Iamgold Q3 2026 Earnings Call Transcript

Iamgold (NYSE:IAG) reported third-quarter financial results on Friday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Iamgold produced 186,900 ounces in Q3, bringing year-to-date production to 558,600 ounces, and remains on track to meet full-year guidance.

The company transitioned to a net cash position with over $1.6 billion in liquidity and generated $2.4 billion of adjusted EBITDA in the last 12 months.

Iamgold repurchased over 32 million shares for nearly $600 million since December and plans to continue buybacks funded by Essakane cash flows.

The company exercised its right to repurchase half of Franco-Nevada’s royalty on Cote for $525 million, aiming to lower cash costs by $150 per ounce starting in 2027.

Cote mine showed improved operations with September’s plant throughput exceeding nameplate, and expectations for strong fourth-quarter performance.

Cote’s updated mine plan, combining Cote and Gosselin, will be released this quarter, potentially increasing reserves and mine life.

Essakane and Westwood mines are performing well, with Essakane generating significant cash flow and Westwood expected to finish at the upper end of guidance.

The Nelligan Mining Complex is seen as a future growth driver, with plans for a larger drill program and a preliminary economic assessment by mid-2027.

Financial highlights include third-quarter revenues of $856.5 million and adjusted net earnings of $237 million, with plans to maintain capital expenditure guidance.

Management is considering introducing a dividend in 2027, demonstrating a strong balance sheet and capital return strategy.

Full Transcript

OPERATOR

Thank you for standing by. This is the conference operator. Welcome to the Iamgold third quarter 2026 operating and financial results conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero.

At this time I would like to turn the conference over to Graham Jennings, Vice President, Business Development and Investor Relations for Iamgold. Please go ahead, Mr. Jennings.

Graham Jennings (Vice President, Business Development and Investor Relations)

Thank you, operator, and welcome everyone to our conference call this morning. Joining us on the call are Renaud Adams, President and Chief Executive Officer, Maarten Theunissen, Chief Financial Officer, Bruno Lemelin, Chief Operating Officer, Ankit Shah, Chief Strategy Officer, and Annie Torquay, Chief Legal Officer. We are calling today from Iamgold’s Toronto office, which is located on Treaty 13 territory on the traditional lands of many nations including the Mississaugas of the Credit, the Anishinaabeg, the Chippewa, the Haudenosaunee and the Wendat peoples. At Iamgold, we believe respecting and upholding Indigenous rights is founded upon relationships that foster trust, transparency and mutual respect.

Please note that our remarks on this call will include forward-looking statements and refer to non-IFRS measures. We encourage you to refer to the cautionary statements and disclosures on non-IFRS measures included in the presentation and the reconciliations of these measures in our most recent MD&A, each under the heading Non-GAAP Financial Measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information.

The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and CEO, Renaud Adams.

Renaud Adams (President and Chief Executive Officer)

Thank you, Graham, and good morning everyone. Thank you for joining us today. The third quarter was a safe and steady quarter for Iamgold. We produced 186,900 attributable ounces, bringing year-to-date production to 558,600 ounces. We are on track to meet full-year guidance and expect the fourth quarter to be our strongest, led by Cote. A year ago Iamgold carried more than $800 million of net debt. Today we are in a net cash position with more than $1.6 billion of liquidity.

Over the last 12 months we’ve generated $2.4 billion of adjusted EBITDA. And since launching our buyback program last December, we have repurchased over 32 million shares for nearly $600 million. Yesterday we notified Franco-Nevada that we are exercising our right to repurchase half of its gross margin royalty on Cote for approximately $525 million. Iamgold will fund the full amount and keep the full benefit, lowering Cote’s cash costs including royalties by roughly $150 an ounce starting in 2027.

Put simply, we are using our balance sheet to retain more of the value of our largest, longest-life Canadian asset. Operationally, the third quarter was a turning point at Cote, its first full quarter without contractor crushing. In September, the plant averaged 37,100 tons per day, above nameplate, and processing contract costs fell to $15.36 per ton per day. September showed what the operation can deliver and we expect a strong finish to the year. Meanwhile, Essakane remains the engine behind our buyback, and Westwood is tracking toward the upper end of its guidance.

Looking ahead, every asset has a meaningful catalyst through 2027. It starts this quarter with the updated Cote mine plan, which will combine Cote and Gosselin for the first time, followed by studies across Essakane, Nelligan and Westwood through 2027. This is where Iamgold stands today: a strong balance sheet, significant capital return to shareholders and a portfolio of long-life, Canadian-focused assets with real growth ahead. With that, let’s get into the quarter starting with health and safety. Our total recordable injury frequency rate is tracking at 0.57 for the year, with no significant environmental incidents reported. Our health, safety and environment teams continue to redefine what responsible mining is today and I thank them for their commitment to each other and our communities.

On production, we have produced nearly 559,000 ounces of attributable year to date. We need about 161,000 attributable ounces in the fourth quarter to reach the low end of our consolidated guidance, well below what we produced in each of the first three quarters of the year. On costs, year-to-date cash costs including royalties are $1,251 per ounce and all-in sustaining costs including royalties are $1,821 per ounce. We expect both to finish in the upper range of annual guidance. Both Cote and Essakane carry royalties that are directly linked to the gold price. With our realized gold price year to date averaging more than $500 above our 4,000 guidance assumption, royalties have averaged $370 per ounce this year, or $45 per ounce above guidance.

On inputs, we saw inflation of about 3% on certain commodity inputs in the first nine months, within our expectations. Labor rates and retention continue to be a significant priority for Iamgold, particularly in Canada. On energy, as noted here, a $10 per barrel move in oil represents about $12 per ounce on consolidated costs including indirect inflation, equating to an approximate $25 per ounce cost increase above our guidance. With that, I will pass the call over to our CFO to walk us through our financial results. Martin.

Maarten Theunissen (Chief Financial Officer)

Thank you, Renaud, and good morning everyone. Strong operating results and a supportive gold price environment again translated into significant cash flow. Mine-site free cash flow was $404.3 million in the quarter, bringing year-to-date mine-site free cash flow to $1.3 billion. Operating cash flow before working capital and taxes for the first nine months was $1.7 billion. Working capital adjustments include $65.3 million of VAT refunds that Essakane received this year.

The operating cash flow funded capital expenditures of $320.3 million, $542.6 million of share repurchases, the net repayment of $200 million on a credit facility, $74 million paid to the Government of Burkina Faso for its portion of the Essakane dividend and $27 million of withholding taxes on our portion of the dividend. The net result is an increase in our cash balance of $344.7 million since the start of the year. In August we also completed the sale of our 35% interest in the Bambadji joint venture in Senegal for $69.7 million, or $48 million net of taxes and transaction costs. As a result, at September 30, Iamgold had $766.6 million in cash and cash equivalents with our $850 million credit facility undrawn for total liquidity of approximately $1.6 billion. Our only remaining debt is the $450 million of senior notes due October 2028, redeemable at par since October 15.

We will continue to evaluate the most efficient use of our balance sheet with respect to the notes and our cash. At quarter end, $321 million was held at Essakane; cash at Essakane built up between distributions and, after quarter end, a further $135.8 million was repatriated to Canada. Turning to our financial results, revenues for the third quarter were $856.5 million from sales of 199,900 ounces at an average realized gold price of $4,277 per ounce, slightly above the market price of $4,263 per ounce for the quarter. Adjusted EBITDA in the third quarter was $503.9 million. Adjusted net earnings attributable to equity holders were $237 million, or $0.42 per share, compared with $170.9 million, or $0.30 per share, in the prior period.

Earnings were primarily adjusted for the gain on sale of the Bambadji assets. Incurred capital expenditures were $109.7 million in the third quarter and $329.4 million year to date. Our full-year total capital expenditure guidance of $500 million plus or minus 5% is unchanged, which implies a step-up in spending in the fourth quarter. Within that total, we have reduced sustaining capital at Cote to $130 million on an attributable basis from $160 million due to the reprioritization of resources and deferral of flex credit projects to 2027.

This is offset by increases in funding capital at Essakane to $105 million from $165 million due to the change in the mining sequence that resulted in additional capitalized waste stripping. Turning to capital returns, during the third quarter we repurchased and cancelled approximately 7.6 million shares for $134.7 million at an average price of $17.58 per share. Since the program began on December 25th, we have repurchased 32.1 million shares for $592.6 million at an average price of $18.47 per share. Our current normal course issuer bid runs to December 11, 2026, and subsequent to quarter end, our board authorized the company to seek TSX approval for a new normal course issuer bid for up to approximately 10% of our outstanding shares.

The buyback continues to be funded by cash repatriated from Essakane. In June, Essakane declared a dividend of approximately $500 million from its 2025 earnings. Iamgold’s portion, net of the government share and withholding taxes, is approximately $400 million. Of this amount we have received a total of approximately $225 million since June, with the balance expected to be distributed through the rest of 2026 and early 2027 as Essakane generates cash in excess of its working capital needs.

On the Franco-Nevada royalty, as Renaud mentioned, we have delivered an irrevocable notice to repurchase 50% of the Franco-Nevada 7.5% gross margin royalty on Cote. Sumitomo decided not to participate, so Iamgold will fund the full price of approximately $525 million from available liquidity and retain the full economic benefit, reducing our effective gross margin royalty from 7.5% to 2.14%. We expect the transaction to close in December with economic effect from January 1, 2027.

This is an important transaction as it allows us a greater share of the cash flow from our largest asset. This fits squarely within our capital allocation framework: cash flows from our Canadian operations fund our Canadian growth at Cote, Westwood and Nelligan, as well as the Franco-Nevada royalty repurchase, further strengthening of the balance sheet and a possible introduction of a dividend, which we are contemplating initiating in 2027. Cash from Essakane continues to fund the share buyback, an approach we continue to evaluate for 2027.

And with that I will pass the call to Bruno Lemelin, our Chief Operating Officer, to discuss our operating results and outlook. Bruno.

Renaud Adams (President and Chief Executive Officer)

Thank you, Bruno. And beyond our three operating mines, the Nelligan Mining Complex in Quebec is where we see the next chapter of Iamgold. The complex holds 4.3 million ounces of indicated and 7.5 million ounces of inferred mineral resources across a dominant land position of approximately 134,000. Next steps: making one of the largest pre-production gold camps in Canada. This year is about drilling, and we have expanded our programs: Nelligan from 18,000 to up to 30,000 meters focused on upgrading ounces and testing extensions along strike and at depth; and at Monster Lake from 15,000 to at least 20,000 meters following high-grade hits deeper in the Mégane zone. In total, we have completed more than 70,000 meters across Nelligan, Monster Lake and Philibert so far this year. All of the primary deposits are within a 17-kilometer radius, which supports our vision of a central processing facility fed by multiple ore sources.

On October 27th, we released our latest drill results from the complex, and they continue to build our confidence in what we have in the Chibougamau region. What stands out to me is that all three primary deposits are moving in the right direction. At Nelligan, mineralization continues down plunge with several intersections grading well above the current resource average. Hole NE26272 is a good example. It intersected 77 meters at 2.23 grams per tonne, well below the current mineralized envelope at more than twice the average resource grade.

At Monster Lake, we have extended the high-grade Mégane zone to a depth of 600 meters and the grades are holding. ML 25293 returned 7.7 meters at 24.5 grams per tonne starting 760 meters down the hole. And at Philibert, our first drilling program confirmed the previously defined zones and grades and point to further potential at depth. Given these results, we intend to run a substantially larger drill program at the complex in 2027. We expect to publish a preliminary economic assessment for the complex in mid-2027, which will bring the larger 2026 drills program into the study and bring this deposit together into one development concept for the first time. And we see the potential for the complex to continue to grow well beyond it. Stepping back, Nelligan, Monster Lake and Philibert are each 100% owned by Iamgold, so our shareholders return the full benefit of the value we create.

With continued success, we see the potential for Nelligan Mining Complex to become one of the largest assets in Iamgold’s portfolio over time, and we are excited about the work ahead. With that, we will progress to questions. I want to congratulate our teams for another quarter of safe and consistent execution. Iamgold is on track for our production guidance. We have generated nearly $1.3 billion of mine site free cash flow so far this year, and we have returned close to $600 million to shareholders through our buyback since December 25, all while building a net cash position and a strong balance sheet. At the same time, we are investing in our future, and through 2027 every one of our assets has a clear catalyst which will demonstrate the potential of our portfolio from a position of financial strength.

Thank you for your continued support. Operator, you can now open the line for questions.

OPERATOR

Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. The first question comes from Anita Soni with CIBC World Markets.

Please go ahead.

Anita Soni (Analyst)

Good morning, guys. Thanks for taking my questions and congratulations on a solid quarter. Firstly, at Côté. Good to see the reduction in processing costs in September. It looks like you got down to that 15-ish mark that you were targeting. Would that be sustained into Q4 and 2027?

Bruno Lemelin (Chief Operating Officer)

Yes, that’s the plan. Actually, the goal for Q4 is to sustain the momentum that we have at operating at nameplate capacity for the whole quarter. So this is the goal, and we believe that with that production level it should be in line with that target.

Anita Soni (Analyst)

Okay, and then would that also—that 36k ton per day, is that the goal? And the $15 a ton for 2027, or are there other shutdowns or maintenance that we should be thinking about?

Bruno Lemelin (Chief Operating Officer)

No major shutdown until the end of the year and for.

Anita Soni (Analyst)

Okay. And then on mining costs—sorry, on mining costs, I just wanted to go over what you need to do in Q4 and 2027 to drive that closer to the sub-$4 per ton mark. And is that ultimately what you see as the target still, or are you still targeting something closer to the mid-3s on that, on mining costs per ton? So what do you need? I’m assuming it’s a pushback and opening up the pit from what I recall from the mine tour. But now that we have some numbers around it, I just wanted to get a little bit more color on what you need to do to drive those costs down.

Bruno Lemelin (Chief Operating Officer)

Yes. In Q4 we’re going to rely less on rehandling and taking re-feed from the low-grade stockpile. So we’re going to try to maximize most of the sent directly to the mill. So you will increase the efficiency of the whole fleet. After that, also as we expand the pit, you’re going to be able to have better packet definition, larger blasts. We’re also working on fragmentation, loading efficiency as well. So we have a very good plan ahead to decrease the cost from where we are right now toward the $4 and even in the mid-threes later on.

That’s our goal.

Anita Soni (Analyst)

Okay, and the last one I’m going to ask, and I’ll jump back in the queue and let other people ask questions. Martin, this one’s for Martin. Can you just walk me through how that royalty would be modeled? I just want to make sure that I’ve got it correct, but I would just assume the revenue times 2.14% and that would be the royalty portion of your cash cost, is that correct?

Maarten Theunissen (Chief Financial Officer)

It would be revenue less cash cost. So your gross margin times the 2.14%. And that is for Iamgold. If you model Iamgold at 70%, the asset on its own—yeah, 3.75%. The 30% that we now own that was previously owned by Sumitomo is what is reducing our portion at 70% further from 3.75% to 2.14%.

Anita Soni (Analyst)

Yeah. That’s where the complexity comes in. I might need a follow-up call. So yeah, I was just trying to figure out exactly how you would report these cash costs versus what the, like, the effective benefit. So I’d be modeling those, the gross margin at 3.75% if I model this at 100% basis, and then apply—anyway, we’ll take it offline. I think I’m running myself in circles on this one. Okay, thank you.

Maarten Theunissen (Chief Financial Officer)

Thank you.

Graham Jennings (Vice President, Business Development and Investor Relations)

Thank you for your question. Appreciate it.

OPERATOR

Thank you. The next question comes from Fahad Tariq with Jefferies. Please go ahead.

Fahad Tariq (Analyst)

Hi. Thanks for taking my question. On the Côté royalty buyback, can you just confirm that you’re using cash on the balance sheet to fund the 525 million and not adding debt? And then second, just any thoughts around how you came to the decision on the buyback now—any internal models on the payback period, IRR, et cetera would be helpful. Thanks.

Maarten Theunissen (Chief Financial Officer)

Good morning. So for the royalty—sorry, I missed part of your question—but basically for us, we will be using cash from the balance sheet. We’re going to continue to use cash as it comes in from Essakane to buy back shares as well. If there is a need, we might have to draw on a credit facility, but it would be very short term if we have to do that. The timing for us makes sense now because then it is effective on the 1st of January next year and it’s keen for the next year.

If you look at the valuation that Franco-Nevada did on the asset a year and a half ago when they bought the royalty from a third party, we are buying it at that same valuation effectively, but the gold price environment is a lot higher. So that is what is having the impact for us. And the additional $150 per ounce is also a big contributing factor for our decision to do this. So it gives a good return. It’s all dependent on gold prices, and I think having the full study later this year will help people understand that better.

Fahad Tariq (Analyst)

Okay, and then on that study, can you just talk about how we should be thinking about the reserve price assumption? And then also just to confirm, will that study only show the 40,000 tons per day base case, or is there some sort of upside case that will also show higher expansion?

Renaud Adams (President and Chief Executive Officer)

No, Renaud here. So to make it short now, the study is somewhat a bit of an update—kind of a new base case of 2022 where the asset was moving from 36 towards 42 with additional equipment that are currently being installed. So it’s going to highlight the full resource potential that we’ve discussed—Côté-Gosselin—which will be turned into the reserve. We’re going to use $2,100 an ounce for the reserve price for the study. And it does not highlight beyond, but would highlight a production profile that gives us the time to rethink and execute on time should we decide down the road to have an extension without losing the production profile.

That is the objective.

Fahad Tariq (Analyst)

And on the reserve price,

Renaud Adams (President and Chief Executive Officer)

$2,100 an ounce.

Fahad Tariq (Analyst)

Thank you.

OPERATOR

Thank you. The next question comes from Mohammad Sidibe with National Bank Financial. Please go ahead.

Mohammad Sidibe (Analyst)

Good morning, Renaud and Tim, and thanks for taking my questions. Just wanted to ask a question on the Burkina refining order and that November 1st requirement. I think you noted that you do have a temporary exemption on that requirement. First, how long does that last? And secondly, is this requirement impacting in any way, shape or form the cash repatriation or settlement timing that you currently have, and the benefit that you have of basically taking cash out of Essakane?

Renaud Adams (President and Chief Executive Officer)

Yeah, so here is that there’s kind of nothing really new here. I mean, this refinery—the government announced more than a year ago the construction of refining with the view to give them a chance as well to refine in-house, from the small scales up to the commercial. There is quite a bit of a ramp-up and so forth. So there is no date on the exemption. So business as usual for the time being. And eventually down the road there would be discussions with the refiner, and our view in this is when everything and everyone is ready, there could be a potential for us to refine in-country a portion of ore.

But there is quite a bit of work to be done before we get there in terms of any change or things like that in the process. So, Maarten, if you want to add anything—but for the execution per se, there is no date.

Maarten Theunissen (Chief Financial Officer)

Good morning, Mohammad. So the real risk of the impact here is really working capital, and if it delays the gold sales process. But there’s very good alignment with the government in these discussions because once the gold gets exported, that’s when it triggers the royalty payments to the government as well. So everybody wants to, of course, make sure that we can convert the gold into cash as quickly as we can, and that would then allow us to not have that working capital impact.

If it is a bit slower, there would be some working capital, but it doesn’t affect our ability to repatriate cash. It may just slow it down slightly.

Mohammad Sidibe (Analyst)

Great, thanks a lot for that color. And then for my second question, just on the Westwood sludge, I know that, you know, in the MD&A there’s a potential mention of the gold coming in or landing in Q4. But could you maybe give us a little bit more color on the refining, the asset timelines, and how you’re working through this? Thank you.

Maarten Theunissen (Chief Financial Officer)

So the material is being shipped in batches to the external refiner and processing has just started this week. So we expect, over the course of November and first half of December, to finish that process so that we should at least pass the assays. Because we’re doing batches, we will be able to then convert it into sales as well. So when we get to the end of the year we should have a good understanding.

Renaud Adams (President and Chief Executive Officer)

Thank you.

OPERATOR

Thank you. The next question comes from Harrison Reynolds with RBC Capital Markets. Please go ahead.

Harrison Reynolds (Analyst)

Hi, good morning. I’m gold team and congratulations on the good quarter and appreciate all the detail provided so far. I wanted to follow up on the sludge there. Do you have any indication, early days still, but on the payabilities you might receive on the gold, and also is there an opportunity to recover this material from the circuit on a go-forward basis?

Renaud Adams (President and Chief Executive Officer)

Bruno, we want to give some color to the—

Bruno Lemelin (Chief Operating Officer)

Yeah. So, in terms of moving forward, we have modified our standard operating procedures so this type of event doesn’t occur again and all future particles that could evade the electrowinning cell would be captured and taken into account every month. So it’s mostly the— The process has been improved. With the team that investigated this area, we were able to measure areas as to how we could improve the system. So yes, the answer is yes, it’s going to be managed on a monthly basis.

But no, the most important thing I think here is to know that we do not feel that there’s been loss of gold over those years. I think, for those of you that know the installation, while the processing facilities recover at a very high rate and function extremely well, it’s not necessarily the most modern. So there’s always a gold-in-circuit that you expect to recover over the year at the end of the facilities. But in this specific case there was gold being accumulated in one specific area that we had not noticed before. This is done now and moving forward you should not expect any adjustment.

Harrison Reynolds (Analyst)

Got it. Thank you. And on the payabilities of that material, what are your early discussions with the refiner like as it relates to how much you might get paid for the gold?

Maarten Theunissen (Chief Financial Officer)

So it’s commercially sensitive information so I can’t give you the exact rate, but it is the same as when companies would send carbon fines or material of a more minor volume. So it’s the same that you would get normally on those processes. Mid to high—mid to very high 90%.

Harrison Reynolds (Analyst)

Got it. Thank you. And just one last one. Good to see the metrics reached at Côté in September and I appreciate the detail you gave so far, but anything you can provide on how operations trended in October? Were you able to be near nameplate throughput, and how costs were tracking on a month-to-month basis?

Bruno Lemelin (Chief Operating Officer)

We do not have visibility yet on the cost of October. But operationally speaking, I could say that our trends continue. We’re very, very pleased with how, since September, it has been operating, and the tendency and the rhythm has continued in October.

Harrison Reynolds (Analyst)

Got it. Thank you so much for taking my questions and congrats on the quarter again.

Renaud Adams (President and Chief Executive Officer)

Thank you.

OPERATOR

Thank you once again. If you have a question, please press star then 1. The next question comes from Delvin G with Scotiabank. Please go ahead.

Delvin G (Analyst)

Hello everybody. Good morning and congrats on the strong quarter. Thank you for taking my questions. So first will be on the Q4, just based on your guidance and year to date. So this Q4 will be a bit stronger on production, and do you have any directional color on the unit costs?

Renaud Adams (President and Chief Executive Officer)

If you refer to Côté per se as a whole, of course you’ve seen the productions toward our 400 basis to date—definitions, we say we remain very, very confident to hit. So by definition it has to be a strong quarter and we’re very confident that the team can pull. We’ve achieved 1,536 in milling costs in September and we think that we could achieve towards a 1,500s for the full quarter. This is the objective we still have. As Bruno has mentioned earlier, our mining cost remains a little higher, but we feel strong that while we may not totally achieve our objective, we think you’ll see an improvement in Q4 on the mining cost and enter ’27 well positioned to continue. So that’s what I could say so far for Côté. We definitely need the strong quarter to meet—we are fully aware of it—but as we mentioned on the throughput and so forth, it’s going well.

Delvin G (Analyst)

Right, absolutely. Thank you. And turning on to 2027, what kind of inflation assumptions shall we assume, and what inflation have you seen on costs ’27 over ’26?

Maarten Theunissen (Chief Financial Officer)

Yeah, yeah. Good morning, Delvin. We’re going through the budget process. If we look at the impact of inflation, based on the current inputs—not the impact of drivers—we are seeing 3%, maybe 4% depending on the operation. So in that range of 3% to 4% would be the inflation assumption for next year, excluding the impact of diesel. So diesel has an impact mainly at Côté and Essakane. About 12% of the total operating cost is for diesel and energy. So it does not have a significant impact, but it does have an impact. And we continue to look at putting in additional gold hedges at Côté. In Burkina Faso, the price is less predictable, but it also doesn’t change that often because of the way that it’s purchased in Burkina. So that’s kind of our main assumptions that we’re seeing thus far.

Delvin G (Analyst)

Right? Absolutely, yeah. Turning to the NAL again, the PEA coming next year. So do you have a cut-off date for the drilling, and will you be incorporating combined economics of Nelligan and Monster Lake and Philibert?

Bruno Lemelin (Chief Operating Officer)

Yeah. The PEA is going to give us a preliminary idea of the economic nature of Nelligan. The plan—we’ll have to look at if we can combine Monster Lake as an underground operation, the Nelligan pit, and also Philibert all together, and see how long of a life we have and the kind of cost structure that we can have in the area. We’re working also on the general arrangement plan to locate infrastructures and how big they are going to be, and a preliminary cost of all those items.

So yeah, mid-2027 we will have a first glance of what Nelligan could look like.

Delvin G (Analyst)

All right, I see. Thank you. And the cut-off date of drilling would be end of year or early next year?

Bruno Lemelin (Chief Operating Officer)

Sorry, could you repeat that one—

Delvin G (Analyst)

For the PEA—the cut-off date for the drilling when you cannot update your economics and resources.

Bruno Lemelin (Chief Operating Officer)

Yeah, year-end. Correct.

Delvin G (Analyst)

Okay, right.

Bruno Lemelin (Chief Operating Officer)

And you would understand that every other aspect has advanced extremely. The most important was really to complete as much as possible the Philibert, and we confirmed from what we had acquired back in ’25 to incorporate it. But of course, when it comes to overall cost and capital and so forth and infrastructure, we’ve advanced enormously. And as we complete the drilling, do the cut-off, and complete the resource, we’ll just incorporate the work and be on time for mid-’27.

Delvin G (Analyst)

Right. I see. That’s all from me. Thank you.

OPERATOR

Thank you. The next question comes from Medina Abdullina with Freedom Capital Markets. Please go ahead.

Medina Abdullina (Analyst)

Good morning everyone. Thanks for taking my questions. So with 2026 sustaining capital of Essakane increased from 165 to around $200 million, should we expect stripping expenditures to remain at similar levels in 2027?

Maarten Theunissen (Chief Financial Officer)

Good morning, Medina. So we are working through our budgeting process and we are looking at that. But for Essakane for next year, we will be spending additional capital to advance the Block 3 and mine life extension. So the capital would be slightly higher. But we are just working through those numbers as part of our planning process at this point.

Medina Abdullina (Analyst)

Thank you. And at Westwood underground, mining costs increased to $320 per ton in Q3, partly due to additional stope preparation. So as underground development progresses, should we expect these costs to normalize next year?

Renaud Adams (President and Chief Executive Officer)

On the underground side—you refer obviously to Westwood, I think—we have discussed that one last. If you look at ’26, ’27, ’28, they should be somewhat pretty similar years as we continue to work on the eastern and incorporation of the eastern corridor. While they will never be perfectly copy-paste, you should expect ’27 to be somewhat in the range of ’26.

Medina Abdullina (Analyst)

Thank you.

Renaud Adams (President and Chief Executive Officer)

Yeah. And the overall guidance for ’27, of course, will come early in ’27 for the plan of ’27, and with the plan of Côté, of course, would highlight somewhat a little more than a one year.

OPERATOR

Thank you. And the next question is a follow-up from Anita Soni with CIBC World Markets. Please go ahead.

Anita Soni (Analyst)

Hi. Just a couple more questions. Firstly, can I go back to the Côté-Gosselin study? Are you still targeting around 70% to 75% conversion of the 20 million ounces that you have in global mineral inventory at this point?

Renaud Adams (President and Chief Executive Officer)

Well, you know, we released our resource update which has highlighted the 20 million, and of course you have to go through some sort of the depletions of the year. So if you do all the math, yes, we continue to be very confident that we could convert that to 70% plus.

Anita Soni (Analyst)

Yeah. And then now that you’re—you know, I guess, I mean, if I’m trying to anticipate how to model Gosselin within the profile, would it be fair to say that it goes near the end of the mine life if you’re going to try to sequence the tailings dam into an empty Côté pit? I’m just trying to get an understanding of that in light of the— You know, in light of the royalty. Right. I think part of the economics of that buyback of the royalty is that you’re buying it ahead of the Gosselin update.

Renaud Adams (President and Chief Executive Officer)

So the sequence that favors the 40,000-ton-per-day scenario is more sequential, more linear. So we focus much more on Côté for the beginning of the life of mine and, subsequently, Gosselin comes last and we’re actually— Yeah, so—which would create some opportunities, of course. But again, this is an updated—what we call really new base case—and would highlight a pretty interesting production profile for the next years to come. But eventually down the road we maintain the door open, of course, to eventually go towards an expansion. But this is not for this time around.

Anita Soni (Analyst)

Yeah, I was just trying to figure out a way to quickly model this because I’m currently just using the Côté and then have some in-situ value for Gosselin. But to try to show the economics on that royalty buyback, I’d have to start to model Gosselin ahead of your update. But okay, thanks. And then just on the Burkina—the requirement to refine in country—how long does that exemption last? And how do you see these—I mean, early days—but what kind of things should we be thinking about if you do have to refine in country in terms of the costs and the cost impact?

Renaud Adams (President and Chief Executive Officer)

On term of exemption, there is no date. I mean, they literally just inaugurated the refinery and, as I mentioned, there’s also all the small-scale mining as well. We’ll see. There is no date extension. So we continue—as a matter of fact, I think we were shipping this week and so forth—and it’s business as usual. In terms of cost per se, as Martin has mentioned, it’s not so much about cost more than making sure we don’t create further delays.

Anita Soni (Analyst)

Okay, great. Thank you. That’s it for my question.

Renaud Adams (President and Chief Executive Officer)

Thank you.

OPERATOR

Thank you. This concludes the question and answer session. I would like to turn the conference back over to Graham Jennings for any closing remarks.

Graham Jennings (Vice President, Business Development and Investor Relations)

Thank you very much, operator, and thanks to everyone for joining us this morning. As always, if you have any additional questions, please reach out to Mano or myself. Thank you all. Be safe. Have a great day.

OPERATOR

This brings to a close today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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