Coeur Mining Q3 2026 Earnings Call Transcript

Coeur Mining (NYSE:CDE) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Coeur Mining reported a sharp year-over-year increase in gold production and cash flow, driven by the new New Afton and Rainy River operations.

Operational challenges included weather impacts at Rainy River and Palmarejo, and a conveyor belt failure at New Afton.

The company ended the quarter with $1.2 billion in cash, returning $111 million to shareholders via share repurchases.

Full-year guidance remains intact, targeting the low end, with expected record adjusted EBITDA exceeding $2 billion and free cash flow over $1.3 billion.

Rochester’s crusher circuit delivered record performance, while Las Chispas and Kensington showed steady operational improvements.

Adjusted EBITDA was $448 million, with a margin of 46%, despite lower realized metals prices.

Capital expenditures reached $145 million, with free cash flow at approximately $240 million.

The company is prioritizing returning capital to shareholders and maintaining a strong balance sheet, with total liquidity over $2.1 billion.

Future outlook includes significant production and cash flow growth, especially from New Afton and Rainy River, heading into 2027.

Full Transcript

OPERATOR

Good morning everyone and welcome to Coeur Mining Third Quarter 2026 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation there will be an opportunity to ask questions. To ask a question you may press star and then one on your touchtone phones. To withdraw your questions you may press star and two.

Please also note today’s event is being recorded. At this time I’d like to turn the floor over to Mitchell Krebs, Chairman, President and CEO. Please go ahead.

Mitchell Krebs (President and CEO)

Hello everyone and thanks for joining our call to discuss our third quarter results. Before we start, please note our cautionary language regarding forward-looking statements and refer to our SEC filings on our website. Starting off on slide three with some highlights from the quarter, the company delivered sharp year-over-year increases in gold production and cash flow with the addition of the New Afton and Rainy River operations beginning in late March. The quarter was lighter than expected given lower metals prices and a handful of operational challenges, which were partially offset by strong performance at some of our other operations.

Mick will provide more details in a few minutes, but a few quick highlights were Wharf’s continued progress toward returning to steady-state levels, Rochester’s record crushing rates, and the great advances made at both New Afton and Rainy River with their respective ramp-ups. On the challenges front, wet weather during the quarter slowed down open pit operations at Rainy River and also contributed to a delay in mining of higher grade areas at Palmarejo, while unplanned downtime at New Afton due to a conveyor belt failure late in the quarter temporarily slowed down their progress.

All that said, we ended the quarter with $1.2 billion of cash after returning nearly half of our quarterly free cash flow back to stockholders through $111 million of share repurchases, bringing the total amount to over $230 million since mid May. We remain on track to deliver significant increases in production and cash flow in the fourth quarter to end the year around the low end of our production guidance ranges, with expected record full-year adjusted EBITDA exceeding $2 billion and free cash flow topping $1.3 billion, assuming current prices, roughly double last year’s levels.

Looking ahead to 2027, we anticipate delivering another record year, mostly driven by full-year contributions from Rainy River and New Afton. Mick, over to you.

Michael Routledge (SVP & Chief Operating Officer)

Thanks, Mitch. As Mitch noted, the quarter included a mixture of solid progress and some short-term operational challenges. However, I’m pleased with how we’ve managed the integration of our two new Canadian operations while safely and efficiently addressing these challenges to enable the company to hit the fourth quarter with positive momentum to deliver a strong finish to the year. Referencing slide 4, let’s talk about the sites and begin with the Canadian assets. New Afton was impacted by the failure of the main underground conveyor belt in late August, which reduced crush conveyor availability and constrained ore supply to the mill, requiring the team to temporarily mine and process at reduced rates. The conveyor was safely repaired by mid September, with surface stockpiles and lower-rate mining production providing ore during the repair period.

The interruption occurred as the ramp-up was gaining momentum, but ramp-up following the outage has resumed with mining rates achieving and sustaining the 16,000 tonne per day target. The near-term priority is to consistently maintain those mining rates while remaining disciplined with cave draw management as we progress towards higher grade portions of the C-Zone in the east and south. Turning to Rainy River, unusually heavy rainfall slowed Phase 4 open pit mining, causing the operation to process more low-grade stockpiles, which affected third quarter production and correspondingly costs. Underground performance at Rainy River continued to improve during the quarter, with mining rates increasing by 50% to approximately 3,400 tonnes per day. The underground operation was targeting 5,000 tonnes per day by year end, and the team are already hitting those levels for short periods, with additional development and infrastructure work planned to provide more work fronts to consistently sustain those levels.

Towards the second half of 2027, the team at Rainy River continues to progress open pit mining, advance Phase 5, and stabilize underground performance at the higher targeted rates while rebuilding stockpile flexibility to maintain strong mill throughput levels during quarter four and into 2027. Moving to our five other operations and beginning with Las Chispas, the operation continued to perform consistently. Mill throughput in the quarter recorded record levels, offsetting lower-than-planned silver grades, while higher gold grades and carryover inventory supported its solid overall performance. The fourth quarter priority is to complete the transition to a single underground mining contractor, safely improve underground productivity, and deliver a strong finish to another solid year.

At Palmarejo, heavy rains disrupted the delivery of critical construction materials needed for backfilling, reduced backfill capacity, limited access to planned higher grade areas, resulting in lower production despite maintaining some of the highest mill throughput rates they have had in years. With the rainy season behind us, the team is restoring backfill capacity with a target of increasing the contribution from the higher graded Algo area while maintaining the stronger throughput levels we achieved during the third quarter.

Turning to Rochester, the crusher circuit delivered record performance during the quarter, with ore processed through all three stages of crushing reaching 6.8 million tonnes, or 7.5 million short tons. Mining rates also exceeded expectations, even as the team successfully completed the Phase 2A and Phase 2B expansions of Leach Pad 6, which required the operation to generate substantial amounts of overliner material. During the quarter, Rochester’s gold production jumped 39% quarter over quarter as higher grade ore from Phase 2A begins to recover.

Silver is coming off the pads more slowly than expected, which we are closely monitoring as faster recovery rates are key to achieving Rochester’s full-year silver production gains. We continue to manage the blending of higher grade sulphide ore to achieve our respective grade and recovery targets. Moving to Kensington, mining and milling performance improvements partially offset lower-than-planned grades, though ore tonnes increased steadily throughout the quarter, with September delivering Kensington’s strongest operating month of the year. We expect the fourth quarter to continue this trend, supported by higher grades.

Finishing with Wharf, the mine delivered a strong bounce-back quarter, with gold production increasing 28% versus the second quarter. With the completion of the ramp-up of the rebuilt and expanded crusher circuit, we expect the fourth quarter to be Wharf’s strongest quarter of the year. With that, I’ll turn the call over to Tom.

Thomas Whelan (Chief Financial Officer)

Thanks, Mick. Turning to Slide 7, I’ll briefly run through our third quarter consolidated results and provide a few details on Coeur’s financial performance and strengthening balance sheet position as we head into year end. On a year-over-year basis, gold production jumped 45%, revenue was up 77%, adjusted EBITDA increased nearly 70%, and free cash flow was 27% higher. On a quarter-over-quarter basis, we delivered similar financial results despite the operational headwinds detailed by Mick, persistent cost pressures, key working capital adjustments, and lower realized metals prices. Digging further into the details from the quarter, as noted on slide 7, average realized gold and silver prices decreased by 4% and 13% respectively, while realized copper prices increased by 9%. Gold, silver, and copper represented approximately 66%, 27%, and 6% of quarterly revenues respectively.

Our revenue mix from the U.S., Canada, and Mexico was a very balanced 34%, 36%, and 30% respectively. Adjusted EBITDA totaled $448 million with an adjusted EBITDA margin of approximately 46%, which was 2% higher than Q2. GAAP net income was approximately $109 million, or $0.11 per share, despite a $190 million increase in quarterly amortization year over year representing $0.18 per share, driven by the purchase price accounting for our new Canadian assets. The quarter included a non-cash purchase price accounting impact of approximately $40 million, primarily associated with the fair value uplift of Rainy River’s acquired stockpile inventory.

This brings the total year-to-date impact of this non-cash accounting adjustment to $265 million. In addition to the direct and significant impact on our P&L and EBITDA, this accounting treatment has led to a material increase in reported CAS to the tune of approximately $580 per ounce, to our year-to-date consolidated adjusted gold CAS of $2,191 per ounce on a year-to-date basis. The impact is even more acute when looking at Rainy River’s year-to-date adjusted gold costs of $3,497 per ounce for the year, of which approximately $1,650 per ounce relates to this accounting treatment.

We are pleased to report that the impact from this inventory-related non-cash accounting item is now substantially complete. Our third-quarter adjusted costs applicable to sales for gold and silver decreased approximately 16% and 1% respectively. Gold and silver costs improved quarter over quarter, primarily reflecting the production mix and the decreasing impacts related to the aforementioned fair value uplift of the acquired inventory related to Rainy River. At New Afton, copper adjusted costs applicable to sales increased in tandem with the lower quarterly copper production related to the conveyor belt failure.

As highlighted on slide 8, underlying inflationary pressures remain present across labor, consumables, and contractor costs. One easy-to-understand inflationary impact is diesel costs, which represent about 10% of our total operating costs. While diesel prices are 32% higher than we planned, adding approximately $30 million to our direct costs, the overall expected impact for the year is less than a 2% increase in our annual total direct costs. Quarterly cash flow from operating activities totaled approximately $386 million, a 25% decrease from the previous quarter, driven by lower prices and $50 million of working capital adjustments relating to timing of interest expense and annual insurance premiums, which we elected to fully fund during the quarter. Capital expenditures peaked during the quarter at $145 million, resulting in quarterly free cash flow of approximately $240 million. It was great to once again see all seven mines continue to contribute meaningful free cash flow despite some of the short-term operational headwinds Mick covered.

As shown on slide 7, the balance sheet has become a strength of the company. We continue to execute aggressively on our return of capital strategy with 46% of quarterly free cash flow used for stock repurchases. Cash increased to approximately $1.2 billion and we have total liquidity of over $2.1 billion, providing us with the flexibility to continue evaluating repurchases alongside organic investment and other capital allocation priorities. Two important final notes on the balance sheet: we were pleased to come to a swift resolution of the insurance claim at Wharf related to last year’s fire incident, which is set to provide an additional $70 million of cash during the fourth quarter, and we also look forward to paying our second semiannual dividend during the fourth quarter.

Turning to guidance, as shown on slide 21, Mitch mentioned our expectation of landing near the low end of the full-year guidance ranges for gold, silver, and copper production, and as a result we anticipate full-year adjusted costs applicable to sales to be near the upper end of guidance. We also want to highlight that cash taxes, capital expenditures, amortization, exploration, and G&A are all trending toward the low ends of their respective guidance ranges.

One final comment relates to our integration efforts. We are extremely pleased with the significant progress made through the first six months since we closed the New Gold transaction, with many key functions already fully integrated and working well. With that, I’ll now turn the call back to Mitch.

Mitchell Krebs (President and CEO)

Thanks, Tom. As we approach the end of the year, we’re focused on safely delivering the key drivers of our strong expected fourth quarter, as highlighted on slides 11 and 12, to deliver record full-year results and to leave us well positioned for an even stronger 2027. With that, let’s go ahead and open it up for questions.

OPERATOR

At this time we’ll begin the question-and-answer session. To ask a question, you may press star and then one on your touchtone phones. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys. To withdraw your question, you may press star and two. Once again, that is star and then one to join the question queue. We’ll pause momentarily to assemble the roster. Our first question today comes from Wayne Lamb from TD Cowen. Please go ahead with your question.

Wayne Lamb (Analyst at TD Cowen)

Thanks, guys. Maybe at New Afton, a bit of an event this quarter with the conveyor. Just on the commentary regarding the mining rates to the 16,000 tons per day level since the conveyor repair, does that imply that you’ve reached the run-rate level ahead of the prior guidance by year-end? And is that being realized on the processing side, or are there still bottlenecks at the mill that have to be optimized?

Mitchell Krebs (President and CEO)

Yeah, I think—hi Wayne, it’s Mitch. Last quarter we said the target was to get up to that 16,000-ton-a-day daily mining rate by the end of October, which is basically what we accomplished despite the short-term disruption of that conveyor belt failure. But Mick, do you want to provide any other color?

Michael Routledge (SVP & Chief Operating Officer)

Yeah, it was a great effort by the team. They did some work during that down to make sure that it was a smooth ramp-up after the shutdown. And we got back up to that 16,000 run rate pretty quickly and steadied out at that level.

OPERATOR

And our next question comes from Cosmos Chu from CIBC. Please go ahead with your question.

Cosmos Chu (Analyst at CIBC)

Thanks, Mitch and team, for a very thorough presentation. As you mentioned, Mitch, Q3 was a bit of a transitional quarter. There were a few headwinds that happened, but as you mentioned, you’ve kept your annual guidance intact. But that would imply a 29% increase to gold in Q4 and 36% increase in silver, quarter over quarter in Q4. I know on slide 11 you list out the different drivers, but essentially you’ve listed out all the different assets and how things will get better in Q4.

But is there one or two key drivers that would allow you to increase production by a fairly large margin in Q4? Again, 29% for gold and 36% for silver. Are there one or two or three or four key drivers in terms of the assets?

Mitchell Krebs (President and CEO)

Yeah, thanks for the question, the right question to ask. We totally agree about the fourth quarter—expected to be a big step up from the first three quarters of the year and should be record territory for the fourth quarter and drive those record full-year results. And you mentioned slide 11, which I agree does a good job of highlighting where we were through the nine months versus our full-year targets, and again pointing to the low end of those guidance ranges.

I’d say the ones that stand out most, Cosmos, in terms of a big step up in the fourth quarter—we already talked briefly about New Afton. Just where they were in the first two quarters since the transaction closed versus the fourth quarter, that’s a big step up. But I think through the combination of the higher sustained mining and milling rates, a slight step up in the grade profile, you know, that combination makes us feel good about the trajectory there for New Afton.

And then you’d point it, I guess, at Rochester. Clearly they need a big step up and we have the ingredients in place there to deliver a very strong fourth quarter in terms of strong crusher performance, better grade, closer to liner. Mick did flag the sulfide material that we’re encountering at the bottom of the pit there, and that’s something we’re managing and keeping a close watch on. But Rochester clearly needs a strong fourth quarter. But that’s the plan and we’ve seen that happen there before when those ingredients are all in place.

Palmarejo I point to as well—that’s a big step up. But given the grade challenges they’ve had, especially in the third quarter with some of the headwinds that Mick mentioned and those now largely being behind them, that offers, you know, an opportunity for Palmarejo to show a step up here in the fourth quarter. And I’ll just put a plug in for Kensington as well. Just driven by grade, that’ll be a big fourth quarter for them, you know, up into the 30, 30,000 ounce range territory.

But they’ve got a good plan that they’re executing on to deliver that. So those are the three or four that stand out mostly to me in terms of the big step up here to deliver the kind of fourth quarter that we’re expecting. Any others that you—

Michael Routledge (SVP & Chief Operating Officer)

I wouldn’t forget about Wharf as well.

Mitchell Krebs (President and CEO)

Oh yeah, yeah, good one. Just with Wharf, obviously been building up each quarter here on the back of the crusher upgrades and repairs that they did earlier in the year. And between those higher crushing rates and placed ounces already on the pad out there, fourth quarter will by far be the best quarter of the year at Wharf. And that would give us another boost here in an overall—or it should be an overall—strong fourth quarter. And it’s a portfolio approach, right.

It’s not like any one mine is delivering this big step up. When you have seven operations, you can kind of use the power of the portfolio from across the sites to deliver on those big expected step ups.

Cosmos Chu (Analyst at CIBC)

Great. Maybe focusing a little bit on Rochester—as you mentioned, the proportion of sulfide versus oxide ore, I guess, has had a bit of an impact in terms of the length of leaching, at least for the silver production. Could you remind me what’s the sort of optimal mix in terms of oxides versus sulfides? And I guess, you know, the other key highlight is that the sulfidic ore might be slightly higher grade, so there’s that trade-off as well. So how do you manage it?

What’s kind of like the best mix in terms of oxide versus sulfide ore? And are we going to see that in Q4?

Mitchell Krebs (President and CEO)

Yeah, it really depends on where we’re mining and when, in terms of encountering some of that sulfide material at the bottom of our pushbacks. Third quarter, I don’t know the exact percentage—maybe you do—but from time to time we will encounter some of that sulfide material, which you’re right, Cosmos, contains higher-grade material. Best thing to do is to blend that in and manage the overall grade profile that’s going out onto the leach pad without compromising recovery rates.

So, Mick, anything you want to add, more detail?

Michael Routledge (SVP & Chief Operating Officer)

Yeah. So the team try and limit the percentage of sulfides to 0.7% as a maximum. We’re actually targeting 0.3% at the moment. And the material that’s on that pad is at about 0.3. So we’re just watching that closely, managing pH levels and other things to make sure that that blend is the right blend for recovery of the silver. The silver is there. It’s just a matter of timing. Cosmos, that you mentioned. It’s about the recovery curve and how flat that is depending on the level of sulfide that we have.

Kaz (Analyst)

Thanks, Mike. So really not a lot of synthetic ore within the ore mix at this point in time.

Michael Routledge (SVP & Chief Operating Officer)

Generally 10%.

Kaz (Analyst)

Perfect. Maybe turning, you know, switching gears to Palmarejo. You know, as you mentioned, Mitch, lower grades in Q3. If I were to just take a look at your Palmarejo guidance for the year, grades will really have to jump in Q4 to hit guidance for the year. Could you maybe talk about, you know, is that a possibility in terms of that increase in grade in Q4 versus Q3 or. You know, Mitch, as you mentioned, this is a portfolio approach. So you’re not really looking at just Palmarejo.

You’re looking at maybe other assets outperforming to offset some underperforming assets. Is that how we should look at, you know, 2026 guidance?

Mitchell Krebs (President and CEO)

Yeah, dare I say both are true? Definitely. The benefit of having multiple assets allows you to have some positives and some negatives. But as we think about Palmarejo and we were just down there, you know, the challenges that they had in the third quarter with the wet weather and some of those construction materials that allow them to do the backfill to get in and mine some of these higher grade areas, you know, that just got deferred into later here in the fourth quarter.

And so the team’s executing the plan to get in there and start mining in those areas to give us that grade kick along with what’s been great mill performance, running really at record levels down there to give them a strong boost here heading into the end of the year. Mick, anything you want to add to that?

Michael Routledge (SVP & Chief Operating Officer)

I think it’s just getting on top of the geotechnical aspect now that we’ve got good supply of consumables and then getting back into that central area of Hidalgo that gives you that grade bump.

Kaz (Analyst)

Great. And then maybe one last question, easy one, you know, great to see, not great, but it’s good to see that the insurance money is coming in in Q4 for Wharf, the $70 million. I don’t think there’s any tax implications. Am I correct? Should I just put $70 million into my Q4 cash flow and that’s all good.

Thomas Whelan (Chief Financial Officer)

There would be tax implications, but offset by our guide. Our guidance stands right in terms of cash taxes. You know, paid about 290 million bucks through the first three quarters. And again I tried to reference that expect overall cash taxes to be at the low end of the guidance for 2026. So and that was all reflected in our updated numbers.

Kaz (Analyst)

So that’s inclusive of that insurance, that money that’s coming in. So we need to tax effect that insurance money.

Thomas Whelan (Chief Financial Officer)

Again, in doing that on a one-off basis, you got to remember the whole portfolio and in the US you file one big consolidated tax return. So again it’s probably a little, I wouldn’t worry about tax affecting that. I would just make sure you’ve got the right cash tax number for the year. And again trying to tie that into the low end of the guidance that we provided for cash taxes.

Kaz (Analyst)

It’s always fun to talk about taxes. Thanks Mitch, Mick and Tom for answering my question. Thanks.

Mitchell Krebs (President and CEO)

No thanks, Kaz.

OPERATOR

Our next question comes from Joseph Rigor from Roth Capital Partners. Please go ahead with your question.

Joseph Rigor (Analyst at Roth Capital Partners)

Hey Mitch and team, thanks for taking the questions.

Mitchell Krebs (President and CEO)

Yeah. Hi Joe.

Joseph Rigor (Analyst at Roth Capital Partners)

I guess, hey, I guess following on where Cosmo started on the guide and the implication of this very strong Q4, was there any consideration given to potentially lowering the guidance or maybe can you talk to why you guys decided not to other than to just guide to kind of the low end given that now you need the strong quarter to kind of get there and maybe that might have given the market a better barometer what the downside risk is.

Mitchell Krebs (President and CEO)

Yeah, I guess. Fair question. You go back to September and the Colorado Springs conference. We took that as an opportunity to give, you know, a good operational update. And that was on the heels of adjusting guidance in Q2 coming out of the gates with the first quarter at New Afton and Rainy River. We modified the guidance at both of those locations. And so then we took a look going into the Mining Forum of Americas and said look, are we still good on the updated guidance at New Afton and Rainy River?

Yes. The legacy operations, are we still on track to at least land at the low end of the guidance ranges? And we felt like we were confident in the ability to do that. So we’ve just maintained the guidance ranges and have pointed people to target the low end. So that was the kind of the thought process there, Joe.

Joseph Rigor (Analyst at Roth Capital Partners)

Okay, that’s fair enough. And then the other question I had was just on the buyback, can you give any color on how much that was done after you kind of knew about the operational challenges and then how much was autopilot buyback that you guys didn’t, you know, discretionarily spend versus, you know, active decisions to buy back just because, you know, given the amount that was spent and what the quarter looked like, it feels to be a mismatch.

Thomas Whelan (Chief Financial Officer)

Yeah, we don’t really talk about buybacks by, you know, months or anything like that. It’s actually in the 10-Q. There is that detail. But again, and sorry, you’re catching me cold on the exact number, but we do disclose what it was by the quarter. Again, I wouldn’t say we upped the buyback activity per se. What we tried to do when it comes to the discretionary portion is really take advantage of down days. And so that’s primarily when we executed, on the down days during the quarter.

Joseph Rigor (Analyst at Roth Capital Partners)

Okay. Okay. It sounds like the rest of it was not very discretionary. So that answers the question. All right, I’ll turn it over. Thanks for answering the questions.

OPERATOR

Our next question comes from Harrison Reynolds from RBC. Please go ahead with your question.

Harrison Reynolds (Analyst at RBC)

Hi, good morning team and thanks for taking my questions and appreciate the detail provided so far. Wondering if there’s any incremental commentary on mining rates and grade reconciliation. Specifically, as you look at the October results you’ve had looking at New Afton and Rainy River, how they’ve progressed and separately, are there any other residual weather impacts to note that have drifted into Q4?

Mitchell Krebs (President and CEO)

Yeah, I’d say we started the fourth quarter on plan. So that’s an encouraging sign that we’re trending toward where we think we will by the end of the year. As far as weather, you know, when we were just down in Palmarejo, the rains seem to have just started to barely subside. So that was trailing a little bit into mid-October and now that that seems to be the rainy season as usual behind them by mid-October or so. Up at Rainy River, you know, that wet weather that slowed them down in the open pit also behind them and has been really for most of October and now the same is true heading into November.

So I’d say the wet weather that we experienced is behind us now at both of those places where it hit us a little bit in the third quarter.

Harrison Reynolds (Analyst at RBC)

Got it. And then, and just to follow up on the buyback question, you know, looking at $111 million in Q3 at the current share price, do you expect to accelerate the buyback pace and what’s the latest thinking on the right split between buybacks and other uses of capital here?

Mitchell Krebs (President and CEO)

Yeah, yeah, we’ll take the same approach that we’ve taken since mid May of, as Tom mentioned earlier, being opportunistic when we think the stock represents, you know, great value and still have that programmatic aspect of the program, you know, continue to chip away even during blackout periods. As far as, you know, can’t predict the future. But we’re not, you know, in the business of announcing a big buyback program and then not doing anything about it.

And I think what we’ve done in the first two quarters since the board authorized that $750 million program demonstrates that. And I think this quarter we talked about 46% of our free cash flow being returned. I think that was a similar amount in the second quarter. Not that we want to tie ourselves to a specific percentage for the fourth quarter and beyond, but I think you can see that we’re serious about trying to return capital back to shareholders while maintaining a balance of bolstering our liquidity and reinvesting back in the business at the same time.

Harrison Reynolds (Analyst at RBC)

Got it. Great. Thanks for taking my question and look forward to the ongoing progress. Thanks.

Mitchell Krebs (President and CEO)

No, thanks, Harrison.

OPERATOR

Our next question comes from Alex Tarentu from National Bank. Please go ahead with your question.

Alex Tarentu (Analyst at National Bank)

Yeah, guys, thanks for taking my questions. Just got a few follow ups. I know a bunch of this stuff has already been touched on, but, you know, at New Afton, it’s great to see mining rates picking up. They’re hitting your target. You know, Mitch, I think you kind of mentioned grades are increasing as well. But yet, like, you know, I’m applying here, the grades have been lagging a bit so far. Are those where you want them to be now or, you know, are you kind of seeing the grades you want heading into 2027?

Is dilution from the new block zone in line with plan?

Mitchell Krebs (President and CEO)

Yeah, I think. Mick, I’ll let you talk about that in a second here. But as far as what the grades are for where we are in that season, you know, we’re right on track. I think we’ve indicated that there’s an expectation that as we get into the south and east portions of the cave, we expect to see a bit of a grade kick even as early as this quarter to kind of help us get to where we want to get by year end and seeing that continue, you know, on into 2027, which should be a much more kind of steady state year there at New Afton.

But Mick, any comments on kind of overall cave health and grade profile as we go forward?

Michael Routledge (SVP & Chief Operating Officer)

Yeah, we continue to manage that carefully, of course, at the start of the grade profile aspects of the cave, it’s developing well or at the right run rates. And the grades that we’re getting from specific draw points are reconciling fairly well to what we expected. It’s really just a matter of time around that ramp up and timing to get across to those higher grade areas.

Alex Tarentu (Analyst at National Bank)

Okay, no, that’s good to hear. All right. And then just another question, Rochester, and we chatted on sulfides already, but I just want to clarify. So like, are these, you know, the amount of sulfides you’re encountering? This is, you know, in line with plan and I understand it’s probably a little bit variable quarter to quarter and you get a few surprises and a few prizes on the negative and the positive side here and there, but generally in line with plan and also the impact on recoveries.

You know, now that this is a, you know, a bigger operation, you’re mining at higher rates. Just wanted to kind of again get a sense of how the recoveries are factoring into your outlook.

Mitchell Krebs (President and CEO)

Yeah, Mick, do you want to cover that?

Michael Routledge (SVP & Chief Operating Officer)

Yeah. So we certainly saw in mine plans that we’re going to encounter some of that sulfide material. It was really expected to be more of a transition zone rather than a bright line. Also, once we got to that area, we saw that the sulfides were really clearly higher and it was a clear boundary. So that’s why we’re managing the blending to less than 10% and managing that maximum limit of 0.7% sulfides and really targeting a lower level than that. So that’s the key aspect of Rochester.

We’ve got the tonnes available from various areas in the pit where we’ve just got to manage that blend to try and high grade as far as we can, because those sulfide materials are the highest grade that we have.

Alex Tarentu (Analyst at National Bank)

Okay, well, it sounds good. It sounds like you have the flexibility to manage that, which is what we want to hear. Last question, Tom, just more of a reiteration. You mentioned some numbers earlier in the presentation about guidance for the year. You recently also said cash income taxes expect to be at the lower end of your guidance. Can you just remind me what you said about capital and a bunch of other items there? Sorry, I just missed your comments.

Thomas Whelan (Chief Financial Officer)

Yeah, so cash taxes at the lower end, capital expenditures at the lower end, exploration at the lower end, G&A at the lower end. So again, all of that factored into the, you know, the culmination of, you know, after adjusting for a more mark-to-market on the metals prices, a free cash flow number of $1.3 billion, which isn’t too shabby for the year.

Alex Tarentu (Analyst at National Bank)

All right, that’s it for me.

OPERATOR

Thanks, Alex. Once again, if you would like to ask a question, please press star, then 1. To withdraw your questions, you may press star, then 2. Our next question comes from John Tomazos, Independent. Please go ahead with your question.

John Tomazos (Independent Analyst)

Hey, Mitch.

Mitchell Krebs (President and CEO)

Hey, John.

John Tomazos (Independent Analyst)

Is it fair to say that Coeur is not looking for too many acquisitions or large acquisitions as we digest the two transactions of the last couple years? And are you looking to simplify the organization in any way or make things easier to manage after having a few bumps in the road?

Mitchell Krebs (President and CEO)

Well, I think it’s fair to say that on the M&A front, we are in a phase right now of heads down, digest, deliver, focus on execution. As you mentioned, between SilverCrest and then New Gold, we’ve added three new operations, and the two new Canadian operations are large operations. And so we want to make sure that we’re delivering and executing on this bigger and better platform that we’ve created over the last few years. So that’s definitely the focus.

That said, you always have to keep an eye out on what’s available that fits with the strategy and could continue to make us a better company. But that’s not the priority right now. And I think with the portfolio constructed the way it is, with, you know, two Canadian assets, three U.S. assets, two Mexican assets, you know, we’re happy with what we have. You know, we’re mindful of the balance across jurisdictions, by asset, and by metal, you know, so we want to make sure that we’re maintaining a nice balance across those three aspects of our strategy.

And so, you know, we’re not looking to change or reduce or modify that structure or the composition of the portfolio right now.

John Tomazos (Independent Analyst)

Thank you. I’m a shareholder.

Mitchell Krebs (President and CEO)

Good. Well, thank you, John. That’s good to know.

OPERATOR

And with that, we’ll be concluding today’s question and answer session. I’d like to turn the floor back over to Mitchell Krebs for any closing comments.

Mitchell Krebs (President and CEO)

Okay. Well, thanks. We appreciate everybody’s time today on a busy reporting day. Just to close out, the company’s never been in a stronger position than it is. We’re on track for a record year, really the first year with this new expanded North American platform. Liquidity levels are building. We’re returning capital to shareholders and really well positioned for an even stronger 2027. And so we look forward to speaking with you again early next year to give you an update on our fourth quarter and full year 2026 results.

With that, thanks and have a great day.

OPERATOR

And with that, we’ll conclude today’s conference call and presentation. We thank you for joining. You may now disconnect your lines.

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