Discovery Silver Corp.

Good afternoon. My name is Sarah and I will be your conference operator today. At this time, I would like to welcome everyone to the Discovery first quarter 2026 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 one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Thank you. I will now turn the call over to Mark Udding, Senior Vice President, Investor Relations for Discovery. Mr. Udding, you may begin your conference.

Thanks very much, operator, and thanks to everyone on the line for joining Discovery's first quarter 2026 conference call on webcast. Joining me today are many members of the Discovery Senior Management Team. Speaking will be Tony Makuch, our President and CEO, Allison White, our Chief Financial Officer, Pierre Rock, our Chief Operating Officer, Eric Calio, our Senior Vice President, Exploration, and Jose Havillera, our Senior Vice President, Corporate Affairs and Sustainability in Mexico. And again, there are many other members of our Senior Executive Team in the room as well. Before we get started, I'll remind you that during today's call we will be making forward looking statements. These statements are based on current expectations and projections about future events. Their subject to risk and uncertainties and actual outcomes may not be what is included in those statements. I refer you to slide two as well as our website for further information on that. In addition, We will also be making reference to a number of non gap measures during the presentation. These. These measures do not have any standardized meaning and they. Under gap and therefore may not be comparable to other issuers. I refer you to slide three on our deck as well as our website for more details. Finally, all all dollar amounts will be in US dollars unless unless otherwise indicated. Now turning to the quarter, to begin with, as many of you know, we're working towards more than doubling gold production at Porcupine to over 500,000 ounces per year. At the same time, we're working towards developing our Cadero project in Mexico, through which we will produce about 14 million ounces of silver. per year, at least over the first 10 years. You know, we plan to achieve these levels of performance while averaging the lowest half of the global cost curve for both gold and silver. And we're going to achieve these milestones using a disciplined approach to investment with a focus on investor returns. During the first quarter, there were a number of key developments in support of achieving our growth objectives. Specifically, we announced the acquisition of LendCorp KID operations in Timmins. We also reported continued outstanding exploration results in and around Timmins, and we continued with our investment programs through which we will both grow and optimize our current operations. Getting into those in a little bit more detail, looking at KID on slide six, we announced the acquisition of the KID operations on March 2nd, We expect that transaction to close very soon, likely over the next few weeks. This is a major milestone for our company. To achieve over half a million ounces of annual gold production, we require additional milling capacity. Through the KIDMET site, we have an opportunity to dramatically grow processing capacity and to process different kinds of ore. There's lots of other benefits as well, including adding valuable infrastructure that will support the future expansion of both Hoyle Pond and Tamor, including the development of TD Decks. It gives us exposure to critical minerals, copper, zinc, and silver through Kidd Creek Mines, adds significantly more exploration potential to our already very large and highly prolific portfolio, delivers cost synergies, and this is a very important point, adds a very large, highly skilled workforce that's going to help us with our existing growth plans. Going to the next slide, this gives you a view of the KID MET site and a conceptual plan for what we expect to do and are currently evaluating. It's a conceptual plan, but it kind of points or shows you our thinking in terms of path forward. And maybe at this point I'll turn it over to Tony to talk about that.

OK, in media just a couple simple things. I mean people should understand first off that the oil pond underground operations are actually under under the kid med site and and you can see that the the blue rectangular box here and it's trying to show where the location could be for the new any new vent raises we we we can establish for the oil pond line. As well as central location would be for a new shaft if we wanted to develop for the TV dead zone. But also I think what we show here there's there's we've alluded to before. There's four circuits at the at the kid med site and you can see where it says a division and we sort of tried to conceptualize on here what would be involved in building and show the location of where we build a new 5 to 7 million tons per annum conventional gold circuit at the plant. or been crushing and how that would fit in. We still continue to use the B division, which is the base metal circuit, its flotation circuit. The C division, we're working pretty hard right now on that. That's about a million ton a year capacity. So looking at the aspect of bringing the board doors to here and run it through this division as early as we can over the next six to 12 months. and that would unlock 2,000 to 3,000 tons a day in the capacity in the dome mill for conventional processing. And you can see that these circuits, that's where it's here, which we would turn into a cold refractory flotation circuit. But on the other side, all the AP and the BC and D circuits that are here could always be utilized as combination-based metal circuits if needed, and a cold circuit that's required. So it gives you a sense on... on what this could unlock for us, basically, if I, you know, you can look by six to eight million, sorry, seven to nine million ton a year new gold processing capacity at the KID MET site, A division at the conventional circuit, C division for processing, one million ton a year for processing, the Borden Ores and the D division, which we would then use to process refractory ores, in Timmins and effectively the refractory ores would be the TVZ zone as we're talking about. And then general location where it is. This map doesn't, sorry, this figure doesn't show where the PAMOA operations are in here, but the PAMOA open pit operations are less than a half a kilometer from the bottom of this page. And the idea would be all the PAMOA ores would be trucked and Timmins, the oil bond ores would be trucked and processed through this new circuit. Perfect. Okay.

Just going on to slide eight, we'll get to the next key development, and that's exploration progress. And, you know, for all the production that we have and we're going to be adding, you know, this is, we think it's one of the most compelling exploration stories in the industry as well. You know, we issued a press release on April 23rd. That's our latest one. I'm not going to get into a lot of the details. Eric will get into the details of that relief shortly. I'll just vary at a high level, say we can continue to get very good results from resource conversion and extension drilling at Boyle Pond, Fordon and Panmark. We've been getting and included in that release was excellent results at a number of district targets near those operations and positive results. at our near-term projects, specifically Dome and TBZ. And again, there's a lot more information that you'll be hearing very soon about that. Slide 9 looks at our investment programs in the first quarter. Sustaining capital for the quarter was about $21 million, mainly related to capital development, mobile equipment, and infrastructure investments at Hoyle, Pond, and Borden. And I'll mention we were very much on track with our capital development activities at those mines, also contributing with new mobile equipment at Panmore and some investments at the TMA6 or our tailings facility project as well. Staying capital was somewhat lower than we planned, which was primarily related to the shifting of delivery schedules for new mobile equipment to the second quarter and just other quarters of the year. Growth capital totaled $40 million. Investment in the TMA6, including our new deposition strategy, and pre-stripping at Panmore accounted for the vast majority of that. And again, pre-stripping at Panmore was very much in line with expectations. Just going to slide 10, this gets to the operating results. During the first quarter, Allison will get into all the financial numbers in a few minutes, and Pierre will then add some additional color on operations as well. You know, in our year-end results, we indicated that production in 2026 would be weighted to the second half of the year, and the Q1 would likely be our lowest quarter of production for the year. Well, production was 60.2 thousand ounces for the first quarter. What I will say is a highlight of the quarter was oil pond. It had a very good quarter in Q1 with an average grade exceeding 12 grams per ton. Also, our total mine tons increased by 4%, and we ended the quarter with stock piles of close to 1.3 million tons, which will help us manage both our throughput levels and grades over the balance of the year. Like production, our unit costs are expected to improve significantly in the second half of the year. One reason our guidance ranges were as wide as they are is because of the variability we saw coming in the quarters. I will say our ASIC number for the quarter was in line with our guidance, and we do expect that number to improve as we get into the second half of the year. Going to slide 11, it shows a visual of, well, Dome Mill, but specifically in the foreground, the crushing circuit. As we mentioned, we expected quarterly production this year to be lowest in Q1, and a significant reason for that was mill throughput. We did 698,000 tons in the quarter. The reduction from the previous quarter, most of that was expected, an expected reduction. Due to scheduled downtime and our understanding of the implications of severe winter on our crushing plant at Dome. We've indicated since we announced the porcupine deal beginning of last year that we were looking at replacing the three stage crushing system that it needed to be replaced. You know that's because it's inefficient and contributes to high unit costs because it's prone to breakdowns, particularly in winter conditions. and ultimately because we're going to need to move it to get it out of the way as we push back the dome pit when we bring dome mine into production. The longer term solution for this is single stage crushing and a sag mill and that's part of our plans going forward in terms of achieving our growth targets. The near term plan is that we are keeping increasing levels of critical spares on site. And there is a newly designed secondary screening system that's going to be delivered at the end of June. It will be installed during the scheduled shutdown in July. And these steps we're taking now are designed to help us when we get to next winter. Just going on to slide 12. This shows you our guidance And I can say we remain on track to achieve all of our guidance for 2026. We've completed the lowest quarter of the year. We expect to see significantly higher production, particularly in Q3 and Q4. An important contributor there will be Hollinger. We began ramping up Hollinger in Q1 and exited the quarter mining about 2,000 tons a day. We expect to get over 40,000 tons from Hollinger this year. There was only a few thousand in the first quarter. We also expect to see higher levels of mill throughput. and supported by the large stock calls I mentioned. With that, I'll turn the call over to Alison White, our CFO, to look at the financial results.

Thank you, Mark, and good afternoon, everyone on the call. On slide 13, let's look at what a solid quarter and start we had in 2026, which reflects the continued momentum that we are building on from last year. We had robust revenues during Q1 of $285 million, an increase of 4% quarter over quarter, primarily reflecting the higher average, higher than average full prices throughout the quarter. More times during the quarter and coupled with the number of ounces sold over the same period, cash costs per ounce were $1,417. As previously mentioned, unit costs are projected to be the highest in the first half of the year and are scheduled to improve during the second half of 2026 As production and sales volumes increase and benefits are realized from the investment to optimize the company's operation. All in sustaining costs average $2,041 per ounce sold, reflecting the higher operating cash costs per ounce sold and is partially offset by lower spend from the sustaining capital during the period. The lower than planned sustaining capital is due to the delayed timings that Mark had mentioned earlier for the delivery of new mobile equipment and for construction work that's ongoing at the tailings CMA6 project. EBITDA grew quarter over quarter to $178 million, an increase of 41% from Q4 of 2025, which is driven by an increase in revenue as hold prices climb. Discovery has continued to have progressively strong momentum since its transition to an operational company last year, continuing to grow EBITDA during each quarter of 2025 and now again in the first quarter of 2026. We also continue the trend to generate solid free cash flow, with adjusted free cash flow of $63 million, reflecting an adjustment of $87 million for a payment made during the quarter to satisfy the company's 2025 income tax obligations. Further, Discovery deployed $67 million in capital expenditures to further advance the asset base at Porcupine, continuing onward with a vision and capital allocation plan of reinvesting in the business to add value. Q1 2026 net income was $81.7 million, an increase of 25% from Q4 2025, and both earnings per share and adjusted earnings per share were $0.10. The increase in net income quarter over quarter resulted from the one-time $45 million reclamation expense for non-operating mine sites that occurred in Q4 2025, as well as the benefit of higher revenue and lower depreciation and depletion expense during Q1 2026. Partially offsetting all of this was the impact of an income tax recovery of almost $5 million in Q4 2025 that was also offset by a $49.6 million of income tax expense in Q1 2026 for the current year, and higher share-based compensation costs that also occurred during the current quarter. The income tax recovery in Q4 2025 resulted from the $40.9 million in a deferred tax recovery that was related to revised reclamation cash flow. And as we end on that tax note, Let's move to slide 14 to review financial metrics. We continue to build on the momentum that began last year across all of our key financial metrics. Revenue and EBITDA have increased each of the last four quarters, and equally through strong earnings generation, we continue to see positive momentum in our operating and free cash flow. With Q1 adjusted operating cash flow of $130 million, and adjusted free cash flow of $63 million that I mentioned previously. The positive free cash flow generation strengthens the company's balance sheet and allows for capital redeployment into the business. So let's take a look at our liquidity position on the next slide, please. Discovery's cash balance totaled $384.9 million at the end of the quarter. The stronger gold price environment translated into $130 million of adjusted operating cash flow. partially offset by the 2026 tax payments and continued capital investments that were covered earlier. Discovery's liquidity position remains robust. With $385 million in cash on hand and a $250 million revolving credit facility with $100 million accordion feature, we have meaningful financial flexibility. We believe that this balance sheet strength gives us the foundation to advance our strategic priorities with confidence. And with that, I'm going to pass it over to Pierre, our Chief Operating Officer.

Thank you. It is a pleasure to be presenting today. I will be speaking to slide number 16. During Q1, we produced 60,269 ounces of gold, with total gold pour of 59,258 ounces. As Tony mentioned earlier, we expect production to ramp up particularly in the second half of the year. The change in production in Q1 2026 versus the previous quarter reflected lower tons grossed at. The impact of this reduction was partially upset by a 15% improvement in the average grade, reflecting a significantly higher grade at oil ponds and a higher average recovery rate. More than three quarters of the reduction in tons process was planned and related to the schedule maintenance, as well as the impact of severe winter conditions on the crushing circuit. Company is currently advancing plans to replace the crushing circuit. Total ore tons mined increased by 4% compared to Q4 2025, and we have close to 1.3 million tons of stockpiled material that is available for processing at the end of Q1. Tony discussed the crushing circuit at the mill in his remarks. I'll point out that during operating days, the dome mill continues to show improved performance. Daily throughput at the mill exceeded 11,000 tons per day on 26 days in Q1, including 10 days when the mill exceeded the operating capacity of 12,000 tons per day. Operating cash costs around sold averaged $1,417 compared to $1,185 in the previous quarter, with the increase mainly reflecting the higher mining costs given the increased mining rate in June 2026 and the impact of lower gold sold. Site level all-in sustaining cost averaged $1,875 around sold, similar to the previous quarter, as the impact of higher operating costs was partially offset by a reduction in sustaining capital expenditures. I'll now turn the call over to Eric Calio, Senior Vice President, Exploration.

Thank you, Pierre, and good afternoon, everyone. I'm on slide 17. Or starting just like today's and another great quarter for exploration now there's 67,000 meters real excellent success both operating mind and growth project. So this line, we have again a lot of new information on my plan today is just go through some of the highlights, starting with the current life at all time. As shown on the slide, which is a long section of itself work at the mind continues to focus on the lower so who is another five holes near the lower limit of the current resource. very positive results. We have several holes containing visible gold in high-grade, directly down plunges, and others indicating potential new high-grade lenses to the web. We're very happy with the progress here so far. We plan to keep these two to three rigs active here for the near term, plus also integrating another two to three rigs in the image upper part of the mine to start advancing those projects as well. Turn to the next slide, which is number 18. see the TVZ area, which is another important drill project for us in Q1. As mentioned in the past, TVZ is a significant zone of mineralization in the southeast part of the Volpon mine that was partially drilled and defined by past operators, but we are now back and adding more holes to support a major resource estimate for later this year. With that in mind, what we see here on the slide is an overall view of the target area, including the main zones, drill platforms, and even the workings from Volpon mine. Well, slightly on the main target here a bit, what we're looking at is essentially a large northeast plunging structure, which is based on drilling state, extending from at least the 850 to the 1680 level, and remaining open in both directions. Internally, the zone consists of a series of lenses, which you show here in various colors, the largest being the TVZ-2, which is a large green one sitting on the south side of the zone, and the remainder being play beams, which sit evasively to the north. And then in terms of drill platforms, just point out that the project already has a number of areas with good drill platforms that have been set up from past work. And these will be activated fairly quickly, but with just a little bit of work. Aside from that, all of our new drilling has actually been from just the 1210 and 1680 levels. And then we'll be certainly starting from 1410 as well. Turning on to my next slide, number 19, we see a more detailed view of the zone and long sections, including recent drill results As indicated, all looking good so far. In terms of 1210, which is in the upper right-hand side of the slide, we had multiple new holes with wide high-grade intercepts, nearby to our first hole that we announced in Q1. And on 1680, several more, which intersected attractive grades in width near the lower limits of past drills. Just to give you a flavor for what we're seeing, intersections on 1210, we're including numbers, sections 4.23 of 55, 0.41 over 11, 5.18 over 9.1, and then intersections from 1580, such as 4.32 over 19, 4.24 over 10, and 4.73 over 6. Important to note is that all these intersections are similar or better to other previously drilled holes in both areas, and the drilling below the 16 level is still very limited. So given above, we're very happy with progress so far. The program is continuing with three drills active on 1210, 1680, and 1410 level, so expect to see a lot of additional new results from the upper and lower parts of the zone very shortly. We're also starting on rehab of new platforms on the 1430 level and the 900, which will provide even more platforms as the year progresses. Returning on to the next slide, which is number 20, we see the Owl Creek area, where we completed another 12 holes near the historic pit, as well as at the 750 zone, which is 750 meters to the east. As indicated here, drilling near the historic pit included eight new holes resurfaced from the 650-meter level with very encouraging values, multiple holes intersecting wide, high-grade zones near the east side, and another continuing to enlarge the overall footprint to the west. Key intercepts to the east confirming the wider, higher-grade zone include values such as 4.11 over 30, 9 over 3, 5.24 over 10, 4 over 13.8. And the key intercepts to the west include 4.5, Drilling at the 750 zone includes one new hole which is designed to confirm and extend the rotation near the 250 level and that's the lower limit of historic drilling. It was also very successful. The intercept of 5.76 over 4.5, 2.57 over 8.9. Given the above, we continue to be very pleased with progress of the project to date and plan to continue with two drills for the near term. With the attorney to slide 21, We see an overall view of the board and mine, where we got another 24 holes in the north-east portion of the mine. Shown here, the focus of the current work continues to be on the main zone, which is the farthest target on the right-hand part of the slide, all drilling being done from the 585 drift, testing mostly down-plunge north-east of the mine work. Additionally, we also saw drilling start on the lower part of east lower zone, or ELZ, which is another mineralized structure Similarities to the main zone, 500 meters to the left. According to notes, both zones still have limited building down plunge and remain open for expansion. So yeah, I'm not going to go into a lot of details here in terms of the results. They're well summarized in our press release, but I guess I could just mention that we continue to have a lot of success here with the building, getting very good grades in both areas, both inside and outside resources and so very optimistic about the use of the site. And turning to slide 22, we have Tamworth, where we completed another 60-set of holes near the pier's open pit resource, as well as Tamworth West, 1.5 kilometres to the west, and the North Contact Zone, north of the base new pit. Filling near the open pit included six new holes designed to upgrade and expand resources, and that's with Q4. Results were equally the expectations with multiple highlights from all areas. Drilling at Panmure West with another six holes down in the historic mine of the Brule Land properties. And as of Q4, also 50 meters, that very nice value. A long strike of Panmure and a similar geologic setting. And then drilling at the North Contact Zone, included five new holes to test the major east-west contact north of the Panmure pit. and also started to show very positive results. According to notes, there's none of the material from Panama West or North Contact area is included in the current resort estimates and we'll be working hard to incorporate this in our next update later this year. Programs continue with four drills, two focused on extensions of Panama 5th, one at Panama West, and one at North Contact. Then going on to slide 23, we see the dome. We're at a continuation of drilling in preparation for the new resort estimates later this year. As indicated on the image, The vast majority of new drilling targeted the northeast part of the resort's pit, but also included final holes from the area to the southwest. Drilling in the northeast area included 10 holes to evaluate mineralization on the Dome Falls near the lower portion of the current resort. Very successful, indicating close correlation of geology, similar or better grades, and with two historic holes, which were drilled mostly before 1970. Drilling to the southwest included four holes as the Q4 continues to define new opportunities for future expansion. Related to sites continuing with two rigs, both now located on the north side of the test, considering results and progress to date, the project remains on track for a new resource net by the end of 2026. So in summary, things continue well and lots more to come. So with that, we'll pass over to Jose Zabalera, Senior VP, Corporate Affairs, Sustainability, Mexico.

Thank you, Eric. Hi, everyone. In Cordero, in Mexico, we continue advancing the project. We'll be, in that advancing, we're including the studies on water and power. And also after the last event of the Flood Mexico event with the president, when she announced incentives on the investment, we got a meeting with senior... Mexican authorities, and that comes for a, they set it as five visits of the project to go in the final process of the evaluation for our MIA. So we will have that message on the next week to continue advancing on the processing of the permit for Semana. So that I pass the words to our CEO, Tony McCutcheon.

Okay, thanks, Jose. Thanks, everybody, for the presentation. You know, we had a fairly solid quarter. It was a quarter where, you know, really our minds definitely outperformed the mill in terms of throughput. The mill had some challenges in terms of weather, but, you know, as we're moving on, we're working at having these things corrected, and we expect to have really solid processing results as the year goes on. I really want to thank the hard work of all the people in the company that The ones that did all the work and got all the success of the year. We really appreciate that. And then to wrap up, on the other side, you can see from exploration and a few other things, we had some significant developments in the first quarter that supports our growth objective. The acquisition of KID is one really important value for the company. There's a lot of Mayor Mrakas, lot of a lot of synergies a lot of a lot of value in terms of what we inherited can take advantage here main thing is the unlocking of. Mayor Mrakas, A process of capacity, you can see, you know when I try to show you somewhere between seven and 9 million tons of new processing capacity that can be unlocked with that and. Mayor Mrakas, You just do the math yourself in terms of when we talk about where we think that we have lots of resources there still give us continued exploration success and there's still a lot of gold left around him and. Some of these are right within existing operating minds and operating infrastructure. We continue to invest and we invest properly in terms of building the value. And like I said, as Mark talked about, we, you know, our growth objective to reach over half a million ounces of coal production. And, you know, that, you know, you can do the math. We have significant plans in place and maybe even somewhat exceed that. Anyway, you know, with that, maybe I'll just thank everybody for participating in the call and be happy to take any questions.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. Your first question comes from Larry Lou with CIBC. Your line is open.

Hi, Tony, Allison, Pierre, Eric, Mark, and team. I guess I'll start off my first question by asking about Kitt Creek. Would you mind reminding us, you know, what are some of the opportunities you see here? Does the acquisition of Kitt Creek change the way we should look at the near-term mine plan? As well as, you know, can you also remind us what are some of the steps between now to closing our transaction in Q1?

Well, I think, you know, the first thing in terms of the acquisition of Kitt, you know, You know the mind still operating. We do expect the mind to operate. They know they're you know and continue to produce produce or so definitely for the rest of this year. We're working hard in terms of what can be done there and done safely and effectively. I think that's that's that's somewhat of an opportunity. There's significant exploration land acquired here and I mean that's really part of a long term exploration program. But you know, if I can book going to slide 7 where tried to show. The biggest part here is unlocking the value of the metallurgical site, what that brings to us in terms of adding mill capacity. You know, we do with very minimal capital investment, we can process the board and oars at the Cape Met site at the C division. We're looking to process, you know, refractory gold oars, such as TV said in the D circuit. Again, these aren't significant capital expenditures for here, and they're not necessarily significant time, too, so. We expect that you know things go go properly we're doing some test work right now and working on permitting that it could be between September and March of. This year in March of next year that we can be actually processing for North here so that unlocks. 2,000 to 3,000 tons a day capacity of stone mill pretty quickly for the coal doors. We mentioned about, you know, Mark mentioned about the significant amount of stockpiles we have on surface as we're building stockpiles from mining. So there's a lot of opportunities there. And, you know, the big part is we're going to be starting engineering now and working on what we need to do to build a whole new mill circuit at PAMOR, sorry, at KIT to treat the Pamela ores, and that's a 5 to 7 million ton a year conventional gold circuit. One of the really advantages here with this, you have a brownfield site where you have over 100 megawatts of power already. We have all the water we need. We have a cleared site with actual concrete foundations in place. Not that the final foundation for all of what we do, but definitely an area that was used in the past for metallurgical work that we can go in here and build a, put a course or bin in, put a primary crusher, a sag mill, and then, you know, can create that, like I say, a 5 to 7 million ton a year gold circuit to process all the pamel ores. and really unlock the value then of dome mills. Think about it, it gives us somewhere between seven and nine million tons a year of processing capacity between six months from now, grossing from six months from now to three years from now. We see the opportunity here. And that's the main part. And in terms of closing, things are working well. We're transferring some final transfers or closure plans, et cetera, with the provincial government. You know, we're kind of thinking we're going to have this thing closed for the end of the month, but there's always something that can happen. But we're, you know, I think we're pretty much . Yeah, for sure.

Thanks, Tony, for that answer. I guess, you know, kind of a follow-up here on Kitt Creek, not diving too deep as well. How, you know, are you comfortable adding copper, zinc, and silver to your portfolio? And should, you know, would this be a good experience for having some processing base metal capacity from Cordero potentially in the future?

Well, yeah, I mean, you know, as part of this part, you know, we have the offtake in place with with Glencore and pretty much the offtake terms are not really much different than the offtake terms that they provided to their own kids site itself. It gives us that lead in in terms of working. So it's a going concern business. It's producing, you know, 3000 tons per day or it's running out of a 1.2 million ton a year capacity currently, and it will continue on that for the rest of this year. You know, we still have to work with them on plans once we take over. So the operation will continue to produce, you know, a copper concentrate and a zinc concentrate. The copper concentrate goes to the orange smelter. The zinc concentrate goes to Quebec, to Montreal. and that those in place, we have that agreement in place with Glencore, and it's great learning capacity for what we would do as we advance Cordero as well.

Perfect. Sounds good. And sorry, if I can, Allison, I do apologize in advance. This is going to be a tax question. So if I look at this quarter's free cash flow, before being adjusted, a large item would be the taxes paid for last year from Porcupine Taxes. So going forward, should we expect more of the monthly installment, or how should we look at taxes, cash taxes being paid going forward?

Yeah, Larry, so you're exactly right. First of all, thanks for the question. Taxes are never anybody's favorite topic to talk about, so you're brave to ask it. But nevertheless, yes, you're right, and we will be and we are paying monthly installments in 2026. The one-time event for 2025 payments was largely just because last year was our first partial year of operation.

Amazing. Sounds good. All right. Thanks so much, Tony and team, for the response. And I'll return to the queue. Thank you.

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

Thank you for taking my question. I'm trying to envision or anticipate the fourth quarter technical study. The January study last year described resources of four deposits and production from three of them. Based on the drilling results, will we have resources from four more deposits, TVZ, Owl Creek, If you're taking material from Hollinger. And now we've acquired Kid Creek, so. Well, the new the new report. Describe 8 distinct resources. And envision production from all eight of them.

Well, that's a good good question. Some of that really, you know, you know offline.

They would have the three. One future the operation for that you know what we were not staying on those and then we've got dome and TV said that that's the base plan for sure. I mean we've had the results that I'll create like this day. You know if we see if we have enough drilling to to do a resource there by year end, but really it's needle 5 or 84th at year end.

And you do have we do have Hollinger that we could discuss or include and yeah, there will be some things out of kit, we're still working on KID, whether that's part of our, we will give something out of KID, but it might be part of a separate report there, John.

Is the 131 million tons that Glencore reported for KID good enough to meet your standards?

I mean, okay, I'm not sure if it was quite that number, but yeah, I mean, I mean, the level of drilling and the level of quality of workmanship, we're not questioning that at all. Eric?

I mean, the drilling has been always done to a measured and indicated standard for the mining, to modify areas really where most of the resources are in the deep part of the mine. So it really is... It could be added to the arches, but it's really not because of the quality of destination or the drilling that they're not putting it in. They have uncertainties with other parts of the mining approach.

I just want to make sure I heard you right, Eric. Did you say that there will be a resource for Hollinger or Owl Creek or not?

Right now, we don't have plans to do it, but depending on how the drilling goes, we could do one.

If you're taking material from Hollinger, do you have resources without drilling them based on earlier data since you're putting ore through the mill?

Yes, there is material at Hollinger. It's a valid point that the material at Hollinger we're mining, that's what's but part of a historic resource or a resource from previous operators and, you know, we're doing it and something we're considering, but it may be more work, John, for 2027, only because You know, in terms of the level of drilling and the kind of stuff where the other work we needed to do to verify the computer for one level report, it made more role in 2027 for all of them. But it is one of the key areas and a lot of potential for what sizeable resorts are.

If I could ask one more, when do you expect to have the single stage crusher at the dome mill And where will you put it? Will it be away from the existing mill site in case a decade from now you move the mill site?

So what we're looking at doing, John, is right now in terms of the primary crusher, what we're looking at doing is either putting an orb in at site and ensure to bring an ore bin at site, a new ore bin and truck dump at site, and do fine crushing, bring crushed material from Pamore, put primary crushing at site. That's one alternative. Second alternative would be to put that there, but we're just working on now. There's some work in the back. If I had a drawing up to show you, there's work in the back that's around the secondary and tertiary crushing plant and going into the tannings where we would excavate some, doing some foundation work where we would put it right now. That would be the first phase of what we do at the Dome Mill. And yeah, the reality is we can keep the mill where it is. have a variation of crushing there and continue to run the dome pit for anywhere from depending on throughput rate that we want to mine at for 10 to 15 years before we even have to move and replace the mill at that dome.

Thank you and congratulations on all the progress.

Once again, if you have a question, it is star one. Your next question comes from Ken Illegaid with SCP Results Finance. Your line is open.

Hello, Tony and team. Just congrats on the quarter and thanks for taking my question. Well, just switching gears to operation. So you've talked about production and costs improving through H2 as throughput and mining rates ramp up. So my question is, What are the main things that we should be watching over the next couple of quarters to see if the ramp up is progressing as expected? And maybe just broadly, are you seeing anything so far in April into May from an operational standpoint that gives you confidence in this ramp up?

Yeah, I just want to make sure I understood your question. You want to know what we're going to watch for this year and how we're doing in Q2? Correct?

Yep.

Right. So of the four sources, we don't report separately, as you know, so I'll be kind of speaking in general terms. I would say to you that our mining rates are progressing really well. We don't foresee any issues here at any of our operations. Of course, as Tony alluded earlier, grades do fluctuate up and down, mostly due to sequencing and some adjustments with block models that we're doing throughout the year. So with that, on that aspect, Ken, I don't anticipate any issues delivering material to the mill, whether it's Q2, Q3, or Q4. processing capacity, we did allude to the fact that we had a few mechanical issues in Q1. I just want to bring to your attention and others' attention that if you compare what we did process in Q1 of 2026, which was about 7,700 tons per day, and you compare that to the previous operator, which in Q1 2025, They process around 4,800 tons per day. You can see that we have put in place some improvements already. So later this year, some of the mechanical parts, secondary screens, to name it, is going to be replaced. So that's going to increase the availability of the process plant. And as I did mention earlier, We did exceed the nameplate capacity of 12,000 tons per day in Q1. We're going to work towards exceeding that 12,000 tons per day in the rest of the year.

And alluding to that, then, the real two primary key indicators, if you want to watch for how we were achieving the ramp-up, one would be daily mill throughput. As you see, the mill is processing more on a day-to-day basis, going from average 10,000 tons a day to 10,500 to 11,000 tons a day or whatever. Second part is our quarterly production of coal. And those are two main drivers that right now, if you want, you can work with that.

OK, so is it fair to say that, I guess, in the long term, you're working on a single stage crusher replacement, but then in the shorter term, you are confident in the reliability of what you have right now?

In the short term, what we need to do is get plant reliability, and the biggest part is the screens on the secondary screens. That's what's been causing some of the troubles. There's lots of areas within the plant, so in the short term, it's reliability on our secondary and tertiary crushing circuit, mostly the screens. That's provided your sizing of the material before you go into your fine ore bin. So that's critical in the short term. A longer-term processing is the movement of the actual primary crusher with different locations and working on other areas. A much longer-term thing is to replace the three-stage crushing circuit with a primary crusher and a sag mill. That's up for a dome. And then the other aspects now, what we're doing with the kid med site, we have a number of initiatives there now. One initiative was to get a board north of that through the C-circuit and open up capacity for it. That gives us like 700,000 to a million tons a year of new capacity at the Dome Mill because we're processing it at the Kidman site. Second part is what we're going to do to build a new five-district. 7 million ton of your conventional gold circuit at the kid med site and the work we're going to do on that. And then the third part is the the refractory gold circuit. Now that we're going to be able to work with that at the kid med site are, you know, Eric can go through. You can see what our resources come come out. If we just look at the resources, have more oil, Pond, Borden and and and Dome. We had well over 15 million ounces of of of of resources. you know, and you should be able to, you know, I don't know, you know, you don't want to mine that over 30 years. We should be able to mine that faster. So the first part, without any expiration success, we need milk capacity. So that's a big value driver. Second part, as you can see, Eric, and all the expiration success we're having, so definitely we need more milk capacity, and then we can become more discernible in terms of As Pierre said, focus on higher grade and proper margin as we understand all the different deposits. We have the potential to build a lot of new mines here, and with that, the mill capacity, those are the things we're working on.

Okay, that's all from me. Thanks, Tony and the team, for taking my questions. Best of luck in Q2, and I'll pass the mic to the next person on the queue.

And maybe just to reiterate, just to tell you that, by the way, when we talk about milk capacity, we're not building new mills. We're in brownfield permitted sites. We're just modifying plants. We don't have to bring in power. We don't have to bring in water systems. We don't have to build... substantial new foundations or we got actually existing tailings areas we just have to modify permits on. So we're working on and within existing operations to grow this stuff. We're not going to Greenfield building brand new permitting, brand new processing operations. Sorry. Carry on.

This concludes the question and answer session. I'll turn the call to Mark Udding for a closing remark.

Thanks very much. And, again, I just want to thank everyone for taking part in the call. As you've heard, to say the least, we have a lot going on. We're making a lot of progress, and there's a lot more to come. And that's good for a bunch of reasons, one of which is we will definitely have a lot more to talk about when we have our next public call. So we look forward to speaking with you then. Enjoy the rest of your day.

This concludes today's conference call. Thank you for joining. You may now disconnect.