SSR Mining Q3 2026 Earnings Call Transcript

SSR Mining (NASDAQ:SSRM) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

SSR Mining delivered a stable Q3 with production on track for full-year guidance, although all-in sustaining costs are expected to be 10% above the top end of guidance due to cost pressures.

Strategic initiatives included a new technical report for Marigold extending the life of mine and the acquisition of Roxmore Resources, enhancing their US portfolio.

Future outlook remains positive with expectations of completing the Roxmore acquisition by year-end and commencing development at Buffalo Valley in 2027.

Operational highlights included significant progress at Marigold, with technical updates showing increased production and a 20-year reserve life.

Management emphasized strong capital returns, repurchasing 17 million shares and maintaining a robust balance sheet with $1.5 billion in cash.

Full Transcript

OPERATOR

Hello everyone and welcome to SSR Mining’s third quarter 2026 conference call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Alex Hunchak from SSR Mining. Please go ahead.

Alex Hunchak (Vice President, Investor Relations & Capital Markets)

Thank you, operator, and hello everyone. Thank you for joining today’s conference call to discuss SSR Mining’s third quarter 2026 financial results. Our consolidated financial statements have been presented in accordance with US GAAP. These financial statements have been filed on EDGAR and SEDAR and they are also available on our website. There is an online webcast accompanying this call, and you will find the information to access the webcast on our corporate website.

Please note that all figures discussed during the call are in US dollars unless otherwise indicated. Today’s discussion will include forward-looking statements, so please read the disclosures in the relevant documents. Additionally, we refer to non-GAAP financial measures during our discussion and in the accompanying slides. Please see our press release for information about the comparable GAAP measures. Rod Antle, Executive Chairman, will be joined by Michael Sparks, Chief Financial Officer, and Bill MacNevin, EVP, Operations and Sustainability on today’s call. I will now turn the line over to Rod.

Rod Antle (Executive Chairman)

Great. Thanks, Alex, and good afternoon to you all. I’m very pleased with the milestones our team achieved over the course of the third quarter, where our four operations delivered another stable quarter. We continued to deliver peer‑leading capital returns. We also published a new technical report for Marigold that materially extended the life of mine, and finally, we enhanced our US portfolio through a bolt‑on strategic acquisition of Roxmore Resources that we announced—a very busy and productive quarter that sets our company up for long‑term success.

Our consolidated production is on track for full‑year guidance with an expected strong fourth quarter, especially at Marigold. However, with the persistent pressures on cost, we now expect our full‑year all‑in sustaining costs will be approximately 10% above the top end of guidance. There are two main drivers. First, at Puna we continue to actively see opportunities for mine life extension in the current operating areas as well as other targets we’re advancing.

Because of this, we made a conscious decision to prioritize ore extensions and stripping into future years, which led to a deferral of processing lower‑cost stockpile ounces into the future. And second, we have not been immune to the industry‑wide cost pressures, and Michael will provide more details on these drivers in the coming slides. With the exit from Turkey now complete, our business is firmly established as an Americas‑focused gold and silver producer anchored by long‑lived operations in the United States. As I mentioned, we announced two significant and positive updates in mid‑October that further bolstered our US platform. We released the updated life‑of‑mine plan for Marigold, showcasing a more than 50% increase in total production and an impressive 20‑year reserve life.

Second, this paradigm shift for Marigold was complemented by the strategic and accretive acquisition of Roxmore Resources and its Converse Project, which is adjacent to the Marigold property. Separately, we continue to deliver best‑in‑class capital returns through the quarter. Over the first nine months of 2026, we have repurchased nearly 17 million shares, returning more than $530 million. Coupled with our reinstated dividend, we have already delivered a capital returns yield of approximately 10% this year. As you can see, our business is in excellent shape and positioned to deliver a strong close to the year. We have a best‑in‑class balance sheet with more than $1.5 billion in cash that allows us to continue the peer‑leading capital returns program.

As we look ahead, there are a couple of catalysts. First, we expect the Roxmore acquisition to close by year‑end, delivering meaningful additions to our consolidated mineral resources and adding to our US growth platform. Second, we are planning to begin development on the Buffalo Valley project in 2027 while also advancing a number of exciting brownfields opportunities at both Puna and Seabee. We expect to be in a position to provide the market with more detail on our growth opportunities moving into next year.

With the opportunities ahead, let’s talk more about our track record of creating value per share on slide 4. Given all the news flow this year, and particularly in light of last month’s agreement to acquire the Converse Gold Project, it is worth highlighting our proven track record of meaningful value creation on a per‑share basis. Over the last two years, we have delivered nearly a 250% increase in net asset value per share and a nearly 500% increase in cash flow per share.

These metrics illustrate a powerful picture of discipline on how we run the business. The figures on this slide reflect successful execution across a number of initiatives. This includes accretive M&A, peer‑leading capital returns, and finally, successful exploration and resource development that has successfully increased reserves and extended mine life across the Americas assets. As you can see on the top right of this page, we have repurchased nearly 37 million shares since 2021, including the almost 17 million shares I mentioned earlier this year.

When it comes to M&A, it’s important to remember that our Americas platform was built through disciplined transactions. The nearly $2 billion in free cash flow generated by Marigold, Seabee, and Cripple Creek & Victor since acquisition has more than repaid their original acquisition consideration, and today they represent nearly $6 billion in consensus NAV. This is a 10 times return on these investments and, importantly, we continue to see significant growth potential ahead for the assets.

So with that in mind, let’s turn to slide five and talk about the Technical Report and Marigold. A significant milestone for us was the publication of the Marigold Technical Report. This was the culmination of years of successful exploration and resource development efforts across the property. The Marigold complex now hosts 4.6 million ounces of mineral reserves supporting a 20‑year mine life and average annual production of more than 200,000 ounces of gold through 2040.

The mine plan is more than a 50% increase in total production against the prior technical report and, importantly, features total production over the next five years that is directly aligned with our prior expectations. Marigold now incorporates Buffalo Valley, where development is expected to commence later next year ahead of first production in 2029. By expanding the Marigold fleet and developing new leach pads for Buffalo Valley, we are able to support significant mine life extension and production growth at this core US asset. It also provides a strategic opportunity to modernize not only the fleet but also how we operate the mine.

Once we get through the initial stripping efforts over the next few years, it unlocks the ability to mine multiple ore faces at the same time, providing operating flexibility you would expect from an asset and an operation of this size and scale. Let’s turn to slide number 6 and the Converse transaction. On October 13, we announced an agreement to acquire Roxmore Resources and its Converse Gold Project at an attractive valuation. This transaction represents a compelling opportunity to add a high‑quality, multimillion‑ounce gold resource next door to our Marigold mine. We’ve been following Converse for some time, and given its proximity to Marigold, we’re able to leverage our knowledge of both the current operations and the new development at Buffalo Valley to inform our due diligence process.

We believe developing Converse with such close proximity to Marigold provides us a clear advantage with operating and financial efficiencies. Converse has the potential to add 150,000 to 170,000 ounces of gold on an average production basis, which complements the multi‑decade Marigold mine life we just published. The transaction further reinforces the quality and scale of our platform in the United States and demonstrates our commitment to deliver accretive growth in our core jurisdictions.

The acquisition will be funded from our existing cash position and is aligned with our disciplined capital allocation strategy. With no material development expected until the early 2030s, the transaction will have no impact on our near‑term free cash flow profile. Now on to slide 7 and how these two updates improve our US platform. Including the recent update to the Marigold life of mine, our US platform now hosts more than 7 million ounces of gold reserves and an additional 9 million ounces of resources. This significant reserve and resource base clearly reflects the multi‑decade pathway ahead for our two US assets. We’ll continue to advance opportunities to deliver resource conversion and growth at both Marigold and Cripple Creek in the coming years.

In addition, this platform will now be enhanced by the forthcoming acquisition of the multimillion‑ounce Converse Project adjacent to Marigold. Once in production, we expect Converse has the potential to take our US platform north of 450,000 ounces of annual gold production in the peak years. With that, over to you, Michael.

Michael Sparks (Chief Financial Officer & Executive Vice President)

Thanks, Rod, and good afternoon, everyone. In the third quarter we produced almost 104,000 gold equivalent ounces at an all-in sustaining cost of 2,005 per ounce. I want to walk you through the key drivers of our full-year cost profile for 2026 beyond the Puna Mine plan changes Rob described, which account for about half of the cost increase. The remaining AISC pressure comes from three key drivers: higher royalty costs driven by elevated gold and silver prices, persistent diesel price pressure on our unhedged consumption, and broader labor and consumable inflation.

Our cost base is anchored by labor at approximately one-third, followed by royalties and supplies at roughly 15%. Each fuel represents 10% to 15% and consumables account for another 10% to 12%. So these five categories collectively represent approximately 85% of our operating costs. On diesel, our 2026 hedge program covers approximately two-thirds of consumption at Marigold and CCMB, or roughly 60% of our total global exposure. Those hedges expire during the quarter at current pricing. Upon the expiration of those hedges, we would expect an incremental $100 to $150 per ounce impact to our consolidated AISC, and we are actively evaluating hedging opportunities in the current environment. Importantly, the updated Marigold life-of-mine plan published in the last technical report already reflects higher near-term diesel assumptions, so this sensitivity is embedded in our forward planning.

While these cost pressures are certainly a headwind, we remain focused on managing the controllable elements of our business and we are well positioned for strong production and free cash flow into year-end. Rod covered our capital returns program in detail. At the end of the quarter we had approximately 4.9 million shares remaining under the NCIB, and at current valuations we see a clear opportunity to complete the program in full before it expires in March 2027.

Now let’s move to slide 9 for a brief review of our financial results. Third quarter revenue was $448 million based on sales of almost 107,000 gold equivalent ounces. Average realized prices were 4,247 per gold ounce and $58.39 per silver ounce. Net income was $0.46 per diluted share and adjusted net income was $0.64 per diluted share. Our adjusted earnings per share were essentially in line with the prior quarter when adjusted for the non-cash reclamation charge incurred this quarter.

The main adjustment to net income was a one-time non-cash increase to the cost estimate associated with water management and tailings storage at Puna. This change reflects the completion of trade-off closure studies on the Pirquitas water management system and tailings storage facility during the quarter. Since Pirquitas is no longer operating, US GAAP requires full immediate expense recognition rather than balance sheet capitalization, which is why this charge flows through the income statement in this quarter.

This did not have an impact on our AISC, and the $43.5 million increase, net of taxes, was fully removed from our adjusted earnings per share. Free cash flow from continuing operations before changes in working capital was approximately $111 million, and inclusive of working capital was $6 million for the quarter. The main drivers of the working capital movement in the third quarter were increased receivables due to timing of Puna concentrate sales and inventory build at both CCV and Marigold over the first nine months of the year. Free cash flow was nearly $305 million, or $486 million before changes in working capital.

We finished the quarter with approximately $1.6 billion in cash and no debt, providing total liquidity of $2.2 billion. This cash position supported the ongoing buyback activity and will also be allocated towards the acquisition of Roxmore Resources, which we expect to close later in the fourth quarter. Our capital allocation priorities remain clear: first, protect the balance sheet for volatility in commodity pricing; second, invest in high-return internal growth projects; third, return capital to our shareholders; and fourth, pursue disciplined and strategic M&A. Our financial strength gives us the capacity to execute on all four simultaneously. Now over to Bill to walk through the operations.

Bill MacNevin (EVP Operations and Sustainability)

Thanks, Michael. I’ll first start with EHSS in Q3. We have continued our focus on reducing risk and potential for harm across the business. Our Eye Care We Care program is underway at Seabee, is being rolled out at CCNV, with preparations for Q4 commencement in place for Marigold. This program enables both field risk identification and proactive reporting of near-miss events. Our safe production delivery is being enhanced by this work. Now on to slide 11. Third quarter production at Marigold was 29,000 ounces, bringing year-to-date production to 98,000 ounces as previously guided. Our full-year forecast calls for Q4 to represent the strongest period of production in 2026. This production cadence reflects the recent completion of pumping upgrades driving increased leach pad solution flows, potential for ore stacking at cell 23B, and planned inventory drawdown through the quarter.

AISC in 3Q27 14 per ounce reflected higher sustaining capital spend as previously guided, as well as cost pressures Michael spoke to earlier. I’ve already touched on the new Marigold mine plan and our excitement around the growth ahead for the asset, but it’s important to note we see significant potential for future mineral reserve additions to further support this multi-decade platform in Nevada. We’re excited to get started on Buffalo Valley and look forward to providing updates on our progress across the district next year.

Now on to Slide 12 for an update on CCNV. In the third quarter CCNV produced nearly 32,000 ounces and AISC of 2,126 per ounce, bringing year-to-date production to nearly 98,000 ounces. Overall, CCNV continues to perform very well against expectations and has clearly established itself as a cornerstone asset in our portfolio. Work to evaluate opportunities to improve the longer-term production profile, including the potential for future mineral reserve conversion, remains ongoing.

Now on to Slide 13 to discuss operations at Seabee. Seabee produced nearly 16,000 ounces in the third quarter at an AISC of 2,094 per ounce. Third quarter operating results included scheduled downtime for the Seabee processing plant, which was deferred from the second quarter of 2026. Year-to-date production is 39,000 ounces, and no further scheduled maintenance is expected before year-end. Development advance for a priority zone in the Santoy orebody is on track to support delivery of high grades in Q4.

We continue to advance exploration and resource development activities at both Santoy and Porqui as potential avenues for mineral reserve growth. AUCKY has the potential to extend the mine life at Seabee well into the next decade, and at Santoy, near-mine drilling seeks to extend operations at the deposit. On to Puna on Slide 14. In the third quarter, Puna produced 1.7 million ounces of silver at an AISC of 2,564 per ounce. Over the first nine months of the year, Puna has produced 5.1 million ounces of silver and an AISC of $25.88 per ounce. At Chinchillas, mining is on schedule, with ore tonnage mined being above plan, resulting in the deferral of lower-cost production from low-grade stockpiles. This is a positive development for Puna, reflecting the potential for meaningful extensions to operations that deliver steady production for Chinchillas into the 2030s.

In addition, our teams continue to advance exploration and resource development drilling at the Cortaderas project, which represents a longer-term mine life extension opportunity for Puna to complement the production profile of Chinchillas. Now to slide 15 for a view of the growth pipeline. As you can see on this slide, we’ve continued to expand and improve our operating platforms in core jurisdictions. We have an advantage in these regions with decades of operational development and permitting experience to support growth ambitions across the portfolio. In Nevada, our acquisition of the Combust project will expand our land position at the northern end of the Battle Mountain trend. We have also continued to advance earlier stage projects across North and Central Nevada, including activity on the Dobbin Joint Venture project.

Similarly, in Saskatchewan we hold a number of unexplored and prospective land positions beyond the greater Seabee property. In addition, we’re advancing the internal valuation of the MISC project near Flin Flon, an area that has seen a lot of positive activity in recent years. While it is too early to say how MISC might fit into our longer-term development plans, we’re encouraged by recent exploration results on the property and will continue to explore opportunities to delineate a project that warrants its place in our extensive growth pipeline.

Elsewhere, we are continuing to advance evaluation of the long-term future of CCNV, where nearly 7 million ounces of mineral reserves present the opportunity for potential mine life extension and long-term production growth. And I’ve already spoken about our excitement around the extension opportunities across Puna, where further laybacks at Chinchillas and potential development at Cortaderas are beginning to delineate a production profile that extends well into the 2030s.

As you can see, we have a wealth of organic growth potential ahead. Advancing these projects delivers the best value proposition for our shareholders, and we look forward to keeping the market updated on developments across the portfolio.

Rod Antle (Executive Chairman)

Consistent operating results against the backdrop and meaningful strategic change for the business. I’m proud of all we have accomplished as a team. We’ve refocused our business on the Americas, we defined a multi-decade production platform in the United States, and we’re generating significant free cash flow and returning to our position as the leader in capital returns amongst our peer group. So with that, operator, I’ll turn the call over for questions. Thank you.

OPERATOR

Thank you, Mr. Antle. We will now begin the question-and-answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. The first question comes from George Edy with UBS. Please go ahead.

George Edy (Analyst at UBS)

Yeah, good evening, gents. I’m just still struggling with my Marigold arithmetic again. If I look at the numbers here, you need 288,000 ounces per annum on an annualized basis, that is, for Q4 for guidance. But then next year is 40% lower. And I guess if I just take the tech report, slightly conservative, so 20.5 million tonnes stacked at 0.4 and 70% recovery, I get 185. And even when I look at the tech report, you’ve got 254 produced, which is sort of an 83,000 ounce timing gap.

Can you help us understand that a bit better, given ore stacking rates were still low in Q3, and how we sort of get to, I guess on an annualized basis, 290 for a quarter and then back to 170? I just struggle to get the modeling to work.

Bill MacNevin (EVP Operations and Sustainability)

Yeah, I think I got all the numbers. George, can you just go slowly through your arithmetic again? I think I caught most of it, but I want to make sure I’m answering the question properly. I think the question is when you look at what we have to do in quarter four and then, moving into next year, dropping.

George Edy (Analyst at UBS)

Yeah, sorry, you need 288 annualized for this quarter and then it’s back to 170. But if I plug in the tech report numbers, like you’ve got 254 produced, which is the actual based off timing, is 83,000 ounces lower. So I just struggle with the timing. How you’re going to get this big catch-up in Q4, but you lose it next year. And I guess in terms of modeling for our side, it’s hard to sort of get the arithmetic to work without this year sort of going crazy.

And Q3 or stacking number being very low, I guess as well. That sort of surprised me.

Rod Antle (Executive Chairman)

Okay, let me. It may be that we have to do this offline just to make sure we got all the basis of the numbers that you’re looking at. But I’ll try to give you a high-level snapshot and then we might follow up, if that’s all right with you, George. I think for this last quarter there were a number of enablers that will allow us to achieve what we needed to do. And that partly is the sort of time lag of quarter four stacking from last year into this year, what was stacked this year, what was stacked partly in the last quarter.

But the key one was putting in that infrastructure for solution flow rates to increase the ability to leach the material that’s already in inventory up on the pads to give us the larger fourth quarter as we move into next year. We’ve completely resequenced the mines, you probably already know with the new Tech Report, with the priority initially for 2027 around the stripping that will allow us to achieve the big step change into 2028. And primarily the ore presentation for next year comes later in the year, not earlier in the year. So there’s a bit of a change in the actual timing of ounces in the areas that we’re in. Most of the ore next year comes from what’s left in Valmy this year and then moving into Red Dot 3, which is a new ore source for us in 2027.

So the sequence and how it rolls out, the grade profiles per month and everything else we can sort of go through, but that’s sort of, at a high level, the sequence of events. And it’s actually changed quite substantially pre the last Tech Report because we actually go down and come back up to achieve that overall five-year guidance, which is fairly much intact. But it’s really around stripping today for the future. As I mentioned, the real key for us for Marigold as we look for the next 20 years is not only the ability to replace the fleet, upgrade the fleet, and modernize the fleet. It’s also the approach that we’re taking to modernize the way that we operate the mine for operating flexibility in the future. Because, as you know, Marigold historically, and continued to be, singularly focused on one, maybe two faces each year.

So we’ve now taken that opportunity to sort of change that paradigm for the future where, once we get through the initial stripping campaign over the next 18 months, we’ll have two or three ore faces open at any one time, which obviously gives us a lot of flexibility as well. So there’s a lot of change that’s been built into the updates. But the detail, we’ll reach out to you separately and try to work through it.

George Edy (Analyst at UBS)

Okay. Yeah. And so for the stacking for Q, do you need to sort of be north of that 5 million tonne? Right. Is that sort of what you need to get? Like, the grades obviously ticked up, but do you need to get sort of north of 5 to hit, guys? Is that a sort of good guess?

Rod Antle (Executive Chairman)

It won’t be, because a lot of it’s going to come from Q4 last year, the stuff we’ve already stacked during the year, as well as cell 23A, which has a lot of inventory already hung up on it from the last three years. So between all of that, and with the high solution flow rates that we’ve now got going up on the pads after all that infrastructure was commissioned, that gives us the drawdowns necessary for this year’s production. And then next year is a completely different story because the ounces that we’re stacking for next year will be fairly light through the next six months.

George Edy (Analyst at UBS)

Okay, yes, that makes sense. Thanks. And maybe just, remarkably, on that AISC I missed earlier, you said, but when do the hedges roll off? And is it maybe right for us to assume that you sort of call out the sequence change at Puna, that Marigold and CC&V, for example, are still on track for original guidance despite, you know, sort of the input and labor and diesel pressures?

Michael Sparks (Chief Financial Officer & Executive Vice President)

Yeah. So I’ll point you to—it’s obviously, you know, it’s been something that has been upon us for the last three years. So it’s not new. The fact is that this year it was exacerbated by the diesel pricing going up above and beyond. You know, on a total basis across the business, we have about 60% of our diesel under hedge, and that’s always held us in good stead. In fact, you know, held us obviously in great stead this year. But 40% has been exposed.

So that was really a big uptick. We’ve also seen cost pressures in labor, the normal labor increases we plug into our budgets on a year-by-year basis—for most of our labor is usually CPI. But more recently we’re getting lots of pressure, and I think we’re not the only one, for professional folks where we’re seeing real ratcheting of competition, which is a real risk to the industry more generally, but obviously wage pressures way above what we’re seeing for inflation for professionals.

So that’s another one. Consumables, you name it—there’s been an increase in cost pressures in the last few years. We’ve been able to offset a lot of that through the BI programs, which has been terrific. While we continue with BI and looking across the business for ways to be more efficient and save money, this year it really escalated. So for guidance for next year, when you play it out, I’d point you to the new Tech Report we just published for Marigold, because we did update a lot of the cost assumptions in there, and obviously earlier this year we did the new Tech Report for Cripple Creek and Victor. So they’re the two big ones that’ll give you a good basis while we’re finalizing the budgets for 2027 at the moment.

George Edy (Analyst at UBS)

Yeah, that’s super helpful, thanks. Thanks, Rod. Thanks.

Rod Antle (Executive Chairman)

Good, thanks, George. We’ll come back to you, George, on just the detailed detail as well, just so we can be a bit more granular, if you like.

OPERATOR

The next question comes from Lawson Linder with Bank of America. Please go ahead.

Lawson Linder (Analyst at Bank of America)

Yeah, thank you very much, operator, and good evening, Rod and team. If I could just ask about the change in the unit cost guidance just to try to appreciate some of the moving parts from Q2 to Q3. So in Q2, three months ago, all-in sustaining cost was trending towards the top end of the range, which would be about 2% higher versus the midpoint. And now we’re calling for about 10% above the high end. So net-net it’s been about 12% inflation in about six months, but a really meaningful acceleration just in the last three months.

If you just look at like three months ago versus today, what was the biggest item that changed that you just weren’t able to appreciate then? And then the follow-up would just be, as you look to 2027, what kind of inflation rate would look like a probable, defensible assumption versus the new 2026 guide of plus 10% versus the range?

Rod Antle (Executive Chairman)

Yeah. So two factors, Lawson, and I’ll pass over to Michael—he can also talk about the cost increases. If you remember when we talked about Q2, the biggest risk was diesel and the persistent high price. That hasn’t come off, and so in fact it actually accelerated. And so when you look at the fact that we had 60% of our diesel usage hedged, the other 40% was—and that’s been—exposed to spot. We’re paying a whole lot more. And when we redid the numbers and the forecast through Q2, Q3, and also obviously moving into Q4, it was a significant driver to the cost increase.

And then the other one was the decision we took to defer some of the lower-cost ounces for Puna that were coming from, or had planned to come from, the stockpiles because we were still seeing mineralization around Chinchillas. And because of that, we made sure the fleet was focused on the continuation of stripping for life-of-mine extensions and deferred the reclamation of those stockpile ounces. So while they’re not this year, they haven’t been lost—they’ve just been deferred to a later time.

So it’s actually a good story, but it had an impact to the all-in sustaining costs as well. So those were the two biggest drivers. Michael, anything else you want to add?

Michael Sparks (Chief Financial Officer & Executive Vice President)

Yeah, I think, Lawson, your other question was in relation to 2027. I think just to reiterate, the baseline I think to start with is the Tech Reports. The one that we just filed with Marigold would have already built in some of this inflationary pressure that we’ve seen, especially around fuel. And so if you were to take the hedges off, that’s that 100 to 150 that I mentioned in the call. And that gets you kind of to a good baseline of around 2,630, 2,640, which would be the 10% increase plus the 150.

And as we’re kind of finalizing the budgets over the next couple months, we’ll be looking at the inflation. We’ll look and see what happens after the US elections in relation to diesel prices, and if we are able to be successful in rolling in a new hedge, you know, we’ll build those things with our guidance that comes out in February.

Lawson Linder (Analyst at Bank of America)

Okay, that’s extremely helpful additional color. And then as we approach the reserve and resource update for year end, I mean, I’m sure at this point you’re probably pretty close to settling on a gold price assumption for the assets for which we don’t have updated technical reports—Puna and Seabee. I mean, when you look at those two remaining assets, how do you think reserve replacement trends there? I mean, would you expect to replace reserves there or could we see a meaningful increase?

I mean, particularly at Puna? But I’d be curious to hear your thoughts on Seabee as well.

Rod Antle (Executive Chairman)

Yeah, Puna is obviously more silver-price impacted anyway, rather than the gold price. So we just updated the reserves with the new Marigold Tech Report. The real key to Puna’s future—and we are working through it, Lawson—is looking at ways to extend the life of mine at Chinchillas beyond what we currently know, as well as the work that’s going on on the new target at Cortaderas. And they’re the two more exciting opportunities for us that will—as soon as we’ve done the work and we have the drilling complete and all the technical work completed around it—we’ll update the market.

But it probably won’t make the MR. If we can make it, we will, but we’ll see where we get to for next year. But clearly we see beyond what we announced last year with the extra four years of mine life extension—more to come. Ideally what would be great as an outcome is sort of a 10-year production profile. So that’s what we’re working towards. But we still want to finish off that piece on the, you know, phase eight at Chinchillas, hopefully phase nine at Chinchillas, and then moving into the Cortaderas project. So that’s the big opportunity there for mine life extension and the increases to the MRMR.

And then also, when you look at Seabee, we’ll be looking at completing the work at Paukis to push that into development here in the next three to six months, which will be a great addition for Seabee, which will add life to Seabee, as well as still looking at the extension opportunities at the Santoy Mine itself. And so that’s the other key part to adding life to those two assets. So they’ll actually come from, in some ways, more new targets and new developments rather than sort of just tweaking at the edges of the current reserves.

Mike

Okay, that’s extremely helpful. And then if I could have one final question just on M&A. Very helpful that you continue to stress what the capital allocation priorities are. It makes a lot of sense. I noticed M&A is the last, I mean when you list those as, you know, protect the balance sheet, internal growth, return to shareholders and then disciplined M&A, I mean, is that a force ranking or should we think of all four of those sort of competing equally depending on returns?

And then I mean, by implication, is there, is there some intention to use additional cash for M&A or do you have flexibility in terms of how you think about M&A versus using your shares or using cash and debts?

Rod Antle (Executive Chairman)

Look, it’s not, they’re not prioritized by force in the way we describe them. They’re all equally important pillars for value creation and protection for the business through cycles. So I wouldn’t sort of read them as a run through. That’s the least of the priorities. I think what we’ve demonstrated over many, many, many, many years now is a disciplined approach to M&A. And I think the reason we talk a lot about our track record, because it’s important that we’ve been able to add value through being acquisitive for the right things.

It doesn’t mean that we feel compelled or at urgency around M&A at all. I know there are. I know we’ve been linked to lots of different opportunities out there in the market from time to time. But I can assure you that we haven’t lost our discipline. We don’t feel a sense of urgency or a drive. We have to do something today to deploy capital. We’ll take our time and should we find something, we’ll bring it to market. If we don’t, we don’t. And the pillars will run through as they normally do and we’ll get focused on returning capital to shareholders and maintaining that sort of that peer-leading yield.

So overall, I think we’ve had a good track record of discipline. That doesn’t change the linkages out there in the market around us with everything else. A lot of that is just noise. But look, when we do bring stuff, Lawson, the transaction we just announced, I’ll just, you know, throw a plug in because you’re giving me an opportunity to do it. You know, the Converse transaction, while on initially you look at it and say, well, that seems like a good accretive transaction, it’s small.

That will be in my eyes in the medium term, when we look back, you know, really a really solid strategic option to add to the portfolio, to build out the US base and the portfolio. So, you know, our job post close, you know, assuming all goes well, which I don’t see any reason it wouldn’t, is to, you know, take the work that there, the good work that the team have done at Roxmore, pick that up and to bring that into our way of thinking for growth opportunities.

And given its adjacency to Marigold, that’s a terrific addition to the portfolio. So we’re really excited by that in itself.

Mike

Okay, yep, those points are all well taken. Thanks very much, Rod.

Rod Antle (Executive Chairman)

Good on you. Thanks, Mike.

OPERATOR

The next question comes from Don DeMarco with National Bank Financial. Please go ahead.

Don DeMarco (Analyst at National Bank Financial)

Thank you, operator. And hi Rod and team. So, Rod, maybe I’ll just start off continuing some of that M&A discussion. I mean, as you evaluate other M&A opportunities, as you do in your normal course of business, do you have any bias toward any particular stage, like of asset, whether that’s a development asset or in production asset? Something like that would be a tack-on, like you did with Roxmore, or something that’s a completely, you know, new and separate asset.

Rod Antle (Executive Chairman)

Look, it’s always a question of value, Don. Like we always talk about, we prioritize it. Some of it’s around jurisdiction, some of it strategically doesn’t make sense. Free cash flow is obviously always one of the larger influences of the decisions that we make. So that’s really the key to us. There’s a lot of. There’s a lot of. If your question is a priority on development assets beyond Converse. No, not necessarily. We already have enough of that in the business.

You know, with the Marigold tech report that we just published, we’ve got quite a big change underway at Marigold over the next 18 months with the new fleet and the other higher mining rates that we’ll be achieving with the addition of the new fleet. We really focused on Cripple Creek and we had a group of your colleagues come down to that asset to really showcase and demonstrate the growth potential that that asset has. And some of the other ones I’ve already talked about on the call around Puna and Seabee. There’s plenty to keep us busy from a development perspective in our project team. A busy week at Converse at the end of the year. So that part of the pipeline seems pretty full.

We did make an acquisition through a joint venture in Dobbins, which is an early-stage, really early-stage exploration play in Nevada, as well, this year. So they’re sort of. They’re the things that we’re looking at. But look, I’m not going to. I think the business itself is terrific in terms of its shape in free cash flow. Going into another large-scale development doesn’t feel like the right next step for us and putting ourselves into that purgatory, in that valley of despair, while you bring some of these large capex builds into production.

Don DeMarco (Analyst at National Bank Financial)

And so at Converse you got first production targeted for 2033 and capex is fairly light until the 2030s. So can you just remind us what the key de-risking milestones are on this over the next couple years? And what would you need in order to make a construction decision?

Rod Antle (Executive Chairman)

Yeah, look, and we haven’t got the project yet, so it’s not that easy to talk freely about until the transaction closes here, Don. But clearly for us it will be the technical compliance to our standards. Not saying that it’s bad or they haven’t done a good job. In fact, we’re quite complimentary of the work they’ve done. But there will be some things that we will focus on: drilling, infill drilling, metallurgy, confirmation plant design, ultimately of the way that we would operate the asset itself.

So nothing significant, but it will take us a bit of time to do those studies. The permitting obviously will be a key limiter to bringing that into production. So making sure that all the baselines are done and all the baseline studies are completed to a standard required in Nevada will be important, et cetera, et cetera. So a lot of it’s normal course, I’d say, but it will take us a bit of time to get there and that’ll be the priority.

Don DeMarco (Analyst at National Bank Financial)

Okay, and then just a final question. At Seabee, you know, we saw very strong grade performance in Q3, so how should we think about grade and throughput in Q4 and into 2027, you know, particularly as Santoy and Porky development progresses?

Rod Antle (Executive Chairman)

Look, for the remainder of the year, we did hit level 41, which was the grade pop. And that’s why that is really what underpins the quarter four performance, which will give us the higher production rate. So that was a great job by the team to have the development rates completed earlier in the year to give us access to that. Next year, obviously we’re going through the budgets now. These spikes, as you know, aren’t normal course. I wish they were.

I wish we had a lot more of them, but that’s part of the work we’re doing at the moment is to identify are there other structures within Santoy that might present themselves as another area of high grade, but it will go back to sort of more reserve grade moving into 2027. And then once we complete all of the work on Porky and then present it to our board for approvals, we’ll obviously update the market on some of the questions you’re asking in terms of how that plays in, what year it will come into production, what needs to be done, what’s the grade profile, how does it add to production, et cetera. So that’s a bit of a work in progress still.

Don DeMarco (Analyst at National Bank Financial)

Okay, thanks. Okay, well, thanks for taking my questions and I’ll just jump back in the queue.

Rod Antle (Executive Chairman)

Good on you. Thanks, Don.

OPERATOR

The next question comes from Steve Green with TD Securities. Please go ahead.

Steve Green (Analyst at TD Securities)

Good afternoon, guys. Most of my questions have been answered, in particular the math around Q4 at Marigold. But just to confirm, I can understand why, given a strong Q4, you expect to make firmwide company guidance. Can you confirm, do you also expect to make the mine guidance at Marigold, the lower end of the range at 170?

Rod Antle (Executive Chairman)

You mean in terms of production? Yes, that’s the plan, which will all be dependent on the inventory drawdown.

Steve Green (Analyst at TD Securities)

Right. Okay, great. And just lastly on the hedges, you mentioned the hedges rolling off this year. Do you have any in place yet for 2027 on diesel?

Michael Sparks (Chief Financial Officer & Executive Vice President)

Not at this time. So we’ve been actively watching the market and we’ll continue to do so as we move forward. With the elevated pricing, it hasn’t opened up an opportunity to put in something that makes sense to this date, but we’re actively watching it.

Rod Antle (Executive Chairman)

Yeah, I think what we’re hoping for, Steve, beyond the impacts of the midterms here in the US today and moving to a more level playing field hopefully in the next week or two, when some of this noise gets out of the system, we’ll start to see what the next year looks like from diesel and then we’ll make our decisions based from that point. But I think we’re all hoping we’re going to get some relief.

Steve Green (Analyst at TD Securities)

Okay, great. And just finally, just quickly, you mentioned the solution flow rates. You put infrastructure in place that you recently commissioned to increase at Marigold the solution flow rates. Is that a Q4 thing? When did that come in? When was that commissioned?

Bill MacNevin (EVP Operations and Sustainability)

It was during Q3. We finished. The key to it was two things. One was the carbon columns commissioning that we did towards the end of Q3 and also the retention pond. So we upgraded the pond so we had more ability to recycle solution around the system and capacity. So they were all done towards the end of Q3 and that then allowed us to increase the solution flow rates to the various areas around Marigold.

Steve Green (Analyst at TD Securities)

Okay, great. That’s helpful. Thanks everyone.

Rod Antle (Executive Chairman)

Good stuff. Thanks. Thanks, Steve. Appreciate it.

OPERATOR

This concludes the question and answer session and today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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