as an extension to the mineralization up to 900 meters to the east, and holes at the North contact continuing to confirm and expand new results reported in Q2. Now turning to my next slide, which is number 16, we see the first of two images providing some different angles for the new intercepts, with this first being a view from the south looking to the north.
Eric Kallio: The key things to note here are the historic main pit and Pamour West pits, which are in the central and left sides of the figure, as well as all the new results shown in the white text. Also notable is the overall strike length, which is now approaching 4 kilometers, and the large areas still remaining to be tested both below and between the two pits. Turning to slide 17, we see a second view, which is from the opposite side, providing a slightly better view of holes at the North contact and the Pamour West areas. As before, new assays are shown in white and indicated, showing very promising results in both areas and along strike. Given all of the above, we are very pleased with progress to date at Pamour, and drilling continuing with four drills.
Eric Kallio: Work is now well underway on the new resource update and on track for early 2027. Turning to slide number 18, we see the Dome, where we also continue to see some very exciting things happening. As previously described, Dome is a historic mining property which already has over 17 million ounces mined, and where we already have the 11 million-ounce resource, but also now working to upgrade and expand for an updated estimate later this year. Geologically, the mine is on the south limb of the Porcupine Syncline, and just north of the Destor-Porcupine fault, with the core of historic mining being centered on two main structures, including the Greenstone Nose and the Dome fault, which are located in the center of the various pit outlines.
Eric Kallio: Looking at the new drilling, we can see that all of this is in the immediate pit area, but focused into the north and south sides, with the results here continuing to look very encouraging in both. Drilling to the south included 22 new holes targeting the southwest extension of the Dome fault from the current pit, and as indicated, continued to indicate excellent grades and widths between the south edge and up to 600 meters southwards, with some of the highlights being 3.41 over 17.3, and 1.42 over 17 in DOM26-046, and 3.56 over 21 in Dome 44. Important to note is the shallow depths of the new intercepts and that all remain open for expansion.
Eric Kallio: Additionally, we had another 14 holes on the north side of the property, which targeted vein systems surrounding the Greenstone Nose under the north wall of the resource pit, and were also very successful, with multiple strong intersections both within and north of the current resource. Additionally, as with the area to the south, I point out that several of the new zones are at shallow depths and remain open for expansion. Turning to my next slide, number 19, we have another image related to the Dome, providing two different views across the target area and slightly more detail on the results, with one on the top covering the south part of the pit looking northeast, and the other covering the north and looking to the southwest.
Eric Kallio: Key things to note here would be the red and green outlines, which represent the current pit shells, and underground workings, as well as the shallow depth and excellent grades and widths in both areas, which remain open for future testing and expansion. Especially striking, I think, is the large gap in resources in the upper image south of the main pit and below the new intercepts. Considering all of this, I think it is safe to say that as with Pamour, we are very pleased with drilling here and continuing with two to three rigs in both the north and south. We are also now well underway with our new resource update and on track for completion in early 2027.
Eric Kallio: With this, I have come to my last slide, which I would just like to close off by saying that it has been a very good year for drilling at all our projects, and we are now working hard on new resource updates for all of these. Very excited to announce and talk about the full potential of these projects more fully early in the new year. With that, I will pass over the call to Jose Vizquerra, our Senior VP of Corporate Affairs and Sustainability, Mexico.
Mark Utting: Where is Jose? He was on the line. He was on the line. Jose? Yeah. Jose has patched into the presentation remotely, and we may be having some connectivity issues, so I will just quickly speak to
Operator: Please stand by. I believe we have reconnected Jose. Connecting. We have lost connection with Jose at this time.
Mark Utting: Okay. I will just quickly speak to slide 20. You have heard a fair bit of the information on this slide. Obviously, we are very excited to have received both the MIA approval as well as the Change of Land Use, which effectively completes the federal environmental permitting process. There has been a real benefit in announcing that in that our Change of Land Use fee, as you have heard, it came in considerably lower than what had initially been included in our guidance, which allowed us to reduce that. With the permits in hand, we are moving forward with updating the feasibility study capital and cost estimates. That work is progressing well and should be completed around the end of the year. We are looking forward to bringing that information to the market. We think it is going to again, highlight
Mark Utting: what an outstanding project Cordero is and how important it is, quite frankly, to the future supply in the silver industry. I will leave it at that and turn the call back over to Tony.
Tony Makuch: Okay. Thank you, Mark. Sorry to miss you, Jose. Thanks, Mark, for filling in there. I am now just going to conclude. I am now on slide 21. Q3 2026, as you get, was a key quarter of accomplishment for the people of Discovery. Our geology and exploration group continued to prove the immense exploration upside. They released outstanding exploration results at Porcupine, which highlight the tremendous growth potential that exists in our Canadian gold business. Both Pamour and Dome increasingly look like they are destined to become large-scale, highly valuable open-pit mines located in Timmins. You can say what you want. That is a forward-looking statement. So, yeah, keep listening. Our people in Mexico were very successful in completing the federal environmental permitting process at Cordero and are now working to move this industry-leading silver project forward. Again, stay tuned.
Tony Makuch: I think there is a lot of positives there with this project. Our people, not least, our people in Porcupine and throughout the company achieved strong operating and financial results, with the operations clearly showing how they can help support the successful execution of all of our extensive growth plans. With that, I want to thank you again for participating in our Q3 call. We will be happy to take any questions.
Operator: We will now open the line to questions. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimal sound quality. If you are muted locally, please remember to unmute your device. Compile the Q&A roster. Your first question comes from Cosmos Chiu with CIBC. Your line is open. Please go ahead.
Cosmos Chiu: Thanks, Tony and team. First off, congratulations, Tony, on your induction into the Canadian Mining Hall of Fame. Maybe my first question is on Pamour, as Eric mentioned, and for me to confirm, is there a new resource update coming out in Q1 2027? If that is the case, areas like Pamour West, is that going to be a part of it? How much more drilling is going to be included in this resource update that is coming up?
Eric Kallio: Yes. The plan is to do the new resource update for Pamour and announce it early in Q1, and that is going to be in conjunction with all the other projects that we have as well, TVZ, Dome, Borden, and Beaujon. We will be including new drilling that was from 2025 and 2026, which is approximately 100 holes or so. The limits of the new update is going to encompass a much larger area than what it did the first time. It was focused mostly in the main pit. Now it will encompass the Broulan, Pamour West area, and also areas to the north where we have the north contact.
Eric Kallio: Keeping in mind all those areas, we will be doing the study with only the holes we have, which does have historic and new, but there is still going to be large areas that need more testing in the future. It is going to encompass all those areas.
Tony Makuch: Yeah, the answer there is there's still more drill holes to release. You're continuing to drill extensively in 2027, both in fill and to growth.
Cosmos Chiu: Yep. More forward-looking statements, hey, Tony Makuch? Maybe good to see the exploration results out of Dome as well. Could I maybe ask about potential sequencing of how the Dome pit and also potentially Pamour getting larger? It's called the Pamour expansion, and as you mentioned, both of them are looking like they could be large-scale open-pit assets. So, how should we look at sequencing? On top of that, you also made a small acquisition this past quarter in Paymaster. Could you maybe talk about the significance of that acquisition and the land package that you've acquired through Paymaster?
Tony Makuch: Well, maybe I'll just start talk a little bit about the sequence, and I think first and foremost, we're continuing to focus on our priority is advancing Pamour. I mean, we know we're mill constrained at this point in time, and that's our focus at Pamour. We are looking now, as we discussed previously, in terms of adding some mill capacity through transferring the Borden ore through the 2-2-1 circuit at the Kidd Met site. Also, though, we are looking, as we discussed, at building, expanding or building a new gold circuit at Kidd, which will then be allowed to Pamour go there, and once Pamour is going there, then it gives us the ability to advance Dome right there. Then there could be further expansions over time.
Tony Makuch: But in terms of the land position, it gives us geography, it gives us places to do other things, but maybe, Eric Kallio, you can give a little bit of color on the geological significance of this area.
Eric Kallio: Yeah, the new lands are contiguous with the west boundary, and they contain the extension of the geology structures that we are testing now. They have a number of different area. I mean, there has been quite a bit of exploration drilling, and there has been a number of different targets with significant drill holes already identified. Some of them are actually extensions of zones that we have at the Paymaster already. So, I mean, it allows us to explore the areas between them, but also develop a bunch of potentially new resources that would be in very close proximity to the Dome Mill.
Tony Makuch: Part of our goal, I think we might have outlined it sometimes, we have the Dome Mill there, and when you do see some of the things of when the previous Dome resource is and where it is in relation to the mill, part of this drilling helps us to find a way to keep that mill operational for extended periods of time if we can, right? But again, lots of work to do, lot of positives, and a lot of forward-looking statements, but we expect significant positive results coming out of here over the next few quarters.
Operator: Next question comes from Jake Savage with Agentis Capital. Your line is open. Please go ahead.
Jake Savage: Hi, everyone. Congrats on another strong quarter at Porcupine and on the Cordero permits as well. I am wondering if you can share any more detail on the operating performance at Borden, any mining physicals in particular, as well as any updates on the growth capital projects at Borden.
Tony Makuch: Mining concept Borden, Duncan.
Duncan King: Oh. We transferred from the contractor. We hired most of their production people. Sorry. The development is still being done by a contractor. In that way, we have changed it up quite a bit. We are getting a lot more footage per man shift.
Tony Makuch: There is also the So yeah, we transitioned from the contractor in operations, right? We bought a lot of new equipment, so that is having some work in this period of time. We think there is a significant upside at Borden in terms of what we can accomplish here. Were you asking about all the growth plans or the growth, what we see growth at Borden?
Jake Savage: Yeah, any updates on the major projects would be great.
Tony Makuch: Well, so we are working on a technical report still, which we expect to come out in early 2027. It should be incorporating these. We updated resource estimates for Pamour with the drill results, updated resource estimates for Dome with the drill results that we are talking about, encompassing some of the work on the mill expansions or the mill expansions or changeovers for Borden, as well as mill expansions, new mill expansions that we talked about for Kidd, for a new gold circuit, and how that should fit in. All this work is being done coming up to, like I say, to Q1 next year. Similarly, as we talked about from our growth plans, we are completing an update to the feasibility study, capital cost estimate, et cetera, for Cordero, and we expect to have this coming out towards the end of this year, early in Q1.
Tony Makuch: We are going to do that so that it will help to outline the path, I should say, a pathway where we can continue to advance these projects. There is significant exploration upside, which drives our need for development and investment in mills and mines, and then how that leads into growth in production and lower costs and basically increase in value.
Operator: Our next question comes from John Tumazos with Very Independent Research. Your line is open. Please go ahead.
John Tumazos: Thank you for taking my questions. First, for the purpose of a generalist or a distant American, could you explain how the 43-101 rules impact Porcupine as one property? Do you have to update everything, and does that discourage you from updating one pocket at a time, like Owl Creek or bits and pieces? Do you have to do a unified total report?
Tony Makuch: Yeah, because they are all feeding to a central mill, we have to be updating them all collectively, right?
John Tumazos: I sympathize with Dawid Myburgh and Gert and all your team doing this mega study. I am thinking ahead, Tony Makuch, maybe to 29 January or 28 January, when you have your third NI 43-101. I guess that there is going to be parts of the Pamour open pit that do not get into the pending second study because the spacing is too wide. Parts of Dome, parts of Paymaster, Owl Creek might not be in, Kidd might not be in, Hollinger and McIntyre, you have not begun the drilling. It feels like something like half of the good news is going to be in January, and that is going to be very good, and then there is another half of the good news or something like that coming a year or two later. Excuse me for thinking ahead.
Tony Makuch: Yeah, no, yeah, they are good points, and really thank you for bringing that up, because that is true. We are going to come up with, and we are putting out a PEA now because we have to collectively bring all these projects forward and try to advance them as we are going. Definitely there will be differences when we start processing stuff at the Kidd Met site versus the Dome Mine site, so then it will give us some ability to advance projects a little bit differently once that happens. Effectively, this is a first phase of PEA, per se, in beginning of 2027. We expect it to be redone in 2028, probably redone in 2029, some further updates in 2030, and Porcupine would progress from PEA to PFS and maybe to further on than that as we continue to grow on and get more detailed engineering and get more information.
Tony Makuch: Yeah, it is all good. You said half the story, it might only be a quarter of the story here, John.
Operator: Your next question comes from Rabi Nizami with National Bank of Canada. Your line is open. Please go ahead.
Rabi Nizami: Thank you, and thanks for taking my question. Congrats on the quarter so far and the year so far. Just a couple of quick ones. Most of my questions have been answered. On the Dome Mill, it is nice to see that we are seeing stable, rising throughput, unit costs coming down for tons milled. Do you have any commentary on how you expect those unit costs for milling to continue to improve perhaps in Q4 and into next year? With that, do you envision that a lot of the improvement that you are working on in the next little while is coming from the mining cost side, or is there a lot more to do on the milling cost side as well?
Gord Leavoy: Most of the cost reduction is through the throughput, and that is through the ongoing repairs and rebuilding we are doing in the mill. We are still not completely finished, but carrying on, we still have moons left to do.
Tony Makuch: But as we are making investments into the plant, fixing things or modifying things, and we are getting throughput up. The biggest thing that can happen over time from cost savings is then you are going to have less and less downtime, more and more availability, less and less upset conditions, which cause us to have to repair or do things that bring in extra costs that are there. So, it is an investment. So, we see improvements in unit cost coming from an increased throughput, as Gord mentioned, and then lower costs just because you do not have these unexpected events that happen. But, a part of our goal is not just to get the throughput up and not just to get the cost down, it is actually to get the metal recovery up as well.
Rabi Nizami: Sounds good. That is good to hear. So there is more to that trend coming up ahead. So moving on to Kidd. You mentioned that some of the CapEx being spent there is already anticipating Borden to start integrating into the Met site next year. Is there any color you can give us on the nature of the work you are doing there in anticipation of that currently? And the second question, somewhat related, is that for the Kidd base metal site, now that you have been operating it for a full quarter, do you have some greater understanding of how you envision that asset continuing into 2027 and beyond? I noticed you have a drill rig active in your Kidd Creek as well, so two questions there.
Dawid Myburgh: Yeah, so first question around the capital linked to the Borden processing at the Kidd Met site. There are two parts to it. So we are going to accept the Borden ore at the Kidd mine site, where we have the surface crusher and the load-out facilities onto the rail, which is linked to the Kidd Met site. So we did a bit of work on the bins, the crusher, to be able to accept Borden ore and do it sustainably into the future. And then, at the Met site itself, there are a few changes we had to do around the circuits. Not much, because we are floating sulfides really, so that is what we do. But a few modifications at the Met site, and that is the majority of the capital spent at Kidd linked to the Borden ore processing.
Dawid Myburgh: I am not sure I understood the second part, but we do have the capacity to process the base metal ore separate from the Borden ore. So we do anticipate running those circuits. We can run them simultaneously. The way the Kidd Met site is designed, it has got four separate circuits, which we have the ability with the bins we have to treat those two ore types completely separately, if that was the question.
Tony Makuch: Yeah, the other part of the question was, what are our plans for Kidd? We have indicated we are not promising how much longer we would keep Kidd operational. Our main performance here is really to try to understand what is going on, ensure it is safe and productive. We have a lot of growth in our gold business in Porcupine, and even as we talked about the Met site, et cetera. We are going to be working over the next while to figure out what the best path is for everything, for people and for Discovery as we move forward. We are exploring there. It is a significant area of exploration over the next while, and we will see what happens as we go forward. It is a deep mine.
Tony Makuch: It has been operated extremely effectively, and we say we have got the same people who have been operating it for a long time, and the operational performance and the ability to meet according to plan and the safety, et cetera, is second to none, I think, no mine in the industry globally. They say it is still safer to work there than probably work at Walmart.
Rabi Nizami: Okay. Thank you for answering my questions, and congratulations again.
Operator: Your next question comes from Cosmos Chiu with CIBC. Your line is open. Please go ahead. Your next question comes from John Tumazos with Very Independent Research. Your line is open. Please go ahead.
John Tumazos: Can I direct to Eric? Eric, what are some of the areas
Eric Kallio: Yeah
John Tumazos: for 2028 that you might drill, 2027, excuse me, that you might drill that we haven't drilled yet? Do you plan to drill Kidd, Hollinger, McIntyre area, Paymaster, Fuller? Where are the new theaters of opportunity?
Eric Kallio: Well, we're going to have continuation work at some of the same areas, but adding in some new, so the combination of the two. We might have discussed a bit earlier, there's still going to be a lot of drilling to do at Dome and the Pamour, just based on the new success. We've expanded the limits quite a bit, but there's still large gaps in there and extensions. That'll be a big part of the projects going ahead. We'll have continuation of work at the mines again, Hoyle Pond, Borden. Borden will be looking at trying to further extend the zone. This year, we drilled out to the limit of the inferred resource and a little bit beyond, but we'll be continuing to take some big step outs to look at the overall size of the resource. We've got the new properties from McEwen Mining.
Eric Kallio: They're at the Paymaster, just to us. We'll be looking at some of those areas there. Around the Kidd mine site, we still have We've started some work this year. We're going to continue with that, and looking at even other targets on the Kidd package to the north of Timmins. A lot of the same things, but big focus on Pamour and Dome.
John Tumazos: Eric, a decade ago, the nice people at Goldcorp would make presentations, and they talked about TVZ and Paymaster. Are there resources or data from the Goldcorp era for TVZ, Paymaster, Hollinger Pit, or from McEwen Mining for Fuller, that you can plug into your NI 43-101 without doing it from scratch, or is there any data like that that helps with the process?
Eric Kallio: Well, there is drilling at TVZ. We have talked about that before. But the spacing of the holes is still too wide to be called even an inferred resource, but it does define a broad target model, which we show goes all the way from 900 to about 1,600. So, a lot of success in there, but still, we are talking about holes 100 to 150 meters apart, so it would not be able to convert immediately. But we will have portions of that as part of this update, and then we will be continuing to drill on that area there. There are some internal studies that was done at the Paymaster, but none of those, again, qualify for NI 43-101 at this time.
Eric Kallio: We will have to study them, and plus we might reinterpret them because different gold prices that we have now and that sort of thing as well. Hollinger, we feel that there is some good opportunities to expand the pit at the current Hollinger Pit to the south, and we will start looking at the model for the other areas. But we have got so much other work on the go right now, we will focus more on the other things.
Tony Makuch: Yeah. I think it is safe to say that TVZ is one area where we are advancing, but it is still a lot of work to do at TVZ. The Paymaster and that whole region and how it ties in, I think that will come over time. Same with Hollinger. We have got extensive amount of work to do at Paymaster, sorry, at Pamour and Dome, and then Hoyle Pond to keep Hoyle Pond operational and keep that thing running, same as Borden. Some of these, they will be the next ones, and that is where over the next 3 to 5 years, you are going to see significant exploration updates every year over year over year, right?
John Tumazos: Thank you. Thank you for your service to the shareholders.
Operator: Your next question comes from Cosmos Chiu with CIBC. Your line is open. Please go ahead.
Cosmos Chiu: Hi. Can you hear me now, Tony?
Tony Makuch: Yeah, we can hear you.
Tony Makuch: Yeah. Now we can.
Cosmos Chiu: Okay, cool. All right. I think the operator doesn't like me too much.
Tony Makuch: The pressure there has been bad, Cosmos.
Cosmos Chiu: Maybe a follow-on question here. I know Jose's not on the line, but Tony, I am sure you are capable of answering all these questions. Could you maybe talk through some of the different alternatives in terms of potentially realizing value at Cordero, be it building it or finding a partner for it? In terms of timing of when that could come out, will we not find out until you have some kind of updated numbers on an updated feasibility study? Maybe if you can touch on that, Tony.
Tony Makuch: Oh, yeah. Okay. Yeah. Good questions. I mean, the first thing we needed to do in terms of advancing Cordero and where we want to go with it, definitely we need to get our permits. We have been working towards updating our feasibility study, mostly on capital cost estimates and re-looking at a few minor things. We are not changing the mine plan or the process plant design that is in the feasibility study. We are just filling some of the holes in a few areas. We expect that to come out, like I say, towards the end of this year and early Q1. From that, then our goal next year is to fully advance it into more detailed engineering and continuing to advance the project in that way, while we can look at alternatives in terms of what is the best avenue for advancing this project for our shareholders.
Tony Makuch: We think the best thing we are going to do is we have an updated feasibility study, and we have the detailed engineering. Our shareholders and we all know what the true value of this project is, and then we can look at a lot of the different options, whether we build it ourselves, and it is a buildable project, to working with a partner or looking at other ways to advance this project. But in the silver space, this is probably one of the best silver projects globally, and do not underthink that the zinc part of this project is strong as well. So, we know it is a valuable project, and we are going to advance it. It is really going to be a lot of stuff, starting from beginning of next year towards the end of next year.
Tony Makuch: We expect to have a lot of these things sort of looked upon and answered and see where we are going to go. Right?
Cosmos Chiu: Great. Thanks, Tony Makuch.
Tony Makuch: Does that answer your question? Did I answer your question? Good.
Cosmos Chiu: Yeah, that did. Maybe another question, just quickly, following on the cost guidance for the year. Great to see that you have maintained your cost guidance, $1,950 to $2,250 an ounce, which is commendable in today's environment where everyone is talking about inflation, and we have seen some others in your peer group actually increase their cost guidance. It is very good that you have maintained it. But on that, Tony Makuch, can you actually talk about inflationary pressures in the Timmins area, inflationary pressures in terms of input costs? On that, I see that you are building a camp at Borden. Is that part of the strategy in terms of retention? Is that what you are trying to do as part of the holistic package of getting workers in the Timmins camp?
Tony Makuch: Well, yeah. First, there are significant cost pressures. Fuel costs, you are seeing diesel costs have significantly increased, and there is pressure on people and access to pressure on equipment purchases and parts there. There is pressure there, but we are also working on other areas in terms of how we spend money and try to find other places that sort of bring the value back that is there. It is a combination. We do have cost overruns in some areas. We have cost underruns in other areas. The net is we are trying to work hard on understanding those things. One area, you hit it on the head, part of it, our reinvestment back into the operations, and where you make the mill more efficient or the reinvestment and building a camp at Borden, part of it is to reduce operating costs.
Tony Makuch: Operating costs are not just the unit costs you pay for people or the unit costs you pay for parts. We practice a lot of loss control. It is about spending a dollar and getting $3 of value from it versus getting $2.50 of value from it or losing money on the money we spent. We do a lot of that. The camp is going to help us in terms of attraction and retention for people. Right now, it has been run. It is basically a drive-in, drive-out operation. I do not mean to be chauvinist, but you send a bunch of men up there to work 12 hours a day, come home, and cook and clean for themselves. I think after seven days, I do not think it would be moons you are going to get the best productivity.
Tony Makuch: I think it is going to pay for itself in terms of productivity for people, safety for people, and just overall positive attitude into the workplace. Those are the kind of investments we are trying to make, investments in people, investments in equipment, investment in assets to get more productivity and improvements in operational performance. There are cost pressures all the time, but we cannot control the cost pressures by the unit. We cannot control the diesel prices, but we can control the other things that we do, and that is what we are working on.
Cosmos Chiu: Great. Thanks, Tony. Congrats again on a very strong Q3, and those are all the questions I have. Thank you.
Tony Makuch: Thanks.
Operator: There are no further questions at this time. I will now turn the call back to Mr. Utting for closing remarks.
Mark Utting: Thanks very much, operator. Again, thanks everyone for taking part in the call. As you have heard, we have some very, very important catalysts coming in the next little while, both updating the cost and capital estimates at Cordero and a resource update and PEA for Porcupine. I can tell you we are very much looking forward to bringing that information to the market. It is appropriate to end with a forward-looking statement that we think these things are going to highlight just how much value there is yet to create at Discovery Mining. Thanks again for joining us, and we will talk to you again next quarter.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
