Agnico Eagle Mines Limited (NYSE:AEM) Q3 2025 Earnings Call Transcript

Agnico Eagle Mines Limited (NYSE:AEM) Q3 2025 Earnings Call Transcript October 30, 2025

Operator: Good morning. My name is Danny and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Mines Limited Q3 2025 Conference Call. [Operator Instructions] Mr. Ammar Al-Joundi, you may begin your conference.

Ammar Al-Joundi: Thank you, Operator. Good morning, everyone, and thank you for joining our Agnico Eagle third quarter conference call. I’d like to remind everyone that we’ll be making a number of forward-looking statements, so please keep that in mind and refer to the disclaimers at the beginning of this presentation. Once again, we are pleased to be sharing a good news story with you. In a nutshell, with record gold prices with strong and importantly, safe production, along with continued solid cost control we are once again delighted to be reporting record financial results. Across all metrics, our business is running well. And beyond the record financial results, we continue to invest in the best pipeline we’ve ever had and we continue to invest in the most ambitious exploration program we’ve ever had, which continues to deliver exceptional results.

With almost 70 years of history behind us, we have never been stronger than we are now, and we have never had a better future than we have today. Before I turn this call over to my colleagues, who will go through our business in more detail, I’d like to spend a few minutes to summarize the key takeaways. One, we’re reporting record financial results, driven by, of course, record gold prices, but coupled with strong and consistent operational performance. We delivered another exceptional quarter of strong production at 867,000 ounces, putting us year-to-date at 77% of our full year guidance range. We sold gold at an average price of $3,476 per ounce, another record and a full $20 per ounce higher than the spot average in the quarter, well done to the treasury team.

At the same time, we continue to work hard to control costs, which means continue to deliver benefits of these record gold prices to our owners through record margins. While our reported Q3 cash costs of $994 an ounce are higher than the previous quarter, the majority of this cost increase is due to higher royalty costs which are a direct result of the higher gold prices. If we back out the impact of these higher royalties, which, again, are the direct result of higher gold prices, our Q3 cash costs would have been $933 an ounce, well below the midpoint of our cost guidance range. Year-to-date, our average cash costs were $943 an ounce. Again, if we back out the impact of higher royalties, our year-to-date average cash costs would be $909 an ounce well below the bottom end of our cash cost guidance range for the year.

All of this, the record gold prices, the solid production, the continued good cost control has led to another quarter of record financial results for our owners. Record EBITDA, record adjusted net income and record returns to our shareholders. Two, we continue to strengthen the company to strengthen the balance sheet and to return record amounts of cash to our owners. We repaid $400 million of debt this quarter. We returned $350 million directly to shareholders through dividends and share repurchases, and we increased our net cash position to $2.2 billion, while at the same time, receiving an upgrade in our credit rating. Three, we continue to invest heavily in building the foundations of our future growth, advancing construction, development and studies of our 5 key pipeline projects and investing heavily in an exceptional exploration program.

At Malartic, we are ahead of schedule on the underground development, ahead of schedule on the shaft and progressing studies for Marban, Wasamac and a potential second shaft. At Detour, the ramp portal is built. We have begun building the ramp to access the underground, and we continue to optimize the mill. At Upper Beaver, I was there just on Monday, we are on budget and we are ahead of schedule. The team is doing an exceptional job. At Hope Bay, we continue to get great drill results, and we are accelerating on-site activity. We’ve upgraded the port, we’re upgrading the camp. We’ve emptied the mill building. We’re progressing the Madrid ramp, and we have completed the box cut for a ramp at Patch 7. At San Nicolas, we continue to progress engineering on this high-grade, high-quality copper project in the best mining jurisdiction in Mexico.

These projects cumulatively represent about 1.3 million to 1.5 million ounces of potential production. All from assets we already own in regions we’ve been operating for decades and in most cases, leveraging off existing infrastructure in place. At the same time, we are investing more than we ever have by a wide margin in our exploration program, and as Guy will illustrate at the end of this call, we continue to get truly exceptional results that will position Agnico Eagle well for decades to come. These 3 key messages are consistent with our story last quarter and are consistent with our focus over the past couple of years. But on this call, I’ve asked the team to spend some time on a fourth key message. I’ve asked the team to spend some time to talk about our continued focus on productivity.

Dom and Natasha will go through a few examples to convey the message that even with gold at $4,000 an ounce, even with record financial results, our teams continue to be absolutely laser-focused on improving productivity at every opportunity at every mine. We are proud of our teams and how hard they continue to work to deliver not only great and consistent results, which, by the way, make my job a lot easier but to also focus every day on pushing themselves to operate even better and even safer. With that introduction, I will now turn over the presentation to our CFO, Jamie Porter, to review our third quarter financial results.

James Porter: Thank you, Ammar, and good morning, everyone. Our operating teams delivered another excellent quarter with strong cost control, particularly on a per tonne basis. By delivering on our production targets and managing costs, our investors continue to benefit from margin expansion in a record gold price environment, a dramatically strengthened balance sheet and increased direct shareholder returns. We are in the strongest financial position in the company’s history. The strong operational performance and cost control paired with higher gold prices to drive record financial results, including record revenue of $3.1 billion, record adjusted earnings of $1.1 billion or $2.16 per share and record adjusted EBITDA of $2.1 billion.

These are excellent financial results, delivering the leverage to higher gold prices as you would expect. At current spot gold prices, key financial return metrics such as return on equity could be as high as 20% for the full 2025 year. Gold production in the third quarter was approximately 867,000 ounces of total cash costs of $994 per ounce and all-in sustaining costs of $1,373 per ounce. We have achieved 77% of our full year production guidance to the end of September. Though we have budgeted lower gold production in the fourth quarter, we are confident in achieving the midpoint of our full year production guidance range of 3.4 million ounces. We are benefiting from record gold prices. However, the higher gold prices do result in increased royalty expense.

In the third quarter, cash costs were approximately $60 per ounce higher than what we had budgeted largely as a result of the increased royalty expense. Despite that I’m pleased to report that our cash costs remained within our guidance range on a year-to-date basis, and we still expect to be at or near the top end of our cash cost guidance range of $965 per ounce for the full year. Our teams have done an excellent job managing costs, the costs that are within our control and continue to work on ongoing optimization initiatives that Dom and Natasha will talk about later in this presentation. All-in sustaining cost per ounce were higher than the prior quarter, primarily due to the increase in cash costs and the timing of sustaining capital spending.

We also expect to be close to the top end of our all-in sustaining cost guidance range of $1,300 per ounce on a full year basis. Our all-in sustaining costs continue to be hundreds of dollars per ounce below those of our peers. Again, this is the result of continued efforts by our teams to control costs and to continuously improve while maximizing the cost synergies and benefits resulting from our regional strategy. We move on to the next slide. We had another strong quarter of free cash flow generation that directly and indirectly benefited our shareholders through direct shareholder returns, the dividend and share buyback and indirectly through the strengthening of our balance sheet. We generated $1.2 billion of free cash flow this quarter and added another $400 million through the sale of equity investments which allowed us to continue to strengthen our balance sheet.

Our net cash balance more than doubled in the third quarter, increasing to $2.2 billion. Given our strong financial position, we decided to redeem an additional $350 million of long-term debt in addition to the $50 million of debt that matured during the quarter. Over the past 18 months, we have significantly delevered the balance sheet reducing our gross debt in that period by over $1.6 billion. Reflecting this strength in credit profile and financial position, I’m also pleased to report that during the quarter, Moody’s upgraded us from Baa1 to A3 with stable outlook. We are, again, in the strongest financial position in the company’s history, giving us the flexibility to take a balanced, disciplined approach to capital allocation. We move to the next slide.

We continue to deliver record shareholder returns this quarter, totaling approximately $350 million in dividends and share buybacks and totaling $900 million on a year-to-date basis. This brings the cumulative shareholder returns in Agnico’s history to over $5 billion, the majority of which has been returned in the last several years. Our capital allocation strategy remains unchanged, and we are well positioned in this gold price environment. We expect to continue to increase shareholder return through increased share buyback activity and potentially through higher dividends. We also expect to continue strengthening our financial flexibility by increasing our net cash position. Given our profitability, we are expecting a significantly higher cash tax payment relating to the 2025 fiscal year in the first quarter of 2026.

This is estimated at approximately $1.2 billion we are allocating cash to fund that obligation. Lastly and importantly, we will continue to reinvest in our business in order to bring our high-return organic growth projects online. We have our 5 key value driver projects Detour Underground, fill-in-the-mill at Canadian Malartic, Upper Beaver, Hope Bay and San Nicolas, all of which generate solid returns at gold prices significantly below the current spot price. At current spot prices, these projects have the potential to generate phenomenal returns. Detour, for example, once ramped up to 1 million ounces of annual production has the potential to generate over $2 billion of annual after-tax free cash flow at that mine alone at these gold prices.

We will continue looking for opportunities to accelerate reinvestment in the business to drive long-term shareholder value. At current gold prices, we’re generating a lot of cash, but we will remain disciplined and continue to take a measured approach to capital allocation with a focus on increasing returns to our shareholders over the long term. With that, I’ll turn the call over to Dom, who will provide an overview of our Quebec and Nunavut and Finland operations.

Dominique Girard: Thank you, Jamie, and good morning, everyone. Our Q3 results for Quebec, Nunavut and Finland continued to show strong and consistent operational performance, just as we saw in Q1 and Q2. We are on track to meet our guidance and we’re positioning ourselves on good foundation for 2026. The production costs remain well controlled and as shown in the bottom right table here, we are seeing record profit margin thanks to the gold price. I’m very happy of our team’s leadership and mindset. Even with higher gold price, the focus remains on debottlenecking the operation and improved productivity. As for example, this quarter, we have 3 mills that beat record — quarterly records at Meadowbank, Meliadine and Goldex. For the next 2 slides, Ammar asked Natasha and myself to explain more and give examples about what we’re doing at the site and regional level to control our cost to manage our business.

You will hear not about cutting, cutting and cutting what you’re going to hear is going to be more about productivity improvement, integrating technology, leveraging skill sets and leveraging our people. The first example is going to be Kittila, led by the team that you could see here on that picture celebrating the 3 million ounces ore. And the second one is going to be about new technology implementation in underground. Next slide, please. So at Kittila, following the new shaft commissioning and ramp-up the team were struggling to meet their operational targets at underground. And from there, I need to recognize the leadership of Jani, Mikko and [indiscernible] for taking action leveraging learning from similar initiatives done at Meliadine in 2023 to drive meaningful change.

So in June 2024, they’ve launched an underground productivity improvement program and as at Meliadine, their approach was built on ownership focused on what matters and on problem solving. They work in collaboration with the employees. They did benchmark to define what perfect shift could look like and to be more productive. At the end, what they did, they’ve worked with the guys driving the equipment, as you could see there, a scoop to find how they could help them to be more productive. And some examples, like just bring the equipment faster than it was before either — it’s an easy one, but it’s things that you — that we kind of implemented to be more efficient. I will just show you some results of that, if I take the 2 graphs on the — bars on the left, the bottom one, you could see the tonnes mined per day improved by 13% year-over-year to the first 9 months of 2024 compared to the first 9 months of 2025, 13% more tonnes moved or mined from underground.

This is with the same equipment, same fleet, same people, more efficient. That allowed them also to do more by themselves and less relying on contractor which helped to reduce the cost. And on the cost side, if you take the top 1 on the left, you could see that euro per tonne minesite cost decreased by 4%, and this is despite inflation and higher royalty. So a very good job to the Kittila team. Thanks for that. Next slide. The second example is about implementing new technology of remote operations. The gains we are doing with those remote operations are not just helping us to control our costs and manage their business. It is more than just the current operation performance. It is also unlocking future growth project, enabling future growth projects.

All of our projects if we could improve what we use into our studies in terms of tonnes move, tonnes mined as well as we’re going to see at Odyssey, if we could improve the ramp development speed, this is significant improvement. So I will start with the example of LZ5 in 2016 where they’ve implemented the first LTE system in the world, underground, since that time, they really, really did very good progress. You could see with the yellow here through the time, we are now approximately over 20% of the tonnes are done through remote operation. And how this is — the gain — where is the gain is there were some areas some time that we were not operating the equipment because we need to do the out of the mine for the ventilation purpose, for example.

So the same skill set and the same thinking has been applied to Odyssey ramp. And you could see the jump done in the year in 2023 when we started to do remote mucking and remote drilling at Odyssey. So we’ve increased the productivity by 20%. Again, same people same team just using the technology. This is a significant improvement. How it works? So you could see the people here sitting on the front of screen in a seat, which is the same that than the one in the scoop. So they are able to operate 3 to 4 equipment each, and we’re collaborating very closely with Sandvik, LZ5 with Epiroc at Odyssey to push those technologies to do more and more. So this is helping us to control our costs. This is also enabling future projects. It is also an aspect on the workforce.

Natasha is going to talk about opportunities and action on the workforce. But those type of things are in the balance to help the workforce. So we are in Quebec approximately 5% of turnover, which is fantastic and those type of initiatives are helping us to have better conditions for the workers for giving them great challenges to our professional. This is helping for the retention. This is helping for the recruitment, and this is helping for the stability of our operation. Next step, stay tuned. We’re moving into the fleet management system. So the blue that you see on the graph there, this is still conventional hauling. Now to be better in that area, we’re implementing fleet management system underground. We’re going to be in the first of the world to implement such a software advanced like we’re thinking about.

In the coming years, you’re going to hear about that. Next slide, moving to the project pipeline. As Ammar mentioned, both projects are on track and evolving very positively. As Guy will talk later, the drilling results keep adding value to the project. Very, very interesting. Canadian Malartic, in terms of shaft sinking where we start more conditional shaft sinking in Q3 we did a record in terms of speed. And we are about 2 months in advance of what we were planning initially when we updated the study in 2023. I would like also to highlight the construction team in Q3 did triple zero for 70,000 hours. What is triple zero is no lost time, no modified work, no medical aid and 70,000 hours, this is equivalent of 1 guy working in the construction for 30 years.

Congratulations to the team, it’s fantastic during those type of achievements. So to close on Canadian Malartic, the study is progressing for the vision to 1 million ounces with a second shaft Marban, Wasamac, everything is on track, and the construction team keep delivering what needed. For example, the administration building is going to be delivered in Q1 is going to be a good thing for the team to be in better position. At Hope Bay, potential 400,000 ounces annual production from the good drilling, I see, I think it’s going to be slightly more than that. Let’s see where the study is going to end. But in the meantime, we are — the key thing is to advance engineering. So we are currently around 25% achieved on the engineering, and we are progressing between 3% and 4% per month, which bring us to the 40%, 50% we were looking before greenlighting the project next year, everything is in good position for that.

And also, the construction team are preparing the field to be able to do that heavy construction time. So you could see here on the picture, there’s 2 new wings. Both of them were approximately 133 people per wing. So we’re building capacity. We’re going to have 6 of them ready to go for construction, operation and keeping exploration. On that, I will pass the microphone to Natasha.

Natasha Nella Vaz: Thanks, Tom, and good morning, everyone. So I’ll cover the operational highlights for Ontario, Mexico and Australia. The regions delivered good safety, operating and cost performance this quarter. And along with the higher gold price, this led to record operating margins at both Macassa and at Detour. Now at Detour, as we continue to stabilize the mill at the higher throughput, the team achieved another quarterly record mill throughput. The open pit mining rate in the quarter, however, was affected by slower progress around the historical underground working. But grade is still expected to improve in the fourth quarter as we move into the higher grade domain in the pit. Over at Macassa, we had a really good quarter there, too.

The team continued to see some overperformance with higher-than-expected grades in localized areas. And then at Fosterville, production this quarter was on target, following a very strong first half of the year. Now in terms of business improvement, similar to what Dom discussed, the teams, they continue to push hard to optimize our business. There is a constant effort to keep all of our operations at a state of optimal performance. It’s just part of their DNA. And the optimization of the ore haulage system at Detour is a really good example of that. It’s a good example of the many initiatives that are going on. It’s a good example of how the team is looking at ways to sustainably lower cost and improve efficiency. And this particular journey started 10 years ago with incremental slow enhancements made over time and significant progress made, as you can see from the utilization and payload improvements as noted on the graph.

And the team, they continue to look for optimizing our unit costs by involving external experts to review their performance and help identify possible efficiency gains similar to what Dom was talking about at Kittila, not just as it relates to haul optimization, but really the entire mining cycle. Another hot topic, and Dom touched on this, is related to the skilled labor shortage that the entire industry faces. Labor is a large portion of our overall cost, and our focus is to not just maintain our operational needs, but also secure the workforce to grow our business and at the same time, manage the costs. So we’re taking a very proactive approach to workforce planning as we grow in Ontario by leveraging our region strategy by leveraging our competitive advantage, specifically when it comes to people.

So our strategy to address the short and long workforce needs is multi-layered, of course, the first one is to ensure we continue to be a Great Place to Work for our employees by continuously investing in our people, by continuously leveraging the culture that Agnico has built we have increased the engagement levels of our teams. And Macassa is a really great example of how powerful this combination can be. Since 2022, we have significantly increased production at Macassa, and at the same time, we’ve significantly improved safety performance. They say that a safe mine is not — is a productive mine. In our experience, it’s also a highly engaged mine. In addition to that, we’re investing in local workforce training. This quarter, we started the underground school of Mines for Macassa.

Our plan is to, over a period of time, train local candidates to meet the increased demand for Macassa, for Upper Beaver, for Detour underground. While we remain focused on hiring First Nations and local employees, we’re also seeing success in filling roles through our immigration program for skills that are generally hard to recruit for in Canada. So I’m very proud of the team because even at these gold prices, like Ammar was seeing their foot is still on the gas. They continue to safely and responsibly make our mines more efficient and more productive, ultimately reduce our costs. Now moving to the next slide. I’ll give you a quick update on the 3 projects for Ontario and Mexico. As you are aware, the Detour Underground project plays a big part in the plan for the complex to be a 1 million-ounce producer annually.

It’s still early days, but as Ammar mentioned, this quarter, we commenced the exploration ramp and have advanced just over 250 meters laterally. We’re also continuing with the infill and expansion drilling and continuing to see positive results, and Guy will talk about that later on in the presentation. As for Upper Beaver, during the quarter, there’s been a lot of progress made in a short period of time. We did have the pleasure of hosting our Board and our senior management team this week at Upper Beaver, but also Macassa. And they were complementary, not just about the progress, but also strong teams that we have on the ground, and I completely agree. In terms of the project with respect to the shaft head frame, the structural steel and the cladding is completed, the winches have been roped up and the service hoist is ready for commissioning.

So shaft sinking is still expected to commence in the fourth quarter. And over at the portal, the excavation of the exploration ramp began at the end of July and has advanced over 250 meters. Finally, with respect to San Nicolas, we continue to engage with government and authorities and our stakeholders related to the key permits that are needed. In the meantime, we’re continuing to advance the engineering of some critical infrastructures which will just help us further derisk and build confidence in the execution strategy. So all in all, good progress being made on the projects. And I just wanted to end by thanking our operations team and the project team for another solid quarter. And so with that, I’ll pass it over to Guy.

Guy Gosselin: Thank you, Natasha, and good morning, everyone. First of all, I would like to start by taking a moment to thank the team at all sites for another excellent quarter, both safety and productivity and cost control went extremely well with an excess of 120 drill rig in action. We’ve completed north of 370,000 meters of drilling in the quarter, now exceeding 1 million-meter year-to-date. That is ahead of our schedule by about 9%, year-to-date in terms of meter and our unit costs are approximately 8% below budget year-to-date as a result of our strong involvement at controlling costs. Our Journey Excellence program continues to deliver. We’re improving safety by introducing more mechanized feature such as robotic arm technology to reduce weightlifting and repetitive motion and we are ramping up our unattended drilling capacity that allow for drilling between shift, which is very beneficial for our underground mining sites.

. Ending towards year-end, we continue to focus on key value drivers, expanding a little bit the drill program on several sites, such as Marban, Detour Underground, Hope Bay and Canadian Malartic, Odyssey where we have good exploration results that continue to blaze the trail to support studies that will support studies to deliver on our vision of growth for these assets. From a results standpoint, I would like to comment on a few projects, starting on Slide 15 with Canadian Malartic. We currently have 29 drill rig in action at Malartic, both underground and on surface at Odyssey in the extension of the deposit around the mine, including the recently acquired Marban project. And once again, this quarter has seen some very exciting results in the upper eastern portion of East Gouldie, results here says 4.8 over 25 meters at 800-meter depth in the area, we anticipate can get to mineral reserve by year-end that could provide additional flexibility to accelerate ramp-up of production in the upper portion of the East Gouldie deposit.

Then also in the lower extension of East Gouldie with result of 2.3 over 30-meter 2,000 meters below surface, which is also kind of aligned with our decision to extend the depth of the first shaft down to 1,870 meters and the deposit remains open at depth and laterally. And on the adjacent Marban project, we’ve so far completed 96 drill on the property for 30 in excess of 30,000 meters since the acquisition — since the drilling started in May following the acquisition mostly to test the eastern extension of the deposit on ground that belonged to Agnico prior to the consolidation. And the results have the potential to increase the ultimate design with result of to 3.3 over 11 meter, 4.6 over 10 meter, approximately 2,200 meter east of the current open pit being considered.

Now on Slide 16, at Detour, as mentioned by Natasha, the exploration ramp is now progressing well with just over 250 — almost 260 meters developed in the quarter, reaching a depth of 43-meter below surface, 62-kilometer of drilling were safely completed in the quarter with 9 drill rate and continue to infill and extend the deposits from surface in areas that are targeted for the underground mine project, both below the saddle portion of the deposit with result up to 3 gram over 40 meters, 2.7 over 55 meters. And to the west of the pit, where the planned exploration ramp would result pretty significant of to 7.4 over 27 meters. The result so far should lead to growth in the underground mineral resources system at [indiscernible]. And based on these results, we’ve added an additional 55,000 meter of drilling in the fourth quarter and expecting to achieve almost 220,000 meters by the end of the year.

Now on Slide 17, as discussed by Dominique, again, some very good results in exploration. We have 6 drill rigs in operation. We’ve completed in excess of 100,000 meters year-to-date, expecting to achieve north of 120,000 meters by year-end. And we continue to see very strong results in Patch 7 area. First of all, in the southern extension of Patch with a result up to 6.7 over 10 meter, 10.7 over 3.8 meter at shallow depth 350-meter below surface, showing that the deposit remains open to the south on the right-hand side of that graph. And two, at depth in Patch 7 with very strong results, up to 12.7 gram over 9.3 meter and 16.9 gram over 4.6 meter both at around 880-meter depth in the strong new discovery at Patch 7 that shows that the deposit remains open at depth and laterally.

So we anticipate that all of the good results we’ve seen at Hope Bay this year, where we have a very positive impact on the mineral resources at year-end and as mentioned by Dominique, all of that be integrated and our potential project development scenario to be communicated in 2026. Then on Slide 16 (sic) [ Slide 18 ], I would like to add a bit more color around Meadowbank. And as you are aware, we’re looking in a current gold price environment to look at opportunity to continue to operate Meadowbank. So we’ve been since 2024 validating some option for pit pushback in the IVR area, but also continue to derisk the underground extension of the deposit that is known to be still open at depth. And all of those good results that we are displaying will be integrated in our scenario analysis to evaluate the pushbacks scenario and eventually to continue to mine from underground only with mill operation at a lower throughput once the open pit are fully depleted.

Finally, at Slide 19, at Fosterville, not mentioned in our press release because it came out right after the cutoff of our press release today, we’re pleased to announce that we’ve reached an agreement with these 2 resources to acquire their 39,000 hectares exploration license that surrounds our mining leads at Fosterville. This will consolidate in total more than 250,000 hectares stretching over more than 100 kilometers along the great at Fosterville to allow the continuation of the full investigation of those structure without any property boundary constraint and the transaction obviously is subject to the Victorian government approval and the closing is expected to close within about 2 months. So on that, I will return the microphone to Ammar for some closing remarks.

Ammar Al-Joundi: Thank you, Guy. As you can see, we continue to work hard for all our stakeholders, and we’ll continue to build off the same foundational strategic pillars that have served us well over the past 68 years. We will focus on the best mining jurisdictions based on geologic potential and political stability. We will be disciplined with our owners’ money, making investment decisions based on technical and regional knowledge creating value through the drill bit and through smart, disciplined acquisitions when it makes sense. We are uniquely well positioned with a quality project pipeline leveraging existing assets in the best regions in the world where we believe we have a strong competitive advantage. And we will continue to be focused on creating value on a per share basis and on being leaders in our industry in returning capital to shareholders as evidenced by over 42 years of consecutive dividend payments and increasing share buybacks.

And finally, before we open up for questions, I’d like to comment briefly on the current exciting gold environment, both the gold price and the sector more broadly, including our recent investment in Perpetua. On the gold price, of course, nobody has a crystal ball and nobody can predict near term moves, but it is very common that when a market moves up quickly, there is often a measured retracement in a period of consolidation before the next leg up. I think that is where we are on the gold price. Long term, we remain very constructive on gold and as all the factors that have pushed gold to outperform over the last 25 years remain in place and in many cases, have become more prevalent. On the M&A front, while we do have the best organic growth in our history, while we continue to have great success in our exploration programs, and while we feel absolutely no pressure to do anything, of course, we will continue to look at opportunities to create more value for our owners through smart and disciplined opportunities on the M&A side.

Our owners want us to look at these opportunities our owners expect us to look at these opportunities, it is frankly part of our job. Our investment in Perpetua is a good example of this. Perpetua is 1 of the largest, highest grade undeveloped open pit gold mines in the United States and to paraphrase one of our senior exploration people. It is the most exciting U.S.-based gold exploration project she has seen in many, many years. Perpetua is also an investment in gold. Yes, there are valuable byproducts that will reduce cash costs but that’s a good thing. This is what we do. We focus on geologic potential in safe jurisdictions, and we try to get in early to gain a knowledge advantage. Thank you again for joining us on this call. Operator, may I ask now that we open up the call for questions.

Operator: [Operator Instructions] Your first question comes from Fahad Tariq of Jefferies.

Fahad Tariq: Ammar, can you talk a little bit about the noncore investments in critical minerals? It sounds like it’s a new subsidiary. I’m just trying to understand what type of investments will be vended in or spun out in there? It sounds like it would be things like Canada Nickel and maybe some other equity investments. And what is the future strategy of that subsidiary. Would it invest in like — make equity investments or actual project development?

Q&A Session

Ammar Al-Joundi: Fahad, thank you for that question. You’re absolutely right. For example, Canada Nickel will be in that subsidiary. I think as most of you know, there’s been a lot of interest globally on critical metals. We are a gold company, but we’re also, in my opinion, the best miners in the regions we operate, and we’re the largest by far a mining company in Canada. We get asked about critical metal all the time. We want to remain a gold company. And so what we’ve — the approach we’ve taken, which is consistent with being disciplined and consistent with our philosophy on capital allocation, which is that it should be based on knowledge. For the last 3 years, we’ve had a small team, as again, most of you know, looking at opportunities on the critical metals side.

With everything that we’ve got going on with the great pipeline we’ve got, with our continued focus on gold, we felt now was the time to let that small group of people have a little bit more independence and look at opportunities on their own. So we’ve contributed small investments that are non-gold, non-copper into that subsidiary. We’ve given a little bit of seed capital. And frankly, Fahad, it’s their job to look at opportunities. We are not obliged to invest more money. We’ll be supportive, but we’ll also have a first shot at looking at what they’re doing.

Fahad Tariq: Got it. And then may be switching gears, can you talk a little bit about how just government relations are going with the new federal government in Canada. Have you noticed changes in terms of the level of access to the government dialogue? And any opportunities in particular for Nunavut infrastructure?

Ammar Al-Joundi: That’s again an excellent question. We have been very pleased with the new government. I’ll give you an example. While we are the biggest mining company in Canada, we really didn’t get a lot of attention from the previous government. The weekend after the election and I got a text from Tim Hodgson, I’ve never met Tim Hodgson. He went out of his way to find out who I was, and I guess who other and I know he’s talked to a lot of other mining executives and so you’ve got to give a government credit when the minister in the very first weekend reaches out to people on their cell phone via text. We know the teams there well. We’ve probably had more discussion with the new government on the importance of mining and the opportunity of mining to contribute to Canada than we had with the previous government over several years.

So we’re very pleased. They are very smart. They’re very engaged, and they really are interested in leveraging off of what mining, for example, can do for the average Canadian.

Operator: Next question comes from Anita Soni of CIBC World Markets.

Anita Soni: First question is with respect to Hope Bay. What are you expecting to deliver by year-end in terms of a resource update? And then what are you targeting for the 2027 study.

Dominique Girard: I could start maybe with the study, and I will let Guy for the resource. On the study, we’re expecting in the first half of next year to deliver PEA study with the engineering at over 40%. And again, as we did that mediating to really have a good view on the schedule and on the cost. We like to give the information when we have enough of that engineering done. I’m very happy to see the progress with the team and midyear — before midyear next year, we’re going to give you more detail on all those KPIs Anita. And with that, I will pass it Guy.

Guy Gosselin: Yes. So as a follow-up, so for year-end, I would say reserve will remain as last year. We’re going to be updating indicated and inferred resources, obviously, integrating all of the new results we’ve been getting expanding Patch 7 driven. And along with what Dominique described our study in 2026 with the new development scenario, new [ cusp ]. So our desire would be to update with a brand-new PFS supported reserve and resources filing by the end of 2026.

Anita Soni: Okay. And then just a question with respect to cost. I know you talked about tariffs a little bit, and it seemed like it was the standard customary cautionary language. But is there any — is there any other — I guess, I’m just trying to get an idea of what inflation — what kind of inflation expectations you’re seeing going into next year? Is it the typical 3% to 5%? Or — and you obviously talked about optimizations where you’re trying to defray some of those 3% to 5%. You’ve done an excellent job this year of maintaining costs within the original range despite a more than $1,000 gold price move. But what can we — what should we be thinking about going into 2026 and other moving parts like changes in grade and things like that?

James Porter: Yes. Anita, it’s Jamie here. We’re obviously working through the budgeting process now. I think 3% to 5% is where we’ve seen labor inflation over the past several years, but across all of our costs, it’s been closer to 6% to 7%. And if you go back over the last 3 years, the average cost of inflation we’ve seen has been 6% to 7%. Our guidance has been up on average by about 3%. So we’ve been able to do a bit better than the rate of inflation over the last few years. Going into 2026, I think we’re seeing a similar level of inflation in around 6% to 7%, across all of our various cost components, and obviously, we’re seeing the pressure on royalty costs as a result of the higher gold price. So we would expect costs will be higher next year just based on the impact of higher gold prices. But as we’ve talked about through the call today, we’re always looking at opportunities to do better than inflation.

Operator: Your next question comes from John Tumazos of John Tumazos of John Tumazos Very Independent Research.

John Tumazos: Could you review the rigs operating across the company? I think I heard there were 29 rigs at Malartic and the meters were being increased 55,000 to 220,000 for the year. Could you give us that review across the portfolio, please?

Ammar Al-Joundi: John, I’m going to — thank you for the question, John. I’m going to ask Guy to comment on that.

Guy Gosselin: Yes. So basically, the 120 rigs as reported are spread over operating mine, advanced projects. I can go through maybe with you off-line if you want to see, but basically, we have those 29 rigs, the 220,000-meter an additional 55,000 meters, you’re referring to pertaining to Detour, where we have those 9 rig operating. So we haven’t seen — I’d say, quarter-over-quarter, we have the exact same number of rigs. We’ve just seen an increase in productivity, and we’re trying wherever we’ve been getting some good results, especially in the pipeline to keep drilling at the same pace during the fourth quarter. Therefore, we’re expecting that we will be in a position to go all the way to around 1.25 million, 1.3 million meters by year-end without spending much more because of the lower unit cost we’ve been getting with those productivity improvements such as the unattended drilling.

Basically, what it means on a day to day is when the driller — with the new rig that we are currently revamping on each of the sites with collaboration with our entrepreneurs, you’re basically adding the function that when the guy hit the rig at the end of the shift for the blasting and the gas clear up you can just press the button, the drill, continue to drill in between shift. So if you look at it, if you can drill 3 more meters at the end of the shift 3 more meter at the end, for an underground mine, it is quite significant. So those are the things that with the same fleet of rig, we can get more done. And we’re going to continue to drill at the same pace because we have some good results. And overall, we are expecting our global exploration budget for the company, $525 million, including an exploration project to be about right on that $525 million for the year based on our [indiscernible] forecast we’ve just done.

John Tumazos: Could you just run through several sites where the most rigs are running, I don’t remember how many rigs were at each site.

Guy Gosselin: Yes. Well, maybe I can provide you with those detail offline, but we have those 29 in Malartic, we have 9 at Detour. We have 12 in Macassa. We have 6 at Hope Bay so maybe I can provide you with the detailed list of the spread of our rig offline, John.

Operator: Your next question comes from Tanya Jakusconek from Scotiabank.

Tanya Jakusconek: I just wanted to talk to you about the reserve and resource replacement this year, year-end 2025. I think if I go through the — what you mentioned we’re going to see increase in reserves at East Gouldie. That was really the only mine the only cause that I heard and then resource growth at Detour and Hope Bay. Is that correct?

Guy Gosselin: Yes, yes, I can take it. So we will also — we are in a good position to fully replace what we mine at Kittila, Macassa and several of our sites will see some partial replacement. We will also have Marban that will get into the mix siding the first iteration of Marban. So net bottom line, we’re expecting to see a net growth, net of mining depletion by year-end by maybe, I don’t know, my guess we should be up by 0.25 million or 0.5 million ounces year-over-year despite the fact that we’ve mined we’ve extracted 3.8 million and will produce 3.45 million this year. So all in all, the drilling has fully replaced what we’ve mined out with a light growth year-over-year.

Tanya Jakusconek: Okay. And should I be thinking as you have done historically that you take your reserve and resource pricing and you look at inflation and adjust accordingly. So I know your reserves are at about $1,450 our resources at $1,750. If I put that 5%, 6% or thereabout inflation, I guess, $1,550 and $1,850, respectively. Should I be thinking that’s how you’re going to approach your pricing for your reserves and resources at year-end?

Guy Gosselin: Well, that’s a very good question. Obviously, with the current gold price environment, we are at that question, and we’re working on it. But our care remains to deliver the margin ounces upfront. Therefore, we don’t want to lower the cutoff grade that will change our mining sequence in the upcoming couple of years. So we are looking at it on a mine-by-mine basis, if there is some excess milling capacity. If we can mine some — so we’re going to be having that in mind, Flexing maybe our gold price assumption on some projects, whether it’s a life of mine extension scenario or where there is additional milling capacity. But our firm intention remains to keep the cut-off rate stable while as you described, offsetting inflation, moving the gold price up in line with that inflation we see overall on the market.

Tanya Jakusconek: So then it’s really what you talk about is real actual replacement of ounces rather than any movement in gold price for what you’re seeing for year-end?

Guy Gosselin: Yes.

Tanya Jakusconek: Yes. Okay. Perfect. Maybe over to you, Ammar, if I could, about just the strategy on the overall portfolio, both from an investment equity standpoint. And then also on your portfolio, your asset — overall assets. So some really — there are some smaller ones that you have in there as well. So I’m just interested in how you’re approaching this — let’s start with the equity portfolio. Should I be thinking your investing in Perpetua is 1 investment. But should I be thinking that whatever sales or sales you make from that investment portfolio, it just gets reinvested into other equities rather than being thought about this gain as allocated to shareholder returns. Should I be thinking about it in that way?

Ammar Al-Joundi: Thank you, Tanya, for the question. No, the money belongs to our owners. We make strategic investments in things that we have looked at and think might have an opportunity to create value for our owners. We don’t do it as a trading position. We do it really again, in line with our philosophy on being disciplined with capital. It’s an opportunity to make an early investment to learn about a project that we might be interested in. And so if you take a look at something like Orla and there’s a long history there. We — eventually, Orla did a fantastic job. They didn’t really need us anymore. There was a lot of money tied up. We took up — we liquidated that position, but that does not go into a pool that goes back into equity.

That is our owners money, and that money everything competes for that money. Investments into our mines, technology, everything has to have a business case. So we do not simply take that gain and allocate it to future equity investments. It’s our owner’s money, and it gets treated like the rest of our owners’ money.

Tanya Jakusconek: Okay. So it just goes part of your cash flow and then gets allocated accordingly.

Ammar Al-Joundi: Correct. .

Tanya Jakusconek: Okay. And then in the portfolio itself, as you hire gold prices, everyone is looking at their portfolio and some you have a lot of big assets that you’re focusing on coming up these top 5 assets that you talk about. Anything that you see as anything within the portfolio for noncore .

Ammar Al-Joundi: Yes. I mean there — I just looked at it this morning, John and I talk about this all the time. You’re right, Tanya. There are some things that transition well, and we continue to be interested in. And as you would expect and as in the history of our company, there are some projects that while we invest in early we end up concluding don’t make the criteria for our owners, and we will be disposing of them. And frankly, again, you’re right at these current gold prices, it’s not a bad time to in some cases, sell those assets.

Tanya Jakusconek: Yes. So when we’re talking about assets, we’re talking about assets, not investments?

Ammar Al-Joundi: Correct. Well, no, no. In this case, I’m talking about the equity investments.

Tanya Jakusconek: Equity investment. How about just overall within the portfolio, just some smaller within the portfolio, anything in Mexico. You’ve got some smaller stuff with that…

Ammar Al-Joundi: Yes. I mean the — you asked about Mexico. There are some things that are now pretty small and nonstrategic. We always look at opportunities to get the most value from any asset, whether that means we operate it or we sell it. I can assure you we do that with all of our assets, including ones that are small. And so if there are some that you might wonder, well, why haven’t you sold them, the simple answer is you can assume that we’ve looked at all the different opportunities and have concluded on the ones that will make the most money for our shareholders, even if it’s a small asset.

Operator: There are no further questions at this time. I will now turn the call back over to Mr. Ammar Al-Joundi. Please continue. .

Ammar Al-Joundi: Well, thank you, everyone, once again for joining us this morning. More importantly, thank you for being our friends and supporters over many decades in many cases, everybody 1 day early, have a nice weekend.

Operator: Thank you. Ladies and gentlemen, that concludes today’s conference call. Thank you for your participation. You may now disconnect.