Coeur Mining, Inc. Aktie

Good morning, and welcome to the conference call to discuss Coeur's second quarter results. [Operator Instructions] Please note that this event is being recorded today.

I would now like to turn the call over to Mitch Krebs, President and CEO. Please go ahead.

Hello, everyone, and thanks for joining our call to discuss Coeur's second 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 3, Coeur's record second quarter results were driven in large part by the first full quarter of contributions from the recently acquired New Afton and Rainy River operations. Quarterly revenue passed the $1 billion mark for the first time in the company's history on the way to record quarterly adjusted EBITDA and free cash flow. Lower prices, inflationary pressures, below-planned grades at 3 of our operations and the pace of production ramp-ups at Rainy River and New Afton were all headwinds during the quarter.

There was also a $140 million or $0.10 per share noncash impact to second quarter EPS and EBITDA from the acquisition accounting driven by Rainy River's stockpile inventory that's worth highlighting. Off the back of nearly $400 million of quarterly free cash flow, our ending cash balance exceeded $1 billion for the first time in history and is expected to continue increasing rapidly, turning the balance sheet into a significant source of strength. We intend to continue deploying this cash into record levels of exploration investment and into our organic growth projects to help us deliver peer-leading ROIC.

We also showed in the second quarter our commitment to returning capital to shareholders as we began to more actively repurchase shares under the expanded $750 million buyback program in the second half of the quarter, and we paid the company's first dividend in 30 years. The company's growing financial strength leaves us well positioned, which is expected to further increase with a significantly second-half-weighted production and cash flow profile.

Hitting on a couple of second quarter highlights, Rochester out of Nevada achieved an important milestone with a new quarterly record of 6.8 million metric tonnes crushed, a 15% increase over the prior quarter. This progress in establishing crusher consistency and predictability has been a true team effort that deserves acknowledgment. As Mick will walk you through, the team also completed the Phase 2A leach pad expansion during the quarter, leaving Rochester poised for very strong second half silver production given the significant number of ounces placed close to liner. It was also great to see Wharf bounce back with a strong quarter as they return to more normal operations after recovering from damages to the crusher last November.

We issued an exploration update last month, highlighting the ongoing success we're having at our 2 Mexican operations. Recent results at Palmarejo with the continued emergence off to the east and at Las Chispas, with drilling in the Gap Zone and at other new targets underscores the continued impact of our brownfield exploration investments on our efforts to drive higher returns on invested capital. While our 5 legacy operations remain on track to deliver their full year guidance, we recalibrated New Afton's and Rainy River's guidance ranges for the 9 months of Coeur's ownership in 2026.

The Rainy River adjustments reflect a more gradual expected ramp-up in underground production rates this year than previously assumed and the New Afton modifications reflect the rate of cave growth we're seeing since the C-Zone development was completed in April. Mick will provide additional details on the great work being done to safely and sustainably deliver the performance that we expect from these 2 new assets. Meanwhile, I'm pleased to report that our post-acquisition integration efforts are advancing according to schedule.

Before turning it over to Mick, our addition to the S&P 400 MidCap Index announced on June 8 was another example of how our U.S.-based North American platform of 7 well-balanced operations offers investors liquid, high-quality exposure to the positive long-term outlook for gold, silver and copper.

Mick, over to you.

Thanks, Mitch. Coeur's operating results in the second quarter included several important developments that bode well for the strength of our enhanced portfolio as we look forward to the second half of 2026 and beyond. As Mitch mentioned, we saw lower-than-planned grades at Kensington, Rochester and Palmarejo, which are expected to rebound in the second half, consistent with our guidance.

A strong second half tailwind at Rochester, aside from the higher-planned grades is the impressive progress of the crushing circuit, which continues to deliver strong, more consistent performance. Of the record 6.8 million tonnes crushed in 2Q that Mitch mentioned, approximately 97% run through all 3 stages of crushing, highlighting the enhanced efficiency and flexibility of the operation as the crushing train moves further into a consistent operating rhythm. The pace of construction for Phase 2a of leach pad 6 accelerated during the quarter.

Some of you may recall the initial flush of silver and gold production in 2023 following placement and irrigation of first ore close to liner on pad 6 Phase 1. With Phase 2a ore placed exceeding 4 million tonnes through July and growing, we expect a similar spike to underpin strong second half 2026 production at Rochester. Phase 2b of Pad 6 is well on schedule, and we expect it to be completed in Q4 of this year, providing additional capacity close to liner.

Turning briefly to Wharf. The team continued to exceed expectations and complete all repairs ahead of schedule following the fire incident in the crusher building last November. Two contract crushing units augmented ore placement rates on the pads as the repaired Wharf crusher achieved full capacity in May. Contract crushing has been fully demobilized and normal operations have now resumed.

Moving to the Canadian assets. We have continued to work closely with the New Afton and Rainy River teams over the last 4 months on integration and mine plan optimization. At New Afton, the primary focus remains on prioritizing healthy cave growth. Executing disciplined cave draw management in these early days is the most important factor we control to protect the long-term health and productivity of C-Zone. We increased tonnage draw from the western portion of the cave at similar grades to the north draw points, and we are still limiting tonnage from the higher-grade eastern portion of the cave following completion of its construction in April.

Daily mining rates during the quarter averaged approximately 12,000 tonnes per day. We are pleased to report that we saw mining rates tick up further in July, including reaching 14,000 tonnes per day during the last week of the month as we've begun to increase draw rates in the west. We expect to achieve targeted throughput of 16,000 tonnes per day early in the fourth quarter compared to the end of the second quarter as assumed in the original New Gold 2026 budget they approved late last year. As a result, we have refined New Afton's partial year guidance to reflect this prudent approach, which is summarized on Slide 12.

At Rainy River, solid production from Phase 4 of the open pit drove free cash flow of $123 million, the highest free cash flow of any mine in Coeur's long history. Open-pit mining, processing and underground development all performed well during the initial full quarter of Coeur's ownership, while waste stripping activities on Phase 5 of the open pit remained ahead of schedule. It is important to note, we kept the mill full all quarter via the operation's significant stockpile inventory.

We expect the acquired high- and medium-grade stockpiles to be depleted by the end of the third quarter, but we will be building up a new stockpile to provide that important level of flexibility with a goal of keeping the mill full at all times. Second quarter production was affected by lower-than-planned underground mining rates, which reflected some short-term execution challenges with the underground mining contractor. I'm pleased to report that after assuming control of the operation and addressing the gaps we observed, underground mining rates are now on the rise as evidenced in the performance improvements we saw in July.

The gaps did require a relatively modest amount of additional capital and operating costs, that Tom will highlight. However, we are expecting a very quick payback. Just to give you a sense, after averaging 2,300 tonnes per day in the second quarter, underground production rates jumped over 40% to approximately 3,300 tonnes per day in July, and we now expect to achieve our target of 5,000 tonnes per day by year-end versus the third quarter as assumed in the original New Gold 2026 budget that they approved late last year. Revised partial year 2026 production guidance at Rainy River is shown on Slide 13, which reflects the slightly slower assumed ramp-up of underground mining rates.

With that, I'll turn the call over to Tom.

Thanks, Mick. Turning to Slide 9, I'll briefly run through our consolidated financial results. Despite being our second lightest expected production quarter this year, our balanced 7-asset portfolio produced quarterly record financial results off the back of the inclusion of our first quarter of our Canadian assets. Some of the many quarterly records included record quarterly revenue of $1.1 billion, a 27% increase quarter-over-quarter.

Record EBITDA of $478 million despite the $141 million noncash expense related to Rainy River's fair value uplift of the short-term stockpile, which must flow through EBITDA, the P&L and our reported CAS number, and record free cash flow of $388 million or more than $4 million per day, an increase of 45% versus last quarter. Our Canadian assets delivered 45% of overall quarterly free cash flow or approximately $175 million despite both assets being in ramp-up mode.

Our Q2 results did see lower realized gold and silver prices than Q1, particularly in June. We are also seeing some signs of cost inflation, specifically diesel costs, as shown on Slide 11. Slide 8 illustrates the tremendous impact of these accelerating cash flows on our balance sheet. Cash of $1.1 billion at June 30 represents a doubling of the balance versus year-end 2025. We paid out approximately 45% of our Q2 quarterly free cash flow with $110 million of buybacks through June 30, the payment of an inaugural $0.02 dividend and the elimination of $39 million of our higher cost capital lease debt. We exited Q2 with liquidity of over $2 billion, leaving no doubt about our balance sheet strength.

With expectations for significantly higher production during the second half of 2026, Coeur is poised to deliver even higher quarterly free cash flow for the remainder of the year. Based on revised guidance and our updated forecast pricing of $4,000 per ounce of gold, $60 per ounce of silver and $6 per pound of copper, we expect to generate 2026 EBITDA of approximately $2.3 billion and free cash flow of approximately $1.5 billion despite significantly lower assumed metals prices in the second half of 2026 and only 9 months of lower than originally planned contribution from New Afton and Rainy River. What an amazing story.

I wanted to highlight the key changes in our updated guidance on Slide 21. We have tweaked our overall 2026 CapEx guidance at Rainy River to reflect $45 million of Phase 5 capitalized stripping costs previously guided as an operating cost and $25 million of expenditures related to underground development, equipment and infrastructure to assist with the gaps Mick and his team identified. Revised CapEx guidance also includes an additional $15 million at Silvertip for 2026 pre-feasibility study and related costs.

Cash taxes were guided downwards to reflect lower assumed metals prices and lower Canadian taxes. Amortization guidance was also reduced as we completed our initial purchase price allocation for the newly acquired Canadian assets. Adjusted CAS guidance for gold and copper at New Afton increased as a result of the lower expected production. However, it is important to note that we did not see an overall increase in total operating costs at New Afton. Adjusted gold CAS guidance at Rainy River also increased as a result of the lower expected production. We are also expecting a 10% increase in total operating costs or approximately $30 million during 2026 for additional labor, rental equipment and maintenance to address the gaps Mick and his team identified.

I did want to spend a minute on the acquisition accounting related to the short-term inventory, including the significant short-term stockpile at Rainy River that we acquired at the transaction closing. The fair value uplift of the acquired inventory, as required under U.S. GAAP, is an important pointy-headed accounting matter to clearly understand given the magnitude and the pervasive impact it has on our financial results. While the impact is noncash, the full year total will be $244 million at Rainy River and $20 million at New Afton. We want to emphasize this noncash amount must be included in our EBITDA, net income and CAS. During the first quarter, approximately $85 million of the fair value uplift hit our EBITDA net income and CAS.

The Q2 impact was a further $140 million or approximately $0.10 per share, and the remaining $38 million is anticipated to flow through during Q3 as we expect to have depleted the remaining acquired short-term stockpile at Rainy River by the end of the quarter, as Mick mentioned. To give a better sense of the order of magnitude of this noncash impact on our CAS, the Q2 impact at Rainy River was $2,036 per ounce of the total $3,788 CAS per ounce. And on a consolidated basis, it represented $834 per ounce of the total $2,442 in CAS per ounce. I hope that made sense, and I'll get off the accounting soapbox.

We remain extremely excited and proud of this platform we have created as a unique North America-only precious metals producer with the heart of silver. We are set up for a strong second half of free cash flow, continued capital returns and cash accumulation on the balance sheet as we continue to deliver on our strategic plan.

I'll now turn the call back to Mitch.

Thanks, Tom. Before opening it up for Q&A, our key strategic priorities for the remainder of the year are shown on Slide 20. We're looking forward to delivering sharp increases in production and cash flow during the second half that are expected to lead to record full year 2026 results, leaving us well positioned to deliver another record year in 2027.

With that, let's go ahead and open it up for questions.

[Operator Instructions] Our first question here will come from Wayne Lam with TD Securities (sic) [ TD Cowen ].

Just want to understand the reset in the expectations for the New Gold assets after just the first quarter of operation post the combined guidance. Maybe starting with New Afton, what was the previously budgeted time line to get to the 16,000 tonnes per day? Or was the revision here also largely grade-driven? Because I think most had baked in a ramp-up to reach the run rate capacity, but it also seems like a second haircut taken at New Afton now from what New Gold management had previously guided to what was outlined in the combined guidance a few months ago to now.

Yes. Well, we'll start there with New Afton. Thanks for the question. The original plan for New Afton coming into this year was for them to be at 16,000 tonnes a day by the end of the second quarter. And I think what we're seeing now is hitting that level early in the fourth quarter. So roughly 3 months slower than what they came into the year, assuming. And so the reset in the guidance ranges there was driven more by that timing. There's a little bit of a grade differential just as we draw from different parts of the cave in response to kind of how the cave is propagating since the construction was completed in April.

But maybe, Mick, you can go a layer deeper than that?

Yes. Yes. Thanks for the question. It's really about that healthy cave propagation. And with respect to the grades, we're really trying to chop the cave up into 6 main areas that's north and south and then split up into the east and west zones. And that's different grades across the cave. But the key to the start of the cave is really about drawing it and getting it balanced and flat so that it comes down as a block. And where the high grades are really in the south and the east, and we have to draw more on the west and the north at the moment to get the cave to propagate in a flat manner. So as we see that coming to bear over this next quarter, then we'll see the draw rates increase, and we should see the grades improve over that period between now and the end of the year.

Does that help, Wayne?

Yes, that's great. And then maybe just at Rainy River, can you give us a bit more detail on the challenges with the underground contractor this quarter? And again, on the prior time line on the ramp-up to 5,000 tonnes per day and maybe some color on the underground grades as well. And then just wondering, maybe for Tom, if you're chewing through more of the stockpiles at a faster rate, resulting in a greater noncash impact near term on the purchase price adjustment, does that mean that, that noncash impact to CAS goes away at some point soon? Or just -- not sure if I'm thinking about that correctly.

Well, maybe I could -- Tom, I'll try and answer that second question first because it's -- I think, a pretty quick answer, which is, yes, it should go away with the third quarter. I think, Tom, in your comments, you mentioned $38 million or so is expected to roll through the P&L in Q3, and then we should be done, thankfully.

So that's on that, Wayne. Is that good on the accounting question?

Yes, yes, that's good color. Yes.

Yes. Okay. Good. And then just on the Rainy River front, I'll say a couple of things, and then Mick, you can cover more detail. I'd say that those short-term execution challenges were more in the kind of in the tactical realm. As those throughput rates started to climb, you could see some gaps start to surface in things like trucks, personnel availability and some infrastructure-related constraints that will be covered by the CapEx increase that Tom flagged.

But we got in there in April, May, Mick and the team, and the team at Rainy River did, I think, a really good job of identifying some of these gaps as they started ramping up to that next level and put a good plan in place pretty quickly. And it's really nice to be able to see in July the effects of that work as the rates started to climb up pretty quickly, and that's continued here into the early days of August. So that has us feeling really good about the second half ramp-up to that 5,000 tonnes a day by year-end.

And just quickly on the underground grade, open pit grade mix, I think in the second quarter, the underground contributed like something like 9% of total tonnes, and that should be almost twice that in the second half. And those underground grades are almost 3x higher than the surface grades, the open pit grades. So as we see that tonnage come up to 5,000 tonnes a day with that higher-grade impact from those tonnes, that's going to be a nice tailwind in terms of the second half production levels there at Rainy River.

Mick, did I leave anything there for you to...

A couple of bits and pieces. Really, just to say, we're actually really happy with the response of our underground mining contractor and working really well with them hand in glove. The early part of the development of the underground was really focused on those development rates and the contract structure focused on that. Once we addressed that and we ramped up hard on the development, that outpaced the mining rates, which then effectively exposed the other bottlenecks that we had to address. So we got after those with our contractor with a great response, and we're seeing already the uptick in that performance with the contractor, focused now on mining rates to balance that against the development rates. And yes, really, really happy about how that's improving.

Okay. Great. Yes, looking forward to the operational improvements in the back half of the year. Maybe just last one at Rochester. Can you just walk us through the expectations into the second half on the grades and recoveries? I know the quarterly guidance had accounted for some of the lower grade this quarter and a pretty big step change on silver into Q4. But just given the longer cycle for silver recoveries that we've seen in the past, is that still realistic to expect those ounces to come out that quickly as per the guided expectations?

Yes. I'd say the 3 biggies there, Wayne, consistent crusher performance that we're now demonstrating, assume that continues higher. And then you've got the nice mix of higher grades and then close to fresh liner. And those are the ingredients for what should be a pretty dramatic second half compared to the first half.

But Mick, do you want to color there?

And during this first part of the year, we had a lot of material that we had to produce as overliner for the construction of those new pads, and that's at a higher size fraction and it slows that crusher performance down. And so we got through that a lot. We're still producing a little bit of that for the next phase of the expansion. But overall, we're in good shape for that uptick in the second half. There's a lot of tonnes sitting on that new liner that has not even been started to irrigate yet. So looking forward to that.

Nice to see a lot of free cash flow coming through despite the slow ramp-up and look forward to catch-up operationally.

And our next question will come from Cosmos Chiu with CIBC.

Maybe my first question is going back to New Afton here. I noticed that recovery was slightly lower quarter-over-quarter, 85.1% for gold and 90.6% for copper. I guess 2 parts to my question. Number one, as you talked about grade potentially coming back up later on during the year, is that going to help in terms of recovery? And then number two, as you had recalibrated your guidance for the year, what kind of recovery rate are you assuming for the rest of 2026?

Yes. Thanks, Cosmos, for the question. As we go into the second half of the year, and as Mick alluded to, we'll not only see a throughput uptick, but we'll see a grade uptick as well as they start drawing on some of those other areas of the C-Zone, and that should flow through to higher recoveries on both gold and copper relative to what we saw in the first half of the year.

But Mick, do you want to cover that as well?

Yes. You nailed it actually. So those lower grades, it's all really about the cave draw management. As those grades come up, we should see some appreciation in the recovery rates.

Great. And then so is like what we saw in Q1, is that a better sort of run rate? I forget in terms of -- based on the technical report, what kind of recovery rates is expected sort of life of mine for copper and gold?

Yes. The first quarter was -- for us, in our world, was 11 days. So I can't even remember what those recoveries look like for that little snapshot of time. But Mick, do you want to answer Cosmos' question?

Yes. Based on the material that we pulled from the cave, the recoveries actually just did better than met model, in fact. So it's tracking well based on recoveries compared to the tech report.

Great. I guess going to Rainy River here, as you mentioned, as underground development caught up, mining rates are now catching up to those development rates. I guess my question is, you did 2,300 tonnes per day in Q2. Is there any kind of internal targets that you can share with us? Like what were you expecting in Q2 for mining rates to have hit?

And then second part is you're getting to 5,000 tonnes per day or targeting 5,000 tonnes per day by year-end. That's almost double, that's more than double what you did in Q2. What's kind of like that cadence of that increase? You did 3,300 kind of now. Is that a good number to use for Q3? Or how should we think of how that increase is going to be? Is it a straight line? Or is it more parabolic? How should we look at it?

I mean, you're asking for some pretty good precision there, Cosmos. But I'd say the rate of underground production between now and the end of the year is fairly linear and gradual. And that 5,000 tonnes a day is not an average for the fourth quarter. It's sort of -- at the end of the year is where we plan to be. So as you think about building that into your model, it's a pretty steady ramp assumed from where we saw July to where we see December.

Great. Yes, it doesn't hurt to ask, right, Mitch, you can always...

You've got a model to update. I get it.

And then maybe in terms of the pre-stripping of Phase 5, how is that going?

Yes, that's a good news story. I mean, at Rainy, we talk a lot about these underground mining rates, but let's not forget the open pit is doing great. The mill is doing great. They're really hitting their stride on the underground development and now chasing that next bottleneck down into the underground mining rates now that we're on top of. But in terms of Phase 5, pre-strip, that's a good story, right, Mick?

Yes. The strip is ahead of the game, and we expect to get a fair amount of material in the second half from 5 now, which is great as we finish off 4 and then we manage coming out of the 4 pushback, we'll get into 5 before the end of the year and post material. Yes, really happy about the progress there. And the mill -- I mean, the mill is full. We have stockpiles that allowed us to keep the mill full continuously. So yes, we're in good shape.

Cool. And maybe one last question. I see that in your CapEx discussion in your MD&A. You have allocated additional $15 million in CapEx to Silvertip. Any updates there you can provide to us? And what should we be looking for?

Yes. Yes. No, good catch. Good question. Since we talked after the first quarter in early May, we wrapped up the initial assessment, and we've now progressed into a pre-feasibility study. And that was a decision that we made together with our Board in mid-May. And so that extra capital that you flagged there, Cosmos, is really a reflection of us funding that additional work to wrap up a PFS, hopefully, early 2027. Meantime, exploration is fully funded for the year to continue to try and expand the resource. That's really hitting its peak right now here in this third quarter. So that extra capital for Silvertip is really to fund the studies that we're proceeding with.

Our next question will come from Josh Wolfson with RBC Capital Markets.

I appreciate all the disclosures on this call and some of the details for the New Gold assets. It's been helpful. Just sort of going into some of the details there further and looking at maybe some of the impacts on 2027. The company was talking about changing, I guess, the draw of the cave for New Afton, maybe balancing things out a bit more. Would it be reasonable to think if you're balancing things out more, the grades that were previously expected in '27 and '28 that were quite high, might be a little bit more smoothed out versus the rest of the mine plan? Or is that -- is the cave sort of changes more limited to 2026?

Mick, do you want to cover that?

Yes, yes. So at the moment, we're busy rerunning those plans. We'll really know that through Q3 and into Q4 as we set the budget for '27 and beyond. But for the moment, there hasn't been any ore sterilized. We're really just making sure that we balance the cave and we draw from the right points to get that balance. And so my expectation is that we'll see that grade at some point over the next period.

And then similarly, at Rainy, I believe the underground throughput or mining rate was closer to about 6,000 over the next 2 years. Is that still a reasonable ultimate target? And maybe is there some slight ramp-up period we should be forecasting in '27?

Yes. No, good question. I'd say that technical report is a good piece of work. Obviously, it was New Gold's technical report, not ours. And there's still some work that we'll want to do here as we get closer to 2027 on how we see that mix of underground versus open pit going forward. For now, getting up to that 5,000 tonne per day from the underground by year-end and carrying that into 2027 is the near-term plan. But there's still a lot of good work to do there in terms of figuring out what that future looks like at Rainy River because there's a lot of optionality there with the open pit that we want to make sure we're factoring into our thinking as we go forward.

Got it. And then last question, just on the capital allocation side. I mean, good work with the initial buybacks. I noted the high cash balance projected for year-end. In that context, I'm wondering, how is the company thinking about the cadence of the buyback through the approved period? Should we forecast similar levels or rates? Or will it change based on share prices? And then when you think about the cash position and the growth expected, where would the company look to invest in growth that could start to be spent in 2027?

Yes. Great capital allocation question. I'll start, and then Tom, you can certainly chime in. I think we set up a well-designed buyback program with a portion of it just automatically chewing away during blackouts, no matter what. And then we can step in during non-blackout periods and be opportunistic when we see the stock at a point where we think it's undervalued. And so it's going to be driven by that. We don't feel like we have a gun to our head to get through $750 million by a certain date. But certainly, when the stock is weak or is underperforming or on a relative basis, seems undervalued, we're going to step in and be aggressive.

And so as we go through the rest of the year, that's really going to be the driver for the pace of that buyback program. But we feel good about coming out of the gate strong since mid-May and the progress that we've made so far, and it remains a key focus for us as we go forward. And as far as that building cash, that gives us a lot of great financial flexibility to pursue high-return growth, starting with exploration on the brownfields exploration side, we'll keep investing as much as we efficiently can deploy at some of those high-priority sites. So that's right up there high on our capital allocation framework.

The big chunky growth really is driven by K-Zone out there at New Afton, advancing the studies and seeing if Silvertip is a potential new source of -- not that long term or not that far off, primary silver production, Canadian production silver growth. You look out at East Rochester a little bit longer term and you think about what could we do over there to take advantage of the exploration success outside of the Franco-Nevada area of interest there at Palmarejo. And then back to Rainy River, what does the future look like there in terms of potential mine life extensions that could require some additional infrastructure to support a longer mine life. So those are some of the big chunks that come to mind.

Tom, what did I forget?

No, we're really happy with the designed program. We'll be coming out of blackout here on Friday. And if we see opportunities with where the share price is at versus our expectations of value, we'll be aggressive.

And our next question will come from Kevin O'Halloran with BMO Capital Markets.

At Palmarejo, can you just remind us what your goal is in terms of building out that resource inventory outside the area of influence? And then how much production do you expect to shift outside that stream area over the next, say, few years?

Yes. Great question. Been a topic of discussion here a lot, especially on the heels of that exploration release that we put out a couple of weeks ago that shows continued success over there, both further to the east at that San Miguel-La Union, we call it the Guazapares area, which is the furthest kind of to the north and east from where our current operations are. That's a longer-term game. That needs to have additional drilling, additional resource growth.

And then Mick and the team are going to start doing their studies around trade-offs of how much mineralization do we need to consider a potential stand-alone opportunity there longer term? Or in the interim, is there an opportunity to haul material from that Guazapares area back to the Palmarejo processing facility? So that's a work stream that will go on for a while and with additional drilling in the meantime.

The nearer-term stuff, that's the Independencia Sur, the southern -- southeastern extension of Independencia that extends off the Franco-Nevada area of interest. That's the nearer-term opportunity. And I think in the second quarter, we saw something like 50% of our gold production subject to the Franco-Nevada terms. The goal is to look at that Independencia Sur in the next 2 or 3 years as the nearer-term opportunity to start bringing in some gold where we can actually sell it for the market price rather than to Franco-Nevada for $800 an ounce.

So there's a near-term play there to the south and east at Independencia. There's the kind of medium-term play further off to the east in that Guazapares area. And then in between those 2 areas, there's a lot of exploration potential and excitement that we'll continue to fund. And that, in my mind, is then the longer-term play even further beyond the Guazapares. So it's like a whole new chapter to the Palmarejo story over there to the east with some near-term, medium-term and longer-term opportunities.

Great. Yes, lots of potential there. I appreciate that. My other question was just at Las Chispas. You had higher throughput in Q2 and slightly lower grades, although grades were still quite strong. How should we be thinking about the production there going forward? Is there a bit of a trend towards higher throughput and a little bit lower grades? Or was this just kind of typical quarter-to-quarter fluctuations?

Yes. Thanks for the question. They are doing a tremendous job there of being very predictable and consistent and steady. And you look at first half performance versus second half expectations, it's a nice equal balance between the 2, and that's kind of the way we see it continuing into the future.

Anything, Mick, you want to add to that?

Just we have a very healthy inventory stockpile, and that helps us to just balance what we get from the mine and balance the grades and the production rates out so that the mill sees what we needed to see, and we just continue to tick along there.

Okay. Makes sense. And then on the mining unit costs there at Las Chispas, I noticed they were up a little bit in Q2. Was that driven by royalties and the peso? Or are there other factors going on there?

Yes, that's a good one. I don't have a good answer to you off the top of my head. I know there was some stockpile management that was taking place building onto the stockpile.

Mick, is there anything that comes to mind?

Yes. It was just with a little bit lower grade, we pushed a little bit more material to keep hitting the plan, but we expect to be on budget by the end of the year. So it's just really quarterly fluctuations.

And our next question will come from Eric Winmill with Scotiabank.

I think a lot of my questions have been answered, but maybe just one on New Afton and the K-Zone. Any updates there in terms of what's happening? I know you said studies ongoing, but are we likely to see an update, you think, later this year or next year?

And are you talking K-Zone, Eric?

That's correct. Yes, New Afton...

Yes, yes, yes. Yes, there's an exploration piece there and then a study piece. Mick, do you want to take the study piece where we are on that work? And then Aoife, maybe you could chime in with a couple of comments on the drilling that we're doing there.

Yes. We're doing the preparations for an FS. We're getting ready. We haven't got an exact date when we'll kick that off yet, but it will be soon because the engineering and the development, and Aoife will talk about the drill in a second, that's ongoing. So we're resourced and moving forward with that. We have time to do that well, and we're already looked at how we'll do that development to get in the right spot to do the drilling and characterize that ready for the engineering requirements of an FS.

Yes. And on the exploration side there, we're having great results from the K-Zone. We've expanded the footprint by just over 300 meters this year on a base of somewhere around 600 meters initially from the maiden resource shape that was outlined in Q1. So -- and the grades are holding up very well. We're seeing some nice wide, juicy intercepts in K-Zone. So we're very excited to see what comes out here in the next resource update.

Does that help, Eric?

Yes. I appreciate the update. And then just a point of clarity, did I hear correctly, you said you're expecting a PFS at Silvertip probably early next year. Could you release something?

Well, we'll complete it. As to whether we'll release it or not, that's probably something we'll just keep internal and whether there's a thumbs up or a thumbs down at that sort of off-ramp, we'll see what it looks like. Is it worth continuing on to an FS? Probably -- and if it is, and we make that transition into a feasibility study maybe on the back of that work, that's something we would look to release. That gives us a little more time as well for the drilling to keep going and catching up and adding to that resource so that we could put together a really economically attractive project in that kind of a final study.

Okay. Great. And last one for me. I know you're still busy integrating the New Gold acquisition. But in terms of overall portfolio composition, are you happy with the assets? Any thoughts on divestitures or things you might want to add down the road?

No, I appreciate the question. We're happy with the portfolio. Everybody is doing great. Every asset is contributing. The second half is going to be a lot of fun. And on the integration front, the people are great. The infrastructure, these assets are terrific. We couldn't be more pleased with everything. Obviously, we've got a little bit of a timing on the ramp-ups that we've made an adjustment for. But as far as the overall portfolio, no, we like everything we have. We like the North America only. We've got good balance across the 7 assets. And so we're pleased with what we have.

[Operator Instructions] Our next question will come from Brian MacArthur with Raymond James.

But can I just ask a bigger philosophical question? Obviously, this is all about free cash flow. You've given good guidance for the rest of the year, but I kind of want to break it up into Q3, Q4, if I can. If I think about this going forward for EBITDA, you're sort of saying you need -- under your forecast, you need $1.3 billion over the back half of the year, with the noncash stuff coming off in Q4, you've got ramp-ups going on. I assume costs are coming down. Should I think of this as 40-60 between Q3, Q4? Is that reasonable?

And then maybe the more important part of the question is when I go to free cash flow, for your CapEx in the back half of the year, is it evenly weighted? Or is it heavily weighted to Q3 or something so that when we get the Q3 free cash flow number, it ends up being 25% or 30% of your expected back half cash flow? And I know it's a detailed question, but I think it is about leads into how much free cash flow the market is expecting and how much you have available to buy back shares and do everything else.

Yes. No, great philosophical question. I was going to just hand over the call to Tom thinking it was going to be a tax question that you're going to ask, Brian. But on the weighting -- your weighting is probably pretty good between Q3, Q4 on the free cash flow. And typically, CapEx is a little higher in Q3 during the better summer season than -- or weather versus Q4. Tom?

Yes. No, Q3 is definitely higher CapEx than Q4. And don't forget Aoife has gazillion drills going in the third quarter. So it will be the heaviest quarter for exploration. But just look at the production profile that we guided, right, you do see the production steps up pretty nicely in Q3 and then steps up even nicer in Q4. So that should help figure out the geography of the free cash flow growth by quarter as well.

And back to Wayne's question on timing of silver at Rochester, that gold comes out a lot faster in Q3, but Q4 then on the silver at Rochester is where you'll really start to see the hockey stick in the second half of the year out there.

Yes, that's what I was trying to work out because you got all these moving parts and you said up and down there and a couple -- and then I guess the other thing just for EBITDA, so we get rid of the $38 million, as you said, from Q3 to Q4 as well, right? So that will be income statement in Q3, but noncash in Q3?

That's right. Yes, it will be nice to get past that purchase price allocation noise in the third quarter and a cleaner, simpler fourth quarter.

Offset by like, let's -- I know it's accounting noise, but this is great operational flexibility for us to have -- I mean, Las Chispas has proven to be -- it's been great to have that stockpile. And at Rainy, it's been great to have that stockpile. Just apologies for the accounting. We're just -- this is what has been forced upon us, too. And so the pain is almost done, and thanks for everyone's understanding it. All of the analysts did a really good job of understanding this, and thank you.

Great. I was just more concerned about the free cash flow. I guess that's really important.

And this concludes our question-and-answer session. I'd like to turn the conference back over to Mitch Krebs for any closing remarks.

Okay. Well, we appreciate all the great questions and everybody's time today, and we look forward to talking with you all again later in the fall after our third quarter results. Have a great rest of the day and rest of the summer.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Good day, and welcome to the Coeur Mining's First Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mitchell Krebs, Chairman, President and CEO. Please go ahead.

Hello, everyone, and thanks for joining our call to discuss Coeur's first quarter results. I'll kick off with some highlights from the quarter, followed by an update on several key strategic priorities in the wake of the recently completed New Gold transaction.

I'll then turn it over to Tom for a recap of our first quarter results before opening it up for questions with the team who's here with me. Before we start, please note our cautionary language regarding forward-looking statements and refer to our SEC filings on our website.

The highlights on Slide 4 showcase our strong start despite the first quarter being the softest quarter of the year. Our record results also reflect just 11 days of contributions from the recently acquired New Afton and Rainy River mines. First quarter silver and gold production increased 18% and 11% year-over-year, respectively, driving quarterly revenue to a record $856 million. EBITDA increased 12% versus the fourth quarter and nearly fourfold year-over-year to a record $475 million.

We generated a very strong $267 million of free cash flow despite over $200 million of quarter-specific and onetime items that Tom will describe in more detail shortly. These accelerating cash flows continue to supercharge our balance sheet with cash and equivalents increasing nearly 11-fold over the past year to $843 million and growing.

A real shout out to the team for getting us out of the gates cleanly and safely in 2026. The production summary on Slide 5 provides the clearest portrait of what we expect will be a truly watershed year for the company. Among many other positive catalysts on tap, the remaining three quarters will reflect full contributions from New Afton and Rainy River, rising production and cash flow from Rochester and a strong rebound at Wharf now that its rebuilt crushing circuit is back up and running, thanks to a tremendous effort by the team there following a fire in the crusher building last November.

Putting that all together, along with consistent performance from our three other operations and taking the midpoint of our guidance ranges, we expect to produce approximately 750,000 ounces of gold over 20 million ounces of silver and nearly 60 million pounds of copper in 2026.

The two new Canadian operations are the main drivers behind an expected 80% increase in our 2026 gold production compared to last year, while also introducing copper into our metals mix and driving down our overall cost profile.

The plus 20 million ounces of silver production we expect to generate this year represents about a 13% increase over last year, driven by a full year of contribution from Las Chispas, which was added in mid-February last year through the SilverCrest acquisition as well as a further expected step-up in production at Rochester.

This level of silver production should keep us in the top 5 of all silver producers globally and is expected to represent over 30% of our revenue this year based on recent prices. It's also important to highlight that 100% of our 2026 gold, silver and copper production will come from North America with about 70% of our revenues coming from the U.S. and Canada.

A couple of other quick updates. You likely saw on March 23 that we provided a corporate update following the closing of the New Gold transaction that laid out an enhanced financial policy, reflecting our priorities of establishing and maintaining a flexible balance sheet and reinvesting back into our assets, all while returning capital to shareholders through a substantially increased share repurchase program and an inaugural dividend, which Tom will talk more about shortly.

On the integration front, we're very pleased with where we are after 7 weeks since the closing. There's been an incredible amount of planning, effort and collaboration throughout the combined organization, which deserves a big thank you.

The teams are engaging in the work of integrating the two companies, and everyone is excited about the stronger and larger platform we've created and the tremendous potential that lies ahead.

Before turning it over to Tom, one final note for me. We published our 2025 responsibility report on April 15, which is summarized on Slide 23. Coeur's approach has always been grounded in driving sustainable growth and long-term value creation, and we focused this year's report on clearly tying our sustainability priorities to underlying business value. Tom, over to you.

Thanks, Mitch. I'll begin with a brief review of our first quarter financial results as presented on Slide 9. Record quarterly performance in revenue, EBITDA, GAAP net income are just the latest signs of the emerging power and consistency of Coeur's combined portfolio.

Key headline financial results included a seventh consecutive quarter of free cash flow and an eighth consecutive quarter of positive earnings per share. This consistent track record of positive earnings and free cash flow, along with our new dividend policy bodes well for future additional index inclusions.

Our first quarter is always a little choppy with our traditionally seasonally low first quarter operating performance and significant working capital outflows. Add in the complexity of closing a transaction during the quarter, this led to a lot of moving parts in the quarterly results.

We included a waterfall chart on Slide 11, where we called out quarter-specific and onetime items totaling over $200 million. However, with the tailwinds of stronger realized prices and a focus on monetizing the opening inventory balances at our newly acquired Canadian operations, we managed to achieve our second highest free cash flow in company history at $267 million.

Our day 1 integration efforts have paid off, leaving us set up for a memorable 2026 as we emerge as the new go-to North American-only precious metals company.

Slide 8 highlights the incredible turnaround story of our balance sheet with last 12-month adjusted EBITDA increasing by over $1 billion compared to the same point 1 year ago, and overall net cash position, along with the new modernized and materially upsized $1 billion revolving credit facility, the balance sheet and overall liquidity levels are in great shape.

Of note, our cash balance increased by almost $300 million during the quarter, more than offsetting the $272 million of net debt that was assumed at the closing of the New Gold acquisition. I would also highlight that we received multi-notch upgrades from our rating agencies as we completed the acquisition, which is external validation of the immense progress and stability we have built.

A couple of final notes on the balance sheet. The obligor exchange related to New Gold's 2032 bonds that we launched on the transaction closing was completed on April 22. This innovative transaction has allowed us to novate over 96% of the outstanding New Gold notes to become core notes, which will provide significant benefits, including no restrictions on our ability to return capital, additional U.S. tax shield and lower filing and compliance costs.

And on April 30, we repaid the bulk of our remaining $45 million of capital leases early to further reduce our overall interest expense going forward. With our 2026 guidance reaffirmed and using our 2026 budget prices, we expect to generate more than $3 billion of EBITDA and $2 billion of free cash flow, as shown on Slide 7.

Even with only 9 months and 11 days of contributions from New Afton and Rainy River. This overall confidence in the portfolio was the basis of the updated financial policy as outlined on Slide 10 for the company, including our return of capital strategy that we announced on March 23.

As a brief reminder, our Board authorized capital return strategy is comprised of a $750 million buyback program, which allows for the possibility of continuous activity even during blackout periods as well as a discretionary component to allow us to execute repurchases opportunistically based on our underlying share price and valuation.

We look forward to executing on this program following several months of inactivity due to blackouts. And Coeur's Board has also approved an inaugural dividend policy of $0.02 per share semiannually with payments expected in the second and fourth quarters.

This amount was selected to make the dividend sustainable for the long run, even under extreme low case pricing scenarios and allows for potential dividend growth over time.

Two final comments from me. Slide 12 includes our usual snapshot of inflationary pressures that we keep a close eye on every day as we manage the business. In the wake of the recent surge in oil prices, we wanted to highlight that diesel represents approximately 6% of Coeur's total operating costs, and our 2026 cost guidance assumes a diesel price of $3.19 per gallon.

A 10% increase in diesel prices would typically increase our cost by about $10 million, which equates to roughly 1% to 2% increase in our CAS per unit. So while we are not immune to this cost pressure, it is less acute than most people might think.

And during the March 23 call, I highlighted several accounting nuances that impact our CAS guidance with a special focus on the fair value uplift of opening inventory that arise from the purchase price allocation from the New Gold acquisition.

With all of Rainy River and New Afton's Q1 2026 sales coming from opening inventory, the CAS for the quarter at those mines approach current spot prices as required under U.S. GAAP as those inventories were recorded at their fair market value.

As a reminder, the associated $85 million noncash impact on CAS during the quarter from this pointy-headed accounting matter is the same concept that we saw at Las Chispas last year.

Our overall company-wide adjusted gold CAS would have been $689 less per ounce to give everyone a sense of the significant accounting impact of this non-cash item, the champagne problems of having so much opening inventory. This nuance will carry throughout 2026 at Rainy River as we are fortunate to inherit an approximate 2 million tonne short-term stockpile.

We will likely have some tweaks to the final noncash impact of this fair value uplift that we will clarify with our Q2 2026 interim results as we finalize new gold purchase price allocation.

With that, I'll now pass the call back to Mitch.

Thanks, Tom. Before opening it up for Q&A, as shown on Slide 20, our key strategic priorities for the year ahead remain unchanged. I'm very proud to report that Coeur finished 2025 as the safest mining company among our peers in the United States for the fourth consecutive year based on MSHA data.

Congratulations to the entire team for having the courage to care and for always pursuing a higher standard when it comes to our commitment to keeping everyone safe. I'm also extremely pleased to announce that both New Afton and Rainy River received the John T. Ryan Regional Safety Trophy for lowest reportable injury frequency earlier this week at the Annual CIM Conference.

New Afton has received this award 11 out of the past 12 years, while Rainy River is a first-time recipient. Our leadership in the safety and environmental areas are two great examples of how we at Coeur set the bar high and then strive to exceed our expectations.

As we look out over the remainder of the year, we will continue working tirelessly to complete a smooth integration of New Gold and to deliver consistent and predictable performance across our expanded and strengthened platform of seven North American operations.

Another key priority will be to continue bolstering our liquidity while making the transition to returning capital to shareholders through our new share repurchase program and initial dividend policy.

Carrying out the largest exploration investment in the company's history and delivering impactful results from these programs will remain a top focus over the remaining 9 months of the year. This includes continued drilling at the Silvertip project in British Columbia, where the higher silver price, Canada's strong support for critical minerals projects and our own ability to advance this one-of-a-kind silver asset are all coming together to create a potential window of opportunity.

Much work remains to be done, and we look forward to sharing our progress there later in the year after the busy summer drilling season. Starting with this current quarter, we're excited to begin delivering the tremendous potential of the company that we've built through our recent investments in exploration and expansions and two well-timed high-impact M&A transactions.

I can't think of a better positioned company in our sector given our production and cash flow profile, metals mix, growth, geographic footprint, trading liquidity, balance sheet and most importantly, the team to deliver it. With that, let's go ahead and open it up for questions.

[Operator Instructions] First question comes from Cosmos Chiu with CIBC.

Thanks to Tom and team for a very good presentation. Maybe my first question is on the free cash flow. You kind of touched on it, some Q1 specific items, $200 million, and it's in Slide 11.

But could you maybe elaborate on it? I just want to make sure that these are nonrecurring, like it won't come up again in Q2. Maybe it will come up maybe in Q1, the Mexican taxes, but certainly won't be recurring for Q2, Q3 and Q4.

Yes. Cosmos, it's Mitch. Thanks for the question. Mitch. I'll ask Tom to say something here in a second. Just high level, and you referenced Slide 11, which is a great place to talk about this. yes, each first quarter, you're really not going to get away from the Mexican tax payments, the interest and the Rochester property tax. The others were onetime.

I mean the incentive payment is variable year-to-year. Strong performance last year led to a larger annual incentive payment in the first quarter of this year. And obviously, the tax payments were higher than they've been in recent years due to the Las Chispas addition last year and just overall strong performance from both Palmarejo and Las Chispas. But Tom, anything else you want to add to that?

Yes. The only thing I would add is just the way we timed the interest on the notes, those will happen in Q1 and Q3. But the rest are only going to happen in Q1 and obviously, transaction costs that was a onetime.

Perfect. And then maybe if I can ask about the capital return program. And Mitch, great to see the dividend now in place and now the $750 million repurchase program now in place. I went through the MD&A. It doesn't seem like you've utilized the share buyback program just yet.

Is there something -- is that something that you look forward to doing sometime in 2026? Is it dependent on free cash flow coming in, dependent on kind of like Coeur Mining share price levels? And I guess, number one, to confirm that hasn't been used. And number two, will it get used sometime in 2026?

Yes. Thanks for the question. Absolutely, we look forward to enacting that enhanced repurchase program. We've been constrained with blackouts from the New Gold transaction from first quarter. Those now will lift after today. So we look forward to becoming more active here starting in the second quarter and beyond on that repurchase program.

Understood. Sorry to come back to this PPA in terms of purchase price accounting to inventory. But I'm just trying to wrap my head around it. I understand it's been marked up to market and -- but the New Afton number over $4,000 in CAS, again, Rainy River over $4,000 in CAS, that seems fairly high.

So is it going to be -- as we go into Q2, Q3 and Q4, is it going to be dependent on sort of how much is being drawn out of inventory versus how much fresh or you are going to be kind of supplementing the inventory production with.

That's going to be a determinant in terms of what CAS is going to look like each and every quarter. And the -- I guess, 11 days of over $4,000 an ounce CAS was just a function of it being all inventory and maybe just anomaly over 11 days.

Yes, you got it. And no need to apologize for the question. You made Tom's day.

Sure. So let's go asset by asset. So New Afton Think of that is pretty much we flushed everything out there from the opening width and finished goods through that -- those first 11 days. So that $20 million impact, which was $2,560 on the CAS and $310 on copper because it's a co-product, that should kind of be in the rearview mirror.

But again, as I referenced at Rainy, it's a champagne problem. We inherited, just to give you a sense, like 30,000 ounces of gold in finished goods and door balances at the end of the quarter on acquisition and as well as I referenced a 2 million tonne stockpile.

So that's well over $400 million of fair value of gold. And so as I mentioned, we're finalizing that purchase price allocation exercise here in the second quarter as we're allowed to. So $65 million of that flowed through. So there'll be a continuing impact through Q2 and Q3.

And as we get a little bit more visibility on exactly how quickly we'll draw that down and through that stockpile, we'll be able to give you a little bit more guidance. But it's -- I just want to keep going back to. This is just pointy-headed accounting. It definitely impacts our earnings, but it doesn't impact free cash flow.

Great. And maybe one last question. In terms of operations. Q1, Rochester and Wharf were impacted by certain issues, maintenance sort of at Rochester and of course, the fire at Wharf -- just to confirm, it sounds like the issues are behind you.

It sounds like everything is -- all the fixes have now been put in place. And so for Q2, Q3 and Q4, should we expect sort of a more normalized level in terms of tonnage, in terms of throughput at Rochester and Wharf?

Yes, I'll start, Cosmos, and then Mick, you can clean up anything that needs to be cleaned up. If you go back, Cosmos, to the guidance that we put out in February in that investor deck, we laid out the production profile by quarter, by mine. And like for Wharf, you can see the first quarter was by far the weakest and then continuing strength throughout the rest of the year.

And then looking at our results here from the first quarter, you can see Wharf was actually just a little ahead of that profile that we laid out back in February. And so the team has done an amazing job there of getting back up and going. And so we feel good about that continued progression through the remaining 3 quarters of the year to land within that full year guidance range that we put out back in February.

Similar story at Rochester, it was a little ahead of plan when you look at expected first quarter versus actual. When you think about some of the things going on, on the ground there from a crushing standpoint, of course, the first quarter has fewer days in it than any other quarter. There was some scheduled downtime for maintenance. There was a lot of overliner being crushed in the first quarter to go out on to the Phase 2 Stage 6 leach pad.

So a few of those things were going on in the first quarter, but we expect to see things continue to build there as well through the year to land within the guidance ranges that we put out last in February. Mick, anything I failed to mention?

No, perfect. I both say building momentum throughout the year as per that quarterly breakdown in the plan. And particularly at Wharf, team did a fantastic job at that recovery curve and got really a couple of weeks ahead, and we're already right on plan for Wharf for the year.

Rochester, we knew that was going to be a shorter quarter, a little bit less grade, and we see that picking up throughout the year. And yes, right on plan, so we're happy.

Congrats on getting the deal done and a strong start to 2026.

The next question is from Joseph Reagor with ROTH.

Some of them were just answered, but I did have one question, which is probably for Tom. On the balance sheet, the deferred income tax jumped from $300 million to $3.15 billion. I'm assuming that's all related to deferred income tax that New Gold had on their balance sheet previously, but is there anything we should think about there? And then with the accounting around the change in the notes, is there any impact to deferred income account -- deferred income tax accounting?

Well, I'm blushing with all the accounting questions. It was exciting. Thanks. So on the debt, a good suit observation. It's carried on the books at $425 million, but the face value is only $400 million. Again, the rules require you to estimate the fair value. And so just given that higher coupon that those notes bear at 6 versus sort of what our market rate would be, you record that a little higher value.

But the bigger impact is what you talked about that deferred tax liability. So again, this is all driven by the accounting rules. So for the purchase or the mineral interest that we've acquired and all the various equipment, et cetera, et cetera, those -- that's been recorded at a very high value, obviously, as we went through our valuation exercise.

But the tax basis of those assets remains at whatever New Gold's tax basis was. So that creates a difference between the accounting value and the book value. And you just take that difference in those values, multiply it by the Canadian tax rate and there you have it.

So that liability is going to reverse over time, similar to what we saw out at Las as Chispas last year, where we had a large tax liability, and that's just going to reverse slowly but surely as the accounting values and the book values get closer and closer.

But that will take literally 10 years to reverse out. But thanks for the question. I hope I gave you a good explanation. This isn't like additional hidden taxes in New Gold's books or anything like that. It's just driven by the accounting for the purchase price.

That was very helpful. And then just kind of big picture, you guys do have a plan of how to redeploy capital. But if you look at the balance sheet, slightly net cash as of the end of the quarter. How aggressive do you guys want to be on reducing the rest of the debt?

Yes. I think both of the notes, the New Gold notes and then our 5 and 8, pretty low interest, pretty patient, pretty flexible. As you think about allocating capital to the highest returns, those aren't going to be anywhere near the top of the list.

So for now, we're fine and comfortable leaving them alone, letting cash build up a bit, getting to probably a more appropriate level of overall liquidity and then keep looking for ways to reinvest the excess cash back into the business.

We talked about our largest exploration program in company history. So we're being aggressive on that front. We'll look at things like Silvertip, towards the Kay Zone out there in the future. But as far as those outstanding notes, we're comfortable leaving those alone for now at least.

The next question is from Josh Wolfson with RBC.

I guess my questions are on the New Gold assets. I know there's not a huge amount of data here to go through given the short period between closing and the end of the quarter.

First question just on Rainy. Within the data that was reported, production looks relatively good. Grade was lighter relative to what, I guess, the recent tech report would have discussed. I think it was something like 1.2, 1.3 grams and the process material is only 0.9.

How should we think about the quarters going forward? Or is there some change maybe on stockpile processing versus what the tech report says?

Yes. Sure, Josh. Thanks for the question. I'll start and you guys can fill in. But I think on Rainy River specifically, yes, late -- second half of last year, Rainy River had some really high-grade open pit material that drove some exceptional performance in the third quarter and the fourth quarter. Our grade profile this year reflects a lower grade open pit profile and -- but increasing over the year.

And then, of course, the other big theme there is seeing the underground mining rates step up over time and transition to more of a balance in the second part of the year between open pit and underground.

So as far as those open pit grades in particular, yes, a little bit lower, I think, according to plan to start the year, like you said, Josh, very small data set there with just the 11 days, but that should build a bit over the remainder of the year.

Yes. I would -- again, just I would point back to the guidance in February where we gave it by quarter. You'll see actually Rainy should have a bit stronger second quarter than third quarter and then a pretty solid fourth quarter based on the mine plan as it stands. But yes, it's going to be a very significant free cash flow generator and really excited.

And just from a tech report perspective, clearly, the tech report grades are on an annual basis, and we try and break that out into that quarterly profile to help show how we're going to perform from one quarter to the next.

So certainly, from -- after we closed the deal for Q2 to Q4, we expect it to be around the grade profile that was [indiscernible]

Got it. Okay. Good to hear. And then on New Afton, with the C-zone, I guess, final drawbell lot done, how should we be thinking about the ramp-up there? Is there anything you can walk us through in terms of expectations maybe -- I know we have the production volumes, but just maybe more at a high level, just understanding execution risks and how the company is managing that?

Yes. Yes. also a back half year expected there at New Afton on the back of that C-zone ramp-up with B-zone now behind them as of the end of last year. The target there is to be approaching that 16,000 tonne per day throughput as we end the second quarter.

I think we -- we started at the end of March and early April, more around 11,000 tonnes per day. So we'll be targeting that 16,000 tonnes a day here in coming months, and that will drive a much stronger back half of the year there to land within the gold and copper guidance ranges that we issued. But Mick, anything else there?

Yes. Mitch nailed it. But since the close, it's been -- it actually trended up a little bit. So it's definitely gaining momentum. We've got around that 13,000 average post close alone. So it's getting stronger, but we certainly want to get it up towards that 16,000 tonnes per day. I expect that to be in and around the end of Q2, the way it's trending at the moment.

The next question is from Brian MacArthur with Raymond James.

Can I just go back to the -- I hate to do this the accounting again. You talked about how everything at New Afton flushed, which is good. But then you made a comment, too, that you had 30,000 ounces on the books of gold as well as material on the pad at March 31.

Those 30,000 ounces, is that going to be additional cash flow that you liberate out of working capital over the next few quarters, i.e., it's over and above the guidance of production that you've given this year for Rainy River, just so I'm clear on this?

I'll go ahead. No, that -- the guidance includes the monetization of the stockpile and the work in process. So no, they stick with the guidance that's in there. The key, of course, is that those ounces that come out of the inventory are going to be at the higher CAS rate, but it's not obviously going to impact the free cash flow.

Right. So you're just going to bring them out. So it's just -- there's no extra cash being liberated is what I'm really getting at here?

Correct. Yes, correct.

Perfect. Second thing, you also made a comment about with restructuring the new Gold deck, it helped your tax structures. Sorry, I didn't quite hear that clearly. Is that U.S. tax structure? Or by doing that, does that help you on your Canadian side as well?

Again, so this obliger exchange that closed on the 22nd of April. What that does is it will novate the 2032 New Gold bonds out of the Canadian entity and into the U.S. entity. So we'll get that tax shelter in the -- against our U.S. income.

Not the Canadian assets, correct? Just additional U.S. Okay. That's what I was trying to figure out.

And again, this is going to make -- it's going to make the rating agencies' lives easier because they're not going to have to rate two bonds. And most importantly, it's removed -- we've got full financial flexibility around return of capital because if not, it was going to be a little cumbersome to deal with those with those two different indentures.

And so great work by our treasury team to -- and our legal team who executed that extremely swiftly, and we're really pleased to have seen such a large uptick on the amount of folks who took advantage of it.

[Operator Instructions] Next question is from Wayne Lam with TD Securities.

Just a couple of follow-up questions. First one, some really good color that you guys have provided on the overall diesel exposure. But just more specifically at Rochester, that would seem to be where you'd have the most exposure just given the scale of the mine.

So just wondering what kind of cost pressures you might be seeing there, specifically on the energy front. And then just wondering if you had any more detail on the timing of planned maintenance activities on the crusher through the year?

Yes. Thanks, Wayne. I appreciate the questions. Tom and Mick I'll throw it over to you on the Rochester specific diesel question. And then maybe you can also hit Wayne's second question around maintenance timing relating to the crusher out there.

Yes. So on the diesel front, yes, we've got, of course, the biggest exposures are the open pits, so Rochester, Wharf and Rainy River. And -- but the overall impact around the total cost, and Tom can weigh in on the percentages here, but it's not too significant. We're not seeing too much from Q1 flowing through into Q2.

But clearly, we're watching that very carefully. On Rochester's maintenance program, the bigger shutdown is really towards the early part of Q4 of this year, where we're going to do some work around feeders on the secondary of the crusher. After that, which is also built into the profile and the plan. So you'll see that in the quarterly profile. So that projection is accurate.

The rest of them are really just short routine maintenance shutdowns, 1, 2, 3 days to change cores and other bits and pieces that are all planned and will continue each year.

And Wayne, the only thing I'd add is absolutely Rochester and Rainy River are the two assets where we spend the most money to produce all the amazing amounts of gold and silver that we're forecasting.

So -- but we've got a team that are laser-focused on monitoring this robust monthly reviews, cost reviews, kind of looking out ahead, understanding when contracts are expiring to keep a really close eye on that. So I feel really comfortable that we're monitoring it as best we can. And so far, so good.

Okay. Perfect. And maybe just a follow-up on that one, sorry. You said there was maintenance planned in Q4, and that is already baked into the quarterly guidance where you have a big -- a pretty big step change in production in the last quarter of the year?

Correct.

Okay. Perfect. And then I guess my only other question was just on the labor cost front. Again, a lot of good detail on the inflation that you guys are seeing. But just wondering what kind of exposure or maybe a breakout on the labor cost pressures that you're seeing between the U.S. operations versus Mexico?

Yes. I'll start, Wayne. It's Mitch. Just that inflationary cost pressure slide that we have in the deck, Slide 12, that bottom left bar chart that shows the year-over-year increase of something like 15%. A decent amount of that is incentive comp higher year-over-year. I just wanted to flag that.

As far as labor pressures in Mexico versus the U.S., I think where we're seeing it more is in the U.S. context versus Mexico. But Tom, do you want to provide any more detail or context?

Yes. I mean, general levels of turnover, we can recruit and we need to recruit. We haven't got any shortfalls in labor availability, just that general mining turnover and recruitment performance is normal. So yes, not feeling too much pressure there at the moment. And from a cost perspective, as Mitch said, we're focused on that, and we're seeing a little bit of increase in cost, but not unusual for Mexico.

And this is -- the first quarter is the quarter where you implement annual incentive -- or it's not annual incentive, base increases. And so those have happened. And typically, if you really under egg the pudding in terms of salary increases, people get their bonus and then head off the other way.

So I think we're feeling really comfortable for now. And for what it's worth, we do, do a sort of a midyear review just to make sure that we're keeping an eye on labor rates because as we all know, you need the bodies to deliver all this production safely and profitably.

Good point, Tom. And Nick, on the turnover rates, we haven't seen an uptick at all. In fact, we've seen things go the other way.

Okay. Perfect. Well, hopefully, we see the same year-over-year share price performance, so you'll be paying out those incentive bonuses again next year. Congrats, guys.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Krebs for any closing remarks.

Okay. Well, thank you for your time and all the great questions today. We look forward to getting back together again this summer to talk about our second quarter results, which should really start to reflect the power of the platform, and we can share our progress on what should be a record-breaking 2026. Thanks again for your time. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Well, good afternoon. Always fun to be back in Zurich. This third year in a row, Mitch has kind of let me get out and speak to all of you. And I mean it's been just an amazing transformation for this company. I mean, I think folks know the Coeur name well, been around since 1928, New York Stock Exchange listed company.

And we've really transformed the narrative about Coeur, and I can't wait to spend the next 15 or 20 minutes or so just walking you through that transformation. I mean when people thought of Coeur before, they thought of short mine lives, they thought about lousy balance sheets. Not necessarily that balanced of a portfolio.

Maybe the team was pretty weak, but I'm joined today by my colleague, Mick Routledge, 30-plus years at Rio Tinto, my partner in crime as we've helped transform this company, Jeff Wilhoit, Investor Relations guru, well known to many of you as we've transformed not just the business, but our shareholder registry and even our analysts, for example, that list looked very different 5 years ago and happy to have added Cosmos and Wayne Lam from TD in recent times.

So if you need to get up to speed, there's a big selection of folks that you can look to, to get an update. So here's the brand-new Coeur. right? A very unique beast in terms of North America only, 20-plus million ounces of silver, 750,000 ounces of gold and now interestingly enough, 60 million pounds of copper from the New Gold transaction.

When you look at this, I mean, what should stand out to you is that absolutely North American footprint. We like to operate in jurisdictions where you heard from Agnico earlier, you can feel comfortable about the investments that you're going to make. That is a key part of our strategy.

You look at this, you see a lot of balance, too, right? See that mix between Canada, the U.S., Mexico. That was a big attraction for New Gold was to add a big meaningful chunk of Canadian production. Probably my bias is a token Canadian on the Coeur executive team as well to have added that. And -- and then again, sort of that mix, one of the questions we get, are you still in the silver business? Still 30% of silver -- of our revenue will be in silver.

Silver is in Coeur's DNA, always will be and go from there. So again, here's just a summary of kind of what we've been able to achieve in terms of growth. And in particular, I mean, Coeur is now up to a $20 billion market cap on the cusp of some pretty interesting index inclusion as a U.S. listed company. We're pretty unique in that perspective. So right now, there's one gold precious metals company on the S&P 500, that's Newmont.

Our objective would be to become that second New York Stock Exchange listed precious metals company on there. We're on the cusp from a market cap perspective. And the other key piece of this is growth in net income, constantly achieving positive net income. We've done that 7 quarters in a row, and that's another key factor. That S&P 500 is dominated by tech companies.

And I know they're looking for more materials type of companies like ours. So that will be something interesting to watch. One of the reasons why we did these last 2 transactions, we bought SilverCrest announced in '24, closed it in February '25, did New Gold in -- announced in '25 closed just a couple of weeks back was we always thought we wanted to get bigger, but only if we were going to get better.

And both of those assets -- both the company acquisitions made us significantly better. They drove us much further down the cost curve. The mine lives are right in line with what we'd like to have. They're very -- they both were very Coeur-like assets, right? We love to invest in infrastructure, in communities that are -- really know mining and then get after it with the exploration drill bit.

Over the last 6 years, we've invested over $300 million and have really tackled those short mine lives. And again, one of the initial pushbacks on the conversations around New Gold was, geez, those mine lives are pretty short, and I'm going to show you in a second here why we're feeling really good about that.

I mean $3 billion of EBITDA, $2 billion of free cash flow, that is a big -- that's a lot of money to deliver, and we're really confident about that. And for the first time, we can -- after years of investment, our shareholders can now expect to begin to see returns. So we announced our initial return of capital, and I'll talk about that in a moment.

So this slide is a summary of the big announcement that we made on Monday, March 23, after closing the New Gold transaction on Friday, March 20. We debated should we do this -- Jack, we should have called you and asked for your advice, but should we do this one bit of news at a time or drop it all at once.

And we had a lot of confidence that our shareholders can handle all this news at once. But in that news release, we talked about our brand-new guidance for the year. So 12 months of Coeur, which we had previously announced and just 9 months of the New Gold assets. We announced 2 brand-new technical reports.

We had to be ready to have those done by mid-February, which was sort of the earliest that we thought we'd anticipate having it close. Really exciting news on that front with Rainy River now out to a mine life of 2035. So again, that's not a short mine life by any stretch of the imagination. And then the very much anticipated news about the K-Zone -- excuse me, yes, the K-Zone maiden resource, over 45 million tonnes.

Rainy River's throughput rate, 16,000 tonnes per day. That's metric. We've gone metric, by the way, but that's a topic for another discussion, 16,360 a day, let's call it, 6 million tonnes a year, 6 million into 48. You can see we have very much a line of sight to mining at New Afton for the next decade. And I would argue, again, my Canadian bias, but it's one of the best mines in Canada, right in -- just outside the city of Kamloops, great infrastructure, very supportive local community, great indigenous relationships, a place where people want to live and work.

And we've had the pleasure of meeting a few of our new colleagues over the course of the due diligence and integration planning and really pleased to have them added in. And then the updated financial policy that we announced. So basically, the 3 things that you'll see us do in terms of what we're going to do with our cash is we're going to continue to invest in exploration and sustaining capital and growth capital.

Underpinned by our -- what's in our DNA is return on invested capital and free cash flow per share. That will always be our #1 priority. Number two is to actually build up a balance sheet that's with the liquidity that's kind of in line with our peers. A ballpark number to keep in mind is kind of in that 15% to 25% of your market cap. So we're $20 billion now. Obviously, a little undervalued. That number will go up.

And so you see us build up some meaningful cash. We have no reason to be ashamed of building up our cash balance after years of -- I think I signed off 28 quarters. I would say 26 of those quarters, we had less than $100 million in cash. So it will be nice to have that final financial flexibility for when prices do go down, and they will go down. I don't think they're going down anytime soon.

But when they do go down, Coeur will be in a position of strength to be opportunistic, which it's never been able to do in its 90-some-plus year history. And then the last piece is a return of capital. So we received plenty of feedback from shareholders, many of you in this room on what to do with our return of capital, wide divergence, as you might suspect, between dividends and buybacks, and we landed on an initial dividend of $0.02 semiannually as well as a $750 million buyback -- there was maybe a bit of a muted response to $750 million, that doesn't seem like enough.

I'd just remind everyone, 3 years ago, our market cap was about $750 million. So to have gone there, I think, -- it was a really good start and looking forward to that. So just a couple of highlights on the New Afton technical report. You can sort of see that right now, the mine life goes out to 2031. So again, on balance, that looks a little short. But when you see the size of this K-Zone and where it's at, we're pretty excited.

We had the opportunity to obviously be part of the due diligence and had a pretty good sense of where the resource was heading. I think it's fair to say, Mickey, you can back me up on this, that this initial resource ended up being larger than we thought as we were doing the due diligence. So we're really pleased on this. We're continuing to have the drill bits going here for the rest of the year.

We'll launch a feasibility study towards the end of the year. Once that feasibility study is done, you can go into permitting. A couple of thoughts there. Permitting in British Columbia, when it's a permit amendment is actually relatively straightforward, I think 9 to 12 months. That's what New Afton has done each of the previous times that they've gotten a new permit.

So that's one thing to bear in mind is like how much is this going to cost? We don't know. We haven't done the work yet, but the last C-Zone took -- cost about $600 million, just to give you a sense. And so if it's $600 million, it's $1 billion with sort of the free cash flow that we're generating, we're feeling very comfortable about that, and we're really excited about the long-term prospects.

And then what I think will be the gem of this transaction is Rainy River. And Rainy River has had a long shadow. I think it was one of the reasons why we were able to get in and acquire New Gold. It's had a long checkered path. $800 million capital turned into $2 billion. They had to sell Blackwater, had to sell half of Rainy -- New Afton at some stage with Ontario teachers, et cetera, et cetera, and they did a fantastic job to stay alive.

But we're really excited about the potential at Rainy River. Much like Palmarejo open pit then went to underground. They're busy working and improving their underground mining development rates. They were struggling a bit on their own. They brought in Tyson. That's someone we're really familiar with. We brought them in up at Kensington. So we're really excited.

And the other hidden gem here. I mean, they just never had any money to do any exploration. They just had enough -- before Pat got there, I think they had actually given up on the exploration potential. And so they really have come up with a long-term game plan. And again, that's just kind of right in Coeur's -- that's our sweet spot. Take that beautiful 25,000 tonne a day mill and try and keep it fed. And so we're really excited about that.

And these 2 assets will be our #1 and #2 free cash flow contributors during 2026, even though we've only owned them for 9 months. So I've really touched base on the updated financial policy. A couple of small things that we did. We've upgraded our revolving credit facility from $400 million to $1 billion, you might say why did you do that? Was it necessary? I mean my experience is when you get offered the money, you take it.

And so the standby fees on that $1 billion facility are the same as they were on the $400 million facility. And we're happy to add really high-quality banks to the facility as along with the continuing support of others. And then the other thing that we did was -- we'll talk about this in a second around our capital structure. We have $300 million of bonds. New Gold had $400 million of bonds, and we did an obligor exchange, which essentially makes the New Gold bond Coeur bonds.

And that was important to have one indenture, so that does not limit our ability to -- in terms of capital returns. It's going to save us some money as well. So it was kind of a neat transaction. We got 96% uptake on that transaction. That will be closed here in the next week or so. So here's just some of the staggering transformation that we talked about.

And sometimes we kind of have to pinch ourselves. And at times, I think maybe the market still doesn't quite believe us that we're going to deliver this. But you can see that step change in EBITDA from $142 million in 2003 to over $1 billion on its way to $3 billion, negative $300 million of free cash flow.

Obviously, that was on the back of the Rochester expansion, $666 million, $333 million, $313 million of which was in that fourth quarter as metal prices really started rising and that number is going to be over $2 billion with only 9 months. There's that capital structure. I remember being here -- vividly being here met with some skepticism.

I said we're going to be net debt -- we're going to be net cash positive by the end of '26. And sure enough, we did. I mean that is a balance sheet that people will not remember as it relates to Coeur, and we're really excited about that. And again, this is a number that we're also particularly proud about that return on invested capital. So 26%. Again, that's taken from Bloomberg.

That's not a non-GAAP measure. You can go look it up yourselves, that's peer-leading, right? We've been driven by that. Mick and I are compensated by return on invested capital and free cash flow per share. That's in our long-term comp. So that's what we're driven. We use that with our -- all of our conversations and to have achieved that level of peer-leading ROIC is extremely rewarding and really exciting. That's a lot of numbers.

We've got 7 mines now, so we got to spread the wealth on that exploration, almost $170 million investment coming. One of the great things that we've done in the last few years is really fix that exploration triangle. You need to have opportunities throughout your exploration pipeline to really make sure that you're continuously replacing reserves and growing your inferred pipeline.

We've done a really nice job. East McGrath joined us a few years back and has helped us really get that in good shape. And so the 2 largest allocations of capital are Las Chispas. Again, maybe one of the criticisms, oh, I thought Las Chispas is only going to have a 7-year mine life, and that's it. Here we are year 1, we already replaced what we mined the previous year. And then the other one is Silvertip, and Silvertip is our exploration project in Northern British Columbia. -- where we're investing a lot.

We just -- we kicked off an initial PEA last year. That work has wound up. Mick and I are presenting to our Board in May, ask for permission to move to PFS. I don't want to get ahead of the Board. But obviously, with this higher silver price environment, all of the work that we've done, we're starting to get pretty excited. And just to give you a sense of order of magnitude of what that could look like, Silvertip's 11 million tonne resource, 300 grams silver. That's -- if you take 2,000 to 3,000 tonnes a day, that's 6 million to 8 million more ounces of silver.

So again, back to that comment about silver is in our DNA. That gets us pushing almost 30 million ounces of silver. So definitely a core part of our business. I'm just about wrapping up here. I don't want to leave without talking about Wharf. Wharf is a little asset that we bought from Goldcorp back in 2015 for less than $100 million. It's always had a 5-year mine life. We spent a whole $11 million on exploration last year.

It now has an 11-year mine life. So we're really excited about that. It's an amazing asset, a great story about M&A. Quickly on Palmarejo, there's a lot of lines on here. I'd ask everyone to focus their attention to this area of the East -- it took us many, many years to consolidate that whole land piece, finally was able to achieve that. We're now spending 70% of our exploration dollars over to the east.

And why that's important is all that area to the east is not infested by the Franco-Nevada stream that burdens the left-hand side of that picture. So very much keep an eye on that. I mentioned quickly Las Chispas and then everyone always wants to talk -- last 3 years, always want to talk about Rochester. It's kind of nice to go to means now we don't have to talk about Rochester all the time.

Mick's got that project on the rails, 88,000 tonne a day open pit heap leach gold silver. It's been a massive impressive project. And Mick and his team did an amazing job building. Everyone who's been on site walks away incredibly impressed. Both companies who we did transaction with did their own reverse due diligence, walked away, very impressed that this is a mine that's going to last for many, many decades in Nevada, arguably the best mining jurisdiction in the world.

And again, the number I'd like to point to is this one right here, right? As we've managed that throughput, $80 million of free cash flow in the fourth quarter. Rochester is going to be our third largest free cash flow contributor during the year. So we've got a little bit about guidance. The one area I'd ask everyone to focus in on, we, unlike other companies, we don't just give the guidance by quarter and then let the analysts divide by 4.

We give the guidance by quarter to -- it's a little bit more math. I apologize to the analysts or those who do their own model. But it's really important to understand that unlike -- not unlike a lot of mining companies, we are particularly second half weighted at Rochester this year. So I just wanted to that. And with that, I'll stop talking and take some questions from the audience.

Okay. I think we have time for one question. Do we have one question from the audience? No, I'm being told that there is no time for any questions. So thank you very much, Tom.

Thank you.

Okay. That ends the session with corporate presentations, and I want to introduce our keynote speaker, Nicky Shiels, Head of Research and Metal Strategy at MKS. Her bio...

Good day, and welcome to the Coeur Mining Update Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mitch Krebs, Chairman, President and Chief Executive Officer. Please go ahead.

Okay. Good morning, and thanks for joining the call to discuss the release we issued this morning. Before I kick off, I just want to quickly point out our cautionary language regarding forward-looking statements shown on Slide 2 in the deck and refer you to our SEC filings on our website.

Starting on Slide 3, there's no doubt that Friday's closing of the New Gold acquisition marked a watershed event in Coeur's history. With our recent successful investments in exploration and expansions at our existing operations, our acquisition of SilverCrest last year and now this transformative transaction, we are emerging as the industry's only all North American senior precious metals producer while retaining our dominant position in the silver sector. Our larger scale, metals mix, lower costs and higher margins, strong free cash flow profile and leading trading liquidity on the NYSE and now on the TSX represent clear differentiators compared to peers.

This strong position affords us a unique opportunity to fund a pipeline of high-quality gold and silver projects, build out a top-tier balance sheet that sets us up to not just survive but thrive across the commodity cycles and begin returning excess capital back to our shareholders.

On Slide 4, we've highlighted the 3 key topics from today's release, our updated 2026 guidance, year-end 2025 reserves and resources for New Afton and Rainy River and our updated financial policy and return of capital strategy. Starting with our updated guidance, which is laid out on Slides 5, 6 and 11. Based on 9 months of production from Rainy River and New Afton and taking the midpoint of guidance, we expect to produce approximately 750,000 ounces of gold, over 20 million ounces of silver and nearly 60 million pounds of copper in 2026. The 2 new Canadian operations are driving an expected 80% increase in our 2026 gold production and also add copper production to go along with our status as a top 5 global silver producer.

Based on recent prices, gold is expected to contribute approximately 65% of our revenue this year, with silver contributing nearly 30% and copper making up the remaining 5%. We anticipate 70% of our revenue this year to be generated equally between the U.S. and Canada, with the remaining 30% to come from our 2 Mexican mines. Importantly, based on recent prices, this new 7-asset North American platform is expected to generate more than the full year estimates of $3 billion of EBITDA and $2 billion of free cash flow that we highlighted when we announced the transaction last November, even with only 9 months of contributions from New Afton and Rainy River.

Turning to the New Afton and Rainy River technical reports and year-end reserves and resources shown on Slides 8 and 9. It was great to see Rainy River add 2 years to its reserve-based mine life out to 2035. At New Afton, the current reserves-only mine life has been extended into 2032 with a strong performance from B-Zone and C-Zone begins ramping up this year.

An important highlight at New Afton is the initial K-Zone resource, which is a key driver of the mine's long-term potential. The initial M&I resource of 48 million tonnes plus another 6 million tonnes of inferred resource is a tremendous starting point. In the context of New Afton's current reserves of 36 million tonnes and annual design throughput rate of almost 6 million tonnes, this resource represents a major opportunity for substantial future mine life extensions. There's obviously a lot of work to do before K-Zone becomes part of New Afton's mine plan, including approximately 36,000 meters of planned exploration drilling over the balance of 2026 and the kickoff of a feasibility study in the second half of the year.

Just a couple of comments from me regarding our updated financial policy and return of capital strategy before I turn it over to Tom. It's especially gratifying to be in a position of returning capital to shareholders after several years of heavy investment to extend mine lives and expand existing operations. On the back of these investments and our 2 recent acquisitions, combined with higher prices, we've created a cash flow machine that will allow us to reinvest in our assets, bolster our liquidity position and start returning capital back to shareholders in a robust, responsible and flexible way.

Tom, over to you.

Thanks, Mitch. On the guidance, I wanted to draw attention to the following key items. Commensurate with the close last Friday, we are busy completing a March 20 close of the New Gold books. For simplicity, we have guided based on 9-month production from April 1 to December 31, 2026, as detailed on Slides 5 and 6. Of note, the 2026 guidance remains generally in line with New Gold's previous 3-year guidance and New Afton guidance is based on payable production to align with the way we report. New Afton is expected to deliver gold and copper production from its newly completed C-Zone cave. Our 9-month 2026 production guidance totals 60,000 to 80,000 ounces of gold and 50 million to 65 million pounds of copper with the C-Zone ramp-up expected to drive sequential quarterly production increases throughout 2026.

Rainy River is positioned to deliver its highest ever annual production in its history. Our 9-month gold production guidance of 230,000 to 275,000 ounces includes production from both the open pit and underground operations. Continued progress on underground mining development rates will be a key factor to ensuring a successful 2026 at Rainy River. Based on our budget prices, Rainy River and New Afton are expected to be Coeur's 2 largest free cash flow contributors even with just 9 months of contribution.

There are a few important nuances to highlight from the CAS guidance on Slide 11. Rainy River's CAS guidance is influenced by 3 accounting-related factors that collectively totaled just over $1,000 per ounce. The first is the noncash purchase price adjustment related to the fair value uplift of the in-process inventory and short-term stockpile. Some of you may recall, we had a similar impact last year with Las Chispas. The noncash impact on Rainy River is estimated to be $180 million in 2026 or $675 per ounce.

Under U.S. GAAP, deferred stripping costs of approximately $40 million or $155 per ounce are required to be expensed versus IFRS where these costs were capitalized. Also under U.S. GAAP, the accounting for the Royal Gold stream at Rainy River increases our CAS by approximately $90 million or just under $240 per ounce.

Two items to highlight for New Afton CAS. Costs are reported on a co-product basis, consistent with our methodology of reporting costs. There's also a noncash fair value uplift impact of its acquired inventory of $20 million or $134 per ounce of gold and $0.15 per pound of copper. These amounts may change slightly as we complete our opening balance sheet work, but we wanted to highlight these preliminary estimates as everyone begins to update their valuation models. Enough pointy headed accounting and on to our updated financial policy. We have been itching to reveal our updated financial policy since we announced the New Gold acquisition. This updated financial policy was the result of months of discussions with our investors and our Board, along with detailed benchmarking versus our larger peer group.

Our revised long-term financial policy pillars are as follows: First, we will continue to invest in growth projects and exploration to deliver peer-leading return on invested capital, which was 26% in 2025. Second, we will build up our liquidity levels to be consistent with our larger peer group with a commitment of always remaining in a net cash position. And third, we will have a prudent return of capital strategy comprised of a buyback program and a sustainable base dividend with an overall preference for buybacks. The strategy has been designed to allow us to maintain financial flexibility to pursue growth initiatives while maintaining a robust level of capital returns.

Coeur's Board of Directors has authorized an expanded $750 million buyback program. This program will consist of both a programmatic component, which allows -- which will allow for the possibility of continuous activity even during blackout periods as well as a discretionary component to allow us to execute repurchases opportunistically based on our underlying share price and valuation. We will be able to begin executing the program after we report our Q1 2026 earnings in early May.

Coeur's Board has also approved an inaugural dividend policy of $0.02 per share semiannually with payments expected in the second and fourth quarters. This amount was selected to ensure the dividend is sustainable for the long run even under extreme low case pricing scenarios and allows for potential dividend growth over time.

Three final items for me before turning it back to Mitch. We have entered into a new modernized and materially upsized revolving credit facility, increasing capacity from $400 million to $1 billion. We want to thank our long-standing partners, including National Bank, our new lead syndicate bank, BMO, RBC, BAML, ING, Desjardins and Goldman Sachs for their continuing support. We are excited to add TD, CIBC, Scotia and Citi to our list of important relationships.

Second, we launched an obligor exchange related to New Gold's 2032 bonds this morning. This innovative transaction should allow us to novate the vast majority of the outstanding New Gold bonds to become Coeur bonds. While the interest rate and maturity will not change, all other key covenants would align with Coeur's 2029 bonds. The benefits of the transaction would include no restrictions on our ability to return capital, additional U.S. tax shield and lower filing and compliance costs.

And third, as of last week, as we promised, we completed a TSX listing prior to the closing of the transaction. This means investors can now buy our shares on either the New York Stock Exchange or the TSX, both under the symbol of CDE.

With that, I'll pass the call back to Mitch.

Thanks, Tom. In closing, I want to thank the Coeur and New Gold teams who have worked incredibly hard over the past few months preparing for this combination. Our focus now turns to executing a smooth integration and working to unlock the incredible potential of this exciting new company.

With that, let's go ahead and open it up for any questions.

[Operator Instructions] Our first is from Cosmos Chiu with CIBC.

Congrats on completing the acquisition of New Gold. Maybe my first question is on these New Gold assets here. In terms of New Afton, Mitch, as you mentioned, the K-Zone, great to see an inaugural resource for the K-Zone and a feasibility study that's coming up in the second half of 2026. Maybe too early to ask, but any other details they can provide to us at this point in time in terms of, say, time line, potential CapEx, potential size? And if you cannot give us concrete sort of numbers at this point in time, could you maybe talk about some of the trade-off studies that you're looking at and how that might differ from how New Gold had looked at it previously, at least for the K-Zone?

Yes. No, good question. I'll start. And Mick, if there's anything I don't mention that you feel like I should have, feel free to chime in. It is basically too early, right? We haven't even started a feasibility study, and this was just obviously the initial maiden resource. But if you think about the C-Zone, which is now just ramping up and the reserve-based mine life built off of the C-Zone going out now to 2032, you kind of have to think about the K-Zone being ready to go around that 2032 time frame. And so if you think about the timing of capital, the 2 or 3 years leading up to 2032 would probably be when the capital would be elevated to develop the K-Zone to have it ready to go.

As far as what the capital will be, we'll let the studies drive all that. I think the C-Zone, which is now just ramping up, was a capital investment somewhere around $600 million. Not that, that is what the K-Zone is likely to be, but that's one indicator of the approximate capital range to think about for the K-Zone. So if you spread that out over a few years leading up to 2032, that's probably not a bad way to think about it. But a lot of work, a lot of drilling, a lot of study work to do between now and then. Mick, anything that you want to add?

Yes. Just briefly, during the due diligence, we looked a lot at the K-Zone, and it's all playing out the way we thought it would. The New Gold team are a super team very technical and had worked the front-end loading far enough to get us to a maiden resource. And now we'll follow a rigorous study program to get through that FS and see what the final size and capital and process looks like for that K-Zone. But for the moment, we have time to do that study work well.

Perfect. And maybe honing in a little bit on the K-Zone in terms of grade. I noticed that the grade is slightly lower than the C-Zone. So how should we look at that in terms of grade, K-Zone versus C-Zone? And I would imagine not much mining dilution has been factored into the K-Zone resource grade at this point in time. Could you remind us how much mining dilution is in the sort of C-Zone reserve grade? And can we use that in any way to kind of estimate or guesstimate what might be needed for K-Zone?

Yes, I'll start. And then Aoife, you're on the call, you can chime in, Mick, as well on the dilution question, if that's something that we can answer now. But I'd say just, again, Cosmos, early days with the K-Zone with this initial resource. There's a lot of drilling to do. I think we alluded to the number of meters still to do this year. The vast majority of the budget this year for exploration at New Afton will be to expand, try and expand and then start infilling that K-Zone. So we'll see how that goes over the next few years as far as what that does to the overall grade profile. But Aoife, Mick, do you want to add anything?

Sure. Yes. I mean we have -- yes, sorry, Mick, I'll go first on the exploration and upside and then hand it back to you for more on the dilution in the mining. Yes. On the exploration side, we -- there's of $80 million of drilling at New Afton this year, 16 of them are dedicated to infill and expansion on K-Zone. There's opportunity along strike and at depth on K-Zone. For the moment, for this year, the priority really is on the lateral potential for growth, in particular, back towards D-Zone, we're drilling the gap between D and K-Zone, and that's about 100 meters along strike and there's a potential -- and we're looking at an area to the other side of K-Zone with about the same strike length. And just to put that into context in terms of potential growth, the K-Zone itself, the current resource shape is between -- varies between about 300 and 400 meters along strike. So we're doing a lot of drilling in that space, and we're seeing some very good early results with similar grades to what we've seen. So we're quite optimistic for growth on K-Zone this year.

Mick, do you want to add?

Yes. From a development perspective, of course, as Aoife said, we're looking to try and grow that resource. And as we start infilling it, then really we'll determine those factors, Cosmos. We'll get down to that technical data as we get into the FS. So we should have a better view of that through next year.

Great. Maybe switching gears a little bit. I saw that in terms of guidance, the cost guidance, the headline number for Rainy River and New Afton were both higher than, say, last year. However, Tom, I think you did a good job in terms of explaining there's a number of factors such as PPA adjustments that need to be backed out or that are now included in this new number. But I guess my question is, what is sort of onetime? The PPA due to inventory is clearly a onetime. But how about some of the stripping costs? Would that kind of carry forward into future years? Just it's an accounting treatment. And so would that carry through? And the way that you account for the Royal Gold stream as well, would that kind of carry through into future years? And is that why we're seeing sustaining CapEx? I believe your number is slightly lower than what I had expected in sustaining capital. I think you're saying $84 million to $98 million previously new goal for the full year at $140 million to $160 million. Is it a recast of CapEx into some of these CAS? Two parts of my question.

Tom, I'll just kick it right -- go ahead.

Yes. No, you nailed it. So the fair value uplift, so we have to mark-to-market the inventory particularly the stockpile material that we planned to mine in the next year. And so again, that's like $180 million, almost $700 an ounce right there. That's onetime. There is -- there are a couple of years of stripping, as you'll see in the technical report. That's just geography. It goes from CapEx under IFRS to U.S. expense under U.S. GAAP. The stream will carry on. Again, just there's a completely different treatment under U.S. GAAP versus IFRS. And then yes, you nailed it on the sustaining, it's lower because we expense it. So -- and then there's probably a little nuance. There's only 9 months versus 12 months.

So again, we've done our best to make it as simple as possible using that April 1 to December 31. As we close the books, though, we might see some tweaks about spending that happened that had been planned and the build didn't come in, et cetera, et cetera. So no rest for the wicked, the team in Toronto are busy closing the books. Thank you, team, and they'll have to close them again on March 31. And if there's anything that needs to be tweaked, we'll be clear about that when we report Q1.

I'd like to if you pass this accounting question right after time. So I would do the same as well. In terms of -- sorry, Mitch. And then in terms of one last question, if I may. The credit facility, the $1 billion credit facility, could you maybe talk about the terms behind it? I think in part, it's the interest rate is going to be dependent on your credit rating. And could you remind us where your credit rating is right now? And could this transaction improve your credit rating into the future? Could it even be potentially investment grade one day? And is that something that you strive for?

I'll go right away.

Sure. Go ahead.

Yes. So again, the revolving credit facility is absolutely modernized sort of the best terms that you would expect given the high-quality company that we've been able to create here over the last couple of years. And so standby charges on $1 billion would have been the same annual fee as we would have paid for the $400 million facility, just to give you a flavor on that front. So -- and as part of the obliger exchange transaction that I referred to, we had to reach out to both S&P and Moody's, who will be coming out shortly with an update on our view on our overall ratings. But absolutely, we're -- we think we're on our way to creating an investment-grade balance sheet. The rating agencies are take their time to move and catch up with exactly where we're at, but you should hear something here shortly from both S&P and Moody's on our updated ratings. And obviously, it will be an improvement.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Mitch Krebs for any closing remarks.

Okay. Well, look, we appreciate everybody's time this morning on such short notice to dial in and hear our update, get a few more details from us now that the New Gold transaction is closed. And we look forward to talking to you again on our first quarter earnings call in early May. Thanks again. Have a great week.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Coeur Mining Fourth Quarter 2025 Financial Results Conference Call [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mitchell Krebs. Please go ahead.

Good morning, everyone, and thanks for joining our call today to discuss our fourth quarter and full year results. Before we start, please note our cautionary language regarding forward-looking statements and refer to our SEC filings on our website. One housekeeping item. You may have noticed, we shifted our reporting to metric units starting this quarter based on feedback we received and to better align with our peers. .

You'll see that prior period figures in the earnings release have been recast for comparability and additional details are provided. Our record fourth quarter results capped off an incredible year for the company that was full of all-time bests and record achievements. I want to take a couple of minutes to run through a few of them, some of which are shown on Slide 4. Record full year silver and gold production increased 57% and 23% year-over-year, respectively, driven by the impact of the Rochester expansion, the acquisition of Silvercrest in February, and consistent performance from our 3 other North American operations.

Full year record EBITDA increased 200% to over $1 billion and full year free cash flow increased to $666 million versus negative $9 million in 2024. Slide 8 does a nice job summarizing how far we've come in just the last couple of years when EBITDA was just $142 million and free cash flow was negative $297 million. Our year-end cash increased more than 10x to $554 million, and net income last year also increased tenfold to a record $586 million.

Our 3 U.S. operations accounted for nearly 60% of our 2025 revenue and silver represented about 35% of total revenue last year. Rochester made consistent progress toward achieving steady-state levels throughout 2025, with full year silver and gold production increasing 40% and 54% year-over-year, respectively. In the fourth quarter, Rochester made a strong statement by delivering record quarterly crush tons and placed tons, along with $78 million of free cash flow which sets us up for an even stronger 2026 at America's largest source of domestically produced and refined silver.

Las Chispas finished the year as our top cash flow generator with $286 million of free cash flow in only 10.5 months of contribution. Just as important was the successful and safe integration of Las Chispas last year, which deserves a big shout out to the entire team. On the exploration front, and our year-end reserves and resources that we issued yesterday, it's really gratifying to see the success of our sustained exploration investments and how they continue to drive up our overall ROIC and extend our mine lives, which Slide 16 does a good job of highlighting.

The Wharf reserve and inferred resource increases and the near doubling of its mine life to 12 years was especially eye-popping and the Palmarejo results that drove a 5-year extension to its mine life were also very impressive, especially the resource growth off to the East. It was also great to see that we replaced a year of mine life at Las Chispas to remain at approximately 7 years. Looking ahead to 2026 and beyond, -- it's clear that Coeur is in the strongest position it's ever been in its 98-year history and is poised to deliver another record year this year.

Our newly issued stand-alone production guidance summarized on Slide 6, and reflects solid year-over-year growth, especially in silver with a 10% expected year-over-year increase, which incorporates a full year of production at Las Chispas and another expected step-up in performance at Rochester. Between higher silver prices and this expected growth in our silver production, silver is expected to contribute approximately 42% of our total 2026 revenue based on current prices and the midpoint of guidance.

And with the expected first half closing of the New Gold transaction, 2026 will represent an even more significant step change in the quality, scale and resiliency of core, which is highlighted on Slide 7. Adding New Gold's to Canadian operations will further reduce our cost profile and enhance our geographic footprint for investors seeking lower risk silver and gold exposure and peer-leading margins. This new and unique platform is emerging at precisely the right time and will be ideally positioned as the industry's only all North American senior producer with a cash flow, liquidity and market profile that is unmatched in the precious metals sector.

As we said on the November conference call, when we announced the New Gold acquisition, we expect the combined company to generate approximately $3 billion of EBITDA and $2 billion of free cash flow on a full year run rate basis based on consensus commodity prices from last October. I'll note that the guidance we issued today does not yet include contributions from the New Gold assets, which will be incorporated in the Coeur's production profile following the close of the transaction.

Looking out over the next few weeks, we anticipate an active flow of news, including the close of the New Gold transaction, which remains on track, and we believe has a good chance to close by the end of the first quarter. Updated SK 1300 technical reports for New Afton and Rainy River will be filed upon closing of the transaction, which will incorporate year-end 2025 reserves and resources for both assets including a maiden resource at New Afton's K zone. We will also provide updated guidance for the combined company and share details of our updated capital return priorities once the transaction closes.

Before handing the call over to Mick, I'll close with a big thank you to the team for the incredible amount of work that has gone into getting the company to where it is today. Closing out strongly in the fourth quarter is always a challenge and year-end reporting is always a heavy lift. But these efforts are even more impressive this time around in light of the new Gold transaction and the related integration planning process. Higher prices certainly helped, but there's absolutely no doubt that we're as well positioned as we are because of the talent, resiliency and dedication of our people across the entire organization. Mick, over to you.

Thanks, Mitch. Our fourth quarter was a 24 of the core portfolio, with all 5 main hitting the straps in a safe and environmentally soman. Strong finishes at all of the mines, especially at Rochester, helped ensure the achievement of our annual 2025 production and cost guidance. Consolidated production for the quarter totaled 112,000 ounces of gold and 4.8 million ounces of silver. Adjusted cash per ounce for gold and silver also continued to be well managed with an impressive $1,207 per ounce and $17.29 per ounce, respectively and allowed for strong margin expansion across the business.

Turning to the assets and beginning with Las Chispas. The team turned in another solid quarter to cap off a great 2025 in its first year in the core portfolio. Silver production of 1.4 million ounces and gold production of 15,000 ounces led to $79 million of quarterly free cash flow. The operations 2026 guidance reflects a full year of production compared to the approximate 10.5 months of 2025 contributions.

Turning to Palmarejo. The main followed up 1 of its strongest quarters in terms of tonnes milled with an even better result in the fourth quarter with over 470,000 tonnes milled averaging over 6,000 tonnes per day. Together with strong grades and recoveries, Palmarejo's free cash flow totaled $63 million. The team in Chihuahua has demonstrated great results with its fill a mill strategy, a unique skill set that we expect to leverage at Rainy River in the future, which is undergoing a similar transition from open pit operations to underground.

Our 2026 guidance points to another great year ahead for Palmarejo. Turning to Rochester. Key performance metrics along the crusher circuit saw marked improvement versus the prior quarter, concurrent with the fourth quarter completion of planned modifications and belt improvements. We exceeded 7 million tons or 6.4 million metric tons crushed this quarter, which was a nice achievement for the team. It has been impressive to see the main steady improvements in silver and gold production as the power of the new crusher train continues to drive results, reaching their highest levels in 2025 at 1.7 million ounces of silver and 17,000 ounces of gold, respectively, in the fourth quarter.

On an annual basis, the positive impact of Rochester's larger scale really stands out with silver and gold production increasing 40% and 54%, respectively, compared to 2024. I'm pleased to report that the average particle size continued to beat the budget level for material passing through all 3 stages of crushing at a PAD around 0.84 inch in the fourth quarter. Importantly, related recoveries continue to track our PSD models as expected. The team is also hard at work on the next phase of the leach Part V expansion, most of which we expect to complete this year.

Rochester is well positioned for an even stronger 2026. We are off to a great start with over 2.3 million metric tons crushed in January. Grades are expected to be lower in the first half of the year, consistent with the main plan, which is reflected in our 2026 guidance. Our long-term focus remains on building consistency and momentum through the 3-stage crushing line and continuing to deliver quarterly crush tons in the 6.2 million to 7.2 million metric tons per quarter range as we drive towards our ultimate objective of a top size of 5/8 of an inch.

Based on the midpoints of our 2026 guidance ranges, we expect silver and gold production to increase substantially compared to 2025. Moving to Kensington. The positive benefits of their multiyear underground development program continue to manifest in the form of new efficiencies and operational flexibility. The team knocked it out the park with its highest tonnes milled and gold grade of the year in the fourth quarter, leading to gold production of 30,000 ounces and the main's lowest quarterly cash of the year at $ 1,533 per ounce. This led to quarterly free cash flow of $51 million, Kensington's best result ever.

Coupled with the successful reserve additions announced yesterday, the main remains on excellent footing and well positioned to deliver a strong 2026. Finishing up at Wharf, quarterly gold production totaled 25,000 ounces leading to free cash flow of an impressive $62.3 million. These good results were overshadowed by a fare in the mains tertiary crusher following routine maintenance in the fourth quarter. The tertiary crusher area sustained some damage in the upper levels, impacting conveyor belts, ancillary equipment like the Host, Korean and electrical systems, and those parts will need to be repaired or replaced.

There was no damage to the 4 tertiary corn crushers in that area on the ground floor. The team quickly mobilized temporary mobile pushing units at site in January to supplement crushed ore tons. Repairs are expected to be completed over the course of the second quarter. Slide 6 provides an indicative expectation for 2026 quarterly production showing a second half weighted crushed tonnes as the site returns to normal operations throughout the year.

As highlighted in yesterday's reserves and resources update, the future of is more exciting than ever. Thanks to the reselling success, recent exploration and technical work that have unlocked new gold reserves, leading to a near doubling of manage with additional upsade remaining from a significantly larger resource pipeline. We look forward to many great years ahead of this one-of-a-kind asset. With that, I'll pass the call over to Eva.

Thanks, Mick. 2025 was a very successful year for exploration with great results seen across the board. Key highlights include not only replacement of depletion across the portfolio, but growth of reserves by 10%. As Mitch and Mike have mentioned, Wharf and Palmarejo were standard contributors in this regard. Inferred resources also grew by a whopping 40% across the portfolio, led by a 216% increase at Wharf an 86% increase at Palmarejo and 30% growth at Rochester.

Moving to key highlights for the year. At War, the Juno North Foley and edge exploration and technical programs were very successful. In addition to increasing gold reserves by 500,000 ounces, 1 million ounces of inferred resources were added. This is a phenomenal result for relatively modest levels of investment, and it has set us up for another year of conversion to reserves in 2026 and in the future. Earlier-stage scout work will also restart this year to help build an even longer-term future of this operation. We had a very busy year at both Mexican operations with up to 26 rigs across both sites.

At Palmarejo, reserves saw a very large increase of almost 40% and moving from 1.4 million ounces on a gold equivalent basis to 2 million ounces. Our other key aim of bolstering the inferred pipeline was very successful with over 1 million gold equivalent ounces added, and this is in addition to 400,000 new ounces in the measured and indicated category. The non-FrancoNevada area of interest deposits of La Union, San Miguel and independency Asur were key contributors along with Hidalgo on the main mine corridor.

All these deposits will continue to undergo aggressive exploration in 2026, along with ongoing early-stage work across the district. Atlas Cheese bus exploration programs resulted in maintaining mine life in addition to the discovery of multiple new veins, including Augusta, lapromesa and Lupita. The exploration pace is expected to continue at similar levels in 2026, involving a healthy mix of scout expansion and infill drilling. Programs at the other sites also fulfill their aims as laid out at the start of 2025 with depletion more than replaced at Kensington and nearly replaced at Rochester.

Our understanding of the system at Silvertip is progressing rapidly, and program successfully grew the mineralized footprint by another kilometer to the site. This gives a new focus area for infill drilling over the coming years in order to support the study programs underway. Looking ahead to 2026, total exploration investment is expected to increase to between EUR 120 million and EUR 136 million. to continue pursuing the high return opportunities we have across the portfolio. With that, I will turn the call over to Tom.

Thanks, Ita. Beginning with the financial summary on Slide 10. We are excited to reveal the record-setting full year results that Mitch highlighted a few minutes ago. It was truly a transformative year. There were so many highlights in quarterly financial records to choose from, but here are a few of our favorites. It was particularly gratifying to see every mine deliver at least $50 million of free cash flow in the quarter. .

We saw a 66% increase in free cash flow to $313 million during Q4, highlighted by Rochester's $78 million of quarterly free cash flow. Adjusted EBITDA margin increased 63%, which was a 60% increase quarter-over-quarter. Our return on invested capital was a peer-leading 26% in 2025. Quarterly realized gold and silver prices increased 21% and 40%, respectively, and have only continued to strengthen in 2026. We are expecting another record-setting year in 2026 for the CDE stand-alone portfolio and look forward to providing updated guidance, including Rainy River and New Afton once the transaction closes.

One note of caution, Q1 is always seasonally low from an operating cash flow profile with significant year-end payments primarily related to Mexican tax and our annual incentive plans. As shown on Slide 9, you can see the net effect of this cash deluge coursing through Coeur's balance sheet. As previewed during last quarter's call, we achieved our long-standing goal of being net cash positive. Total debt declined $250 million or 42% year-over-year, and we ended the year with a cash balance of $554 million and now have total liquidity nearing $1 billion in climbing.

We made some progress on our $75 million buyback program that we announced during the second quarter. We were fairly limited in our ability to execute the buyback program during the second half of the year due to trading restrictions related to the New Gold transaction. This limitation will end upon the closing of the transaction when we intend to announce a robust update to our return of capital strategy. Our capital allocation framework will remain disciplined with a continued focus on generating strong returns on invested capital and deploying excess cash where it creates the greatest long-term value for stockholders.

Concurrent with the strengthening price environment, we enhanced our annual guidance related to cash taxes and royalties to reflect the champagne problems of higher commodity prices. One final update for me. We look forward to the closing of the New Gold transaction and welcoming our new Canadian colleagues to the core team. Robust integration planning has been underway since mid-November, and we are prepared for day 1 after closing. With that, I'll now pass the call back to Mitch.

Thanks, Tom. Before we open it up for Q&A, I just want to touch on several key priorities and themes for the year ahead on Slide 18. Of course, continuing to build on our safety and environmental performance always remains priority #1, successfully closing the New Gold transaction and accomplishing a smooth integration is obviously a critical priority for the year. A full year of steady contribution from Las Chispas, a further step up at Rochester, and delivering on Wharf's back-half-weighted plan are also key drivers for the year ahead.

And as Ifo mentioned, we are allocating a record amount of capital to exploration investments in 2026 and a 47% increase compared to 2025 levels, delivering the expected results from these programs to keep driving our ROIC higher and adding mine life is also a key priority in 2026. At Silvertip, we plan to continue advancing the project with a potential transition into a pre-feasibility study based on the results of the initial assessment that is now wrapping up. With higher silver prices, continued drilling success, solid project front-end loading and Canadian support for critical minerals projects like Silvertip, there could be an attractive path forward to adding to our future silver profile that we look forward to evaluating together with our Board.

And finally, we look forward to updating you on the impacts of the New Gold transaction once it closes with combined full year guidance reserve and resource updates from New Afton and Rainy River and details regarding the path forward for returning capital to stockholders. With that, let's go ahead and open it up for questions.

[Operator Instructions] And the first question today comes from Wayne Lam with TD Securities.

Congratulations on a good quarter. Maybe I just want to start off with a question on the reserve grades at Lesiba. It seems as though there was a big part taken on the grades now in the past couple of years. Is that a function of a lower cutoff grade or reinterpretation there? And then just given the mine grades have been well ahead of reserves since the start-up of the mine, when will we start to see a bit of a normalization of the grade profile there?

Yes, sure. Wayne, thanks for those questions. I'll start, and Mick if, if you want to chime in. I think on the last chip grade profile, it really reflects a more conservative approach to the modeling that we took here after taking the reins last February, it's consistent with how we do it at our other mines. It's something we had identified in the diligence actually that grade was being overestimated, tons underestimated. And so after operating it for 10.5 months, we incorporated that into the year-end resource model. But Mick, anything you want to add to that or Ifa?

Yes. From an operational perspective, that is what we expected. And after running the site for a year, that's exactly what we found. I reconciled very well to the due diligence that we saw -- we tested the plant to make sure that it could run at those slightly higher run rates to make sure we're going to still deliver against the budget, and we did exactly that. Aoife any thoughts .

Yes. And I think -- it's certainly not due to disappointing drill results. I think we've actually seen the opposite that this year, particularly at last cuspshere we had, in our due diligence and our expectations for lower grades in that block. So we've been very pleasantly surprised with the tenor of the gray out there as well. .

And so to an second question about just go-forward grades, should we see more of a tighter fit between reserve grades and actual results .

Yes. And as we're seeing that, we saw some of that, and we thought would trend in that direction, and that's what we did. So going forward, we should see that normalize to the expected planned levels.

Does that help .

Yes, that's really good color. Maybe on the exploration results, a pretty good update on the resource additions across the portfolio. Just wondering on the maiden resources you guys report at East Palmarejo. Are those all outside of the Franco stream and when could we envision those being brought into production? And then just wondering with the guided sales under the stream in the 40% to 50% range this year, which is slightly lower year-over-year. How should we be thinking about that number over the next few years? And should we expect that to continue to decline?

Yes. Yes, I'll start off and then maybe Tom, on the -- or Mick, on the shape of the percentage inside and outside over time. But in short win, all of those ounces are outside of the area of interest that the Franco-Nevada gold stream covers. The bulk of them were further off to the east out there in that Guazapares area that Aifo mentioned. And so the near-term stuff, the Independencia kind of extension of Independencia down there to the south and east, that represents a near-term opportunity for us.

And then in the meantime, we'll continue to expand and extend hopefully those resources off there further to the east, and that can develop a potential future source of ore or maybe even a stand-alone operation depending on on where we end up with that additional drilling here over the next few years. In terms of percentage inside, outside. How should we think about that?

Yes. It's virtually all inside the AOI for the next couple of years until we get some more success in the areas that you just described in.

But exploration-wise, we'll be this year, 70% or so of the exploration budget of Palmarejo will be outside of the area interest over there to the east lane. .

Do you want me to comment on Itami because that is bigger area is close to infrastructure underground and so there's some ventilation work that we'll need to do to develop that and some minor permitting. But Aifo and the team characterized that better, then that will certainly fall into the nearer term next few years as we get a little bit of EY and look at that balance. .

And in terms of the upside that rotor is with a number of deposits sector like San Miguel is a Golden Solera Union is predominantly gold. So it's really going to give us some nice operational flexibility as we develop that further in the next number of years. .

Okay. Perfect Yes. sounds like quite a considerable future opportunity. So I appreciate the detail on that. Maybe just last 1 for me. Just on the cash tax guidance of $400 million to $500 million this year. Do you have any additional color on what a breakdown of that looks like between Mexico versus the other operations? And just wondering if you still have tax pools to draw on, particularly in the U.S. Or does that guidance assume at some point, full depletion of those capital pools?

Tom, do you want to take that? .

My favorite. Thanks, Wayne, for using the tax question. I would think 80% of the taxes are in Mexico. And so we are going to be paying some cash tax in the United States and it's just mainly because of the way the tax pools or the tax losses work. We will be sheltering the bulk of of net income, but there's still going to be a little bit that ends up being paid. So if you want to use that 80-20 breakdown and apply that to the guidance, that would be my -- that's the guidance. .

Okay. Great. That's really good color. Congratulations again on a good quarter and looking forward to seeing the closing of the New Gold transaction. one? .

Yes. No, thanks for the question, Wayne. .

And your next question comes from Josh Wolfson with RBC. .

Just looking forward at the upcoming closing and the capital returns comments that were made earlier. Is there any kind of preference the company has in terms of dividends or buybacks here and as the company thinking about those 2 aspects, apologies, not to totally front run your upcoming announcement. .

Yes. We don't want to steal our own thunder before we get to the closing when we'll roll out a more a clearer path forward on return of capital. But suffice to say, those are the 2 levers that we've been looking at and thinking about and talking about with our Board obviously, a slight preference more for the buyback route, just given the flexibility that, that provides. But recognizing that, look, as -- on a combined basis, you look at across the peers, and we're sensitive to making sure that we're -- we're benchmarking well against the peers as far as how we think about returning excess cash back to our stockholders. .

All right. And then another question sort of along the same lines. Given the financial positioning and free cash flow outlook, the company has been active in increasing the exploration budgets and investment across the portfolio. How are you thinking about that from the New Gold assets? Is there anything that you can look to accelerate in 2026? There are any specific opportunities at least some of the early integration analysis? .

Yes. Yes. No, thanks, Josh. Good question. I think let's get past the close and the integration, ensure continuity, but we are looking at how can we allocate some additional capital to exploration at both sites, in particular, probably Rainy River, as you think about some of the regional opportunities there on that big land package. But I think we want to take a little bit of time to make sure we've got our ducks in a row, got the team aligned and then we take the next step as far as potentially ratcheting up the level of investment in exploration, in particular, at Rainy River. If anything you want to say? .

No, that's -- you want to cover time .

Some great opportunities there. I mean both, obviously, both operations. But I think at Rainy River, we'll apply that same playbook, Josh, that we've used successfully at our other operations, and it takes time and capital. and some commitment. But I think over time, there's a lot of potential there. Yes, you bet. Thanks for the questions. .

And your next question today comes from Joseph Rieger with Roth Capital Partners. .

Just got to ask on Rochester, and I know Mick touched on it a bit. But I know that the model seems to be internally matching with the recoveries as we see them seem a bit light on the silver side, particularly -- at what point do you guys have to like go back and kind of like reassess the economics of the project? Or is it just a matter of getting the crush size to where it's supposed to be? And then do you expect the recoveries will improve accordingly. .

Yes, it's much the latter there, Joe, and Mike you can add to anything that I say. But -- you're right, the actual results are tracking model for the product size that we're putting out there on that Stage 6 leach pad as we continue that progression from a P 87% down to P85%. We'd expect to see the recoveries continue to track model and improve. Gold is less sensitive, but in particular, on the silver, we'd expect to see as we get closer to that 5.8%. Those recoveries ratchet up to just shy of 60% level. It's just, as you know, Joe, it's lower and longer on the silver recovery curve relative to gold. Mick, anything you want to add? .

Yes. And the focus in '25, as we said a few times, was really around getting that throughput level above the $7 million tons or the $6.2 million per quarter, and we're starting to get really into that range and look to make that sustainable. There was some really good development projects that we did in November to help us with that and to focus on the reliability of the crusher. .

And so though 2026 is really about trying to hone that in and drive those crush sizes down with the equipment that we've got and then a few small projects to be to get that in tune. But yes, it's a good path forward. And we're really in the range of what it said it would do on the packet. We've now just got to match the ore body knowledge with the capability of that crusher and make sure that it's in it every day. But overall, we're really happy about the progress so far.

Okay. And then 1 other one. Some of your peers have been maybe not successfully, but purchasing puts on things like gold and silver as a way to hedge downside given we've seen some record high prices. Is that something you guys are going to consider doing or I think in the past you used some collars or you guys given the cash flow situation of the company just going to kind of leave it exposed to the market?

Yes, you're right. As you recall, Joe, we did use some hedging during the Rochester capital project to kind of help shore up the the cash flow and the balance sheet. We're always looking at those things. But as we sit here today, we're going to let remain unhedged, keep focusing on what we can control on the cost side to keep pushing ourselves down the cost curve and retain that full exposure to prices. .

[Operator Instructions] Your next question comes from Brian MacArthur with Raymond James. .

So I go back to what Wayne was asking. I had the same question. Just on the tax pools, you made a comment that they're slightly different. I thought there were fairly substantial NOLs. Will they last like a number of years? Or are there something that -- obviously, we've got pretty good profitability now that we're going to use them up in 2 or 3 years. Or can I continue to think that on the U.S. operations, those will last like 3 or 4 years and you only pay fairly low taxes. Is that fair? Or is there something different in the structure of the NOLs based on your comments that it's not going to work that way?

Yes. So in the 10-K, look to the tax note. So we're down to $530 million year-over-year. It was $630 mill. So that gives you a sense that we used up about $100 million last year. And so again, at these prices, that's probably 2 years, Brian and we've blown through them. But again, just the way the limitations worked, some of the years you can only shelter 80%. And so that's why we're in a cash tax position in the United States this year. So I hope that gives you a sense.

Yes, that -- that's quite helpful. And just on the question about Palmarejo, as you find all this new ore that's off ground. I mean you mentioned we're going to stay up at a $40 or $50 for the next couple of years, let's say, does that drop -- I mean in the past, you've been down as low as 35%. Does that drop pretty substantially though, as we go out 5 years? Or if you're still just finding so much or at different areas, you just don't know what your sequences going to look like yet. .

Tom, do you want to .

Yes. Look, I mean, Aifoe and Mick are absolutely focused on finding is much of the as possible. At this stage, we do not have it, but we've highlighted all of the opportunities that are emerging, and I feel really excited about getting less of that production coming from from the area that's covered by the Franco stream, but for the near future, expect virtually all of the production to be subject to the stream.

And Brian, what's great there is obviously the Palmarejo reserve and resource increases were quite significant and in particular, that extension to the mine life. That's just building out more runway for us as we continue to allocate more and more of our exploration dollars off to the east to over time, develop that next chapter of Palmarejo more and more to the east over time, starting with the Independencia SER, extensional stuff, but then while we do that, we'll in parallel work to better define what that -- those further East deposits mean in terms of the future production profile. .

At Palmarejo. So it's a good strategy. It's taken a long time to kind of put all the pieces in place, but we just need to stick with it. And hopefully, over time, like Tom said, we'll see more and more opportunities open up to the east. And -- and over time, we'll make that slow transition.

No, I totally agree. I guess I was just trying to push a little bit to see when you saw that transition just when I was looking at it those additional years we are adding out. But that's okay. We can take that offline. .

This concludes our question-and-answer session. I would like to turn the conference back over to Mitchell Krebs for any closing remarks.

Okay. Well, we appreciate everybody's time today, and we look forward to speaking with you again in the spring to review our first quarter results. Thanks a lot, and have a great rest of the day. .

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to the Coeur Conference Call announcing the acquisition of New Gold. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mitch Krebs, President and CEO. Please go ahead.

Good morning, everybody, and thanks for joining the call to discuss the transaction we announced earlier today. It's my absolute pleasure to have Pat Godin, New Gold's President, CEO and Director, on the call with me.

Before kicking off, I just want to quickly point out our cautionary language regarding forward-looking statements shown on Slide 2 in our slide deck and refer you to our SEC filings on our website.

This combination creates the industry's only all North American senior precious metals mining company with an unrivaled production, cash flow and liquidity profile. The rationale is clear and compelling, and it provides tremendous benefits for both sets of shareholders that we look forward to highlighting on today's call.

When Pat and I first met about 2.5 years ago and talked about how M&A factored into our thinking, we both said we were only looking for opportunities that could make our companies better faster than we could on our own. We also both agreed that successful transactions are about people, about bringing together companies with similar cultures and forming a stronger, deeper and more resilient team and creating opportunities for them to develop and to unlock value for shareholders over time. And we believe this transaction achieves both of these principles.

We see right now as a unique window of opportunity to be bold to take advantage of the current macro environment and to leverage what our 2 companies have worked to put in place over the last several years and create a one-of-a-kind North American precious metals mining powerhouse like this.

Turning to Slide 4. This transaction results in a $20 billion U.S.-based precious metals producer with lower costs, higher margins and over 80% of its revenue coming from the U.S. and Canada. It will be one of the world's top 10 largest precious metals companies, and it will remain a top 5 global silver producer.

On a combined basis, the transaction is expected to catapult 2026 EBITDA to approximately $3 billion and free cash flow to approximately $2 billion, resulting in a sector-leading free cash flow yield and a rapidly growing cash balance. That cash can be reinvested in a wide range of organic growth opportunities, including the K Zone at New Afton, brownfields exploration at Rainy River and across all of our existing operations in the U.S., Mexico and Canada.

We see the scale and quality of the combined company leading to a potential investment-grade credit rating, higher levels of capital returns to our stockholders and provide investors with some of the sector's best trading liquidity. And as an American company, we're uniquely positioned to be added to key major U.S. indexes that can further enhance that liquidity. Without a doubt, this transaction makes Coeur a stronger, more resilient company and importantly, is per share accretive for our stockholders across all key metrics.

Slide 5 highlights how New Gold's 2 growing high-quality Canadian mines are an ideal complement to Coeur's 5 operations. Together, these 7 operations are expected to produce approximately 20 million ounces of silver, 900,000 ounces of gold and 100 million pounds of copper or approximately 1.25 million gold equivalent ounces next year. As I mentioned, over 80% of the combined company's 2026 revenue will be generated from U.S. and Canadian operations, while the pro forma revenue split by metal highlights the heavy gold and silver weighting of the combined company, along with a small but meaningful exposure to copper. We'll continue to operate our headquarters here out of Chicago, and we'll maintain New Gold's Toronto office, along with a small office we've had in Vancouver dating back to 2017.

Before turning the call over to Pat, I just want to congratulate him and the entire New Gold team for what they've accomplished over the past several years. New Gold's talented and highly experienced Canadian team also deserves special recognition for advancing the company to where it is today. New Gold's strong culture of safety and commitment to excellence is evident throughout the organization and is a direct reflection of Pat's impact and leadership. And we look forward to working together to combine our 2 teams to help lead this exciting new company going forward.

Pat, over to you.

Thanks, Mitch, and good morning, everyone. I'm very proud of where New Gold stands today. We are driven by strong common values. The courage to care culture is embedded in our behaviors. We built our reputation as a miner of choice quarter after quarter. We are a growing producer, and we are operating from a base of 2 long-life mines in one of the best mining jurisdictions.

Last week's third quarter results underscore the progress we have made and the sustained growth profile ahead of us. In talking with our management team and Board about what next chapter of the New Gold story will be, we came to a consensus that combining with Coeur was the best transaction for New Gold shareholders and for our 2 operations for several reasons as mentioned on Slide 6. It provides an immediate and attractive premium over our current share price, consistent with numerous recent transactions in the sector. Coeur's portfolio of 5 mines is hitting its stride precisely at the time that ours have, representing very compelling upside in our combined asset base.

Given the New York Stock Exchange listing, index inclusion and tremendous trading liquidity, we become part of a unique platform with a sterling track record of safety and environmental compliance as recognized by the MSHA as the safest U.S. mining company over the last 3 years. Being part of a resilient and durable multi-asset companies with Coeur's existing operational footprint results in a robust North American producer with the size and scale to unlock further value in the 2 operations and benefits shareholders in the current strong market environment.

Given these opportunities and the mutually beneficial characteristic that Mitch previously mentioned, we see potential for a re-rate in Coeur share price post transaction. And it creates career development opportunities for my talented colleagues that Mitch referred to a moment ago.

I look forward to joining the Coeur Board to support the integration and transition of New Afton and Rainy River into Coeur. I'm also looking forward to helping surface additional value to Coeur's operation and projects.

I will now pass the call back to Mitch.

Thanks, Pat. Slide 7 summarizes the key transaction details. As disclosed in this morning's release, Coeur will acquire all of the outstanding common shares of New Gold via a plan of arrangement. New Gold shareholders will receive 0.4959 Coeur shares for each New Gold share, implying a total equity value of approximately $7 billion. This represents a 16% premium based on New Gold's closing share price last Friday.

Upon completion, existing Coeur and New Gold shareholders will own approximately 62% and 38% of the combined company, respectively. Regarding shareholder votes, the transaction requires a 66 and 2/3% shareholder approval from New Gold and majority approval from Coeur stockholders. Shareholder meetings are expected to be held in the first quarter of next year, and the transaction is expected to close in the first half of 2026. The transaction is subject to customary deal protections that are highlighted on Slide 7 as well as to applicable stock exchange and regulatory approval and the satisfaction of certain other customary closing conditions.

I'll take just a couple of minutes to quickly review New Gold's 2 operations and how they make Coeur not just a bigger company, but a significantly better one. Starting on Slide 8. New Afton is a highly prospective low-cost gold and copper underground mine located in British Columbia that's been in operation for the last 13 years and adds significant free cash flow and multiyear growth to our current profile. New Afton's location makes it one of the best assets in Canada, and we're excited to add this world-class mine to our portfolio. Development of the C-Zone has ushered in a new growth phase at New Afton, as shown in the bottom right of the slide. And with the ongoing exploration success at the K-Zone, we see significant potential to meaningfully extend New Afton's mine life.

Turning to Rainy River in Ontario on Slide 9. This large-scale open pit and underground gold mine with a 25,000 ton per day mill adds an additional linchpin to Coeur's gold production profile with expected production of around 340,000 ounces in 2026. Rainy River reported record quarterly results last week, including over $200 million of free cash flow in the quarter, which reflected the ongoing ramp-up of underground mining activities to supplement open pit operations, which reminds us of a similar transition that took place at our Palmarejo mine several years back. We're impressed with the vast underground -- underexplored land package along with other exploration potential, both at surface and underground at Rainy River, and we look forward to accelerating the level of exploration investment there.

As you can see on Slide 10, these 2 operations position New Gold as one of Canada's largest and lowest cost producers. This really is the proof in the pudding when we talk about only getting bigger if it makes us much better.

Looking at Slide 11, you can see just how well the 2 companies fit together to become such a powerhouse. The $20 billion combined market capitalization places the company in a unique and leading position and will provide investors with some of the best liquidity in the sector. I mentioned the significant combined production profile and the overall cost and margin profile is dramatically enhanced. You can see in this table how our 2026 cost per ounce are expected to decline by double digits as a result of this transaction.

I've also mentioned the EBITDA and free cash flow profile, but I want to point out the free cash flow per share metric on this table, which shows accretion of approximately 40%. And finally, from a balance sheet perspective, both companies reported strong third quarter results last week with record free cash flow and growing cash balances. These themes are expected to continue, leading to a net cash position at closing and a rapidly growing cash balance looking ahead.

Slide 12 highlights how each company is in the early stages of generating significant cash flow after several years of heavy investment. Our recent and expected cash flow profiles are similar and together represent a true step change. In the case of Coeur, it was only 2 short years ago that our EBITDA was $142 million and our free cash flow was negative $297 million. Even compared to our expected EBITDA of over $1 billion and free cash flow of approximately $550 million this year, the combined cash flow over the next couple of years represents a massive increase.

Slides 13 and 14 demonstrate the leapfrog effect of the addition of New Gold to Coeur compared to peers, moving us to the front of the pack in terms of production, market cap, EBITDA and free cash flow and positioning the combined company as an attractive alternative for investors looking for high-quality North American precious metals exposure.

Importantly, as Slide 15 highlights, Coeur will retain its status as one of the world's largest producers with expected 2026 silver production of about 20 million ounces. In addition to the sheer number of production ounces, silver will represent over 30% of the value of our total reserves, which is in line with other traditional silver peers. Two of the many benefits of this transaction are the larger scale it creates and the expanded presence in British Columbia will have with the addition of New Afton. Both of these factors can help us advance our high-grade Silvertip critical minerals project and its large and growing silver resource in Northern BC in the future.

Slide 16 highlights the impact of adding New Gold's lower-cost assets to our overall positioning on the global cost curve. Going forward, Coeur will be much more resilient and much better positioned throughout the cycle. And together with the strong combined balance sheet, can not only make money but can actually be opportunistic during low price environments rather than simply fighting to survive them.

Slide 17 pulls together several of the key benefits of this combination that Pat and I have mentioned this morning. We think these attributes translate into strong re-rate potential based on how the combined company benchmarks against peers. On the right side of this slide, you can see the peer-leading free cash flow yield of around 10%, which helps support the case for this upside potential.

We've also both mentioned trading liquidity, and Slide 18 shows how Coeur is expected to be among the most liquid names in the sector. As a U.S. listed U.S. domiciled large-cap precious metals producer, our trading volume should appeal to institutional investors of any size and could be further enhanced by being added to key major U.S. indexes. Also, we plan to seek a TSX listing post closing.

Slide 19 summarizes some of the value we feel we can bring to New Gold's operations to unlock their full potential. I mentioned our Palmarejo experience earlier, and we have a long track record operating and optimizing underground operations that we look forward to leveraging at New Afton and Rainy River. Similarly, we've invested heavily in exploration over the past 5 years, which has successfully and meaningfully grown our reserves and resources and extended our mine lives. Maintaining this commitment to drilling across a wide range of opportunities within this larger platform can unlock significant value and help to further increase our ROIC over time.

We're honored that the New Gold team is entrusting us to uphold the responsible stewardship of these 2 proudly Canadian operations. Our experience at Silvertip has helped establish deep roots at all levels of government and among important stakeholders across the country. We enjoy strong relationships with First Nations at Silvertip, and we take very seriously the high standards of conduct necessary to operate safely and responsibly. We look forward to maintaining New Gold's head office in Toronto as part of our robust commitment to Canada.

Slide 21 summarizes our shared priorities and values that will carry forward regarding health and safety, protecting the environment and maintaining meaningful partnerships and having a positive impact in the communities where we operate.

And just to close out on Slide 22, hopefully, you'll take away from this call the strong underlying rationale for this transaction and the many benefits it provides both sets of shareholders. We're excited to be creating a company that doesn't exist in the industry and to be doing it at such an exciting and opportune time. This transaction will result in a truly better, more relevant and more resilient company, which is what investors have been asking for and what we've been pursuing with our recent initiatives, including the recent Rochester expansion, elevated levels of investment in exploration and the transformative SilverCrest transaction we completed earlier this year.

With that, let's go ahead and open it up for questions.

[Operator Instructions] The first question comes from Wayne Lam with TD Securities.

Congratulations on the transaction. Maybe just wondering in terms of opportunities that you had evaluated over the past year, just wondering why this one made the most sense. And maybe a comment in terms of timing given you guys had just completed the SilverCrest transaction earlier this year.

Wayne, good question. Thanks. Just in terms of other opportunities, I mentioned that Pat and I have been talking for over 2.5 years. Last year, we decided to pivot to SilverCrest just given there was a window of opportunity and the timing associated with that opportunity, which, as you mentioned, we closed in February of this year, and then we kind of pivoted back to Pat and the New Gold team.

We've always seen this as a really interesting and unique combination to add 2 high-quality Canadian assets into our portfolio, what it does for the combined company and that cash flow profile and to be able to do it on an accretive basis, you really can't find opportunities out there. We have pretty stringent M&A filters and New Gold is the one that checks all of the boxes. And so that's why we've had this opportunity really on our radar screen going back now over 2.5 years.

Okay. Great. And then maybe just wondering how you guys viewed the Rainy River asset within the context of the broader portfolio given the shorter mine life there?

Yes, sure. I mean I mentioned the third quarter, I think, was a great indication of just how far Pat and the team have come with transitioning and repositioning Rainy River with over $200 million of free cash flow just in the third quarter. I think the reserve mine life right now is out to 2023. There's been a lot of work that's gone in to get Rainy River to where it is today. And the one thing that only now is really starting up is the exploration focus, and that's something we're excited to come in and carry on and in fact, accelerate. We see a lot of potential there. It's still early days, both at surface and underground and then on that large package -- land package that they have.

So I think there's a lot going on there at Rainy River between the transition from open pit to underground over the next few years. And I think another evolving chapter there now will be on the exploration front as we increase and sustain a higher level of investment there in exploration.

Okay. Great. And then maybe just last one. How should we think about Silvertip here still in the pipeline? And do you view potential for divestment of some of the other gold assets like Wharf or Kensington? And then just given the strong free cash flow profile, are you going to look to further deploy that cash following this transaction?

Yes. Let's see. On the kind of non Coeur question, at this point, we look at every asset that we have as being strong contributors. We've gotten really over the hump at Kensington. That's one that needed a fair amount of investment to get to where it is now, a solid free cash flow contributor. Wharf just continues to give -- I think we're over now $500 million of free cash flow since we acquired Wharf for $100 million back in 2015, and we're looking to the end of this year there at Wharf to hopefully deliver a meaningful increase in the mine life at Wharf. So each of our assets, I think, is contributing. And so we can get past closing and integration, and then we can always look at the portfolio and assess. But right now, we like the composition of the portfolio that we have. It's a great balance.

Silvertip, yes, I think -- and I tried to allude to it in the comments, obviously, having a larger platform, having a bigger presence in BC, those are both things that could be additive to Silvertip as we continue to evaluate that high-grade polymetallic critical minerals project with a hefty silver component up there in Northern British Columbia. Probably doesn't change the timing. We still have drilling. We still have project stage gates around completing an initial assessment. And if that's attractive, moving on to the next phase of a PFS and if that's successful, et cetera, et cetera. So I think Silvertip is still sort of that longer-term option for that next leg of growth, but it probably puts us in a better position from a capacity standpoint to be able to take that on when the timing is right, assuming there's an economically viable project there.

And then return of capital. Yes. I think, yes, that's one of the attributes that really attracted us to this opportunity. This company on a combined basis, whether you look at spot prices or you look at consensus prices, is going to be literally accumulating billions of dollars of cash over the next several years. There are some great places to allocate that capital back into the business. So we mentioned the K-Zone. That's a significant driver of future growth and likely worthy of investment. The exploration, I mentioned at Rainy River, but throughout our portfolio, we've got a lot of brownfield exploration potential at places like Palmarejo, Kensington, at Las Chispas. We'll continue to deploy capital into those high-return opportunities.

And then as cash builds up, we will definitely be talking to our Board post closing about how do we return capital, a higher amount, maybe in a more sustained way and what the alternatives are there to have a robust capital return policy back to stockholders.

The next question comes from Lawson Winder with Bank of America Securities.

Patrick, a question directed more towards you, I think. Just looking at Slide 11, which does a great job of highlighting some of the benefits of this transaction and some of the high-quality assets in both of the portfolios. But one thing that jumps out is the market capitalization of Coeur is about 2x New Gold. While New Gold and Coeur Mining have about the same gold equivalent production. So Coeur has about 644,000 ounces next year. You guys have about 598,000. I mean, so the 2 companies look rather comparable. I guess the question on my mind is like why sell now when -- this slide strongly argues for a doubling in New Gold's market cap from here as a stand-alone company?

Thank you for the question. So it's pertinent. So the fact is on the short term is right now, but we look in the long term, too. So we are at the inflection point to execute C-Zone and to complete also the development of Rainy River. And we are now seeing more bigger scale. And we look at different opportunity with that and believe that the combination with Coeur is the best next step for New Gold based on their mine life, too. And we're getting in scale. We're diversified. We have a higher quality portfolio, long-life asset and also the where to play was an important factor for us.

And the thing that -- I think the 3 jurisdictions where we're working in are very attractive, and it will generate a robust free cash flow. So that's the -- and we diversified the risk on 7 assets, too. So I'm not saying that I'm not used to deal with risk. It's my job. But 2 assets that are performing is today, it's excellent. But if you can build that on 7 assets, you can take decision on the long term and make decisions that are in the best interest of the shareholders on the long term. I think it's the fact that we are adding. We have the benefit. We expose our shareholders to silver. I think that is excellent. The 3 commodities are really very good mix. It's very accretive. Our shareholders are keeping exposure to copper and gold, but they're adding silver.

None of the assets -- on the 7 assets, none of -- there are no asset that is more than 25% of the EBITDA -- of the NAV, sorry. So I think it's excellent. It's well balanced. And also what is interesting because we did our work on Coeur asset, we really like the assets. So Rochester is having a promising future in terms of exploration. I think and is there for good reason for a long period of time. I was personally really impressed by the quality of the execution, the commitment of people and the future that we can have at Palmarejo and Las Chispas with a low tonnage but high quality and an asset that is having a promising future in terms of exploration.

I think previously, we had a question about Wharf. Wharf is having also -- if you look at the mine life, we're seeing the potential to extend the mine life of Wharf, and it's well managed, good discipline and also is a low risk. And also it's the same for Kensington. So it's -- I think it's -- we are bolting 7 mines in great reduction with exploration potential. And I think it's going to be a really nice platform and derisk for a lot the value for shareholders in the long term.

Okay. Understood. Could I ask about looking at New Gold from the point of view of having a critical mineral asset in New Afton. I mean, have you guys had any preliminary discussions with Investment Canada just to get a sense of how they might think about this transaction, particularly vis-a-vis the large copper component at New Afton? And do you perceive any risk around the Investment Canada ruling?

Yes, I'll take that. And Pat, feel free to chime in if I don't cover anything. We haven't had any preliminary conversations. We see this -- we'll submit an application, but we see this as providing multiple benefits to Canada. I mean, with the elevated levels of investment, not only in exploration, but in things like a block K, maintaining the Toronto office, the team, the TSX listing, we see this as in mostly a precious metals through a precious metals lens. But we'll go through the process. It's probably the reason why the estimated closing date is in the first half of 2026 because that will probably be the long pole in the tent. But we don't see there being a significant level of risk associated with Investment Canada Act approval.

Okay. And then if I could just push you guys a little bit on the exact timing of the shareholder vote. So you mentioned Q1. I mean, do you have a sense if it would be like January, February, March or even a week within Q1 that you've potentially narrowed it down to at this point?

And that should be a simple question, [ Lawson ], but then you talked about the government shutdown here in the U.S. and the SEC trying to clear a merger proxy to file and get clear and mail. That's an added level of complexity, I guess, when thinking about your -- an answer to your question. Early in the first quarter would be the goal, but let's see how quickly we can get through the SEC and mail out a proxy.

The next question comes from Eric Winmill with Scotiabank.

Mitch and Patrick, congratulations on the deal. I think a lot of my questions have been answered. I think a bit of confusion there anyway. So just to follow up quickly on the capital allocation. And obviously, New Gold is set to generate pretty strong free cash flows in the year ahead. Any additional detail in terms of the Coeur side in terms of big capital programs underway? Or is there an ability to pay down debt sooner on the Coeur side?

Yes, sure. Coming into this year, debt repayment was definitely that along with closing Silvercrest and integrating Silvercrest. We're right at the top of our to-do list. We have repaid debt faster, as you might imagine, than planned and have really now gotten to the point where the only thing left on our balance sheet are the [ 5 and 18 ] senior notes. There's about $300 million of those outstanding. They're not due until 2029. That's a pretty low-cost, patient, flexible piece of capital that allocating capital to taking out [ 5 and 18 ] paper is probably not the highest and best use. So we'll probably just leave those. I mean we've been chipping away at a small amount of remaining capital leases. But as we end the year here, and I think last week on our earnings call, I mentioned we expect cash to exceed $500 million by the end of the year.

We'll go into 2026, continuing to build cash, which we think is okay. We've lived life the last few years with a pretty lean cash balance as we've gone through a lot of this heavy investment. So letting cash build up, then we can get on the other side of the closing of this transaction, and then we can have a good discussion with our Board about allocating that capital.

In terms of big projects, we're -- like I said, we've come out of the heaviest cycle there with the Rochester expansion in particular. We have a few -- we have a leach pad expansion out there at Rochester. We have a tailings dam raise that's underway up at Kensington, those kinds of things. But otherwise, we're now getting into this phase of more just of a sustaining CapEx and heavy free cash flow, which is what we've been working toward the last 5 years or so.

Okay. Fantastic. I really appreciate it. Maybe just one more on deal synergies. Any additional details you could provide there on where you see opportunities for synergies?

Yes. This is less about synergies and really more about what these 2 companies together represent and how unique and special of a company this is with the scale, the quality with the U.S./Canada footprint with likely an investment-grade credit profile. This is going to be a much lower risk, higher quality, more resilient business. And so it's really driven more by that and less about synergies.

In fact, the New Gold team is a critical part of the success of this transaction going forward. When you think about the bring ramping up Block C and then hopefully, future Block K out at New Afton, the transition from open pit to underground at Rainy River. Those teams are -- they're amazing. They're experienced, and they're really critical toward retaining and continuing to deliver on those key priorities at those operations. So it's more about that and less about synergies.

[Operator Instructions] the next question comes from John Tumazos with John Tumazos Very Independent Research.

If you paid all the new gold debt off next year and all the miscellaneous derivative liabilities, funded reclamation and every wish list for CapEx and exploration on both sides, at current prices, roughly how much cash would you have left over?

At current prices, I'll bet you, you'd still be around that $1 billion ZIP code, John.

So you got a lot of work to figure out how to spend the money.

It's a high-class problem, but we'll think of it less as spending and more about investing and how do we prioritize that in a way that feeds the best returns and drives that ROIC that's gone -- been going up for us. And in the case of New Gold is also one of the peer-leading ROICs. How do we keep moving that in the right direction. And once all of those priorities are funded with what's left over, how do we most efficiently return that capital back to stockholders.

I remember meeting Justin Rice and Dennis Wheeler in 1980 in Wallace, Idaho when it was just the Coeur mine, and I'm just pinching myself at 20 million ounces of silver and almost 1 million ounces of gold. Congratulations.

Thanks John. Yes, those are two names. I appreciate your comment.

There are no further questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to Mitch Krebs for any closing remarks.

Okay. Well, hey, thanks, everybody, for joining on such short notice, and we look forward to updating you as we move ahead on this transaction and work to deliver the benefits of this exciting combination. So thanks again. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Coeur Mining Third Quarter 2025 Financial Results Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Mitchell Krebs, President and CEO. Please go ahead.

Good morning, everyone, and thanks for joining our call today to discuss our third quarter results. Before I kick off, please note our cautionary language regarding forward-looking statements and refer to our SEC filings that are on our website.

The third quarter highlights on Slide 3 showcase our second consecutive quarter of record results driven by higher realized prices strong production levels and solid cost management. As a result, our cash balance is growing rapidly and is expected to exceed $500 million at year-end placing us solidly in a net cash position heading into 2026. Based on recent price levels, we now expect our full year EBITDA to exceed $1 billion and our full year free cash flow to top $550 million, both of which are higher than our prior estimates.

Mick and Tom will provide some further operational and financial details in a few minutes, but a couple of other highlights I wanted to quickly mention. Our Las Chispas, silver and gold operation in Sonora, Mexico had another consistent quarter of production during its second full quarter, since the SilverCrest transaction closed back in February. Its free cash flow increased by 34% to $66 million in the third quarter.

In addition to their solid operational and financial results, we issued an exploration update last month that highlighted several high-grade intercepts at Las Chispas. We couldn't be more pleased with the SilverCrest transaction and the addition of the Las Chispas operation managed team.

It's a great example of well-timed M&A that has allowed us to significantly up-tier our asset portfolio by adding low-cost silver production and immediately bolster our balance sheet, which has put the company in a terrific position as we look ahead to what should be an even stronger fourth quarter and a record-breaking year in 2026. On the share repurchase program, we managed to get nearly 10% of our initial $75 million program completed so far, and we'll continue to evaluate our repurchase activities and overall capital allocation priorities with our board over the coming months.

At Rochester, the team continued to make solid progress toward achieving steady state. We mentioned during our last call that we took extended downtime early in the third quarter to make some modifications to the crusher corridor, which have proven to be successful. Mick will talk more about the progress there in a few minutes.

Finally, you'll see we fine-tuned our full year production guidance ranges and we also tweaked our cost guidance ranges. These narrower production guidance ranges resulted in a small increase to the midpoint of our full year gold production guidance and a slight decrease to the midpoint of our full year silver production guidance. The main drivers to these adjustments our Las Chispas, Palmarejo and Wharf being nicely ahead of plan, offset by some Rochester ounces being pushed into 2026 to reflect lower than planned crush tons so far this year.

Before I turn it over to Mick, I just want to quickly thank the team. Our safety and environmental performance this year is among the best in our company's 98-year history, and the operational and financial results speak for themselves. It's great to see these themes all coming together at the same time, the impact of our recent investments in expansions and exploration, the SilverCrest acquisition and now these higher prices to generate these strong results for our shareholders from our balanced platform of North American assets.

Mick, over to you.

Thanks, Mitch. The third quarter was another solid step forward for Coeur, marked by strong execution and operating discipline throughout the business. Consolidated gold and silver production continued its 2025 trend of positive sequential quarterly increases, delivering over 111,000 ounces of gold and 4.8 million ounces of silver.

Adjusted cash per ounce for gold and silver also continued that positive trend compared to Q3 2024 at $1,215 per ounce and $14.95 per ounce, respectively. Looking in more detail at each of the operations, rock solid, consistent production and cost performance with a balanced portfolio was the key takeaway in the quarter.

Beginning with Las Chispas, the operation continues to perform exceptionally well, with silver production increasing to 1.6 million ounces and gold production to 17,000 ounces, generating $66 million of free cash flow, as Mitch mentioned earlier. The mine's outperformance to date and expectations for a strong finish to the year led us to increase the range of 2025 silver and gold production guidance. I'm also pleased to report that the full integration of Las Chispas is now complete, kudos to the entire team for a job well and safely done.

Turning to Palmarejo. The mine delivered $47 million of free cash flow during the quarter with strong recoveries and mill throughput that reached their highest levels in 6 quarters. The pace of exploration activity has also increased in the East District outside the Franco-Nevada gold stream area of interest. Including drilling, mapping and site work in the highly prospective [indiscernible] and Guazapares trends, which we believe will be key drivers in Palmarejo's next leg of growth.

Palmarejo's strong performance year-to-date and expectations for a good finish to the year supported an uptick in their full year 2025 production guidance ranges and driven by continued strong cost management a reduction in their full year 2025 cost guidance ranges.

Turning to Rochester. The priority in the third quarter remained on building consistency and momentum through the 3-stage crushing line, which continues to drive steady sequential growth in production at a lower overall cost profile. Gold and silver production increased 3% and 13%, respectively, compared to the second quarter driving a second successive quarter of free cash flow of $30 million.

I'm pleased to report that the average particle size continues to trend downward for material passing through all 3 stages of crushing from a P80 of around 0.92 inches in the second quarter to slightly better than budget levels of 0.84 inches in the third quarter and the related recoveries continue to track our PSD models just as we expected.

As mentioned last quarter, the team took an extended down period in July to successfully implement several modifications after startup to further enhance the tremendous processing power and efficiency of the cushing train. We also managed through some premature beltway challenges in the secondary reclaim feeder during the quarter with a few more minor modifications to address this in the fourth quarter.

This downtime resulted in a slight decrease in tons crushed compared to the prior quarter. However, total tons placed on Stage 6 in the third quarter increased over 9% to 8.3 million tons by utilizing our available fleet and supplementing crushed tons with direct to pad material. Revised 2025 production and cost gains ranges at Rochester reflect the cumulative effects of this year-to-date downtime and the expected timing of ounces coming from Stage 6.

Moving to Kensington. The positive impact of the recently completed multiyear underground development program continues to shine through in the form of a stronger, more consistent production profile. Gold production increased for the third consecutive quarter exceeding 27,000 ounces. Cost per ounce at Kensington has shown similar sequential improvement in 2025 reaching $1,659 in the quarter.

These positive trends contributed to free cash flow of $31 million, Kensington's highest quarterly cash flow in over 6 years. In light of strong results to date, coupled with greater flexibility and productivity taking route throughout the mine, Kensington's 2025 production guidance has increased and its 2025 cash per ounce range has been narrowed downward.

Finishing up at Wharf, the mine achieved its third consecutive quarter of increased production and lower cost applicable to sales. Quarterly gold production increased by 16% to 28,000 ounces, leading to free cash flow of an impressive $54 million. This great year-to-date performance led us to increase full year gold production guidance by 3,000 ounces. At the same time, moving cash guidance down by $125 per gold ounce. As Mitch mentioned, the power of Coeur's balanced North American portfolio is fully enjoying this moment of record-setting metals prices.

With that, I'll pass the call over to Tom.

Thanks, Mick. As highlighted on Slide 8, our strong Q3 financial results demonstrate the power of our 5 asset portfolio, which is delivering as expected. It was pretty exciting to see the surge in quarterly free cash flow and EBITDA margin during the quarter. Perhaps more exciting is the resulting dramatic improvement of the company's financial position in such a short period of time.

Metal sales climbed 15% to $555 million during the quarter, driven primarily by a healthy increase in the number of ounces sold and further accentuated by the 15% higher silver price quarter-over-quarter. This strong top-line revenue growth, combined with overall solid cost control, led to several new quarterly financial records for net income, adjusted EBITDA, free cash flow and adjusted EBITDA margin. One neat metric to highlight is that Coeur's free cash flow party continued at a pace of roughly $2 million per day during Q3, and we expect this rate to increase with the expected higher Q4 realized prices.

Turning to the balance sheet on Slide 11. Our cash balance grew to $266 million. We took advantage of our improving financial position to early repay $10 million of higher cost capital leases as we aim to drive down our interest expense even further. We have now repaid over $228 million in debt during 2025, driving our net debt below $100 million. We closed the quarter with a net debt ratio of 0.1x.

We are prepared to declare victory on achieving our long-term goal of net debt to EBITDA of 0 during Q4 2025, which is nicely ahead of schedule. Included in our Q3 2025 earnings was a significant milestone around our $630 million of U.S. net operating losses. As the students of accounting on this call will appreciate, we recorded these U.S. net operating losses on the balance sheet during the third quarter.

This accounting requirement resulted in a onetime $162 million noncash tax benefit for accounting purposes during the quarter, which is a reflection of the strong performance of the U.S. operations over the past 3 years on a cumulative basis. We have enhanced our guidance and disclosure relating to tax matters to provide additional color on the go-forward effective tax rate and on quarterly taxes paid.

Speaking of guidance, we have fine-tuned our 2025 production and cost guidance as is the normal cadence after the end of the third quarter. As Mitch referenced, the overall production changes are truly minor tweaks and speak to our overall predictability over the past 3 years. Despite a stronger peso than we had budgeted and higher royalty obligations due to stronger gold and silver prices, we are particularly excited to lower our cost guidance at 3 of our 5 mines, which reflects the efforts of our business improvement culture and signs that our 2025 inflation estimates were conservative.

With that, I'll now pass the call back to Mitch.

Thanks, Tom. Before moving to the Q&A, I want to quickly highlight Slide 13 that summarizes our top priorities for the remainder of the year. We've made tremendous progress this year by delivering on our strategy and pursuing opportunities to further improve the quality of the business. We expect this discipline and focus to result in a strong finish to the year and to position us exceptionally well for a record year in 2026.

With that, let's go ahead and open it up for questions.

[Operator Instructions] Our first question comes from Mike Siperco with RBC Capital Markets.

Maybe starting possibly with -- maybe starting with Mick on Rochester or I assume it's Mick anyways. Net of the guidance change and what you're seeing in the second half at the crusher, can you talk a bit more about what's needed to get the operation up to full capacity or steady state, let's say, into 2026 from a throughput perspective?

Mick, do you want to go ahead and take that?

Yes. Mike, thanks for the question. Absolutely. We telegraphed a little bit that we're going to do those extended shutdowns during July, and we did that. And we've got 3 really strong projects done, 1 on the primary, which was really to help us get more efficiently in and out of the primary to maintain that asset around a real system underneath the primary. So that allows us to then run more consistently at the primary level.

On the secondary, it was about some modifications that we did to split the 2 secondary systems up, so that we can run 1 of the systems, while maintaining the other one, which also impacts the productivity improvements. And then the third key project that we did during the quarter was an auto sampler downstream around the tertiary system that allowed us to both drive uptime to get more tons through the pipe and to get better visibility of the size fraction online during dynamic operations.

So all 3 of those projects have really driven the opportunity for more uptime for size control and productivity at Rochester. That was done in the third quarter, and we've seen some good things that that's getting some traction and we're looking forward to better results going forward.

And just, Mike, to piggyback on what Mick just highlighted to get to the point of what's needed to get up to capacity out there and say that the unplanned downtime late in the third quarter regarding that conveyor belt under the secondary crushed ore stockpile that cropped up, which caused us to to lose a little bit of momentum there on the back of completing those projects that Mick just highlighted, that will get addressed here in November.

And that should -- there's always going to be something I'm sure that pops up from time to time, but that's probably the 1 thing that we need to get behind us and then we'll hopefully have some clear runway on the backside of that. Is that fair to say, Mick?

It's absolutely fair to say. The trend is positive. We're seeing some better numbers as we go through this month and year-to-date now that we've got those projects behind us, and we'll just continue to tweak. I'm really actually quite happy where we're at. It's not unusual that we'll do some of these modifications at the startup. And in relative terms compared to the industry average, it's been quite a lean set of modifications to be there. So, so far, so good.

Does that help, Mike?

Yes. And I guess just to follow-up on that, that was going to be my next question. I mean when you look at the issues that you have been addressing, either sort of planned or unplanned, would you say this is more normal course adjustment during a ramp-up of an operation of this size or are you seeing more with respect to either the conveyors or the wear or the material you're running that maybe needs more of a step back and some readjustment? Or is it both?

I'd say it's much more of the former, Mike, things that when you run a large crusher train like this for a little while, if something pops up, you fix it and then you move on.

Mick, fair to say?

Absolutely fair to say. It's not atypical conveyors, belts, adjustments to shoots a little bit on strike up bars around the secondary that we'll make adjustments on that will give a bit more longevity on the belts, and we should see the benefits of that going forward.

So then if I can ask and maybe without getting into guidance specifics, the original 2025 guidance that called for about 20,000 ounces of gold and 2 million ounces of silver in Q3 and Q4. Is that still a quarterly run rate that you feel confident can be reached next year?

Yes, I'd say the step up from 25% to 26% will be pretty material out there, getting closer to that on a full year basis, that annual kind of plus 30 million-ton crushing rate, which is really where we need to be to achieve that kind of annual 7 million to 8 million ounces of silver 70,000 ounces of gold on an annual basis.

So we expect to see some momentum in the fourth quarter heading in that direction. And then sustain that more throughout 2026, and that's going to give us a nice incremental step up year-over-year out there.

Okay. Great. Maybe 1 more for me, and then I'll turn it over. Just [indiscernible] on growth, nice segue to M&A. Obviously, Las Chispas has worked out pretty nicely for you over the last 12 months or so. You seem to be anyway as well into cash harvest at this point. How are you thinking about other opportunities either producing or in development out there in the market? And maybe if you can address that in the context of how you're thinking about Silvertip in the longer term?

Yes. Yes, sure. Thanks for the question. Look, we came into this year very internally focused on some clear priorities around closing and integrating SilverCrest, ramping up Rochester to steady state, paying down debt quickly. And now here we are almost in November, and you can say that we've either completed or are well on our way to checking the box on all of those.

And we're always looking, right, at that things that we could do to potentially make this a better business up tier the quality of the company and the operations that we have not that much of a focus on going back into the development stage game, after having just come out of a period of pretty heavy investment at Rochester, Kensington in exploration, being in this free cash flow positive phase is somewhere where we'd like to remain for a while.

And so, any opportunities that we look at, though, have to fit a fairly rigid set of criteria around being gold and silver and improve the quality of the business, sticking in our jurisdictions where we are. So we're always looking at those things. There's not a lot of those, frankly, that fit all those criteria. So we're always actively monitoring and evaluating those kinds of opportunities.

Just turning to Silvertip for a second, that's very much a part of how we think about growth in the future, not necessarily in the near term, but looking out a bit longer term, that's a significant leg up in growth, in particular, on the silver side, that could bring in a pretty chunky amount of annual silver production, assuming Silvertip becomes a mine.

I think, I said last quarter, we kicked off an initial assessment here to take a look at that project. We'll need to complete that next year, consider whether we move on to the PFS phase. And then if that clears -- if the project clears that hurdle and onto the feasibility study stage, obviously, permitting and then a lot of drilling. So all of those things take time. We don't want to do anything to cut any corners or any shortcuts. We want to make sure we get it right.

Of course, Canada is providing a lot of support for critical minerals projects like Silvertip. So we're getting our arms around that and seeing how that might affect the overall time line. But -- so it's out there a few years, but it's something that we're continuing to advance. And I think it's probably going to look pretty attractive, especially at the -- in the current metals price environment.

Our next question comes from Joseph Reagor with ROTH Capital Partners.

Mitch and team. So just first thing, I know you guys gave a little bit of guidance on how the tax rate is going to look this year. But what should we be thinking about as far as next year and beyond now that this is -- you have this deferred tax asset?

Tom?

Sure. Thanks. We're taking bets on whether we get a tax question. So thank you. So again, it was critical to highlight the setting up of the tax asset. And so for years, we've really had basically a 0 effective tax rate on our U.S. earnings. And so that will change starting next year. The federal rate is 21%. The states are -- you might want to add in like 3% on average.

And so that should be the go-forward kind of rate. We'll tweak that, of course. We have to wait and see how fast we choose through all of the net operating losses and trying to predict how fast that's going to happen with these increasing commodity prices has been -- it's a high-class problem to have. But we should even be in a situation, where we -- there's a potential to actually pay U.S. income tax, which in 2026, federal income tax, which was a pipe dream many, many years ago. So I don't know, if that gave you enough color, Joe, but that's how you should be thinking about it.

That's helpful. And then was a good quarter overall, but I did note Palmarejo and Las Chispas saw a little bit of a drop in grade -- was there anything to that? Or is it just sequencing? Is it Las Chispas -- was it related to the stockpiles that are processed, like any color you guys can give there for what drove that?

Yes, I think you actually just almost answered the question with your answer there with your suggestions at least. Mick, do you want to give a little more color?

Yes. I mean in underground [indiscernible] mines, of course, we're already always characterizing a little bit more ore as we go through the production phase. And when we do that, we then look to see whether that was economic. And then you can either stockpile that ore or you can run it through the pipe. With Palmarejo, of course, we've got upside in our mill and capacity there. So we chose to run some of that. We'll run about, I think, 6% more tons through the pipe in the quarter, and that helped to make those adjustments to the gains.

But let's just ask for sure, we ran a lot of that historic stockpile down, and that's a great thing. So that we've now got a very clear view of the stockpile that we have sitting there at Las Chispas.

Our next question comes from Kevin O'Halloran with BMO Capital Markets. .

So great to see the cost guidance coming down at most of the operations, and it looks like that's mostly on the back of higher guided production. But can you guys comment on what you're seeing from a unit cost perspective? And any main cost pressures that you might be seeing across the portfolio?

Thanks for the question. I think we have that inflation slide in the deck that we typically include that shows from our perspective, we're still squarely in that sweet spot of strong rising prices and flat input costs into the business. I think, it's Slide 9, in the deck. Combined, those are close to, I think, around 60% of our total OpEx.

And you can see that whether you look over the last 12 months or the last 24 months, it's a pretty attractive cost environment that we're seeing. So not a lot of pressure. There's no tariff pressure at all, at least yet. But I don't know, Mick, Tom, is there anything on the unit cost side that...

Yes. I mean, look, we saw inflation 3 years ago or 2 years ago, when we put really robust cost controls in place at all of the sites and they're holding true. We're still focused on costs even in this nice price environment and being disciplined in that space helps to drive the margin. So yes, we're enjoying that.

Kevin, 1 thing to pile on is just from a royalty perspective, I mean, that's something that can impact costs. And so despite paying some higher royalties, even out at Rochester we've had a royalty that we'll start paying based on these prices. And so that drove a lot of the Rochester increase. But I think it's fantastic that we're able to lower the cost at the other 3 mines despite the higher royalty pressure.

And don't forget the peso as well, right? The peso has been very strong. And Mick and Sandra and the team down in Mexico have done a great job on costs. So really happy.

Great. Yes. That's helpful. Just moving on, kind of already touched on this at Palmarejo, but with higher metals prices, I think pretty much everyone in the industry is facing the decision of whether to send lower grade ore to the mill. Maybe it was previously considered waste and now with metals prices, it can go to the mill. You mentioned you're seeing a bit of that at Palmarejo. Are you seeing or facing any of those sorts of decisions at any of the other operations? And do you expect that impact going forward? Or do you expect to be sticking largely to the mine plans?

Yes, Mick, do you want to...

Yes. I mean, look, on an annual basis, we'll try our best to stick to the mine plans. We're always finding that marginal ore, and then we'll make a decision about that to stockpile that we run it. And the great thing is though we don't just look at that grid, we look at the recovery. So if you look at Palmarejo, for instance, similar lower grade material actually recovered better.

And so the balance of play on that was good, and that's why you see that positive that positive outcome at Palmarejo. So just the grid by itself has to be coupled with the tons and the recovery performance.

[Operator Instructions] There are no further questions at this time.

Okay. Well, we appreciate everybody's time today. Thanks for joining our call. We wish you all a happy Halloween. Safe, healthy holiday season ahead. And we'll talk to you when we report fourth quarter and year-end results early next year. Thanks. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.