Discovery Silver Corp.

Good afternoon, my name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the Discovery 4th Quarter and Full Year 2025 Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw a question, again, press the star 1. Thank you. I will now turn the call over to Mark Uring, Senior Vice President, Investor Relations for Discovery. Mr. Uring, you may begin your conference.

Thanks very much, operator, and thanks, everybody, for joining us today for Discovery's fourth quarter and full year 2025 conference call and webcast. Joining me today are most of Discovery's senior management team, Speakers in today's presentation will be Tony Makuch, our President and CEO, Alison White, our Chief Financial Officer, Pierre Roth, our Chief Operating Officer, Eric Calio, our Senior Vice President of Exploration, and Jose Hablera, our VP Sustainability and Corporate Affairs in Mexico. After each speaker presents, Tony will have some concluding remarks. As you know, this morning we issued our Q4 and full year 2025 results. The press release MD&A and financials are available on our website at discoverysilver.com and on CEDAW. Before we begin, I'd like to remind you that during today's call, we will be making forward-looking statements. These statements are based on current expectations, assumptions, and projections about future events. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking information. For more information about the FLI, please refer to the information on slide two in this deck as well as forward-looking information on our website. In addition, we'll also be making reference to a number of non-GAAP measures during this presentation. These measures are included to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. These measures do not have any standardized meaning prescribed under GAAP and therefore may not be comparable to those of other issuers. Again, I refer you to slide three in our deck and our website for information on non-GAAP measures. Finally, all dollar amounts today will be in U.S. dollars unless otherwise indicated. With that, I'll turn the call over to Tony McCooch, Discovery CEO.

Hey, good afternoon. Thanks, everyone, for joining us for this call. I guess we didn't all get the memo from Doug Ford that we had other priorities for today, but anyway, we appreciate you being on. You know, maybe, and before I get on to the results, I, you know, always like to say, well, in the end, you know, when we have to acknowledge the people at Discovery, we made a lot of progress and, We are doing something special here and, you know, we have people in Port Pine, we have people in Chihuahua. We're doing some, I think, some great stuff. You know, our people live in Kimmichap, Lowell, Toronto, LaFerrari, a lot of different areas in Canada and Mexico. And anyway, thanks for all you do. And, you know, we look forward to continued success as we progress out of Q4 into 2026. Looking at Q4 in 2025, you know, with a solid quarter, In particular, adjusted earnings per share increased 75% from the previous quarter. We continue to generate substantial cash flow, even as we increase our investments for the future, and we continue to build our balance sheet strength. Definitely nice to be in a strong gold market. I'll briefly run through the numbers, and then others will get into the details. You know, there's a couple forward-looking statement things. Again, Mark made reference to them, so I won't do that. I'll just jump to slide number four. which summarizes our strong results for the quarter. And you can see production increased 6% to almost 67,000 ounces. Operating cash costs improved from Q3, largely reflecting inventory movements between the quarters. At the corporate level, our all-in sustaining costs increased from last quarter, but this was related to the higher sustaining capital expenditures in quarter. And last quarter, we said we would be increasing capex in Q4, and we did. So these are investment aims of driving our growth and helping us to improve the operations and ultimately to see lower cost costs and improve productivity over the next while. Going to slide five, and I'll just talk about our earnings performance. Not bad for a company with this first production, just nine months of, or eight and a half months of production, we already had significant earnings. Revenue totaled $274 million, a 16% increase from last quarter. The revenue does include gold sales of 64,000 ounces and a net realized gold price of $41.57 per ounce. If it does total to $126 million, similar to the last quarter, and there was a $45 million impact from an accounting charge related to recommendation obligations, that change brought down our dividend to some degree. And you can ask Alison about that a little bit later in the column after I pass the questions on. Earnings per share was $0.08 per share, while adjusted earnings per share were $0.14. As I mentioned, our adjusted earnings per share was up significantly from $0.08 last quarter. Slide six looks at cash flow and cash, our cash position. As I mentioned, we continue to generate a lot of cash flow in Q4. The operating cash flow totaled 163 million, up from 153 million the previous quarter. Pre-cash flow was close to $70 million. It was lower than the last quarter, but it, you know, again, it reflected our higher capital expenditures in the quarter. Our cash position in Q4 rose 20% to 410 million. Our total liquidity rose to just under $660 million, and total liquidity, including our cash as well, is $250 million from a revolving credit facility we finalized in Q4. It also has a $100 million accordion feature, but you may recognize this is all undrawn at this point in time. Going to slide seven, looking at our key investment programs. Total capital and expenditures was just under $100 million, including leases. In the quarter, sustaining capital expenditures were $34 million, mainly related to investments in oil, cotton, and board and new mobile equipment, capital development, and infrastructure at the underground mines. We also continue to invest in our dome mill and our tailings facility to support our operations going forward. Growth capital was largely focused on pre-stripping at the PAMOR and investments in our containers management facility. I'll talk to you more about that in a moment. Capitalized exploration, mainly related to resource conversion drilling, was almost $10 million, and you'll see momentarily that our exploration expenses will increase substantially in 2020. We feel it is as much a driver as high gold prices and production. What we can drive in terms of value with expiration drill bit is, I think, is enormous in this company. Speaking of expiration on slide eight, I think we put out two press releases, I guess, one in Q4, and we just put one recently out in Q5. And I guess in simple terms, we're getting excellent results everywhere we are drilling. Our resource conversion expansion drilling is going very well at Foil Pond, Boardman, and FAMOR, which is a three main areas where we're drilling. Also having success at district targets like Owl Creek and the Burlap Pit. We know Owl Creek being contiguous with Foil Pond, Burlap Pit, a target that's about a kilometer and a half west of FAMOR. In the results we issued earlier this month, we also reported very encouraging results at the TDZ zone. and favorable results from initial drilling. Eric will get into more of the details later in the presentation. I'll just turn now to slide nine. We did issue our guidance this morning with our Q4 results. That's our guidance for 2026. And I think our guidance shows the solid production growth from 2025 to 2026. unit costs that will improve as the year progresses and the continuation of a significant investment program to support our growth and improved performance. Slide 10, you know, production guidance is 260 to 300,000 ounces. It is important to note that production will be weighted to the second half of the year. Unit costs will start the year at high end of our target ranges, reflecting the ramp up of production, as well as the significant weighting of capital expenditures in the first half of the year. By the second half of the year, we expect to see the numbers that are in the lower end of our ranges and potentially better than the rates, specifically as we see some of the cost savings related to the capital investments. Going to slide 11, looking at our capital. At a high level, the run rate for capital investment in Q4 2025 will continue in 2026 and be weighted to the first half of the year. In terms of sustaining capital, we are investing significantly in replacing the mobile fleet to Hohepaun and Borden and in upgrading infrastructure. We're also investing in the dome mill and the dome tailings facility to both increase capacity and improve the efficiency of performance as well as our environmental standards in terms of how we want to progress, specifically in our tailings area. Looking at growth capital, the two largest items are investments at the TMA6 or tailings facility, including work to divide the No. 6 dam into cells. We did this at Lakeshore Gold with our Bell Creek Mill. We did it at other places. It has a number of benefits, including allowing it for progressive rehabilitation and reducing potential viabilities going forward as we progress and continue the deposition in these areas. Other key components of our growth capital are continued pre-stripping at Tamar. As we build the Tamar mine, bring the Tamar into commercial production probably by the end of 2027, as well as a new base at Borden. Going to slide 12, the $90 million to $100 million we're showing for Cordero is mostly related to the change in the land use fee. We did a change in land use, and we are expecting to receive this sometime in Q1 of this year, and then we feel pretty confident moving ahead with this project. And finally, as mentioned, we are planning a significant increase in our exploration budget in 2026 from 2025, mainly in the Porcupine region in Ontario. As I said, exploration is success-driven. We're having a lot of success in exploration, and we plan to do a lot of drilling this year, at least 280,000 meters of drilling. So with that, I'll turn the call over to Alison White, if all.

Before I get started, I'm actually going to let Mark Hutting say a few words about our technology on the call today.

Yes, I've been informed by Q4, our service provider, that they have had some technical problems and that while the broadcast, the audio is working, these slides are not visible. We apologize for that. We'll be looking into it after the call. What we will try to do is be as clear as we can in terms of the points we're trying to make and make sure that copies of the slides are available after the call as well. Again, our apologies for that and we'll continue on now.

Thanks everybody and thank you, Tony, for the introduction. On slide 13, sorry, Q4 was a strong finish to 2025. We had operational momentum that translated into solid financial results across the business. We reported revenues of $274 million in the quarter, a 16% increase quarter over quarter, driven by higher than average real life hold prices. On a full year basis, total revenues reached $653 million, reflecting two and a half quarters of results under Discovery's ownership. As we had communicated earlier in 2025, Q4 2025 was a period of reinvestment for Discovery with increased capital expenditures to provide needed investment for the Port Decline operations to achieve their full value potential. Very importantly, we had EBITDA of $126 million and continued to generate solid cash flow with operating cash of $163 million and free cash flow of $68 million after deploying $95 million in capital expenditures to further advance the asset base at Port Decline. If we move on to slide 14, let's look at adjusted earnings. Discovery delivered adjusted net earnings and adjusted net earnings per share in Q4 of 2025 of $113.5 million, or 14 cents per basic share, an increase of 75% from the prior quarter, demonstrating strengthened revenues from robust production throughout the quarter. Net income also benefited from a deferred tax recovery driven by an adjustment of previously unrecognized deferred tax assets related to reclamation obligations as reclamation spend was moved inside the active mine life. As we walk from the $0.08 of unadjusted earnings per share, there's an addition of $0.04 for a one-time $45 million reclamation expense for non-operating mine sites due to an accounting remeasurement related to a discount rate change, which will measure the obligation in line with the applicable accounting standard. There's a one cent change of $10.9 million in expense related to share issuance for the TTN resource development agreement that was put in place during the quarter and another penny for foreign exchange losses and TSA costs arriving at the total of 14 cents in adjusted earnings per share for the quarter. Let's review EBITDA on slide 15. EBITDA grew quarter over quarter driven by increased revenue as gold prices climbed, partially offset by other operating costs recognized. Overall, Discovery has continued to have progressively strong momentum with growth in EBITDA during each quarter of 2025. Equally, through strong earnings generation, we continue to see positive momentum in our free cash flow. The free cash flow generation bolsters the company's balance sheet and allows for capital redeployment into the business, promoting additional value. Speaking of reinvestment, let's move on to capital expenditures on the next slide. During the prior quarters, we mentioned that the second half of the year would be more heavily weighted toward capital expenditures. The 53% increase in capital spend from quarter three to quarter four demonstrates that commitment, which will remain consistent as we move into 2026 and aligns with the guidance that Tony mentioned earlier. Capital expenditures in Q4 2025 totaled $99.9 million, compared to $65.2 million in Q3 of 2025. Of the $99 million, sustaining capital expenditures accounted for $34 million, while $66 million were growth capital expenditures. Sustaining capital expenditures were largely focused on procurement of mobile equipment and capital development at Foil Pond in Borden, combined with construction work to buttress the number six tailings management area at the dome property. Growth capital expenditures primarily related to pre-stripping at PMOR and longer-term investments at the TMA state. Let's move on and look at cash costs and all-in sustaining costs on slide 17. Tier 4 2025 cash costs per ounce sold improved to $1,185 versus $1,339 in Q3 2025, primarily driven by a higher change in inventory in the prior quarter. In Q3 2025, inventory change costs of $13.8 million were recorded related to ounces held in inventory at the end of Q2 2025. And if we look at all unsustaining costs on slide 18, all unsustaining costs averaged $2,034 per ounce sold for the quarter compared to $1,734 per ounce sold in the previous quarter. The increase in AASD per ounce sold compared to the previous quarter largely reflected a $13 million increase in sustaining capital expenditures, primarily related to higher levels of investment in mobile equipment and capital development, higher corporate G&A costs, and higher accretion and amortization expenditures related to reclamation obligations, which is partially offset by the favorable change in inventory that I previously mentioned. And if we move to look at our liquidity slide on slide 19, Discovery's cash balance at December 31, 2025 totaled $410.7 million, an increase of 20% from $341.5 million at September 30, 2025. The stronger gold price environment translated into $68 million of additional free cash flow, and that's net of the meaningful amount of capital we deployed back into the business and that I mentioned earlier. Discovery's liquidity position remains robust, with $411 million in cash on hand a $250 million under-run revolving credit facility, and a $100 million accordion feature. We have meaningful financial flexibility, and we believe this balance sheet strength gives us the foundation to advance our strategic priorities with confidence. And I'll now pass it over to Pierre for his remarks.

Thank you, Allison. It is a pleasure to be presenting our Q4 results from our port-to-fine assets. During Q4, we recovered 66,718 ounces of gold and poured 67,010. Both of these results show an increase from the previous quarter when we recovered 63,714 ounces and poured 65,978 ounces. Higher production in Q4. reflected the favorable impact of increased mining rates at Panmore and higher average grades at Royal Pond and Borden. The overall grade for the quarter was lower than in the previous quarter, mainly reflecting a higher proportion of tons processed from Panmore. At Royal Pond, you may recall the impact of summer high temperatures, on the production from the mine. As the higher grade stoves were temporarily slowed down, those stoves are now back to normal production rate, and we are assessing ventilation upgrades and cooling options this year to provide relief during the summer months. At Borden, we experienced highway closure on several days due to winter storms in December. We ended up stockpiling the Orem site, which was delivered to the process plant early in 2026. As for Panwar, our mining rate remains well ahead of the PA plan for 2025. At the Dome Mill, we processed over 892,000 tons at an average grade of 2.58 grand per ton, an average recovery of 90.2%. Based on operating days during Q4 2025, mill throughput averaged 10,145 tons per day, a 9% increase compared to the previous quarter. Mill operating costs during Q4 averaged $21.68 per ton, similar to the $21.15 per ton processed in Q3. Operating cash per cost Operating cash costs around Seoul averaged 1,185, down from 1,339 in Q3. Site level ASIC averaged 1,824 around Seoul, compared to 1,699 in the last quarter. Flight increase in ASIC reflected a 49% increase in sustaining capital expenditures nearly $33 million more in Q4. Our sustaining capital expenditures during the quarter were mainly related to increased mobile equipment procurement and higher levels of capital development at both Hoyle Pond and Borden, along with investments at the process plant and tailings storage facilities. I'll now turn the call over to Eric Calio our Senior VP Exploration.

Thank you, Pierre, and good afternoon, everyone. I'm on slide 21. Before I start, I'd just like to say that it's been another good quarter for exploration with another 50,000 meters drilled, an excellent success with building and operating mines and new growth projects. So with this in mind, there's a lot to talk about. Before getting into that, I'd like to just start with a few comments on the location and geologic setting for our key projects in the Timmins area. So starting with geology, First, I'd like to point out that the entire area we're looking at here is in the southwest part of the Apatibi Greenstone Belt, underlaying by rocks from four main formations, including two volcanic and two sedimentary. The two volcanic being the Tizium de Loro, represented by the green and yellow, covering most of the central part of the map, and the two sedimentary being the Forked Pine and Tamiskaming, which are the gray and darker gray units surrounding the volcanic.

Eric, can I just interrupt you for one second? Just for this part, particularly the presentation, I can certainly imagine how it would be helpful to be looking at the map. I'm told there is on the left side of the screen that you'd be looking at a downloadable PDF. I don't know exactly what the icon is, but there is a PDF there that can be downloaded and viewed, so that may be helpful as we go through these. Sorry, Eric. Go ahead.

Okay. Okay. Yeah. So in addition to that, and as indicated here, I think it's important to note that most of the rocks here have been strongly folded or cut by two very prominent faults, including the Duster Porcupine, which is the east-west trending dashed blue line near the lower part of the image, and the Burroughs Benedict, which is the north-south line, which cross-cuts this near the center. In terms of current operations, the Dome and Hollinger sit on the west side of the map, just east of the city and north of Duster Porcupine, and Hoyle Pond and Pamor are approximately 18 kilometers to the east and along narrow bands of volcanic extending easterly from Timmins, with Pamor being adjacent to the Duster Porcupine and Hoyle Pond being about five kilometers to the north. So turning on to my next slide, which is number 22, you see a close-up for the Hoyle Pond Elk Creek area. which contains three of our main targets, including the Lower F, TVZ, and Owl Creek. And as mentioned, this area is located on a narrow band of volcanic 18 kilometers from Simmons. As shown here, Coal Pond is located on the far east side of the image, with mineralization centered on a distinct northeast training flexure. The Lower F is on the northeast side of the mine, just east of the 1060 fault, and the TVZ in sedimentary rocks 800 meters to the south. Owl Creek's about three kilometers to the west and centered on an easterly plunging wedge of volcanics just east of the Owl Creek Falls, with mineralization mostly in swarms of veins near the east tip of the wedge. So turning to slide 23, we can see a long section for the lower edge, where we added another 12 drill intercepts to the east and west sides of the current resources with very positive results. As shown here, drilling to the east included six new holes into the projected down plunge extension of the zone and included multiple holes with visible goals and highlights such as 59.18 grams per ton over 6.2 meters and 31.33 over 1.6 to confirm that the zone is definitely open to depth. Drilling to west included another six holes targeting the lower edge of the zone and as with Q3 continued to identify more high-grade lenses minimization included values up to 69.34 over 4.1 and 28.73 over 5.1. Considering the above, we're very happy with the progress here so far and plan to keep these two to three rigs active for the near term, plus another two to three in the middle to upper parts of the mine. And then turning on to slide number 24, we see an image for the TVZ where drilling is now in progress and we see results from our first hole. As previously described, TVZ is a significant zone of mineralization in the southeast part of the Holpon mine. It was partially drilled and defined by past operators, where we're now going back and adding more holes to support a maiden resource update later this year. Details for the zone as it's modeled to date are shown on the current slide, and indicate mineralization in a series of northeast trending lenses between the 850 and 1410 level, with the bulk of the mineralization being in one main lens, which we call the TVZ2, shown here in green, and most of the remainder enslaving sitting to the north. Also shown in the image are locations for the new drilling, which is being done on the 1210 and 1680 levels, with work on 1210 focused mostly on infill and conversion, and 1680 on extensions to depth. In terms of results, we have the one hole back so far, but with very positive results, including intervals of 3.9 over 7.5 from the TVZ2, and 4.1 over 30.1 meters with multiple high-grade intercepts from an untested gap 100 meters to the north of this. Going forward, the program's continuing with one drill on 1210 level and one on 1680, with the second slated to start on 1210 very shortly.

We're also planning for drilling, which is going to be happening on the 1410 and 900 levels later in the year. Turning to slide 25.

we see Owl Creek where we completed another 17 holes near the historic pit. Details for the main target and new holes are shown on the current slide. And as indicated, the pit is outlined in yellow and the new holes favoring the center and west side. As indicated in our release, drilling here was very successful and included several highlight holes including values such as 4.8 over 35, 0.7, 3.45 over 25 from holes 18 and 09C in the center of the pit. as well as 2.61 over 33.9, including 5.36 over 3 and 5.52 over 5 from hole 20, which was drilled on the far west side of the zone, where drilling at this point is still very limited. Given the bug, we're very pleased with progress to date and continue the program with two drills for the foreseeable future. So next, turning to slide 26, you see a planned view of the Borden mine, where we completed another 19 holes in the northeast portion of the mine, and expand the main zone. Details for the drilling are shown on the slide and indicated all this was done on cutouts 5, 6, and 7 in the east part of the 585 drift, which sits about 200 to 300 meters angle all through the target. Looking at results, they're all very positive. The hole's generally confirming the overall shape and grade of the current resource, even adding a small expansion on the east side. There are too many highlights to go through individually. I think it's worth pointing out that the ones from the expansion area at some of the best values, such as 16.97 over 14.7, including 21.76 over 10.8 meters, 6.64 over 12, and 8.24 over 15.2. Given all this, we feel Borden is in very good position for future exploration and resource additions and planning to have a very steady drill program ongoing here throughout 2026.

The next turning to slide 27,

We have the PAMOR, where we completed another 61 holes, both near the current resource and in a new area we just started near the Brulein Pit, 1.5 kilometers to the west. New drilling near the current resource includes 60 new holes designed to upgrade and expand zones for future updates. And as with Q3, easily met expectations with multiple highlights, including 1.26 grams per ton over 140 meters, 1.5 over 26.9 and 2.7 over 44.5 in holes at or near the bottom of the current pit shell. Drilling at Broulon included one new hole, which has accepted some very nice values as well in a similar geologic setting to Pamore, including 2.06 over 29.6 and 4.15 over 25. Important to note is that there are no current resources between this area and the Pamore pit. Drill program here is continuing. with three drills focused on the east and west extensions of the current pit, and one at Brule Land.

So then going on to slide number 28, we see the dome, where drilling is now in progress.

Initial results starting to come in, looking very positive. And as previously described, this entire project is centered on the historic pit and mine site, shown in the center of the slide, where we already have 11 million ounce inferred resource, but now working to upgrade and expand it for a new resource update later this year. In terms of the new drilling, the vast majority targeted the southwest part of the resource pit, with one hole targeting the area to the northeast. For the area to the southwest, drilling tested both inside and outside the current pit shell with key intercepts from inside, including 1.47 over 12.5, 13.64 over 6.5, and 7.17 over 5.6. and intercepts outside, including 1.61 over 28 and 4.86 over 18.5. For the area to the northeast, the new hole tested adjacent to the historic mining and intersected 2.5 over 12.4 and 3.97 over 6. Drilling at the site is still continuing with one drill at the northeast target and a second drill arriving later this month.

So then turning on to slide number 29, we see a summary of plans for 2026.

And as indicated, we see a lot of the same projects continuing, but also a few differences and a much higher budget of 280,000 meters. We're just going through the list starting with Holt Pond. We'll continue to focus on the S by adding new work at XMS and several other mid-mine target areas. Borden, the case of Borden, is staying much the same as this year. For Pambor, Our plan is to continue to have a strong focus on infill drilling surrounding the pit, but at the same time, gradually increase work at depth and on strike, especially at Brulein. For TVZ and Dome, as expected, we will see a much higher budget from last year to complement the new resource updates later in the year. And then finally, for regional projects, we're looking at one to two drills working steadily at board and surface, and another two to three for Timmins, which will be shifting between Owl Creek Bollinger McIntyre, and possibly the Paymaster. So in summary, a lot of projects in progress, a lot of good results, and a lot more to come. So with that, I'll pass over to Jose Jabalera, our VP Corporate Affairs at Sustainability Mexico.

Thanks, Eric. Hi, everyone. For our project in Mexico, Cordero project in Chihuahua, Mexico, we are in the final stage of the evaluation of our environmental impact assessment. So lately we've been having a lot of meetings with the senior level in the government of Mexico, with Semarnat, who is the environmental authority, and also with the Minister of Economy, Marcelo Ratz. These meetings are being very clarifying where our tram it is. So we think that we are very close to get it or in a final stage of that evaluation and get our approval in the month to come. So also last week, well, this week was a big visit of the Canadian Minister LeBlanc to Mexico City. He was talking with President Chainbound, and they touched the things around mining and around permits that are already on tram it. So we think that that will help us for our tram it in seminar. So in the meanwhile, we are going and advancing work for use of natural gas or this evaluation with the grid power or natural gas. Also do a lot of work around the local water treatment plant where we will get the water for our process. So in the meanwhile, we keep working on those things around the Cordero project in the zone. So thank you very much. Good work to our CEO, Tony McKinch.

Okay, thanks, Jose. You know, anyway, maybe you get the impression we've got a lot going on. Maybe we can spend a lot of time talking about operating results, and we've got a lot of really interesting things and operations we can do in terms of, you know, increased production, lower cost, and really great value. On the financial side, the company's well-managed, strong balance sheet, generating cash. We're profitable in our first months and two months of operations and continue that on throughout the course. A lot of exciting things there. And, you know, on the expiration side, we have all kinds of exciting things to talk about. We could probably spend a lot more time talking about the expiration upside here. And as I talked to Eric, you know, we were 40 again in terms of the what you can do from an exploration point of view. We, you know, I think from, you know, speaking out to any geologists out there, anybody looking for some exciting work and being able to be part of new discoveries, give us a call. We're happy to, we got lots going on and we're happy to make a lot of investments. We're also doing a lot of pretty good engineering studies for growth where, you know, as Eric talked about, we're studying Dome, we're studying TBZ, looking at moving those forward and we got one of the best development projects in the silver space in Mexico at, Cordero, and we're just waiting at the cusp of getting our approval to move that forward. Companies will finance and able to finance. So, you know, like I started to call, we talked about we're building a very special business. Hopefully we can get that across to people and even start to get the sense of the energy in the company and the people. We'll continue to generate excellent results and really continue to invest in this business and build value for our shareholders. So thanks again for participating in today's call and we'll be happy to take your questions.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw a question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone in your device, Please pick up your handset to ensure that your phone is not on mute when asking a question.

Again, press star 1 to join the queue. And our first question comes from the line of Cosmos Chu with CIBC.

Your line is open.

Hi, thanks, Tony and team. Maybe my first question is on the Hollinger open pit. I'm seeing that you're ramping up production from Hollinger in 2026. It seems to be contributing earlier than what we had expected. Is that, especially if we were to compare it to the PEA that was put out a bit over a year ago now? Is that, is my memory serving me correct, Tony?

Yeah, I mean, there's opportunity there. I mean, Hollinger was a project that was being, was stopped by, completed by Newmont. There's still some work to do there. We still felt that there's some additional system mining that we can take place in its current form. We have a bigger plan for Hollinger over the next few years, and we think Hollinger can be a value driver for Hollinger McIntyre, a big value driver for another 50 years of gold mining in Timmins. But that's a whole other story. But we do see it, you know, and Pierre might get a little bit of color, but at least this year and next year, some value from that.

Correct, Pierre?

Sure.

I guess, Pierre, could you give us a bit more numbers then, if possible? So, you know, in terms of, like, tonnage, what's the grade versus pan bore? You know, I didn't get to visit it last year when I came up with you. Is there anything that needs to get done in terms of stripping or dewatering, so capex? And, again, tonnage, you know, your open pit tonnage, how much of that is going to come from pan bore versus... Hollinger, anything that could help us, you know, kind of refine our model, that would help. So what we have at Hollinger Cosmo right now is mining about six, seven benches that were left behind. And that's what we're planning to do this year. So if you want to plug numbers in your model, you can use 2,000 tons per day. And the grade that we're planning at Hollinger is about 1.4.

And the strip ratio is?

Strip ratio is very low because essentially it's been done before, so called one-to-one. And this is incremental to what you are mining out of Tambor, correct? So, yes, is the short version. Now, what we're going to do is because the grade at Hollinger is more interesting right now than what we're mining at Pamor, and we're still limited by our processing capacity, we're going to offset some of the Pamor feed with the Hollinger. Great. So there will be a stockpile material from PAMOR, but that being said, we're still planning to process more next year at 2026 than what we've done in 2025. And then, as you mentioned, STRIP is pretty low. So I guess CAPEX is, yeah. So CAPEX isn't, you know, not a lot of upfront CAPEX that I need to consider.

Not a whole lot.

Yeah. And the permitting, there's no permitting, all the permitting you have in place, and everything's okay? Correct. Everything's in place to continue mining, and actually we started mining in January. Perfect. Thank you. Maybe switching gears a little bit, going to Cadero. It certainly sounds like it is exciting, from what Jose is saying. But I guess my question is, I believe you're still working towards kind of a new technical report to update us on the numbers at Cadero. And Tony, to the extent that you can kind of share with us, what can we expect? Is it going to be an update to your CAPEX or any other areas that you're updating? Throughput, would it stay about the same? Anything that you can share with us, I think that would be great.

The biggest thing, Cosmo, is we've got to update the CapEx. We've got a little more detail on a few areas, such as water treatment to have power. Some other areas, we're taking a little bit of time looking at security at site, et cetera. I don't know if there's anything else, Forbes, that you could add to that, or that's pretty much what we're looking at. We're not looking at sort of a whole updated feasibility study. I think we've done a very, very good job on our current one. It's more than that.

The only changes in scope from the FS we put outside in 2024 would be looking at gas power rather than grid power. So we're still doing some evaluation of that right now and probably come to a decision point in the second quarter of this year. But aside from that, we're looking at the same size of plant, a very similar mine plant, especially more advanced work that we've done on the water treatment plant. But thankfully, you have a very similar scope and sort of focus

And in terms of timing, when are you expecting to provide us with that new technical report?

We're still sort of talking through that now.

I mean, obviously it opens up a bit of a can of worms to go through a full technical report process, so I think it's an internal exercise for now. And then if anything is released, it wouldn't be until the second half of this year.

Or let's just say three months, three to four months after we get our permits.

Okay. And then maybe one last follow-up question on Cadero. You've kind of allocated $90 to $100 million in terms of CAFEX for the project in 2026, a part of which is fees required for permits. Could you maybe break that down for us? How much of that $90 to $100 million is, you know, related to fees and how much is related to,

know engineering studies and other um things that you're working on that could go ahead sure so cosmos this is allison um the fees are the high um the fees are vast majority of that just as you mentioned of the 90 to 100 million and roughly um the fees are between 70 and 80 million dependent on the final outcome of the ratios that are required as a part of the calculation for the overall payment that has to be made. That won't be finalized until later this year when we actually receive the information about the permit.

And what's that for again, the $70 to $80 million? And is it higher than what you had expected previously?

So it's for the land use permit. And it is higher than what we had initially anticipated. The government goes through an annual process to update the required calculation for the fees. And this utilizes some of those most recent updates.

Great. Awesome. Thanks, Tony and team. Those are all the questions I have. But I guess Doug Ford was referring to the hockey game. That's the more important thing. You'll be happy to know we're winning 1-0. We're winning 1-0. Thank you.

From my perspective, right, Allison?

Our next question comes from the line of John Tomasos with John Tomasos Very Independent Research. Your line is open.

Thank you very much.

How many meters of snow do we have up in Timmins this week? And should we expect the tons per day to be maybe 1,000 tons a day less for the first quarter simply because it's harder to move surface material?

Well, probably about two meters of snow total accumulated. I wouldn't doubt a meter and a half anyway. Hey, no, I don't think the snow, it's winter country, it's winter people, like the snow doesn't stop operations. I think there's maybe some other things, but I don't know, Pierre, are we going to have any less trip at this point?

There's a usual plan shutdown, right? But if you want to compare the first few months of 2025, compare that to what we've done in 2026, we're ahead of what was done in January, February.

last year.

So being better than Newmont is good, but are we as good as 9,700 tons a day in the fourth quarter?

What do you think? Sure. Yeah.

Well, our goal is this year to do Possibly, I think it's somewhere around 3.7, 3.8 million tons processed throughout the year and try to increase that again next year. All of its availability and utilization of plants, combination throughput, but we've got to do it in short. I mean, we have more ore stockpiles on surface than we have mill capacity right now. We could probably shut the mines down for three months and still keep the mill running if we wanted So our issue is processing, but we, you know, in terms of processing, we don't want to run, you know, increase throughput and impact metallurgical recovery. So we're trying to do things the right way.

To that point, John, as you heard today, we're spending money, lots of capital money in the mill to improve our process over there. So yeah, 3.7 million tons, but our objective, is to go back to that 12,000 tons per day and exceed that.

So the permit is 15,000 tons a day. And when we made repairs in April and July, I thought there were days of 12,500 tons a day. But on a sustained basis, we struggle to do 10,000 tons a day, and we're milk-constrained.

No, I know. So we could get, we do do 12,500 tons a day, even better on any given day. But part of it is, you know, reliability of the plant and maintenance, et cetera. So, you know, you've got to look at availability and utilization combined with numbers, John. So whenever we do run, Gord's on the phone, but those are the rates that you try to turn on and then, you know, things happen, right? And or we have maintenance shutdowns, et cetera, so. In order to achieve the rates we want, those are the type of rates we've got to run at a nominal capacity in order to achieve the final numbers on an average basis.

Is Gord going to make a comment? Going to make a comment, Gord?

I can make a comment. We are working towards a 12,000 ton per day average over 365 days, John. We're not there yet. We still have another year of maintenance work to do in here. We're probably almost halfway through what we had planned to get done, but we are not done yet. And we will beat 9,700 tons a day in the first quarter, guaranteed.

So looking ahead a few years, maybe five or more,

There looks like there's enough ore for 75,000 tons a day if you restart all the pits full. Yeah. What are the next stepping stones to increase? For example, can we get quickly to 25,000 tons a day by dropping a used sag mill into the existing mill, an extra ball mill? flotation tanks, et cetera? Do we buy the neighbor down the road? Or do we just write a big check for $500 million and build a 30,000 ton a day mill like Cordero twice? What's the way to get big?

Well, all those are iterations of things we're working on, John. And in the end, we You know, we talk about the exploration and we're drilling to find more stuff. And like I say, we can mine probably, you know, we can stockpile more while we're mining Hollander stuff. And we can be selective in terms of putting the highest grade through. But ultimately, we don't want to be building big stockpiles and having big money tied up in inventory. So, you know, our goal is to increase mill capacity. And increasing mill capacity is what helps us to get to the higher production levels in spite of any exploration success, and they throw that on, and that's why it's an exciting company. And, yeah, you know, it's not going to happen in six months, but it's not going to take us 10 years either to get, when you talk about 50,000 tons a day of milling capacity, it'd probably be a reason to think that that's probably what we need in 10 minutes over the next few years. And, you know, we have a lot of initiatives we're working on try to get there. I wish it would be as easy as just dropping in a new sag. I don't use sag mill in front of the mill.

Just drop a new engine in the car and put your foot on the gas, but there's a little bit more to it than that. I agree with you. You're right on track.

In terms of Mexico, Wheaton said on their call Tuesday morning that counting reserves and measured and indicated but not inferred. They were paying $60 an ounce for the silver in the ground at Antamina, plus $15 or 20% a spot for the stream. So they invested to buy in at a $75 an ounce break even. That makes the... 230 million ounces of production based on your old feasibility study at $22 silver look awful good as though Cordero is worth more than discovery is. Um, if the permit comes this quarter and I guess people are going to throw money at you based on what Wheaton precious metals paid, um,

How quickly can we pour silver in Chihuahua?

By the first of 29?

Oh, you know, the feasibility side, I had about a two-and-a-half-year building. Yeah, you know, if we're now, then I would be pretty close to that, right?

John, just to add on to that, I would just clearly say financing is not the limitation there, as we all know. And so that won't be a hurdle in order to get moving on the construction side.

Thank you. I'll give somebody else a chance.

Next question comes from the line of Ravi Nizami with National Bank of Canada. Your line is open.

Good afternoon. Thanks for taking my question.

I just wanted to ask you about your 2026 guidance and particularly the cadence of how we expect to see the year play out on a quarter-by-quarter basis. You've mentioned that it's an H2 weighted wrap-up in terms of production and costs commensurate with that. So could you tell us a bit about what's driving that? Is the production more driven by throughput going to the mill, or is it more of a grade factor, if you could give us a bit more color on that?

Talk about that, Pierre. Are you okay?

Well, in terms of throughput, you're correct. It's backloaded towards the end of the year rather than front end. In terms of expenditures, we still have high capital costs. I think there was a slide on that. Did you show that?

The capital cost is in the first part of the year, and the production is in the

You should see, so like you've seen from Q2 to Q3 to Q4 in 2025, you should see this over the same type of, you know, Q1, 2026, Q2, Q3, Q4, you know, incremental increase quarter over quarter. And same thing on the cost side, incremental decrease quarter over quarter as we progress. And, you know, we have a lot of other initiatives than we, you know, in terms of other things that should help us reduce costs and improve productivity. Those are the kind of things you should expect quarter to quarter. So maybe we're at the top end of the guidance and low end on the guidance on the production rate in the first quarter. And by the last quarter, we're probably equal or beating the guidance on both costs and production rates.

Thanks for that. And in terms of just capital allocation through the year, obviously with a heavier cap expend in the first half and the tax payment in Q1 as well. And well, hopefully we also see the land transfer payment in Cordero as well. So with that, how are you thinking about your liquidity position? And what would be the conditions under which you would consider drawing on the revolver? Is that something we'll see through the year?

So, Ravi, we are definitely keeping our eyes on that, I would say, almost every day and utilizing what we have. We still anticipate having a very strong liquidity position at the end of 2026 because we run multiple different scenarios through our budgeting process at various different gold prices, and it will be highly dependent on the price of gold. But in any scenario, whether that's a spot price, a short-term consensus price, or a call it downside case from short-term consensus, we have a significant amount of liquidity between the revolver and just regular cash flow generation to support what we have put out in our guidance.

But the really, and the question though too, if let's say the price of gold stays where it is today, we could advance all of our projects, advance, even begin advancing Cordero and still building our cash position.

So not drawing our revolve. Okay, thank you very much. I'll pass the mic on.

A big part of our business is, I mean, we're working towards, you know, positioning ourselves as being, you know, we want to be the lower half of the cost curve in the industry, so we've got to pull our costs down. Some of that is improvements in infrastructure, et cetera, and it's also improvements in productivity. You know, and that's a goal, and that's how we want to have to differentiate ourselves.

and from a value proposition point of view.

Sorry. Our next question comes from the line of Jake Savage with Agentes Capital.

Your line is open.

Hi, everyone. Congrats on another strong quarter of production and exploration at Porcupine. Given a few of the things you've talked about, the pits ramping up and the mill ramping up, Can you walk us through how you're planning to optimize the overall mill feed grade at the dome mill? Are you looking at adjusting the blend with Hoyle Pond and Borden, given the ventilation upgrades and mobile equipment upgrades? Are things tracking pretty close to the PEA, or are you increasingly selective?

Right. So for 2026, we're going to track pretty well, if not in excess of the PEA for the two underground mines. The bulk of the feed, of course, is coming from Tamor in the PEA. And in our case here, we're basically adding some from Bollinger. So the total blend here, we're trying to keep close to 40%.

45% from the underground, and the rest is coming from the open pit. Excellent. Okay, thank you.

Our last question comes from the line of John Tomasos with John Tomasos Very Independent Research.

Your line is open.

So, Gord, whenever you're doing under 10,000 tons a day instead of 12 and a half, what are the parts that break down and limit the production?

Well, John, we had some issues with our screen decks in the secondary crusher. Our supplier made some changes to new screen decks and Didn't inform. Turns out we had to go back to the old style. So that is our biggest issue that we've had in the last quarter and the first two weeks of January.

Is that fixed?

That's fixed. And we have new screens coming. So we've rehabbed the screen that was in place. We have a spare screen that we also rehabbed and made the changes to. with METSO and METSO is building us a new screen right now. So our lower tonnage is, when we're running, we're running at very high rates. Problem is keeping it running for the full month. So it's our utilization, it's the availability. So we've had two issues in January. We had a conveyor belt issue Then we had screen deck issue, which are both fixed now.

When you stop at 12,500 tons a day and don't get to the 15 permitted level, what's the next bottleneck?

So above 12,000 tons a day, to get to 15,000, we would need some horsepower and grinding and some more leach retention time.

And the thickener. Thickener would need to be upgraded.

So when do we go and apply for a permit to raise the 15,000 ton a day?

And do we raise it to 25 or a bigger number? Well, that would...

That would be a Tony question, I think. Yeah, you know, John, these are all things that we're working on. The concept of the scope of that. We're looking at other alternatives. As you talked about earlier, do we upgrade this plant? Do we build a new plant somewhere? Do we take advantage of some other plants in the area and have a combination thereof? focus in those directions. It is as big a priority to us as the exploration and as the production, you know. So, you know, the development and growing that is very important and it's things that we're working on, right? So, you know, it's going to unlock a lot of value. If we get another 15,000 tons a day of milling capacity, we're not going to have to wait for, you know, that long for feed to feed that plant. And, you know, it'd be incremental to what we do. And so very, very, very, very quick payback on any of that kind of stuff.

John, to Tony's point here, as you know, PAMOR is limited by the mill capacity right now. So once you remove that constraint, PAMOR can offer and deliver a whole lot more than the 10,000 tons per day that is in the P&A.

A year ago when you made your presentation March 2nd in Toronto, I just assumed that you would build the Cordero mill twice and drop a 30,000 ton a day mill right into Dome. And now a year has passed and we haven't added a lot of capacity. We're still refurbishing. But if you announced the 30,000 ton a day new mill and led a couple contracts,

the two neighbors down the road that don't want to sell you the mill they'd be paying you to take it because they missed the boat so why don't you just go ahead and announce a big new mill well i mean that's you know what is it to announce a big new mill it requires a big new tailings areas it requires power it requires water and it requires permits and You know, John, the other aspect of it is to announce a big new mill like that, you could, because of the size of the footprint, you could be creating a permitting thing, an issue and time on permitting, whereas if we can do some incremental things with a few other selected locations, it might be more strategic for us. You know, we can announce it, and then the time we announce it and the time to get it into production and built might be the same, and that's what we're working towards, John.

So, Tony, July 15, the town last year appropriated $27 million Canadian to move the water tower and the water treatment plant to help you expand the Hollinger Pit. Everybody's rooting for you. Everything's easy, isn't it?

Yeah, yeah, yeah, we're moving, we're moving, boy, you know, and, you know, we talk about what the opportunities are. You can see the drill results, and you're bringing up a lot of the opportunities around. To me, it's nice that that milling capacity is our problem. Sometimes you just don't find your, you know, and we're there, and we've got the right market, right? The price of gold and metal prices are high, and We have earnings, we're generating cash flow, so we have to finance the money to invest back into the business. We're working on all these things in stages. I would expect as the year progresses, there's going to be a lot more clarity on that. That is the big value driver. as much a value driver as exploration success, as development success, and the mines. And so what we said in November last year, what we would have said in April of last year is still the goal. We have the opportunity to stabilize and get a long-term production from Panama and oil pond in Borden. We have the opportunity to build at least two new mines at TVZ and Dome. And, you know, and we have the opportunity to discover new resources and even expand upon that. You've seen some of those results already. And, you know, we said we were going to try to increase our current mill capacity. We're working on that and trying to get that up to, you know, just, you know, I could say around 4.3, 4.4 million tons a year on a current mill. But the real solution is to get new capacity. We've still got to keep our current business in good form and get our costs down and keep that running while we're working to make the right decision in terms of how we grow our production and our milk throughput.

Thank you all for your service. I just want to buy season tickets for the Discovery Arena, and I don't want you to wait too long. I want to be in good health by the time it's built.

No problem. Thank you. Thank you. We're all in the same boat. The clock is ticking, right? Pitter-patter, right? Hope you're safe.

And that concludes the question and answer session. I would like to turn the call back over to Mark Uding for closing remarks.

Thanks, Operator. And thanks, everyone, again, for taking part in today's call. As you heard, there's a lot of lot of exciting things going on there's a lot of energy and we think we've got some pretty compelling catalysts right in our very near term here so there's a lot to talk about and we look forward to having a next update so we can tell you about our additional progress thanks again ladies and gentlemen that concludes today's call thank you all for joining and you may now