Torex Gold Resources Stock

Thank you for standing by. This is the conference operator. Welcome to the Torex Gold Second Quarter 2026 Results Conference Call and Webcast. [Operator Instructions] The conference call is being recorded. [Operator Instructions]

I would now like to turn the conference call over to Laura Totan, Manager, Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our Q2 2026 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found under the Investors section of our website at www.torexgold.com.

I would also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on Page 2 of today's presentation as well as those included in the Q2 2026 MD&A. On the call today, we have Andrew Snowden, President and CEO; and Dan Rollins, CFO. Following the presentation, Andrew and Dan will be available for the question-and-answer period.

This conference call is being webcast and will be available for replay on our website. Last night's press release and the accompanying financial statements and MD&A are posted on our website and have been filed on SEDAR+. Also note that all amounts mentioned in this call are U.S. dollars unless otherwise stated. I will now turn the call over to Andrew.

Thank you, Laura, and good morning, everyone, and welcome to the Torex Gold Q2 results call. And first results call for me in the role as President and CEO following Jody's retirement last month. And the main takeaway from the quarter is that our Morelos operation is performing to plan with production very much on track to achieve our annual production guidance. For those of you following along on the slides, I'm talking first to Slide 4, which summarizes our second quarter results. And this tracks to expectations as we mined through planned lower-grade and lower-gold-recovery stopes in the quarter, producing just over 96,000 ounces, putting us at around 197,000 ounces gold equivalent year-to-date.

I expect Q2 to be the lowest production quarter of the year as we return to higher-grade areas of the mine in Q3 and Q4. And we are already seeing the benefits of these improved grades with production of over 43,000 ounces of gold equivalent in the month of July, which is setting us up well for a good step-up in production here into Q3.

All-in sustaining costs of $2,459 an ounce were elevated, in part, due to this lower production quarter. But, importantly, our margins remained robust at 46%. We also continue to generate strong free cash flow of $94 million, supporting about $55 million in capital returns to shareholders during the quarter. Most importantly, we delivered yet another safe quarter with no lost time injuries for the fifth consecutive quarter, maintaining a 0 lost-time injury frequency rate per million hours worked for both our employees and contractors.

Turning next to Slide 5, you can see our all-in sustaining costs on a year-to-date basis at $2,165 an ounce, which is elevated compared to our typical run rate due to 3 key factors. Firstly, the impact of the lower grades on production and sales. And as I mentioned, these grades will, though, pick up and improve costs in the second half of the year. Secondly, we saw higher plant reagent costs, and that was due to both consumption rates and unit pricing. And this was required to process the lower recovery ore we were working through in the quarter and in the first half of the year.

Thirdly, a stronger peso, which year-to-date has averaged about 17.5:1, and that compares to our original guidance of 19:1, and that's created a meaningful impact given about 50% of our operating costs are peso-denominated. Although production is expected to step up over the coming quarters and, accordingly, costs will decrease significantly, we have revised our year -- full year all-in sustaining cost guidance to a range of $2,000 to $2,100 an ounce. Note that these costs are based on the updated full year guided metal prices of $4,500 an ounce gold, and that used to be $4,000 gold in our original guidance, as well as updates to our silver and copper assumptions of $72.50 silver for the year and $6 a pound copper for the year, which are more reflective of the metal prices we've seen year-to-date.

Sustaining capital guidance has also been revised upwards to $135 million to $145 million, and that primarily reflects the impact of the peso as well as some additional equipment leases at Media Luna. Importantly, we're still tracking to plan for our original full year production guidance of 420,000 to 470,000 ounces, and we'll be generating significant free cash flow through the course of the year.

Operationally, Q2 was a very strong quarter, as you can see here on Slide 6. Mining rates at both Media Luna and ELG continue to outperform at 7,700 tonnes per day at Media Luna and nearly 3,100 tonnes per day at ELG. And we're expecting rates at each mine to stay around these levels through the remainder of the year.

On the processing side, throughput in Q2 was also ahead of design at nearly 10,800 tonnes per day, and you can see this shown on Slide 6 on the left-hand chart here. This is a level we expect we'll be able to continue to achieve through the remainder of the year. Copper and silver recoveries both saw meaningful improvements in Q2. And while gold recovery showed some improvements quarter-over-quarter, it remains slightly below the targeted 90% set out in the technical report. As noted earlier, we are expecting an improvement in recoveries through the remainder of the year and have already begun to see better recoveries in July, where we saw about 88%.

Turning next to Slide 8 for an update on our projects. Media Luna North continues to progress on schedule with first production still expected by the end of the year. A few milestones in the quarter. Notably, we broke through on the North vent adit in June, which will enable installation of our ventilation fans, which will support first ore production and mine-level development. We also broke through on the 1-kilometer haulage drift, which is connecting the Media Luna North deposit into the existing Media Luna ore handling system, another key milestone for the project. Our focus now is on expediating the procurement and construction contracts to commence construction activities in the underground mine.

At Los Reyes, with the compelling results of the preliminary economic assessment that we walked through on the call we had last month and with that PEA now in hand, work has commenced on the PFS, which is expected to be completed by late 2027. Drilling is also well underway with 4 rigs on site now actively working and the 20,000 meters of drilling planned for this year and we'll be focused on derisking and upgrading the resources across the 3 main trends. I was down in Los Reyes myself last month visiting the team at the property and the ramp-up of activities is going exceptionally well there at the Los Reyes site.

On the subject of drilling, we also recently released our quarterly Morelos drilling and exploration update, which is summarized on Slide 9. And I'm very pleased to say that with the exceptional results we've seen to date to the east and south of Media Luna, we're accelerating the program in this area with an additional over 13,000 meters of drilling planned for this year. We're targeting to add new resources in this area with our year-end MRMR update expected to be released in March of next year.

As a result, our overall budget for exploration has increased from $77 million to a record $85 million across our portfolio of assets. This acceleration program will begin to explore the potential of the San Miguel corridor between Media Luna and Luna West may be mineralized with the San Miguel fault likely acting as the main source of mineralizing fluid. ELG Underground continues to return strong results that demonstrate potential both at depth and along strike of the main mineralized trends and second-order structures. The program continues to support our target of replacing reserves and resources with our year-end update in March.

And with that, I'll turn the call over to Dan to walk us through the financial results.

Thanks, Andrew, and good morning, everyone. Starting on Slide 11. Our all-in sustaining costs were elevated this quarter due to the factors noted earlier on the call. Margins remained robust with an all-in sustaining margin of 46%. Free cash flow of $94 million was net of $39 million in Mexican profit sharing payments, which you recall we paid annually each May. With production and costs expected to improve through the back half of the year and the period of elevated tax and profit sharing payments now behind us, we expect to generate strong free cash flow through the second half of the year.

Turning to Slide 12. AISC guidance has increased to a range of $2,000 to $2,100 per ounce from a range of $1,750 to $1,850 per ounce, reflecting both internal and external cost pressures. The main drivers of the increase in AISC guidance are as follows: one, a combined $130 per ounce impact from higher plant reagent consumption and higher reagent prices with the increase in unit pricing, a reflection of increased costs for key inputs such as ammonia in the production of sodium cyanide, a key consumable for us; two, a $70 per ounce impact from continued FX headwinds with guidance now assuming a Mexican peso of 17.5:1 versus original guidance of 19:1; three, a $40 per ounce combined impact from higher mining volumes and lower gold recoveries; and four, a $30 per ounce impact from higher forecast sustaining CapEx, which really is a reflection of the stronger peso and underground development rates and some additional capital equipment leases.

We are targeting to reduce reagent consumption rates as we utilize additional strategies to manage cyanide consumption levels within the plant. This includes the recent introduction of lead nitrate, the addition of another MACH Reactor and when we begin to leverage a new GM model that our team has recently completed. If successful, we expect reagent consumption levels to improve in 2027, noting inflationary pressures related to reagent pricing and the Mexican peso may persist.

Moving to Slide 13. Despite the higher costs, cash flow during the quarter was robust, and our cash balance increased to $169 million from $130 million, which includes $55 million of capital returned to shareholders and the $39 million in annual profit sharing payments I discussed earlier. During the second half of the year, we expect income tax installments to average around $55 million a quarter.

As illustrated on Slide 14, our overall liquidity position continued to improve. We exited the quarter with no debt and now have available liquidity of over $500 million. During the quarter, we also extended the term on our undrawn credit facility by 1 year to June 2030, which along with the $200 million accordion feature provides us with additional financial flexibility should we need it. With the highest cash outflowing quarters now behind us and production at AISC expected to strengthen, we are well positioned to generate strong free cash flow through the second half of the year which will fund our capital allocation priorities, including returning $350 million of capital to shareholders during the year and exiting the year with a minimum cash balance of $200 million.

Turning to capital returns on Slide 15. During the second quarter, we returned $55 million to shareholders, including $11 million in dividends and $44 million in share buybacks. On a year-to-date basis, we have returned $176 million of capital, representing approximately 50% of our full year target of $350 million.

Before moving to the question-and-answer period, I wanted to reiterate that we are well positioned to deliver a strong half to the year as grades improve and gold recoveries stabilize. These production factors, combined with a strong metal price backdrop are expected to lead to robust free cash flow and strong capital returns. With that, I'll hand the call back over to the operator for the question-and-answer period.

[Operator Instructions] Our first question today comes from Allison Carson from Desjardins.

My first question is just on costs. Can you just give us a bit more color on which one is the bigger impact to cost? Is it the peso or consumables? And if you're in the higher grade stopes now with better gold recoveries, is there a chance that the cyanide consumption comes down for some cost savings outside of guidance?

Yes, I can take that. So as we said on the call, the bigger driver really is the combined impact on consumable costs with respect to consumption rates and actual pricing. So the consumption rates are at about $100 an ounce to the AISC guidance, while the pricing added around $30 an ounce versus the peso, which has added around $70 an ounce. We are expected to still go through some lower recovery stopes here in the second half of the year, but the recoveries are expected to improve a little bit, but we are definitely seeing the higher grades.

So we expect consumption rates for cyanide to be consistent with the first half, so around 6.5 kilograms per tonne. But as we start to deploy some of these new initiatives and we test to see their effectiveness, we expect that as we get into better recovery stopes in 2027, we should see cyanide consumption levels decline and potentially get back to more normalized levels that we experienced through 2025.

Allison, sorry, just to add to that as well and to reiterate some of the comments that Dan made. Our metallurgical team have been working really hard for the first half of the year in working through adjustments to the plant to be able to manage cyanide levels to much more reasonable levels and to maximize recoveries. We've seen a slight improvement in recoveries here through Q2.

We expect we'll see some further improvement through the back half of the year. And with that, I think with these changes that are being made, which Dan touched on around adding lead nitrate into the leach circuit in terms of replacing a MACH Reactor in our process as well to increase oxygen and pumping into the process.

We're already seeing some signs of that driving improvements in our cyanide consumption. And so we're -- although we'll see some pressure through the course of 2026 here, we are expecting to see some of that pressure being relieved into 2027 and beyond.

All right. Great. That's very helpful additional color there. And just my other question is just on Los Reyes. I know you did touch on it, but I was just wondering, you said drilling is going well. Has everything remained on track? And do you still expect to get through the whole program this year with a slightly later start? And is there any chance you can sort of advance drilling a bit this year to maybe pull forward the PFS next year?

And so look, you're right, Allison, the drilling has commenced back in May. Everything is tracking well so far, and we're very much on track to be able to deliver the 20,000 meters that are planned through the course of this year. I think just given the timing of when we got started and given the drill started turning in May, we've got 4 drills currently turning, being able to achieve anything more than 20,000 meters is probably unlikely at this stage. I think hitting our target for this year would be a good outcome.

And then we'll look to continue that drilling both from upgrading and expanding resources, as well as drilling to support our geotech and metallurgical work for the PFS. And so that will also start through this year and into next year and support the PFS coming out kind of late next year. We're kind of thinking late Q3 into Q4. Accelerating something ahead of that is probably unlikely at this stage. We do have a number of trade-off studies that still need to be performed, and we can't undertake those trade-off studies until we've got more results from the geotech and metallurgical testing that we'll be doing from the drilling that's underway at Los Reyes.

Our next question comes from Cosmos Chiu from CIBC.

Maybe my first question is on provisional pricing. I saw that you booked a $8.7 million realized loss in Q2. But I guess my question is more with -- you mentioned there's no more QP hedges in place at the end of Q2. And with the silver prices up today, gold prices up today, copper prices has been up year-to-date. So could we -- if metal prices were to stay where they are, could we see a positive provisional pricing adjustment in Q3?

And can you remind me like how long is it between shipment and the final realized price? How long is that going to be -- how long is that period between settlement now that there's no more QP hedges in place?

Yes. Thanks, Cos. So for those that aren't aware, the provisional pricing really reflects the fact that we have -- right now, we have a delta of about 1 month between when we sell the concentrate and we finally get the final price on the concentrate. So there's about a 1-month risk on that. Going into last year, we had a bit of a wider period where we had a spread of potentially up to 3 months. But with the new contracts we put in place this year, we've been able to pull that down to 1 month. So that's one of the reasons we're no longer doing QP hedges. We don't have that same exposure.

When we do start to sell to one of the smelters later this year, we will see a bit of a longer term between when we ship and when we get final pricing. So we'll likely have some QP hedges in place there. But right now, no QP hedges. The provisional pricing really reflects that material that is unpriced or hasn't had a final price on it. That exposure is mark-to-market at the end of the quarter. And as metal prices were stronger at the end of Q1, where we ended Q2, especially for gold and silver, that's what created that loss.

With the return of stronger gold and silver prices here and continued strength in copper, if everything were to stay the same, we would expect to see a bit of a benefit on a provisional pricing gain on the material that was outstanding at the end of June. But again, it would be minor because if everything stays flat, you'd see no provisional pricing going forward on anything shipped August, September or October because metal prices haven't changed.

So short, if metal prices stay, we see a provisional price gain, and we'll look to use the QP hedges when we start to see pricing risk of more than a month.

Great. And hopefully, commodity prices stay -- keep going up. And then maybe my next question is on Media Luna North. As you mentioned, production is still on track for late 2026. I think, Andrew, you kind of mentioned the vent shaft, vent raise and also the haulage drift. But could you maybe summarize for us in terms of the key sort of deliverables you need to target and to meet between now and year-end to get to production by the end of 2026?

Sure. So the key things that we're working on right now to support underground development costs would be completing the ventilation system within the North Vent Adit, although we've broken through and we have just received at site the ventilation fans, and so they will now be installed over the next months. And so we've got a contract crew mobilizing to be able to complete the installation of those ventilation fans.

As well as now that we've got some of the main drifts and connections in place, we're also looking to install and implement the UDS system to be able to distribute paste into the plant. And so the piping and elbows and all the equipment needed to install the UDS system is being procured. Some of it has been delivered to site already, and that will be installed here over the coming months.

And so they're really the big maybe construction activities, which are remaining. Otherwise, it's really just development of the mine that we've obviously been tracking well at. And now we've got at least the ventilation adit open. We've got a passing through the mine, which allows us to stick to plan on first ore in late 2026.

Great. And then maybe one last question. There was a lot of discussion on the strengthening Mexican peso and the impact it's had on cost. I seem to remember, and I checked last night, you do have some hedges, currency hedges in place. There are some puts at MXN 18.50 to $1, so they're kind of in the money. But I guess there's just not enough. There was only about $15 million of exposure as of the end of the quarter.

So I guess, in the end, what's your strategy in terms of -- is there a strategy in terms of potentially hedging out that risk, the Mexican peso risk? And how much exposure would you need? Clearly not $15 million, but can you remind me what's your exposure in terms of Mexican peso in cost?

Yes. So on an all-in sustaining cost basis, Cosmos, about 50% of our costs are denominated in peso, and that's direct peso exposure. There has been a lot of volatility within the peso over the last few years. We've seen it from a weak point of north of MXN 20 to during the Media Luna build where we saw it to a strength of low -- high MXN 16 level. So we are going to look to try to mitigate some of the exposure going forward. So you would have seen during this quarter, we've added to -- we've added the -- we've extended the period of hedging. So we've added another quarter.

We'll look to have more of a dynamic hedging process going forward where, purely, we'll look to lock in some additional pricing more to balance out future swings in pesos versus trying to take a bet on the peso. We're just trying to minimize the swings that we've experienced in the last few years.

I expect the peso will continue to remain strong. It's an economy that's benefiting from a lot of foreign direct investment as a lot of manufacturing starts to move back there for a bit of a nearshoring. So I think that will continue. But we'll look to mitigate that going forward. Obviously, we're not going to hedge 100% of our exposure, but we'll try to target probably up to about 60% of our peso exposure to have hedged at any one time.

Our next question comes from Lauren McConnell from Paradigm Capital.

I was just sort of looking at that July number of 43,000 ounces, which is quite encouraging. Do you see that as a representative run rate to expect through Q3? And did it really benefit from timing or particularly a favorable stope sequencing? Or is it grade? Or is it recoveries? Or is it kind of a blend of all of those? Just wanted to get some color on that and how you're seeing it through Q3 and Q4.

Yes. Thanks for the question, Lauren. And I mean I agree July production was definitely very encouraging, and we were seeing the -- those high-grade stopes that we were expecting to hit through July. And so that's always nice to see that come through. I mean to set expectations for Q3, I would say building in an expectation of about 115,000 ounces is a good estimate for Q3 and then a step-up from that in Q4. And so August and September production are probably going to be a little bit softer than July. The grade will step down a touch and then pick up more through the course of Q4. And so I would kind of model 115,000-plus for Q3 and then a further step-up here in Q4.

Okay. Perfect. And then just on the cost front and sort of looking out to sort of next year, if the peso stays around MXN 17.5 or even ends up being a bit stronger and reagent pricing remains where it is today, does sort of the new 2026 range provide a better starting point for 2027 than that original sort of $1,750 to $1,850, and maybe what are sort of the biggest opportunities to offset these pressures next year that you guys see?

Yes, on that front, so obviously, the peso is one of those external factors that we can't control. So if you went with our original guidance, which was at MXN 19 versus the new guidance at MXN 17.5, that's added around $70 an ounce. So you could take that from original guidance and add it. Then you have the impact of the higher metal prices that have an impact on both royalties, profit sharing and our temporary occupation agreement. So I'd say that's all there.

The big one really is going to come down to reagent consumption. We had gone into the year looking to budget probably around 2.5 to 3 kilograms a ton cyanide, and we're doubling that right now. That's the biggest cost driver. If we can pull that back to more reasonable levels, then I'd say that the guidance from original guidance from this year, adjusted for the strength of the peso and metal prices is a good place to start.

Our next question comes from Don DeMarco from National Bank Financial.

Andrew, thanks for the additional color on Q3 and Q4. Certainly, it sounds like you're off to a pretty strong start in July. It's encouraging. And it provides conviction on the rebound, H2-weighted year. I'm just wondering, free cash flow yields are still elevated in Q2. What other tailwinds do you see in Q3 to support that? I mean, Dan, you spoke about the -- some of the tax payments and so on. Can you just give us a refresh of some of the other nonoperational costs that you see over the balance of the year?

Yes, you'll see a bit of a step-up in exploration spending because we always have a bit of a slow start to the year. So Q1 is usually the slowest period for exploration spending, Q2 picks up. And then Q3, Q4 are usually the highest. So we'll have a little bit more exploration spending in the second half, but nothing material that's going to impact free cash flow.

We'll see our CapEx increase a little bit in the second half, especially as we get near finishing Media Luna North. But the biggest driver for improving that free cash flow yield is going to be the gold price. So, just alone, gold is now trading at $4,350 and we have now budgeted at sort of $4,250 for the year, that's $100 an ounce. And if we're doing, as Andrew said, probably between $115 this quarter, that could add another $11.5 million to free cash flow, and it's there.

The other risk would be continued strengthening in the Mexican peso. Again, that's a headwind that we're not able to absorb. Been fairly stable, but right now, it's trading around MXN 17.25 versus our guidance at MXN 17.5.

[Indiscernible] there's no big payments. The $39 million of profit sharing, that was paid. The annual true-up on the mining tax and any leftover on the corporate income tax was paid in Q1. And as I stated on the call, you can expect to model around $55 million of income tax installments for Q3 and Q4.

Okay. That's great color. And then just a second and final question. Given the ongoing mine plan optimization ramp at Media Luna, should we view the current throughput assumptions as conservative? Maybe you could just, Andrew, give us your latest thoughts on the scope to increase the throughput at the mill.

Yes. And so look, for the time being, Don, assuming kind of current run rate of throughput in that kind of 10,000 to 11,000 tonnes per day rate, I think that's a good assumption to have. And as we talked about in previous calls and previous meetings, we are continuing to look at opportunities to upsize that throughput and increase that throughput through 2 different streams, one being the debottlenecking stream, which we're expecting the engineering results to come out in September, but potentially could see something up to 10% improvement in overall throughput and so something in the 11,000 tonne per day range could be the output of that.

Loosely, I would expect that benefit to come in, at the earliest it would probably be mid next year, but it's difficult to give you precise timing until the engineering studies are finished, and we know exactly what work is required to debottleneck and how long the lead time is on anything we would need to procure. But that would be, I think, a reasonable estimate at this point to think about.

And then we're also working through both the engineering work and the business case on what a larger plant expansion could look like. That could take a plant up to 14,000 tonnes per day. That would obviously be a longer project. You should think about that being sometime around late 2028 as being available, but that's subject to us making a decision early next year. And so we're kind of progressing that work to be able to have the data to make a decision in Q1 of next year. We'll see what that business case looks like, but that's the timing you should think about for the -- for any kind of potential larger expansion.

Yes, I'll certainly look forward to those catalysts.

[Operator Instructions] Our next question comes from Jeremy Hoy from Canaccord Genuity.

I appreciate the extra color that you've provided on the costs in the detail there. It's very helpful. One question remains for me. You've mentioned in previous press releases on exploration that regional drilling is underway currently on Atzcala and El Naranjo. I remember some of those targets being pretty sizable. Can you maybe give us a preview on what you're seeing there and how you're thinking about them? Are we thinking about them as incremental increases in resources, potential step changes? Or is it just too early to say? And when will we see the first results from the drilling there?

In short, Jeremy, I think it's too early to give you a whole lot of color there. We've actually just started to drill at Atzcala over recent weeks there. And so we expect we'll have first results there kind of later on this year, and we can share those either end of this year or into the early part of next year, and that will provide much more information on what the opportunity looks like there.

I mean, of course, the exploration team are excited. The testing and the work that we've done to date is very encouraging. And so we're looking forward to seeing the output of those drill results. And of course, as we've talked about before, that could provide us an opportunity to think about a heap leach facility, which would be separate from the processing plant opportunity that we just talked about and further growth of production within the Morelos complex.

If you think about kind of resource expansion and resource increase, I mean, the nearer-term opportunity there, Jeremy, are the points we talked about on the call, which is bringing the Media Luna East and Media Luna South into our resource base, and that's why we've increased our drilling investment in that region through the balance of this year, and we are hopeful that we'll be in a position to be able to declare some resources within those new areas in March of next year. And so near-term resource growth will come from Media Luna East, Media Luna West. Atzcala will obviously take a bit more time as we undertake the drilling and be able to show what that deposit potentially could look like.

And we look forward to those updates on both near mine and regional.

And as there appear to be no additional questions, this will conclude today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.

Hello, and welcome to the Annual and Special Meeting of Shareholders of Torex Gold Resources Inc. Please note that today's meeting is being recorded.

If you participate in today's meeting and disclose personal information, you'll be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you'll be deemed to represent and warrant to Computershare and the company that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure.

During the meeting, we will have a question-and-answer session. [Operator Instructions]

It is now my pleasure to turn today's meeting over to Mr. Rick Howes, Chair of the Board of Directors. Mr. Howes, the floor is yours.

Thank you. Good morning, ladies and gentlemen, and welcome to the Annual and Special Meeting of Shareholders of Torex Gold Resources Inc. I'm very pleased to be here today. With me in attendance today are Jody Kuzenko, in her last engagement as President and Chief Executive Officer; and Andrew Snowden, Chief Financial Officer, who upon completion of today's meeting will assume the role of President and CEO as Jody enters retirement. Also in attendance are Adam Segal, the company's General Counsel and Corporate Secretary; Daniel Ricica, Audit Partner with KPMG, the company's auditor.

We will begin with the formal part of the meeting, and then I will make a few closing remarks. As this meeting is being held virtually via a live webcast, it is necessary to set out a few rules for the orderly conduct of the meeting.

Questions on a motion can be submitted by any registered shareholder or duly appointed proxy holder by clicking on the Q&A icon on the virtual interface at any time. When you submit a question, the system will include your name, which entity you represent, if any, and whether you are a registered shareholder or a duly appointed proxy holder in the message that is sent to us. Questions about procedural matters or directly related to the motions before the meeting may be addressed during the meeting.

If you have already voted by submitting your proxy form or voting instruction form in advance of the meeting, it is not necessary for you to vote again today. Voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on each business item and a short time will be provided to finish recording your votes after the presentation of all business items.

When the polls open, click on the Vote icon to register your vote. You will only have a certain amount of time to vote when the polls are open. In our capacity as shareholders in attendance at this virtual meeting to expedite the formal business, I will move and Mr. Segal will second all motions.

We will now proceed with the formal portion of today's meeting.

I now ask the Annual and Special Meeting of the Shareholders of the company come to order and I appoint Adam Segal as Secretary of the meeting. For the purposes of this meeting, I appoint Computershare Investor Services Inc. through its representatives as scrutineers to tabulate the votes of the polls taken at this meeting and to report on the results.

The matters to be considered at today's meeting are set out in the management information circular of the company dated May 6, 2026, which I will simply refer to as the circular.

The notice calling this meeting, the circular, and a form of proxy were delivered to the shareholders via notice and access notification that was mailed on or around May 14, 2026. A copy of the circular and other meeting materials are available under the company profile on the SEDAR+ website and on the company's website. The audited consolidated financial statements in the company for the fiscal year ended December 31, 2025, and related MD&A were filed on SEDAR+ and posted on the company's website. A copy was also mailed to anyone who requested the financial statements and related MD&A.

Unless there is any objection, I will dispense with the reading of the notice of meeting.

Computershare has attested the proper delivery of the notice calling this meeting. Proof of service of such delivery has been provided to me by Computershare. I direct that a copy of the proof of service be attached to the minutes of this meeting as a schedule.

A quorum for the transaction of business at this meeting is 2 persons present in person, each being a shareholder entitled to vote at the meeting or a duly appointed proxy holder holding or representing, in the aggregate, not less than 25% of the issued voting shares of the company. I've been advised that the quorum requirements have been met, and I declare that this meeting is properly called and duly constituted for the transaction of business.

I have received the scrutineers' report, and I direct that their formal report be attached to the minutes of this meeting as a schedule.

As we mentioned, voting today will be conducted by electronic ballot. Polls are now open. And at this point, all registered holders and duly appointed proxy holders who have properly logged in with their control number or invite code will be able to register their votes by clicking on the Vote icon.

We will now discuss each item of business on the agenda for today's meeting.

As the first item of business on the agenda, I now present to the meeting the audited consolidated financial statements of the company for the fiscal year ended December 31, 2025, together with the auditor's report to the shareholders. As I mentioned earlier, copies of these documents were mailed to the shareholders who requested them, and they are available on the company's profile on the SEDAR+ website.

We do not propose to read them to the meeting and no vote is required on them. Any questions relating to or discussion of the company's audited financial statements and auditor's report will be deferred until the question-and-answer period at the conclusion of the formal part of today's meeting.

The next item of business is the election of directors. The company did not receive notice of any other director nominations in connection with the meeting in accordance with its advance notice bylaw. Accordingly, the only persons eligible to be nominated for election to the Board of Directors of the company are the following nominees who were named in the circular.

I therefore move that each of the following nominees be elected as a director to serve until the close of the next Annual Meeting of Shareholders: Richard Howes, Andrew Snowden, Caroline Donally, Jennifer Hooper, Jacques Perron, Jay Kellerman, Rosie Moore, and Rodrigo Sandoval.

I second the motion.

The next item of business is the appointment of auditors of the company. I move that KPMG LLP, Chartered Professional Accountants, be appointed auditors of the company until the next Annual Meeting of Shareholders and that the Board of Directors be authorized to fix their compensation.

I second the motion.

The next item of business relates to changing the name of the company from Torex Gold Resources Inc. to Torex Resources Inc., which must be approved by not less than 2/3 of the votes cast at the meeting. I move that the approval of name change resolution, the full text of which is set forth on Page 10 of the circular, be approved.

I second the motion.

The next and final item of business is the approval of the company's approach on executive compensation, often referred to as Say on Pay advisory resolution. I move that the Say on Pay advisory resolution, the full text of which is set forth on Page 10 of the circular, be approved.

I second the motion.

Are there questions on any of the motions before the meeting?

As there are no questions, we will move on to vote. If you haven't voted already, please register your votes by clicking on the Vote icon and select the For or Withhold buttons next to the name of each proposed director and next to the resolution for the appointment of KPMG as the company's auditors.

For the other items of business, the approval of name change resolution and the Say on Pay advisory resolution, register your votes by selecting the For or Against buttons next to the resolution.

We will provide registered shareholders and duly appointed proxy holders another 10 seconds to complete the electronic ballots.

[Voting]

The electronic balloting will now be closed. When the voting page indicates the resolutions are closed, the votes will automatically be submitted.

I have been advised that all of the resolutions have been passed. I ask that the scrutineer compile the report regarding the results of the voting on all business matters and the results will be published on SEDAR+ and by press release. I also direct that the results of the poll be included with the minutes of this meeting.

The formal items of business as set out in the notice of meeting have now been dealt with. And as there is no further business to come before the meeting, I declare the formal part of the meeting to be terminated.

But before we close the call, I would like to make a few remarks. Today, we say farewell to a very talented leader, Jody Kuzenko, who is retiring as President and CEO of Torex after 8 years of exceptional service. I want to thank Jody for her unwavering dedication to creating lasting value for our shareholders while fostering a resilient and values-driven organization. Jody's numerous contributions to Torex have been foundational and will continue to have a lasting impact on our business and our team. On behalf of everyone at the company, we wish her the very best in this next chapter.

As we say farewell to Jody, we welcome Andrew Snowden as the company's new President and CEO. Since joining Torex in 2021, Andrew has done an impeccable job as CFO and has played a pivotal role in the company's success. The Board has full confidence in Andrew and the executive team to lead the company through the next phase of continued growth and success.

In closing, I would like to thank you, our shareholders, for your continued support and trust in us and I want to reiterate our commitment to generating meaningful and sustained value for all who choose to invest in us. As shareholders, we have much to be proud of in the strong performance of the team we have entrusted to manage this business. And I would like to recognize the dedication and accomplishments of the entire Torex team. We continue to build a strong foundation for sustained growth in Mexico and beyond.

That concludes today's meeting. Thank you all for joining us.

This concludes the meeting. You may now disconnect.

Thank you for standing by. This is the conference operator. Welcome to the Torex Gold First Quarter 2026 Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Dan Rollins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our Q1 2026 conference call.

Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found under the Investors section of our website. I'd also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on Page 2 of today's presentation as well as those included in the Q1 2026 MD&A.

On the call today, we have Jody Kuzenko, President and CEO; and Andrew Snowden, CFO. Following the presentation, Jody and Andrew will be available for the question-and-answer period.

This conference call is being webcast and will be available for replay on our website. Last night's press release and the accompanying financial statements and MD&A are posted on our website and have also been filed on SEDAR+. Also note that all amounts mentioned in this call are U.S. dollars unless otherwise stated. I'll now turn the call over to Jody.

Thank you, Dan, and good morning to everyone on the line. As this will be my final earnings call as CEO of Torex, I wanted to take a moment here to reflect on how the company has evolved since I joined back in 2018.

Back then, we were a single mine company with production from ELG and a mine life out to 2024. Media Luna wasn't yet in reserves, and we were facing a potential gap in production between the depletion of the open pits and the start of Media Luna Mining.

In the years since, we've extended the mine life of the open pits and systematically stepped up production from ELG underground to ensure stable production until Media Luna came online. We tunneled 7 kilometers underneath the river to connect to the south side of Morelos, we designed and built and successfully ramped up Media Luna ahead of schedule, and we now have steady production of gold, copper and silver coming from two mines with the third on track to come online later this year.

We've also invested meaningfully in exploration, adding 10 years of mine life at Morelos, now out to at least 2034, and we have a very clear line of sight to continue to extend mine life far beyond that.

From a financial perspective, we funded Media Luna of cash flow and a small amount of debt. Not even 3 quarters after starting up Media Luna, we are now once again debt-free and generating strong free cash flow, announcing a return of capital program for our shareholders for the first time in the company's history late last year and stepping that up even further with our results announced last night.

We've also expanded our portfolio with the addition of Los Reyes and 4 early-stage exploration properties, extending our footprint outside of Guerrero and venturing into Sinaloa, Chihuahua and the United States.

As I step into retirement here and Andrew takes the helm, I leave the company a place that I'm proud of and excited about the future under Andrew's leadership as the company continues to grow in Mexico and beyond.

Now getting into our quarterly results, turning to key highlights here on Slide 4. Finished production was lighter quarter-over-quarter due to mine sequencing at Media Luna as we mine through lower grade and lower recovery stopes per this year's mine plan. All-in sustaining costs of $1,917 per ounce were elevated, primarily as a result of the lower finished production, higher reagent consumption and stronger-than-expected Mexican peso. However, our financials remained very strong with a record AISC margin of 60% for the quarter as well as record quarterly revenue and adjusted EBITDA.

Despite $165 million of tax and royalty payments to government, we generated $157 million of free cash flow, enabling the full repayment of debt outstanding while also returning $121 million to shareholders through dividends and buybacks during the quarter.

Importantly, and critically, all of this success was accomplished safely. I am so pleased to say that our lost time injury frequency is once again 0 per million hours worked for both employees and contractors, just truly remarkable safety performance.

Full year guidance is outlined here on Slide 5, with a return to higher grades and recovery stopes planned in the second half of this year, production and costs are expected to strengthen accordingly. As such, we remain on track to achieve both production and cost guidance for the year. And I'd note here that Q2 production and costs are expected to be similar to those achieved in quarter 1.

Moving on to our operational performance on Slide 6. The processing plant was impacted by two extended periods of maintenance during the quarter. One was planned, and the other was unplanned when we went down in February to replace a faulty batch of bolts, which subsequently created issues with the discharge grades in the SAG mill. I'm pleased to say that following the repair, the plant has returned to operating above design levels. And in the month of April, we averaged over 11,400 tonnes per day.

Recoveries in the chart on the right reflect the lower recovery stopes that I mentioned and are expected to remain at current levels through quarter 2 before increasing in the back half of the year.

Mining rates at both Media Luna and ELG underground are ahead of plan, as shown here on Slide 7. At Media Luna, we were able to achieve consistent production at design mining rates of 7,500 tonnes per day. This is 9 months ahead of the schedule set out in the technical report and 3 months earlier than our latest forecast. This is due to how far advanced we were in capital development in 2025, which provided us the operational flexibility we needed. It's also due to the performance of the ore handling systems, including the Guajes Tunnel conveyor that the team got working very reliably, very quickly. At ELG underground, rates continue to deliver ahead of their targeted 2,800 tonnes per day, a trend we plan to continue until Media Luna North comes online in quarter 4 of this year.

Updates on our projects are summarized here on Slide 8. At Media Luna North, we continue to make excellent progress on the North adit breakthrough, which is on track for midyear. Once completed, ventilation fans will be installed, allowing access to the ore body for infrastructure construction to support first ore production.

We have also continued to progress on plan the main haulage ramp back to the existing Media Luna infrastructure with breakthrough on this ramp expected in late June. At Los Reyes, work on the preliminary economic assessment continues to progress is on schedule for completion midyear. The study is contemplating a combined open pit and underground mine with mill throughput of 5,000 tonnes per day. Our target is for production between 140,000 and 150,000 gold equivalent ounces per year with an initial mine life of at least 10 years.

Field work on site has not yet resumed at Los Reyes, but we continue to be in active discussions with all three levels of government and the local communities to create the conditions to safely and importantly, sustainably return to the area and resume work.

Finally, before I hand the call over to Andrew, I'll touch on the exploration results we shared last week, summarized here on Slide 9. In the Media Luna cluster, we're seeing strong potential to expand resources to the south and east of the mine with surface mapping suggesting potential continuity between these two zones. Additionally, infill drilling is being conducted at the mine to upgrade inferred resources to indicated with our year-end update with a target to offset depletion.

Drilling at Media Luna North has recommenced, targeting to expand resources even further to the north of the new mine, while drilling at Media Luna West will resume in the second half of this year, looking to build on the inaugural resource we declared in March of this year.

At ELG underground, following the discovery of mineralized structures running parallel to the El Limón Sur trend announced in May last year, we've continued to find more of these structures, which importantly remain open along strike and at depth.

We also continue to encounter mineralization beyond the boundary of known resources at Sub-Sill and El Limón West trends. All of this suggests that we've yet to fully unlock the full potential of ELG underground and expect another year of resource expansion and reserve replacement with our year-end update next March.

At our regional targets at Morelos, early drilling at Atzcala is giving us a better idea of the structural orientation of the Breccia bodies, while drilling at El Naranjo commenced last month. We look forward to sharing the results of these programs once they are available. With that, I'll hand the call over to Andrew to take you through financials.

Okay. Thank you, Jody, and good morning, everyone. And I'll start my commentary just turning first to Slide 11. And as Jody noted, our all-in sustaining costs for the quarter came in just above our guided range, largely due to lower production and a strong Mexican peso, also due to the impact that higher metal prices. Had on our royalties and profit sharing as well as higher reagent consumption required to process the lower recovery ore that, again, Jody mentioned.

Despite this, our margins remain robust at a record 60% for the quarter. And costs are expected to trend lower through the back half of the year as we return to higher grade and recovery stopes.

One area we've been seeing cost pressure is with the peso. As I mentioned, we have budgeted the year at an average exchange rate of 19:1 but averaged about 17.5:1 through the first quarter. With 50% of our operating costs peso denominated, we are sensitive to movements in the exchange rate. And in Q1, it added about $50 an ounce to our cost profile. We have placed further peso hedges now for both 2026 and 2027 to provide additional protection and to mitigate against these fluctuations, but we recognize this is a cost pressure we expect will continue for the foreseeable future.

Additionally, a number of our peers have seen cost inflation owing to higher diesel prices, and this has been a common question we've received from shareholders over recent months. And so I do want to just touch on this briefly.

Given our operations are now fully underground and the majority of our Media Luna fleet is battery electric, diesel costs only make up a small percentage of our cost profile. In addition, diesel is subsidized in Mexico and to date has only seen an increase of approximately 15% year-to-date. And so for context, if prices stayed at this level through the end of the year, we would see less than a $5 an ounce impact to our all-in sustaining costs.

Next, just talking briefly about free cash flow. You would have seen that we generated an impressive $157 million for the quarter, and that was after we paid $165 million of taxes and royalties in Q1. Our outlook for free cash flow remains very strong. And at current spot prices, we're forecasting approximately $650 million of free cash flow to be generated this year.

Turning next to Slide 12. You can see here this provides a breakdown of our cash flow for the quarter. Our adjusted EBITDA of $159 million was a quarterly record, of course, supported by high metal prices and record margins. And this allowed us to fully repay the outstanding debt accumulated during the Media Luna build while also returning $121 million of cash to shareholders through both the dividend and $111 million of share to share repurchases. And I'll speak more on our enhanced return of capital program that we announced last night momentarily.

Before we move off the topic of cash flow, though, just as a reminder to everyone of the cash flow seasonality we have, and you can see that here on Slide 13. I know as the group on the call are aware, Q1 is always our highest cash outflowing quarter of the year as we pay our annual true-up for taxes and royalties this year amounting to $165 million in total on account of higher metal prices we saw through the course of last year.

Q2 will see our annual Mexican mandated profit sharing payment, which we expect will be approximately $38 million this year. Q2 will also likely be impacted by lower sales compared to Q1, just given Q1 benefited from the sale of the inventory on hand at the end of the year. And as usual, we expect Q3 and Q4 to be the highest cash flow quarters of the year with these annual payments then fully behind us.

Next, just turning to Slide 14. You can see here an outline of our current liquidity position. And despite the significant tax and royalty payments that I mentioned as well as the return of capital program that we've been executing on, our cash balance grew quarter-over-quarter to $130 million, and we expect this to continue to grow over coming quarters and to at least our minimum balance of $200 million, which is our current target.

Following the repayment of the final $30 million of debt outstanding in January, we're once again debt-free and had available liquidity of $467 million at the end of Q1.

Next, just moving on to capital allocation. And you can see on Slide 15 that there are four key priorities for our capital allocation. These are all outlined here. Firstly, we're looking to continue to invest in our Morelos property to extend the production profile of the property, and that's supported by $45 million of drilling on the property for this year. We're also investing $100 million of capital to complete the construction of Media Luna North by the end of this year.

Secondly, we're focused on unlocking value across our portfolio of development stage and exploration properties, including Los Reyes and Sinaloa and our other properties across Chihuahua and Nevada, while continuing to look for and seek value-accretive M&A.

Thirdly, focusing on our balance sheet, growing our financial strength to a minimum $200 million of cash on hand, and that will provide us both operational and strategic flexibility looking forward.

And finally, our shareholder returns, which we have just enhanced, and I'll dive into that next on Slide 16. And as you will have seen last night, we announced a target to return a total of $350 million to shareholders in 2026 through both an increased dividend and continuing to aggressively buy back shares, which is a strong return, particularly given where our shares are currently trading.

As I mentioned, at spot prices, we're expecting to generate approximately $650 million of free cash flow this year. And so the $350 million we expect to return to shareholders represents about 55% of this forecasted free cash flow or approximately 40% prior to nonsustaining capital expenditure.

The $350 million includes the $121 million returned during the first quarter and builds on the total of $165 million that has been returned to shareholders to date since announcing our inaugural return of capital program last November. With this announcement, our dividend was also increased by 7% to [ CAD 0.16 ] per share, implying a forward annualized dividend yield of about 1%.

Our intention with this announcement was to provide more transparency and clarity on the magnitude of capital we expect to return this year. And we feel that returning over 50% of our free cash flow to shareholders is a meaningful way to generate value for our shareholders with the remaining amount being reinvested across other capital allocation priorities in our portfolio.

Finally, before I open up the line for questions, although Jody is not retiring for another month, this will be her last earnings call before I step into the President and CEO seat next month. Anything I say here will not do her leadership and tenure at Torex justice, but I do want to take a moment to acknowledge Jody publicly in front of the analysts and investors on the line for all she has done and accomplished at Torex over the past 8 years. She has made a real difference to the lives of so many in Mexico and beyond and will be greatly missed by everyone across the team here at Torex as well as I'm sure all of our stakeholders, including those on the line today. And with that, I'll open up the line for questions.

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

Jody, all the best to you, enjoy retirement. And Andrew, congratulations. And here comes the questions. Maybe my first question is on the enhanced return of capital program. As you mentioned, you really talked about the intention in terms of capital return in 2026. But there wasn't any mention in terms of what happens beyond 2026. I guess maybe a question to Andrew. Is the intent of the enhanced program to be maintained into future years? Or is it something that you would, I guess, look at year-over-year?

So our intent with the return of capital announcement last night was to provide guidance on what to expect in 2026. And so we will be looking at that program annually to determine what our annual commitment will be each year going forward. Just to note, though, of course, our return of capital program does include a dividend, and that quarterly dividend is expected to be declared every quarter going forward. And so that's something that you can expect we would maintain in future years. And then in addition to that, we'll be providing annual guidance on what to expect from a share buyback perspective.

Great. And then Andrew, maybe if you can talk about how you came up with that sort of 55% of free cash flow being returned back to investors. We've seen from other companies in your peer group, they've talked about 35% return, 40% return. 55% is certainly on the higher end. Maybe can you talk about how you came up with that number?

Look, I think for us, Cosmos, I mean what's very compelling is where our shares are currently trading. We're currently trading at a significant discount compared to our peer group. And so it's a very compelling business case to be buying back our shares at this price. And so that helps motivate us to be very aggressive in our share buybacks this year.

That said, we are looking to maintain in and around 50% of our free cash flow for our own balance sheet. And so we're looking to both return that capital to shareholders as well as grow our cash balance and liquidity on the balance sheet to deliver on broader capital allocation priorities. And so we just felt like the right balance for us given the opportunity for our share buybacks as well as our broader strategic priorities.

Maybe switching gears a little bit at Los Reyes. Likely, you won't be able to give me a time line in terms of when you can potentially return to site. But if you can, that's great. If not, then could you maybe walk us through when you do return to site, what can we expect? Are you going to bring drills back? Are you going to start drilling once again? Like what can we expect? Is there a plan in place in terms of what we can expect once you get back to site?

And then I guess there's been some news in terms of a change in government at Sinaloa. The government -- the Governor of Sinaloa had recently resigned. Is there any kind of read-through in terms of the asset level and how you view the time line of your potential return? Anything that we should read into it?

I'll take this question, Cosmos. And so a few questions in there. Firstly, just to validate your assumption, Cosmos, we're not in a position to provide a specific date on when we'll be returning to site. I don't think it's appropriate to put pressure on the team. We'll make that decision at the right time.

And that said, though, I'd say our discussions at all level of government, both locally and federally has all been very positive and constructive. We're feeling very well supported across all levels of government and are making positive steps forward to create the conditions to access site. We're hoping to get to site, obviously sooner rather than later, but the timing is still -- would still to be determined.

When we do get to site, though, our plans are already set. We'll be looking to get the drills turning fairly imminently once we do get access to site. The drill rigs are actually already on site. They were not removed from site by prime when they stood down the workforce over a year ago. And so the drills will be ready to turn fairly quickly after access is available.

And then we'll also be looking to do work to support advancing our PFS. And so there's various other sample testing that we'll look to do to be able to support column testing and other metallurgical work. We'll want to fully assess the initial plans of plant location to make sure that, that location makes sense based on geotech conditions and do further sampling and testing at site. And so the work will be twofold, both drilling to continue to support the resource base as well as work to support the PFS.

Great. And then maybe one last question, Media Luna North. As you mentioned, production start in late 2026. There's a number of kind of items being progressed at this point in time. There's the main access ramp haulage drift, ventilation. But I guess my question is, is there a critical path? Is there certain items that we need to make sure that you complete on time to hit that target in terms of late 2026 production?

Yes. There's a number of key milestones in the plan, Cosmos. And as Jody mentioned today, everything is tracking to plan. I would say, I mean, at this point, the key critical milestone, which is imminent here is the breakthrough of the North vent adit. It's important for us to get access to additional ventilation to be able to commence the broader ramp development and open up the mine. That's in plan for May of this year, and that will be a key milestone to then start building out the mine.

In addition to that, there's obviously the procurement activities that are underway. All of our long lead items have already been -- orders have already been put in place. we've got commitments from those vendors to be able to deliver online with our schedule. But until that equipment obviously arrives at site, there's always some risk associated with that. But as we did with Media Luna, we're working very closely with our suppliers to make sure that they adhere to their commitments to us. And that work is ongoing. But at this point, everything that we're seeing is supportive of us producing first ore in December of this year.

The next question comes from Don DeMarco with National Bank.

I'd just like to echo Cosmos's comments as well. Jody, best wishes on next steps. First question, great to see the shareholder return program. With that, the $200 million minimum cash balance seems readily achievable, especially looking to the high free cash flow quarters in H2 and beyond. Is this minimum adequate dry powder to develop Los Reyes or even for M&A given cash could provide a bidding advantage on some deals?

Look, Don, I'll take that question again. The $200 million we see as being a minimum balance that can provide us good operational flexibility as we work through seasonality in our cash flow looking forward.

We will naturally, as you rightly point out, we will naturally build a cash balance beyond that through the course of this year. And in addition, we do have a fully undrawn $350 million revolver. And so the combination of where our cash will land at the end of this year and the available credit facility that we have, we feel provides us good flexibility to be able to support our broader strategic initiatives.

As we kind of think about M&A more broadly, obviously, if opportunities do come up that are beyond that, we've got lots of debt capacity that we could take on to support the right deal at the right time. And so we feel we've got the balance sheet to be able to support whatever strategic priorities we are looking to focus on going forward.

And sorry, just to answer your question about Los Reyes, we'll be coming out with our PEA on that, of course, next month. As we've talked about in the past, we expect capital to be in the region of $500 million. And so that's the level of cash that we can build up very quickly here. And the timing of that would be in the '29, 2030 period. And so a significant period of time here to build cash to be able to support that build, and we're very comfortable with that path forward.

Okay. That's helpful. Then looking at Media Luna, given that you achieved the Media Luna mining rates ahead of schedule, is there any read-through -- favorable read-through to higher production this year, maybe even possibly towards the upper end of the guidance range?

Well, I mean, there's a potential read-through there, Don, in us being able to achieve mining rates at Media Luna beyond 7,500 tonnes per day. And so that's something that we're working through. And today, I would say, assuming a steady state of 7,500 tonnes per day is a good go-forward plan to include in your models and your assumptions.

In terms of overall production, I wouldn't expect that we would be above our guidance range. I think we're very comfortable with our guidance range. And that is although we're ahead of schedule on hitting the rates at Media Luna. If you remember, I think in Q1, our initial target was to be at 7,000 tonnes per day, and we achieved 7,500 tonnes per day. And so the incremental ore there will not have a meaningful impact on our annual production.

Okay. And then just as a final question, looking to your exploration update from last week, there was some comments on the prospective drill target at Atzcala. Are you getting any initial indications from the modest drilling that's been done so far of its potential in terms of the stand-alone oxide deposit and so on? Or is that really something that we need more drilling to verify?

Look, it's too early, Don, to be able to share any specifics at this point. We will have more data that we can share later on this year. But I know we've had discussions in the past about the real potential that we see within Atzcala and everything we're seeing today continues to support the potential that we hope we can prove out in Atzcala, but we'll have more data that we can share in the second half of this year once we undertake further drilling.

[Operator Instructions] The next question comes from Lauren McConnell with Paradigm Capital.

Congratulations, Jody, again on the retirement. Just talking about the plant at Morelos, you guys have contemplated taking it back up to that historical 13,000 tonne per day levels. Can you just remind us of sort of when that decision could possibly be made and sort of what the key factors going into that are?

Yes. I can take that question again, Lauren. Thanks for the question. So that's work that's underway now. Clearly, in the current gold price environment, the business case is potentially compelling here. But there's work that we need to do both to understand the engineering that's required to bring the plant back up to those historic levels as well as understanding the broader impact that, that decision could have on our go-forward mine plan and resource base. And so what we're -- the work we're looking to do through the course of this year is to support us having a discussion and becoming decisional, I would say, in Q1 of next year.

Okay. Perfect. That's really helpful. And then if we were to factor in or think about factoring in, it would be more like a 2028 time frame then if you did move forward with it.

Yes. I think that's a fair assumption, Lauren. Correct.

And then just a quick question on Media Luna North. When you do tie that in, I just want to confirm that there's no plant downtime and there's no Media Luna mining rate downtime during that tie-in.

That's correct, Lauren. No impact to the plants in any way and no downtime within the Media Luna mine either.

As there appears to be no more questions, this concludes today's conference call.

You may disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you for standing by. This is the conference operator. Welcome to Torex Gold's Fourth Quarter and Full Year 2025 Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Dan Rollins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our fourth quarter and full year 2025 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found under the Investors section of our website at www.torexgold.com. I'd also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on Page 2 of today's presentation as well as those included in the Q4 2025 MD&A.

On the call today, we have Jody Kuzenko, President and CEO; and Andrew Snowden, CFO. Following the presentation, Jody and Andrew will be available for the question-and-answer period. This conference call is being webcast and will be available for replay on our website. Last night's press release and the accompanying financial statements and MD&A are posted on our website and have been filed on SEDAR+. Also note that all amounts mentioned in this call are U.S. dollars unless otherwise stated.

I'll now turn the call over to Jody.

Thank you, Dan, and good morning to everyone on the line. I thought it's important to start with our strategy slide here at the outset. It underpins some of the opening comments I want to make about the CEO transition that was announced a few weeks ago. As most to follow us well know, one of the key reasons Torex has been able to deliver results so consistently over the years is that we have anchored our business and systems. Planning, scheduling and executing work in very defined, clear and thoughtful ways. And these systems are in place across all aspects of our organization, not just production and maintenance work at the operations. Succession planning within Torex is no different. This is something we plan for at all staff levels of the business. .

Since Andrew joined Torex as CFO in 2021. He's been an integral part of developing and executing against the strategy that has yielded very successful results to date and beyond strategy, designing and implementing the systems that have made us successful. Certainly, certainly within finance, but well beyond that as well, including systems that touch projects and operations, maintenance and supply chain, all of this has positioned us nicely to now actually execute on the succession plan. So this transition really is a product of planning, planning that will deliver continuity for Torex and by extension, our shareholders. Our stakeholders should expect to see no less than the consistent results this team has delivered together over the past several years. This also means that there won't be a material shift from the strategic pillars outlined here on Slide 4.

Our focus in 2026 will continue to be on servicing the value that now sits within our expanded portfolio. First, by demonstrating the long-term potential of Morelos through drilling, by delivering preliminary economic assessment for the Los Reyes asset by midyear, starting drilling at the early stage exploration projects acquired in Nevada and Chihuahua and with the cash flow we're now generating with Media Luna behind us aggressively returning capital to shareholders.

Reflecting on the accomplishments from 2025 here on Slide 5, the year was truly a transformational one for our company. We achieved commercial production at Media Luna in May and successfully ramped up ahead plan through the year, exiting 2025 at a mining rate of 7,000 tonnes per day, well ahead of our targeted 6,500 tonnes a day. We remain on track to achieve design levels of 7,500 tonnes a day out of Media Luna by midyear 6 months ahead of the schedule outlined in the feasibility study. The success of this ramp-up can be seen on the slide. You can see strong second half production as mining rates hit stride and throughput at the process plant remains strong and stable. Production is expected to remain around these H2 '25 levels going forward, noting that in this year, production is slightly weighted to the back half, and there are a couple of reasons for this grade and what we're seeing at the mine through stope sequencing and achieving that 7,500 tonnes per day run rate by midyear.

Strong 2025 production supported by a backdrop of high metal prices resulted in record annual all-in sustaining cost margin of 51%. Additionally, record quarterly free cash flow of $166 million enabled us to fully repay the debt we had accumulated through the Media Luna project. I want to take a moment to underscore this point here. Torex paid for Media Luna out of cash flow, no stream, no royalties, no equity raise. And here we are, 6 months post commercial production debt-free.

Lastly, on this slide, but certainly not least, our next level safety program has been appraised across the business, which is evident in the lost time injury frequency of 0.07 per million hours worked for both employees and contractors, compared this to the most recently reported Mexican mining industry average of 3.61%. 2025 has certainly marked 1 of the safest years on record at the Morelos Complex. We expect 2026 to be no different.

Slide 6 outlines our 2026 guidance, which was released last month. Gold equivalent production of 420,000 to 470,000 is markedly higher than the 383,000 ounces produced in 2025. This primarily reflects the full year of production from the processing plant and steady-state mining rates at Media Luna this year. Costs are largely in line with the all-in sustaining costs of $17.83 per ounce gold achieved in 2025. This is elevated over previous years due to the impact that significantly higher metal prices have on the taxes royalties to government and the Mexican legislative profit sharing that we pay our employees. Sustaining capital expenditures are slightly higher than the $107 million spent in 2025, as you would expect because this marks the first full year of commercial production from Media Luna.

Non-sustaining capital expenditures this year include $100 million to $105 million related to Media Luna North project costs. as well as $65 million to $70 million on various projects across Morelo that are centered on optimizing and driving efficiencies. One example of a project like this is the construction of a conveyor that connects the Guajes Tunnel to the Guajes crusher. This conveyor will reduce rehandling costs by more than $1 per tonne mined from Media Luna. At our guided metal prices of $4,000 per ounce gold, $45 per ounce silver and $4.90 copper and the Mexican exchange rate at 19:1, we have forecasted generating $450 million of free cash flow this year. With where metal prices are sitting today, we're now forecasting this to be upwards of $700 million of free cash in 2026.

Moving on to our 5-year outlook here on Slide 7, you'll note the stable production profile we expect to deliver through at least 2030. This outlook is also markedly improved from the previous 5-year outlook of 450,000 to 500,000 ounces of gold equivalent per year through 2029. So if you normalize this year's outlook for the 2024 reserve metal prices used in the prior outlook, production would actually be closer to 480,000 to 530,000 ounces of gold equivalent. This is a market step-up. A few factors contribute to this increase, including the Media Luna ramp-up being ahead of schedule, continued mine life extension on ELG Underground from ongoing exploration success and mill throughput consistently delivering above design levels.

On the subject of mill throughput performance is outlined here on the left on Slide 8, you can see the second half performance was ahead of the design rates even when considering the 5 days of scheduled mill maintenance we had in October. The chart on the right showcases the quick ramp-up we had for gold and copper recoveries, both consistently achieving design levels of 90% and 92%, respectively, and silver recoveries are also ramping up nicely to the design level of 85%.

On the mining front, mining rates at both Media Luna and ELG Underground are shown here on Slide 9. The chart on the left displays the steady ramp-up at Media Luna this year. The key to unlocking the final step-up to 7,500 tonnes a day by midyear was the successful commissioning of the final rock breaker, the final waste pass and the final waste conveyor this quarter, all of which have now been completed.

ELG Underground mining rates have also been consistently ahead of the 2,800 tonnes per day we targeted last year and even delivered a new quarterly mining record in Q4. I expect to see mining rates stay around this 2,800 tonnes per day through the end of this year before reducing to more normalized levels when consistent feed is being delivered from Media Luna North at the end of 2027. Those 2 things go together.

Further details on the progress of Media Luna North is provided here on Slide 10. As we announced with our annual guidance release, total project CapEx is now expected to range between $108 million and $113 million compared to the pre-feasibility study estimate of $82 million. This increase primarily reflects the decision to purchase the mining fleet outright instead of leasing it, which just made sense in the context of this record metal price environment. Underground development is progressing very well. It sits today at about 40% complete. You can see the completed development here in gray and the development planned in red. We've already started development on the North Vent Adit and have started on the haulage tunnel from the Media Luna side coming in towards Media Luna North. With the development on track and procurement sitting at 30% of orders placed, including all long lead items, we expect first mine production by year-end and then expect to quickly ramp up this new mine through 2027.

Moving on to Slide 11, I'll touch on our next development project in the pipeline Los Reyes. The preliminary economic assessment is progressing nicely and is on track to be completed by mid-year. For 2026, we have budgeted $18 million to complete the PEA, commence the PSS and conduct 20,000 meters of drilling on the property. I want to note here that delivery of the PEA is not dependent on resuming drilling activities at site given the amount of drilling completed to date. That said additional drilling will be required to adequately advance the pre-feasibility study. We have to conduct more metallurgical testing, some geotechnical work, we have work to do to derisk the resource model and in certain areas, we're looking to upgrade more inferred resources to the indicated category.

I want to make a comment here on security at Los Reyes. No different than the approach in Guerrero, the safety of our employees and contractors as the most important consideration of this project. We will not resume drilling at Los Reyes until we have confidence -- complete confidence that it can be done both safely and sustainably, that's key. We're working closely with local communities, and we're working closely with all 3 levels of government to create the conditions for these employees and contractors to return to their field work.

Lastly, our exploration program for the year is summarized here on Slide 12. The overall budget for this program has increased to a record $77 million for 2026. Approximately $43 million of that will be attributed to Morelos as you would expect to conduct just over 113,000 meters of drilling. Similar to previous years, the program will focus on replacing reserves and expanding resources at ELG underground and Media Luna cluster, with a smaller portion of the budget set aside to explore 2 higher priority regional targets Atzcala and El Naranjo. I've already mentioned that $18 million has been earmarked for both exploration and study-related costs at Los Reyes, these coming months here will determine whether in the extent to which it will be spent. In Nevada, we expect to spend $12 million primarily on 7,500 meters of drilling at Gryphon, where we have the option to earn into 100% of the property. Additionally, 2,500 meters of drilling will be conducted at Medicine Springs, where I'm pleased to say we earned into 100% ownership as of January.

Finally, $4 million of set aside for 5,000 meters of drilling at Batopilas and early-stage targeting work at GD. All in we're pretty excited about our exploration program this year. It's quite robust with plenty of high-quality targets across the entire suite of assets. In terms of news flow, you can expect our annual reserve and resource update late March per usual, and we'll look to provide an update on some of our exploration programs in Q2.

With that, I'll turn the call over to Andrew to walk through our financial results.

Okay. Thank you, Jody, and good morning, everyone. So before we dive into the financial details this morning, I did want to take a moment just to acknowledge Jody's retirement announcement. I believe I share the same sentiment as everyone on the line that Jody has done an incredible job of delivering on her mandate as CEO. With the Media Luna project complete and a clear line of sight on production for at least the next 10 years, generating strong free cash flow and a return of capital program now in place the company is well set up for this next stage of growth. May I echo Jody's comments that the underlying message from my transition to CEO in June is one of continuity. And I look forward to continuing the strong relationship we've built with all of our stakeholders by building on the strategy we've been successful in executing over the past several years. .

Moving now on to our Q4 financial performance here on Slide 14. Our excellent second half performance and the current metal price environment resulted in record margins of 51% for the year and a record 57% for the quarter. Q4 costs were slightly higher quarter-over-quarter, primarily reflecting the first quarter of paste backfill in Media Luna as well as the impact of higher metal prices on royalties. Given the timing of paste commissioning, we will incur some additional costs at Media Luna through until mid-2027 as we look to catch up on the backfilling backlog incurred during the 2025 year given the delays in completing the paste plant. The lower chart on this slide just shows a record free cash flow of $166 million generated in Q4 as Media Luna really came into its stride.

Turning to our cash balance through the 2025 year are shown next on Slide 15, with record adjusted EBITDA of $730 million for the year enabled us to execute on a number of capital allocation priorities, including the acquisition of Reyna Silver for $27 million in cash repaying all but $30 million of our debt balance by the end of the year, and we subsequently fully repaid our debt in January. And we also returned $44 million of cash to shareholders through a combination of dividends and share buybacks. This is in addition to the over $350 million of capital expenditure for the year, most of which was related to the completion of the Media Luna project.

Turning next to Slide 16. I just -- I do want to just take a moment here to remind everyone at the cash flow seasonality that we typically see year-on-year. While production is expected to be largely consistent quarter-over-quarter, albeit slightly second half weighted, the first half of the year is when our heaviest tax royalty and profit-sharing payments are made. I wanted to just walk through briefly here some of the key cash payments that we're expecting here through that first half period. You can expect to see a 1% royalty payment, which we pay in March each year, about $12 million. Our 8.5% mining tax payment is also due in March. We expect that to be about $55 million. And we also have the annual income tax true-up, which is paid in March and that's expected to be about $20 million this year. And this is all in addition to the regular quarterly tax installments of at least $60 million in Q1. And related to fiscal 2026 as well as a quarterly 2.5% royalty.

Additionally, we do have several employee payments scheduled for the first half of the year. And this year, we paid about $30 million in January related to the company's long-term incentive plan. And in Q2, we'll see a $35 million payment related to the payment of our annual profit sharing in Mexico. And as usual, Q3 and Q4 are expected to be our strongest cash flow quarter of the year. Our balance sheet and liquidity position are clearly well set to fund these payments and we've laid out next on Slide 17. As of year-end, we had about $30 million of debt remaining outstanding, and we subsequently repaid that, as I mentioned, in January. So we're now sitting here debt-free. Total liquidity at the end of the year sat at $426 million, $120 million of which was in cash. And we continue to have access to our $350 million credit facility, which matures in June of 2029. As well as an accordion feature of $200 million that is available at the discretion of the lenders.

Now being debt free, we expect our cash position to quickly build over the coming year, especially at current metal prices. And that to be available for capital allocation priorities. Overall, we're an excellent financial position to deliver and execute on these capital allocation priorities, and these are summarized on Slide 18. Our focus remains on deploying in 4 key areas: firstly, increasing mine life and expanding margins at Morelos, which we're doing so through the exploration program that Jody spoke to just a few moments ago. Growth through Los Reyes, our portfolio of early-stage exploration projects and value-accretive M&A, should an opportunity present itself. Thirdly, building on our balance sheet up to the minimum of $200 million cash. And finally, continuing to return capital to shareholders, which you can see summarized next on Slide 19.

Just to touch on that return of capital. In the second half of 2025, we returned about $44 million to shareholders through our Phase 1 return of capital program. This is comprised of a quarterly dividend of $0.15 a share, the first of which was paid in December and coupled with some share buybacks. In total, we purchased over 800,000 shares in 2025 and at an average price of CAD 57 a share, and we've continued to be active on the NCIB in 2026, repurchasing over 400,000 shares at an average price of just under $67 a share. And that's year-to-date. We also just last night declared our second quarterly dividend at that $0.15 a share level.

We expect to continue to opportunistically buy back shares this year and have just entered into an automatic share purchase plan to enable share repurchases at times when we are in blackout period. With numerous exploration targets in the pipeline for this year, operations at Morelos delivering ahead of expectations and the record free cash flow generation as well as the solid return of capital program in place or well set up to embark on our next chapter of growth.

And with that, operator, I'd like to open the line for questions.

[Operator Instructions] Our first question comes from Allison Carson with Desjardins.

First of all, I was wondering if you could discuss how the security situation at Los Reyes could impact the work you've planned for 2026 and what that could mean for the overall time line of the project?

Yes. Thanks, Allison. That's a good question. It's certainly on everybody's mind with the incidents occurring in Sinaloa over the course of this last month. I want to start by saying how saddened we are by the incident. I mean this is a situation where the Mexican mining community really comes together. 10 men lost their lives, 10 good miners. And it's just an absolutely tragic situation. As I said in my commentary, we had plans to start drilling this year and $18 million allocated. The team here, desktop in Toronto and Vancouver is working away on the PEA that work continues. We expect to have the PEA ready and available to market by middle of the year this year.

The big question on everybody's mind is, if and to the extent we're unable to get to site for a bit of a prolonged period at what point does that start to impact the pre-feasibility study? Because as I mentioned, we have to get to site to actually do the work. And the way we're thinking about it is probably about middle of the year this year. If the teams aren't on site doing environmental baseline work additional drilling, get some additional samples for the geomet work and the Hydro G work, then the pre-feasibility study will start to be shifted out from mid-2027, down towards the end of 2027. This is not like a week-for-week month-for-month shift because, of course, we'll work to compress it because we're not going to be capital constrained here. We want to get on with building this mine, but there will be some impact if we don't have the data available to us by accessing the deposits.

I will say in terms of security situation more in terms of the security situation more broadly. There are state-by-state nuances in security. And even within states, there are local nuances. And so that's very much the case here in Sinaloa. I will also say that when we made the decision to acquire this project, we diligenced this issue extensively. We knew what we were getting into. And my view is that, that was deeply reflected in the purchase price. The outcome of the events of the last month is that government at all levels is now deeply involved. They have to be. And so the work we have been doing has gained some new momentum here to enable us to create the conditions to put our people to work and put them to work safely and sustainably. So we're optimistic that, that can be achieved.

That's great. It's very helpful to get all that color in there as well. My next question is just on Media Luna. With the strong mining rates out of Media Luna in Q4 and now that we're already partway through Q1. I was wondering if you could comment on whether we're seeing rates continue to advance ahead of schedule? And if it appears likely that the ramp-up will be completed ahead of mid-year .

I'll take that one, too, Allison. I mean, I consider the ramp-up to be complete. The difference between 7,000, 7,500 tonnes a day isn't really that significant, it's a couple of extra loads onto the belt. The real ticket to getting it ramped up stably was bringing on that last waste path. So we have an outlet for the waste and can start campaigning waste through Guajes tunnel. The other thing that has happened over the course of the last, I would say, 5 months is that we've really broken the back of the paste plant. All of that infrastructure that supports backfilling is now working very well and to design rates. And the other thing that has happened is we've connected now the pace plant to the stable source of reliable energy, which is the low voltage power line instead of using the dead set. So all of that bodes really well for this continued accelerated ramp-up and even ramp up beyond the 7,500 tonnes a day. So feeling very confident about what we're seeing out of Media Luna from a volume perspective. .

Great. That's very helpful. Congratulations on the great 2025.

Our next question comes from Lauren McConnell with Paradigm .

Jody, congratulations on your retirement announcement. And I think I speak for most and saying things, we'll obviously miss you on these calls and tours. You've been wonderful obviously, to work with from this side of things, but look forward obviously to continuing working with Andrew and the rest of the team. My first question comes about EPO or Media Luna North. What are sort of the critical path items to keep first production in Q4? Is it development meters, long lead procurement or infrastructure tie-ins. And where do you see sort of the highest risk in execution? .

That's a really good question. We see Media Lunas a very low-risk project. largely because there's hardly any construction to do. Remember, it just ties back into all of the Media Luna ore handling system. So there are 3 things really on the list. One is development. I mentioned how well we're progressing on it. We have no issues with continuing at the rates we're seeing. The other is landing the long-lead electrical equipment and fans and ventilation. Both the fans and the electrical equipment have been ordered. We expect those to land here in the coming months tying them in will be orders of magnitude more simple than the electrical and ventilation tie-ins that happened at Media Luna.

And so the way we are looking at it is that Q4 of 2026 for first production is a very solid forecast. We very much expect to be producing ore through the back half of this year at Media Luna North, and that will then enable us to dial back rates at ELG Underground. So in terms of the overall production profile, you should be thinking about the mill as consuming 10,800 tonnes a day, 7,500 tonnes or more of that coming from Media Luna and then the delta divided in some way that makes sense between Media Luna North and ELG underground, but feeling very good about the progress of. It's a very -- I would describe it as an uncomplicated tuck-in to the Media Luna cluster.

And then just to be clear, too, with the Media Luna North tie in. Is there any impact to Media Luna copper mining rates or processing at that time? .

That's actually a really good question. One of the things, as we were completing a study on Media Luna North was the integrated mine planning with Media Luna, so that we didn't get in the way of taking stopes at Media Luna or material handling, what stope is going to be available as many of the Luna North comes on as we would expect with Torex, that is very, very tightly planned. Those 2 assets need to work coherently and together so that they complement one another, not get in each other's way. And so that's planned. We don't expect any impact to Media Luna production as we bring on Media Luna North.

Our next question comes from Don DeMarco with National Bank Financial.

Thank you, operator, and good morning to the Torex team. Congratulations on the high free cash flow and the debt-free status. So my first question on the mining rates at Media Luna. So -- now that you're on the cusp of achieving that 7,500 tonne per target and sooner than expected, is there a potential? And do you see merit in exceeding this mining rate? .

There is potential to exceed that mining rate, Don. There will come a point in time in the not-too-distant future that we'll be talking about production from the Media Luna mine collectively, which will include Media Luna North and then eventually Media Luna East and Media Luna West. What we would do with the material is produced it laid on the ground, stock pilot and feed it through the plant in the event that we face an interruption out of the mine for whatever reason. But we will be mill constrained moving forward. And so as we start to produce more from the underground, we are actually, as a management team, turning our attention to the possibility of upsizing the flotation circuits at the mill, which will be the constraint. That could unlock some additional production from a finished ounce perspective at Morelos. And so this is an evolving increase.

First, we've got to get the mines. We've got to bring EPO on and get that producing to more than 10,800 tonnes a day and concurrently do a study to see how much CapEx it would be to bring the mill back up to that 13,000 tonnes a day we used to run at when we were in open pit production, which essentially involves adding cells to the flotation circuits. So exciting times for us from a life of mine planning perspective, that I would characterize as very much as upside only here.

Okay. That's great. And that's actually -- that was my next question about the mill. I mean I think now that you're in production really hitting your stride it's -- the questions turn to the levers to optimize and upsize the operations. So you mentioned 13,000 tonnes per day at the mill, and we'll look forward to more. But is that kind of an upper limit then -- or is there scenarios before that? Or is it just too early to kind of know where this might head at some point in the future? .

I think there are scenarios to get us from the current 10,800 to 13,000 in a stepwise incremental way. It's not something that you should think about as all at once. And based on the information and the equipment and what we know today, you should be thinking about 13,000 in that range as an upside cap. Beyond that, we would need a new grinding circuit, which then you start to do through your life of mine very, very quickly, producing 450,000 to 500,000 ounces a year is already a really big mine.

Okay. And then maybe just as a last question. I mean, how do you manage? you have a development team and operations team. Do the 2 teams kind of work interchangeably, whether it's on development or operations? And -- or do you kind of redeploy the development team to work on North how do you kind of manage the different skill sets and sort of that's very required on site.

Really that's a really good question. And it will become increasingly important for us as we bring on Media Luna North and we are looking to deploy our development team and our operations team as cost efficiently as safely and as productively as possible. I don't know that interchange is the right word, but cooperatively is definitely a word. And I'm going to give you a specific example of this. We originally, when we were doing the development on Media Luna North had development reporting into the projects team, right? That's a normal thing to do. It's a new project. The project owns the project, and then we'll be handed over to the operations once it's complete at the end of the year. Because there were so many synergies available to us with equipment, with men, with material with supervision, we moved the development of Media Luna North over to be hung from the operations team so that the crews could be lined up together so that we made sure that we were maximizing productivity and minimizing costs and downtime. Just a really specific example of how we're thinking about that Media Luna deposit as a cluster. And as I said, there will come a point where we're treating it as one integrated giant mine.

Okay. And congratulations again on your retirement.

As appears, there are no more questions, this concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you for standing by. This is the conference operator. Welcome to Torex Gold's Third Quarter 2025 Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded.

I would now like to turn the conference over to Dan Rollins, Senior Vice President of Corporate Development and Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our Q3 2025 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found on the Investors section of our website at www.torexgold.com. I'd also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on Page 2 of today's presentation as well as those included in the Q3 2025 MD&A.

On the call today, we have Jody Kuzenko, President and CEO; and Andrew Snowden, CFO. Following the presentation, Jody, Andrew and I will be available for the question-and-answer period. This conference call is being webcast and will be available for replay on our website. Last night's press releases and the accompanying financial statements and MD&A are posted on our website and have been also filed on SEDAR+. Also note that all amounts mentioned in this call are U.S. dollars unless otherwise stated.

I'll now turn the call over to Jody.

Thank you, Dan, and good morning, everyone, on the line. Last night, we released our quarter 3 earnings. And in every way, this has truly been a pivotal quarter for Torex. It really is the one we've been working for. Highlights as follows: The ramp-up at Media Luna underground has been advancing ahead of plan. ELG underground continues to exceed expectations. Our processing plant is delivering above nameplate on both throughput and recoveries. We hit a major milestone with our first quarter of significant free cash flow generation since the beginning of the Media Luna build.

We have finally arrived here at our free cash flow inflection point. We used that money to substantially reduce our debt. We implemented our inaugural return of capital policy with both the dividend and the buyback program now in place. And during the quarter, we bought back $7 million worth of shares. And overall that, we've taken our first steps on growth beyond Morelos, closing 2 acquisitions, adding 5 new assets to our portfolio. In what's been a transformational year for the company, our third quarter results are the first time we're really able to showcase the new operating and cash flow capability of our Morelos assets.

Starting here with our strategic pillars on Slide 4. No changes to discuss in our overall strategy. We just continue to work this plan. I'll get into the detail on the progress under each of these pillars throughout the call, but I do want to start with an update on the pillars centered around being a leader in responsible mining. In our ongoing efforts to reestablish ourselves as one of the safest mining companies in the industry, we've been hard at work designing and executing a comprehensive program that we've called next level safety.

This is a combination of work streams aimed at safety leadership, risk mindset, safety systems, including fatal risk standards and critical control refreshers across the operations. And we're doing some real interesting work to either further -- even further enhance our culture of care. I'm proud to say this work is paying off. There were no lost-time injuries during the quarter and the lost-time injury frequency at the end of quarter 3 of 0.42 per million hours worked for both employees and contractors on a rolling 12-month basis, really an industry-leading number.

Getting into our operational results here on Slide 5, you can see the significant step-up in production we had quarter-over-quarter. Quarter 3 coming in at 119,000 ounces of gold equivalent was much more representative of how successful the ramp-up at Media Luna has been, which up until now wasn't so obvious given the impact of the capacitor failure we had causing the 10-day shutdown at the mill in quarter 2. All-in sustaining cost was also improved quarter-over-quarter, coming in at $1,658 per ounce, resulting in strong margins of 53%.

Additionally, we generated $113 million of free cash flow, an important inflection point for the company as it allows us to execute on our capital allocation priorities, which included repaying $75 million of debt, plus another $20 million post quarter end. And it allows us to implement our inaugural return of capital policy, which Andrew will speak to shortly. Slide 6 sets out how we're tracking to our annual guidance. As you can see here, the gold price continues to put pressure on both production and cost guidance given that we report on a gold equivalent basis. And our guidance for this year was set at a gold price of $2,500 an ounce.

Our year-to-date production of 262,000 ounces would have been closer to 270,000 ounces were if not for the higher gold price, and our year-to-date all-in sustaining costs of $1,732 would have been closer to $1,600. With that said, we're still aggressively chasing the low end of production guidance and the upper end of cost guidance for the year. To be clear, this statement is made at our guided metal prices. You will also note on this slide, we made a minor adjustment to sustaining capital guidance during the quarter, increasing it by $15 million. This reflects the increased underground development we've had to undertake to support the Media Luna mine ramp-up to get us to hit our targeted tonnes in spite of the delays in commissioning of the paste plant.

That said, I'm very pleased to report that we've been paste backfilling since September. We've got 3 stopes now filled with 6 more in the plan between now and year-end. The last point on this slide is a reminder that non-sustaining capital guidance was revised in quarter 2. There have been no further changes, and we continue to expect to come in within this range. Slide 7 showcases the strong performance of the processing plant, which has been exceeding expectations for the past several months. The chart on the left shows throughput, which you can see has consistently been above 11,000 tonnes per day, well ahead of the nameplate capacity of 10,600 tonnes per day.

While it's still too early for us to say that this type of performance can be considered steady state, it certainly points us in a direction that we have upside beyond 10,600 especially during months not impacted by major planned maintenance periods. The chart on the right shows recoveries, which were 94% for gold and 95% for copper in September also ahead of their design levels of 90% and 92%, respectively, reflecting how well the met teams have optimized the flotation circuit since commissioning.

Switching to the performance of our underground operations on Slide 8. The chart on the left shows the steady ramp-up of the mining rates at Media Luna. We have set a target to exit quarter 3 at 6,000 tonnes per day, and the team exceeded expectations. They delivered a quarterly average of nearly 6,150 tonnes per day. You'll see that rates in September are about 7,800 tonnes per day, and this largely reflects the third primary ore pass and rock-breaker coming online during that month as well as a greater amount of development ore moved during the month.

Just to caution here, do not carry the September number forward. We expect the monthly averages to return to levels more in line with our targeted ramp-up rate, especially as we're adding paste backfill to the cycle and we maintain our guidance that we're looking to exit 2025 at 6,500 tonnes per day out of Media Luna. The chart on the right shows that mining rates at ELG underground are also well ahead of our targeted 2,800 tonnes per day, averaging 3,200 tonnes per day for each of August and September.

We expect to continue mining at around 2,800 tonnes per day out of ELG until EPO comes online at the end of next year. On the topic of EPO, you'll see the update set out here on Slide 10. We continue to make good progress on design, development and permitting, all concurrently. As at the end of October, we've completed just over 500 meters of development in the ramp, taking off from the Guajes tunnel and remain very much on pace for first ore production by the end of 2026. Importantly, the modification to our MIA-Integral to permit construction of a waste dump facility was approved by SEMARNAT in July.

So this means we now have all necessary permits required to begin operating EPO. It also means that we have operational flexibility to dump waste on the south side or campaign it through the Guajes tunnel on the conveyor. On the feasibility study work, our teams have now finalized the mine design, the waste dump design, mine sequencing and integrating that mine sequence and scheduling with Media Luna.

We've also initiated procurement processes for long lead equipment supply in support of construction, leveraging the specifications and engineering that we undertook with the Media Luna project. All in here, both our operations and projects are performing exceptionally well, and we fully expect this strong momentum to carry through to the remainder of the year.

I'll now turn the call over to Andrew to talk about our financial results.

Okay. Thank you, Jody, and good morning, everyone. So starting first on Slide 11, you can see a step change in our cost profile from our second quarter performance as we started to see the benefit of the Media Luna ramp-up. This cost performance, coupled with the continued strength of the gold price supported strong all-in sustaining cost margins of 53% in the quarter, which is 47% year-to-date. I expect our margins to remain robust as we close out the year here, particularly as gold prices hold and as economies of scale continue through the Media Luna ramp-up.

As Jody noted, we also generated $113 million of free cash flow during the quarter, marking the first quarter of significant free cash flow since the early days of Media Luna Construction. Really nice to get to this point, and you can expect to see Torex continue to generate strong free cash flow from this point going forward. With the strength in the gold price, I do want to just remind you of the impact this has on our reported gold equivalent production and cost performance compared to our guidance metal prices, and you can see this summarized on Slide 12.

As Jody mentioned, the gold price year-to-date has been about 28% higher than our guided price of $2,500 an ounce. This has had about an 11,000 ounce impact to our reported gold equivalent production amount due to the nature of the gold equivalent calculation, and this was slightly offset by the higher silver price, but it still resulted in gold equivalent production being about 8,000 ounces lighter than where we would have been, all else being equal.

This impact was even more pronounced on our all-in sustaining costs as the higher gold prices not only impacted the gold equivalent calculation, but also the amounts we pay in our Mexican legislative profit sharing, our royalties and our temporary occupation agreements. At guided metal prices, our year-to-date all-in sustaining costs would have been around $1,600 an ounce, which puts us in line with the top end of our annual guided range of $1,400 to $1,600.

Turning to Slide 13. The robust free cash flow generated during the quarter allowed us to repay $75 million of debt, fund the $26 million acquisition of Reyna Silver in cash and also repurchased $7 million of shares. Also to note, we did repay another $20 million of debt in October post the Q2 close here. While I'm talking free cash flow, just a brief reminder, we do have some seasonality to our free cash flow, as I think everyone is well aware.

In Q1 of next year, the Q1 '26, we are expecting and currently forecasting annual payments of about $90 million to cover the company's annual tax true-ups, the 8.5% mining tax and the 1% mining royalty. In addition, there will be the annual PTU or profit sharing payments, which will be paid in Q2, and I expect that will be in the $35 million to $40 million range.

Turning next to Slide 14. You can see here our liquidity position and debt profile at the end of the quarter. With net debt of $48 million, excluding leases, we're in a solid position to repay all of our remaining debt over the next couple of quarters. I expect that will be repaid by the end of Q1, while also increasing our cash position. As of the end of Q3, we had $280 million of available liquidity, $107 million of which sat in cash at the end of the quarter.

Next, turning to Slide 14. I do want to talk about some big news that we announced yesterday around our return of capital program. You can view this announcement really as the first phase of our return of capital program. One we expect will evolve as our balance sheet further strengthens with the expectation that the next phase will allow us to be more decorative on the overall level of capital to be returned annually. Under this initial phase, we've declared a quarterly dividend of CAD 0.15 per share, the first of which will be paid out to shareholders in early December. We view this dividend level as sustainable and one that can potentially grow over time.

In addition to this dividend, we will also be opportunistically buying back shares, which as noted earlier, we've already started to be active on. We plan to renew our current normal course issuer bid in the coming weeks, and we'll look to leverage this program over the next 12 months. With the projected level of free cash flow to be generated by the business, this return of capital program will not impact our ability to fund other capital allocation priorities, which include continuing to invest heavily in the drill bit across our expanded portfolio, funding value-enhancing growth such as EPO and Los Reyes and maintaining a strong balance sheet with significant liquidity to take advantage of accretive external opportunities as and when they come up.

Finally, just a very brief update on our hedge book. You can see that summarized on Slide 16. Since the Q2 update, we've just added some initial colors on the Mexican peso looking out to 2026 and '27. These are all summarized here on the slide, and we'll look to layer in further hedges over the coming quarters to grow this protection with the goal of having hedges in place to protect up to 60% of our peso-denominated costs. The gold put options that we have in place for 2025 do all roll off at the end of this year, and we have no additional puts in place on the gold price beyond 2025.

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

Thanks, Andrew, and good morning. Starting on Slide 18. We've made excellent progress on our acquisitions of Reyna Silver and Prime Mining with both transactions now closed and integration efforts well underway. Early exploration work has commenced at Gryphon and Batopilas, 2 of the 4 assets we acquired through Reyna Silver. At both assets, we're completing target definition work to assess and rank targets to be drilled in 2026. This assessment will be based on results from geochemistry, geophysics and remote sensing work with teams already on the ground at both assets. We expect to invest around $10 million across the 4 properties from Reyna Silver in 2026.

At Los Reyes, development stage project we acquired through the acquisition of Prime Mining, work on the preliminary economic assessment is underway following closing the transaction in October. With enough drilling done to date to advance the PEA, we are tracking for completion by mid next year. We expect to invest about $10 million in drilling at Los Reyes in 2026, plus additional dollars to complete the PEA and kick off a pre-feasibility study.

Lastly, on Slide 19 summarizes the drilling results from the ELG underground press release we put out last month. Drilling was focused on the El Limón Sur and Sub-Sill trends and additionally uncovered 2 second order structures running parallel to both these trends. These new trends appear to have acted as conduits for mineralizing fluids and have extended mineralization both laterally and vertically, supporting our target of expanding resources at this deposit year after year. This discovery only underscores that we're yet to unlock the full potential of ELG underground, a deposit where we firmly believe we can continue to extend mine life and expand resources year after year for many years to come.

With that, I'll turn the back -- the call back over to the operator for any questions.

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

Maybe my first question is on your return of capital strategy here. Great to see that you've put in an inaugural dividend of CAD 0.15 per share. But maybe if I can ask, how did you come up with that number? How did you come up with that level? To me, it calculates to about a 1% dividend yield. Was that something that you're striving towards?

Cosmos, Andrew here. I'll take that question. I mean 1% felt about right. Really, the genesis behind the dividend level that we wanted to start at was thinking about a level that we felt very comfortable that we could continue and was sustainable in any gold price environment and that -- and the overall $40 million that equates to U.S. annually was a level that we felt very comfortable with in the mix of our overall capital allocation priorities and that happens to come out at about 1%, which I think was fairly in line with the general levels of our peer group.

I'll also maybe just note that this is really only our first quarter of free cash flow post Media Luna. It's really what I would describe and as we talked about on the call, as our first -- our initial phase, first phase return of capital program. We'll look to evolve that through the course of 2026 as the balance sheet continues to build, but that's the right level that we thought would be the inaugural dividend.

Great. And as we talk about levels here, you also repurchased CAD 10 million in shares in Q3. Is that a good level in terms of the foreseeable future in terms of quarterly buybacks?

Again, Cos, I think given this is just our first phase, we've deliberately not come out with any kind of annual targets on volume of shares that we'll look to buy back in any specific period of time. We'll probably evolve to that, I think, through the course of 2026. I'll say the volume of our buybacks in any given month or any given quarter will be dependent on where our share price is trading and how we've been performing against our peer group. That said, obviously where our share price is trading today is a very attractive price. We're obviously blacked out for the next couple of days post our Q3 earnings, but I would expect that we'll be looking to dip into the market and buy back some shares in short order here.

Great. And maybe if I can switch gears a little bit, and this might be another question for you, Andrew. I'm looking at these QP hedges -- and I've read it quite a few times. I'm still kind of not fully grasping it. Is it just related to, I guess, mitigating the risk in terms of provisional pricing, and that's why you're hedging out the silver and copper. I guess my question is, how significant is it? Is it related to provisional pricing? And then it sounds like it cannot qualify as hedge accounting. So is it going to introduce some kind of accounting volatility into your reporting?

Yes. Good question, Cos. This is the first time we're actually entering into the QP hedging. And so just to give you some context around why we're doing that. So firstly, it relates to our concentrate sales that we started to produce following the Media Luna construction. So it's the concentrate that now comes from our plant under our contracts with the traders. So to date, most of those concentrate has been sold to the traders. The traders actually have the option right now to select M+1 or M+4 as in the settlement terms.

What we're looking to do is actually overall reduce volatility over an annual period where we want to make sure that we achieve M+1 settlement terms on all of our sales. And so although the traders are typically elected M+1 on all of our sales to date, when the market is in backwardation, they'll likely select M+4 from time to time. And when they do that, we'll enter into QP hedging to ensure that M+1 outcome is achieved.

And the goal here is really to make sure that through the year, we'll average something close to the market price rather than having some contracts close at M+1 and some contracts close at M+4. So I think at this point, it's very small volumes that we've entered into, but we will look to execute that from time to time where we see that exposure to achieve that consistent outcome.

Great. And then maybe one last question. Gold equivalent ounce reporting has caused a bit of, I would say, not volatility, but kind of a lot of explanation needed to be made in terms of gold equivalent ounces, how that's being calculated, how that compares to your original guidance. Is that something that you would reconsider in terms of the way you guide, in terms of the way you report in the coming years, especially given the fact that as you talked about Media Luna coming in, there's more byproduct now, including copper. Again, how should we look at gold equivalent ounce calculation and reporting on a go-forward basis?

Yes. That's a fair comment, Cos. I mean it's -- we've not lived through this period of price volatility that we've had over the past 12 months. And so we weren't expecting, obviously, the explanations that we've had to provide through the course of this year to explain some of the variances.

I think as we look forward to 2026 here and the guidance that we'll be releasing in January, at this point, we expect to probably expand that guidance more than it maybe was in 2025 to provide guidance on individual metals rather than just gold equivalent. And so we will continue to report on gold equivalent. I think that's an important metric, but we will provide incremental guidance on individual metals so that helps the market and investors and analysts understand our production profile.

The overall goal line for us here, Cos, is transparency. We want everybody to understand clearly what our production is and how we're tracking against our commitments to market.

The next question comes from Don DeMarco with National Bank Financial.

First off, I'll start with the plant. I see it's running above the 10,600 tonne per day nameplate. Can you restate the drivers for this? And do you have an upper limit target that you might hope to achieve? And can you sustain grades at this higher level throughput? I mean, obviously, that will be in flux of Media Luna ramps up, but just interested to hear more color on this.

Yes. Thanks, I'll take that question. Yes, I'll take that question. As you know, we did over 11,000 tonnes a day through quarter 3. And one of the key drivers for that was centered around we didn't have a major maintenance period scheduled in the quarter. You'll recall the downtime we took in May of this year as a result of the capacitor failure. So the team just didn't take that time down. They took the opportunity to do every bit of maintenance they could to set us up for a maintenance-free quarter 3, which drove those rates.

The other thing driving those rates is that, generally speaking, the ore on the Media Luna South side is softer than the ore on the north side, which allows us to increase tonnes per hour. And when we took the mill down during the transition period from [indiscernible] 10,600 tonnes a day with the Media Luna transition, we didn't downgrade power and power to the SAG mill and the ball mill had been the limiting factor under the open pit flow sheet.

So we've got more power than we need. We've got a little bit softer ore, and we are continuing to optimize our maintenance planning, both on a quarterly basis and an annual basis. What that all tools up to is something that we are actively discussing, what kind of commitment we make to the market. At this point, we're holding on 10,600 tonnes a day. I will tell you, as we're running the 2026 budget, we are flexing an upside at 11,000 tonnes a day.

Too soon to put it into the models, but that could very well be where we're headed here. In terms of your question around grade, as you know, we are looking to get as many tonnes as we can out of Media Luna and ELG underground at a $4,000 gold price, that has allowed us to selectively soften cutoff grade zone by zone to get more tonnes with maybe a little bit less grade. So there will be impacts around the margin, I would say, on grade driven predominantly by the gold price, but secondarily by this upside we're seeing at the mill. It's all connected.

Okay. That's -- all that is just very excellent color, and we look forward to further details on your throughput rates going forward. But maybe we can dig into grade a little more. So you got Media Luna underground, I see it's on track for 6,500 tonnes per day at year-end. You got -- you had a record in September. I see that. That's great. But you're still on track for that pace and then 7,500 midyear. But with this looming, how should we think about year-over-year improvements in grade going forward with a more favorable blend with higher weighting to Media Luna?

Yes. It will be very unlikely that we'll have a lot of blending capability moving forward. I mean, at 7,500 tonnes a day, another 3,000 tonnes a day and 2,000 tonnes a day out of EPO, you can see that we're going to be filling a hungry mill, even call it, at 11,000 tonnes a day. And so you can expect to be grade to be fairly flat moving forward.

Okay. Okay. And just maybe as a final question and I'll shift over to Dan. So Dan, yes, great to see the Prime acquisition close at Los Reyes. You mentioned the PEA is tracking mid-2026. Looking forward to this milestone. But is this subject to a resumption of exploration at site? And what is the level of working conditions right now in...

Yes. I'll let Jody talk about the working conditions. On the PEA, there's over 200,000 meters of drilling and a significant portion of the resource is already in the indicated category at very tightly spaced drilling. So there's enough critical mass of drilling to continue to move ahead with the work that Prime had started on the PEA. Our team has just taken that over now. We've got our team heading down to Vancouver to meet with some of the consultants over the next couple of weeks. They'll take a look at the design elements that were sort of proposed by the Prime team, look to see if we want to do anything differently.

Again, we bring a bit of a better balance sheet. We're an operating company. We're going to be looking to put a PEA out that is going to be a study that we're going to build off and will inform the PFS and then subsequent to a feasibility study. So we're well on track there. No more drilling. The drilling that we want to do in 2026, if not earlier, is really to I'd say, expand the resource, tighten up some areas of that resource model where we want to see some more drilling and really inform the work that will be part of the PFS study that will kick off next year with the aim of getting that PFS out to market sometime in 2027 and likely a year later, followed by a feasibility study.

In terms of the security concerns at site, Don, our team has been there on multiple occasions now. Even just this last week, we have a team of managers from Morelos heading out there across functions, security, logistics, HR and finance. And I would say we are making our way there step by step with a view to resuming drilling just as soon as we can without pushing it too quickly. What does that look like?

We've tapped into our relationships with the Federal National Guard to show a presence there. We have had many discussions with the municipal level of government to start to undertake the work to rehab the road from [indiscernible] to the site. There's some 30 kilometers of road there. We will start to let contracts to rehab that road. And then we will start to show a presence there from a security perspective, which we have done. So all of those things coming together step by step, we will make the decision when we feel it is safe to do so to resume that drilling program. Progress is being made.

The next question comes from Allison Carson with Desjardins.

Congratulations on a great quarter. Most of my questions have already been asked, but I do have one more question on the capital return program. You mentioned that this is just the initial program. I was wondering if you could sort of expand on how you expect it to evolve over time or how you'll change your decision-making process with it.

Yes. So I can take that one again, Allison. Really, how we expect it to evolve is to -- with the goal of being a bit more declarative on the overall return of capital program. This Phase 1, we've announced an initial dividend with the goal of opportunistically buying back shares. As it evolved through the course of next year, I expect we'll get to a point where we'll be able to come to the market with an overall percentage of free cash flow that will be allocated to the overall return of capital program that would be allocated between the different buckets between dividends and share buybacks. And so that's really how you can expect the program to evolve through 2026.

[Operator Instructions] The next question comes from Lauren McConnell with Paradigm Capital.

Congratulations on that nice free cash flow. Just building a little bit on Don's question about the processing plant and operating above nameplate. Just wondering, you talked about the fact that there was no maintenance in Q3. Is there any maintenance planned for this quarter? And could you give any color in terms of how the plant has been operating so far quarter-to-date?

Yes. The plant has been doing really well, both on throughput and metallurgically on recoveries. We look at it in 2 ways, Lauren. And there is maintenance scheduled for this quarter 4. We have to do a liner change at the mill and various other maintenance. And so we're tracking that closely to be able to go down and pull back up to deliver on that targeted low end of production guidance. You can't go maintenance-free for too many quarters in a row. If you don't schedule the maintenance, your equipment will schedule it for you, Lauren.

That makes sense. Yes. And then just switching gears a little bit to exploration. You guys commented that you're thinking around $10 million for Los Reyes and $10 million for the Reyna Silver portfolio. Can you provide any color on sort of what you're thinking for 2026 in and around Morelos in terms of budget for exploration?

Yes. So caveat, we're just going through that budgeting process right now. So we'll come out with final numbers, but $10 million at Los Reyes, $10 million across the Prime assets, probably the majority of that at Gryphon and Batopilas. At Morelos, we're probably looking at something consistent with what we did in 2025. So think about $40 million to $45 million at this point in time, similar focus to what we've been doing in 2025.

Again, large focus on ELG underground. That's an asset that starting in 2018, we had around 185,000 ounces of reserves. We've now increased that by almost 500% on what we've mined and having the reserves at the end of 2024. So that will see a big chunk. Media Luna cluster will continue to see a big chunk of spending, Media Luna proper, Media Luna East, Media Luna West, EPO, EPO North. And then we'll continue to refine our regional targeting, where we look to get a little bit more targeted on some of the regional targets, specifically at [indiscernible].

Perfect. And then just in terms of exploration updates between now and year-end, what should we be watching for?

Yes. So we'll have another release out likely late November, early December on Media Luna West drilling, just the final results from that work. We'll also have an update on EPO, where we've now completed that drill program. And then we'll likely have a couple more updates in January, February, setting us up for our year-end MR&R update, which tends to come out mid- to late March ahead of our publishing our annual information form.

As there appears to be no more questions, this concludes today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.