CDE Q3 2026 earnings call transcript, November 5, 2026

Good morning, everyone, and welcome to the Core Mining 3rd Quarter 2026 Financial Results Conference Call. All participants will be in a listen-only mode should you need... The assistance, please send to 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 touch-down 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.

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... 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 Worf's continued progress toward returning to steady state levels, Rochester's record-crushing rates, and... 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 Palmareo, 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...

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 four, 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 push conveyor availability. and constrained ore supply to the mill, requiring the team to temporarily main 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 C-Zone 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 mining. management as we progress towards higher-grade portions of the sea 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 workfronts to consistently sustain those levels towards the second half of 2027. The team at Rainy River continues to progress open-pip into the next half of 2027. Mining advance phase five 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 last 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 Palm Rejo, 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've 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 grade Hidalgo 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 all processed through all three stages of crushing reaching 6.8 million tonnes. or 7.5 million short tonnes. Mining rates also exceeded expectations, even as the team successfully completed the Phase 2a and Phase 2b expansions of LeachPad 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. guidance. We continue to manage the blending of higher grade sulfate ore to achieve our respective grade and recovery targets. Moving to Kensington, mining and milling performance improvements partially offset lower than planned grade. Stoke ore tons increased steadily throughout

the road. 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 main delivered a strong bounce-back quarter, with gold production increasing 28% versus the second. With the completion of the ramp-up of the rebuild 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.

Thanks, Mick.

Thanks, Tom.

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. 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 questions, 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 Cowan. Please go ahead with your question.

And our next question comes from Cosmos 2 from CIBC. Please go ahead with your question.

Thanks, Mitch and team, for a very thorough presentation.

Hi, Cosmos.

As you mentioned, Mitch, Q3 was a bit of a transitional quarter. There was a few headwinds that happened. But as you mentioned, you've kept your annual guidance intact. 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? Is that what, you know, allow you to increase production by, you know, 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? Yeah. 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 record 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 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, that combination makes us feel good about the trajectory there for new Afton. And then you point at, 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. Paul Moreo, I'd point to as well. That's a big step up. But given the grade challenges they've had, especially in the third quarter with the...

Some of the headwinds that Mick mentioned and those now largely being behind them, that offers an opportunity for Paul Moreo 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 up into the 30,000 hours. Uh, range territory, but, um, 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? I wouldn't forget about WARF as well. Oh yeah. Yeah. Good one. Just with WARF. We've 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 WARF and that will give us another. 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. 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 sulfitic 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? Yeah. 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 as from time to time, we will encounter some of that sulfide material, which you're right, Cosmos, contains higher grade. The 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? Yeah. So, the team try and limit the percentage of sulfide. 0.7 is 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.

Thanks, Mike.

So, really not a lot of sulfuric ore within the ore mix at this point in time. 10%. Perfect. Maybe turning, you know, switching gears to Pomarejo, you know, as you mentioned, Mitch, lower grades in Q3. If I were to just take a look at your Pomarejo guidance for the year, grades will really have to jump in Q4 to hit guidance. 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 Pomarejo. You're looking at maybe other assets outperforming to offset some underperforming assets. Is that how we should look at it? Look at, you know, 2026 guidance. Yeah, dare I say both are true. Definitely the benefit of having multiple assets, you know, allows you to have some positives and some negatives. But as we think about Pomarejo 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 great 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?

I think it's just getting on top of the geotechnical. Aspects now that we've got good supply of our consumables, and then getting back into that central area of Hidalgo that gives you that great bump. 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 WARF. $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?

There would be tax implications, but our guidance stands, right, in terms of cash taxes. You know, we've paid about $290 million 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. So that's inclusive of that. That insurance, that money that's coming in. So we need to tax effect that insurance money. 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 fee. So again, it's probably a little, I wouldn't. Worry about tax effecting 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. It's always fun to talk about taxes. Thanks.

Thanks, Mitch.

Thank you for answering my questions. Thanks.

Thanks, Cos.

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

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

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

Once again, if you would like to ask a question, please press star and then 1. To withdraw your questions, you may press star and 2.