Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD Third Quarter 2026 Operating and Financial Results Conference Call and Webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. At this time, I would like to turn the conference over to Graeme Jennings, Vice President, Business Development and Investor Relations for IAMGOLD. Please go ahead, Mr. Jennings.
Thank you, operator, and welcome everyone to our conference call this morning. Joining us on the call are Renaud Adams, President Chief Executive Officer, Maarten Theunissen, Chief Financial Officer, Bruno Lemelin, Chief Operating Officer, Ankit Shah, Chief Strategy Officer, and Annie Torkia Lagacé, Chief Legal Officer. We are calling today from IAMGOLD's Toronto office, which is located on Treaty 13 territory, on the traditional lands of many nations, including the Mississaugas of the Credit, the Anishinaabeg, the Chippewa, the Haudenosaunee, and the Wendat peoples. At IAMGOLD, we believe respecting and upholding indigenous rights is founded upon relationships that foster trust, transparency, and mutual respect. Please note that our remarks on this call will include forward-looking statements and refer to non-IFRS measures.
We encourage you to refer to the cautionary statements and disclosures on Non-IFRS Measures included in the presentation and the reconciliations of these measures in our most recent MD&A, each under the heading Non-GAAP Financial Measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and CEO, Renaud Adams.
Thank you, Graeme, and good morning, everyone. Thank you for joining us today. The third quarter was another safe and steady quarter for IAMGOLD. We produced 186,900 attributable oz, bringing year-to-date productions to 558,600 oz. We are on track to meet full-year guidance and expect the fourth quarter to be our strongest, led by Côté. A year ago, IAMGOLD carried more than $800 million of net debt. Today, we are in a net cash position with more than $1.6 billion of liquidity. Over the last 12 months, we've generated $2.4 billion of adjusted EBITDA. Since launching our buyback program last December, we have repurchased over 32 million shares of nearly $600 million. Yesterday, we notified Franco-Nevada that we have exercising our right to repurchase half of its gross margin royalty on Côté for approximately $525 million.
IAMGOLD will fund the full amount and keep the full benefit, lowering Côté's cash costs, including royalties, by roughly $150 an oz starting in 2027. Put simply, we are using our balance sheet to retain more of value of our largest, longest-life Canadian asset. Operationally, the third quarter was a turning point at Côté, its first full quarter without contractor crushing. in September, the plant averaged 37,100 tons per day above nameplate, and processing costs fell to $15.36 per day per ton. September showed what the operation can deliver, and we expect a strong finish to the year. Meanwhile, Essakane remains the engine behind our buyback, and Westwood is tracking toward the upper end of its guidance. Looking ahead, every asset has a meaningful catalyst through 2027.
It started this quarter with the updated Côté mine plan, which will combine Côté and Gosselin for the first time, followed by studies across Essakane, Nelligan, and Westwood through 2027. This is where IAMGOLD stands today, a strong balance sheet, significant capital return to shareholders, and a portfolio of long-life Canadian-focused assets with real growth ahead. With that, let's get into the quarter. Starting with health and safety, our total recordable injury frequency rate is tracking at 0.57 for the year, with no significant environmental incident reported. Our health and safety and environment teams continue to redefine what responsible mining is today, and I thank them for their commitment to each other and our community. On productions, we have produced nearly 559,000 oz attributable year to date.
We need about 161,000 attributable oz in the fourth quarter to reach the low end of our consolidated guidance, well below what we produced in each of the first three quarters of the year. On cost, year-to-date cash costs, including royalties, are $1,251 per oz, and all-in sustaining costs, including royalties, are $1,821 per oz. We expect both to finish in the upper range of our annual guidance. Both Côté and Essakane carries royalties that are directly linked to the gold price. With our realized gold price year to date averaging more than $500 above our $4,000-guidance assumption, royalties has averaged $370 per oz this year, or $45 per oz above guidance. On input, we saw inflations of about 3% on certain commodities input in the first nine months within our expectation.
Labor rates and retention continue to be a significant priority for IAMGOLD, particularly in Canada. On energy, as noted here, a $10 per bbl move in oil represents about $12 per oz on our consolidated cost, including indirect inflation, equating to an approximate $25 per oz cost increase above our guidance. With that, I will pass the call over to our CFO to walk us through our financial results. Maarten?
Thank you, Renaud, and good morning, everyone. Strong operating results and supportive gold price environment again translated into significant cash flow. Mine-site free cash flow was $404.3 million in the quarter, bringing year-to-date mine-site free cash flow to $1.3 billion. Operating cash flow before working capital and taxes for the first nine months was $1.7 billion. Working capital adjustments include $65.3 million of VAT refunds that Essakane received this year.
The operating cash flow funded capital expenditures of $320.3 million, $542.6 million of share repurchases, the net repayment of $200 million on our credit facility, $74 million paid to the government of Burkina Faso for its portion of the Essakane dividend, and $27 million of withholding taxes on IAMGOLD's portion of the dividend. The net result is an increase in our cash balance of $344.7 million since the start of the year.
In August, we also completed the sale of our 35% interest in the Bambadji joint venture in Senegal for $69.7 million, or $48 million net of taxes and transaction costs. As a result, at September 30th, IAMGOLD had $766.6 million in cash and cash equivalents, with our $850 million credit facility undrawn for total liquidity of approximately $1.6 billion. Our only remaining debt is the $450 million of senior notes due October 2028, redeemable at par since October 15th. We will continue to evaluate the most efficient use of our balance sheet with respect to the notes. Of our cash at quarter end, $321 million was held at Essakane. Cash at Essakane built up between distributions, and after quarter end, a further $135.8 million was repatriated to Canada.
Turning to our financial results, revenues for the third quarter was $856.5 million from sales of 199,900 oz at an average realized gold price of $4,277 per oz, slightly above the market price of $4,263 per oz for the quarter. Adjusted EBITDA in the third quarter was $503.9 million. Adjusted net earnings attributable to equity holders were $237 million, or $0.42 per share, compared with $170.9 million, or $0.30 per share, in the prior period. Earnings were primarily adjusted for the gain on sale of the Bambadji assets. Incurred capital expenditures were $109.7 million in the third quarter and $339.4 million year to date. Our full year total capital expenditure guidance of $500 million, ± 5%, is unchanged, which implies a step-up in spending in the fourth quarter.
Within that total, we have reduced the spending capital at Côté $230 million on an attributable basis from $160 million due to the reprioritization of resources and deferral of less critical projects to 2027. This is offset by increases in spending capital at Essakane to $105 million from $165 million due to the change in the mining sequence that resulted in additional capitalized waste stripping. Turning to capital returns, during the third quarter, we repurchased and canceled approximately 7.6 million shares for $134.7 million at an average price of $17.58 per share. Since the program began in December 2025, we have repurchased 32.1 million shares for $592.6 million at an average price of $18.47 per share.
Our current normal course issuer bid runs to December 11th, 2026. Subsequent to quarter end, our board authorized the company to seek TSX approval for a new normal course issuer bid for further 12 months for up to approximately 10% of our outstanding shares. The buyback continues to be funded by cash repatriated from Essakane. In June, Essakane declared a dividend of approximately $500 million from its 2025 earnings. IAMGOLD's portion, net of the government share and withholding taxes, is approximately $400 million.
Of this amount, we have received a total of approximately $225 million since June, with the balance expected to be distributed through the rest of 2026 and early 2027, as Essakane generates cash in excess of its working capital needs. On the Franco-Nevada royalty, as Renaud mentioned, we have delivered an irrevocable notice to repurchase 50% of the Franco-Nevada 7.5% gross margin royalty on Côté.
Sumitomo elected not to participate, so IAMGOLD will fund the full price of approximately $525 million from available liquidity and retain the full economic benefit, reducing our effective gross margin royalty from 7.5% - 2.14%. We expect the transaction to close in December, with economic effect from January 1, 2027. This is an important transaction as it allows us a greater share of the cash flow from our largest asset. This fits squarely within our capital allocation framework. Cash flows from our Canadian operations fund our Canadian growth at Côté, Westwood, and Nelligan, as well as the Franco-Nevada royalty repurchase, further strengthening of the balance sheet, and a possible introduction of a dividend, which we are contemplating initiating in 2027. Cash from Essakane continues to fund the share buyback, an approach we continue to evaluate for 2027.
With that, I will pass the call to Bruno Lemelin, our Chief Operating Officer, to discuss our operating results and outlook. Bruno?
Thank you, Maarten. Starting with Côté Gold. Côté produced 92,000 oz on a 100% basis in the third quarter, or 64,400 oz to our account. This brings production for the year to 262,900 oz on a 100% basis. On the mining side, we moved a quarterly record of 12.4 million tons of total material. This included 3.8 million tons of ore at a strip ratio of 2.3 : 1. Grade mined was 0.93 g per ton, in line with the mine plan, as we continue to open up the pit through the pushback. We expect good mining rates in the fourth quarter as the fleet that supported the contractor crusher is back in the pit. The pioneering on the pushback is mostly complete, and three new haul trucks come into service.
In the plant, we milled 2.9 million tons, which averaged below nameplate for the quarter due to the extended annual shutdown in August, and the plant's first quarter running on owner-only crushing. By September, the improvement was clear. The plant averaged 37,100 tons per day, or 1.1 million tons in the month, above nameplate of 36,000 tons per day, with record crusher and HPGR throughput. Head grade in the quarter averaged 1.1 g per ton, with recoveries of 90%. Recoveries were lower than in prior quarters due to downtime on one of our two Vertimills early in the quarter. With both Vertimills in operation, recoveries have improved, and we continue to optimize grind size through the circuit. Reconciliation of the reserve model to mill feed and production continues to be excellent.
Looking at the fourth quarter, we expect the plant to average nameplate of about 36,000 tons per day, with higher grades as mining moves into higher-grade zones of the mine plan. With that, we expect Côté to finish at the lower end of its guidance range of 390,000 oz-440,000 oz on a 100% basis. Turning to cost, Côté reported third-quarter cash costs, excluding royalties, of $1,243 per oz, cash costs of $1,544 per oz, and all-in sustaining costs of $2,056 per oz. In dollar terms, production costs were down 5% from last year as we began to see the benefit of owner-only crushing. On a unit basis, mining costs were $4.77 per ton, which remained above target due to contractor support for pioneering work on the pit pushback, plus higher explosive costs and diesel prices.
We expect mining costs to decline in the fourth quarter on higher volumes and as pushback-related activities wind down. Milling costs were $18.92 per ton for the quarter, down from $20.85 in the second quarter. The best data point is September, in which milling averaged $15.36 per ton. Our targets are unchanged. We plan to exit 2026 at about $4 per ton for mining and about $15 per ton for milling. For the full year, we now expect cash costs, excluding royalties at Côté, to be above the top end of our guiding range of $900 per oz -$1,050 per oz, and all-in sustaining costs, excluding royalties, at the top end of the $1,475-$1,625 range. We expect fourth-quarter costs to be lower, with more ounces, more tons, and better unit costs.
Royalties at Côté were $301 per oz in the quarter, or 19% of cash costs. With the repurchase of half of the Franco-Nevada royalty, this will reduce the royalty impact on cash costs by approximately $150 per oz. Now to what comes next to Côté. We remain on track to release the updated Côté mine plan and mineral reserve estimate this quarter, followed by the technical report shortly after. For the first time, this plan will bring Côté and Gosselin together into a single pit and one mine plan. With a consolidated pit, we expect the plan to show an increase in reserves and mine life. It will also set out a near-term path to take the plan from 36,000 tons per day - 40,000 tons per day. This comes from little debottlenecking and targeted improvements to the existing plan.
The second cone crusher is already in place, and work has started on a third Vertimill, which we expect to install early in 2027. The remaining elements include improvements to the refeed systems, additional fine ore dome capacity, and likely additional leach tanks. In parallel, we are continuing trade-off studies on a larger expansion. Given the size of the combined Côté and Gosselin resource, we see meaningful long-term potential, and our focus is on determining the right scale and the right path to unlock it. The Phase II pushback underway today also gave us more flexibility in the pit as we evaluate those options. Turning to Westwood. The mine produced 28,500 oz in the third quarter and 97,100 oz year-to-date. We now expect Westwood to finish at the upper end of its guiding range of 110,000 oz- 130,000 oz.
Underground, we mined 99,000 tons of ore at 8.09 g per ton, tons were 10% higher than the prior year period on favorable stope sequencing and improved mining recovery, and grade benefited from sequencing and lower dilution. The mill processed 309,000 tons at a blended grade of 3.0 g per ton, with recoveries of 94%. Most importantly, Westwood generated $51.7 million of mine site free cash flow in the quarter and $218.2 million year-to-date. I also want to expand on the gold-bearing sludge-type material our mill team identified at the bottom of the pregnant solution tank during a review of the electrowinning circuit. The material is believed to have accumulated over a number of years. It has been recovered and placed in drums with a total combined weight of 14,700 kg.
Samples indicated solids content of 19%-27% and gold content in the solids of 6%-47%. For illustrative purposes only, using the average of those ranges, the material could contain approximately 30,000 oz of gold. I want to be very clear, this is not an estimate of a recoverable or payable gold of production or of the financial benefit. We do not have a representative sample of the material. The illustration is subject to significant uncertainty and should not be regarded as a reliable estimate, and the actual gold recovered may differ materially. The material will be processed by an external refinery, and subject to completion of refining and assay, we expect the gold recovered to be reflected in our fourth quarter production results, although there can be no assurance as to the quantity or timing.
Any gold recovered from this material is not included in our 2026 guidance. Turning to costs. Cash costs at Westwood were $1,794 per oz in the quarter, and all-in sustaining costs were $2,118 per oz. Year-to-date cash costs are $1,529 per oz, and all-in sustaining costs are $1,980 per oz, both within our guidance ranges. Costs per ounce were higher this quarter compared with the first half of the year, reflecting fewer ounces sold and more drilling and stope preparation on the ground, with underground mining costs of $322 per ton. Looking ahead, we have invested $12 million of expansion capital so far this year on development into the eastern zone of the mine to support the study of bulk mining options. The updated technical report planned for the second half of 2027 is expected to highlight that potential.
Bulk mining could potentially support higher underground throughput at a lower mining cost, replacing the lower-grade feed from Kanzik with higher-grade feed from underground. We see this as a meaningful opportunity for Westwood, and we look forward to advancing that work. Turning to Essakane. The mine produced 94,000 attributable oz in the third quarter, or 110,500 oz on a 100% basis. Year-to-date, Essakane has produced 277,500 attributable oz, and we are on track for our guidance of 340,000 oz- 380,000 oz.
Mining totaled 11 million tons, including 3 million tons of ore. The mill processed 3.3 million tons at a head grade of 1.18 g per ton. Both mining and milling rates were in line with plan, which reflects the continued strong management of our supply chain by the team at Essakane. Most importantly, Essakane continues to generate strong cash flows.
Mine site free cash flows was $271.1 million in the quarter and $735 million year-to-date on a 100% basis. Looking further ahead, we plan to publish an updated technical report for Essakane in mid-2027, which is expected to outline the potential to extend the mine life up to 2035 through additional phases in the Essakane pit and adjacent areas. Turning to costs, Essakane had a strong quarter. Cash costs excluding royalties were $1,122 per oz, 21% lower than the prior year period. Cash costs were $1,603 per oz, and all-in sustaining costs were $2,063 per oz. Mining costs were $5.44 per ton, down from $7.13 a year ago, as the saprolite and the transition material in the Lao pit requires less drilling and blasting. Royalties were $481 per oz, or 30% of cash costs.
Our average royalty rate was 11% in the quarter compared with 9% a year ago. On energy, our fuel supply and costs have not been materially impacted by the conflict in the Middle East to date, although fuel prices increased by about 3.5% in September, and we continue to monitor the risk closely. For the year, we expect cash costs, excluding royalties, to be within the guidance range of $1,150 per oz-$1,300 per oz, and all-in sustaining costs, excluding royalties, at the top end of $1,550-$1,700 range. Finally, on the matter of the government decree requiring companies to use local refiners in Burkina Faso. As we noted, we have received a temporary exemption from this requirement. Meanwhile, we are working closely with the government and related stakeholders to ensure there is no interruption in the refining process. With that, I will pass it back to Renaud. Renaud?
Thank you, Bruno. Beyond our three operating mines, the Nelligan Mining Complex in Quebec is where we see the next chapter of IAMGOLD. The complex holds 4.3 million oz of indicated and 7.5 million oz of inferred mineral resources across a dominant land position of approximately 134,000 Hectares, making one of the largest pre-production gold camps in Canada. This year is about drilling, and we have extended our programs, Nelligan from 18,000 to up to 30,000 m, focused on upgrading ounces and testing extensions along strike and at depth, and at Monster Lake from 15,000 to at least 20,000 m, following high-grade hits deeper in the Megane Zone. In total, we have completed more than 70,000 m across Nelligan, Monster Lake, and Philibert so far this year.
All of the primary deposits sit within a 17 km radius, which support our vision of a central processing facility fed by multiple ore sources. On October 27, we released our latest drill results from the complex, and they continue to build our confidence in what we have in the Chibougamau region. What stands out to me is that all three primary deposits are moving in the right direction. At Nelligan, mineralization continues down-plunge, with several intersections grading well above the current resource average. Hole NE-26-272 is a good example.
It intersected 77 m at 2.23 g per ton, well below the current mineralized envelope, at more than twice the average resource grade. At Monster Lake, we have extended the high-grade Megane Zone to a depth of 600 m, and the grades are holding. Hole ML-25-293 returned 7.7 m at 24.5 g per ton, starting 760 m down the hole.
At Philibert, our first drilling program confirmed the previously defined zones and grades, and points to further potential at depth. Given these results, we intend to run a substantially larger drill program at the complex in 2027. We expect to publish a preliminary economic assessment for the complex in mid-2027, which will bring the larger 2026 drills program into the study and bring these deposits together into one development concept for the first time. We see the potential for the complex to continue to grow well beyond it. Stepping back, Nelligan, Monster Lake, and Philibert are each 100% owned by IAMGOLD, so our shareholders return the full benefit of the value we create. With continued success, we see the potential for Nelligan Mining Complex to become one of the largest assets in IAMGOLD's portfolio over time. We are excited about the works ahead.
With that, we will progress to questions. I want to congratulate our teams for another quarter of safe and consistent execution. IAMGOLD is on track for our production guidance. We have generated nearly $1.3 billion of mine site free cash flow so far this year, and we have returned close to $600 million to shareholders through our buyback since December 2025, all while building a net cash position and a strong balance sheet. At the same time, we are investing in our future, and through 2027, every one of our assets has a clear catalyst which will demonstrate the potential of our portfolio from a position of financial strength. Thank you for your continued support. Operator, you can now open the line for questions.
Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from Anita Soni with CIBC World Markets. Please go ahead.
Hey, good morning, guys. Thanks for taking my questions, and congratulations on a solid quarter. Firstly, at Côté, it's good to see the reduction in processing costs in September. It looks like you got down to that 15-ish mark that you were targeting. Would that be sustained into Q4 and 2027?
Bruno?
Yes, that's the plan. Actually, the goal for Q4 is to sustain the momentum that we have at operating at nameplate capacity for the whole quarter. This is the goal, and we believe that with that current production level, it should be in line with that target.
Okay. Would that also, that 36,000 ton per day, is that the goal and the $15 a ton for 2027, or are there other shutdowns or maintenance that we should be thinking about?
No major shutdown till the end of the year. For 2027.
Okay. On mining costs, I just wanted to go over what you need to do in Q4 and 2027 to drive that closer to the sub $4 per ton mark. Is that ultimately what you see as the target still? Are you still targeting something closer to the mid threes on mining cost per ton? What do you need? I'm assuming it's a pushback in opening up the pit from what I recall from the mine tour, but now that we have some numbers around it, I just wanted to get a little bit more color on what you need to do to drive those costs down.
Yes. In Q4, we're going to rely less on re-handling and taking refeed from the low-grade stockpile. We're going to try to maximize most of the ex-pit directly to the mill. You will increase the efficiency of the whole fleet. After that, also, as we expand the pit, you're going to be able to have better packet definition, larger blasts. We're also working on fragmentation, loading efficiency as well. We have a very good plan ahead to decrease the cost from where we are now toward the $4 and even in the mid threes later on. That's our goal.
Okay. The last one I'm going to ask, and I'll jump back in the queue and let other people ask questions. Maarten, this one's for Maarten. Can you just walk me through how that royalty would be modeled? I just want to make sure that I've got it correct, but I would just assume the revenue times 2.14%, and that would be the royalty portion of your cash cost. Is that correct?
It would be revenue less cash cost, so your gross margin times with the 2.14%.
Okay.
That is for IAMGOLD, if you model IAMGOLD at 70%. The asset on its own is at 3.75%. The 30% that we now own from that was previously owned by Sumitomo is what is reducing our portion at 70% further from 3.75% - 2.14%.
Yeah, that's where the complexity comes in. I might need a follow-up call. I was just trying to figure out exactly how you would report these cash costs versus what the effective benefit. I'd be modeling the gross margin at 3.75% if I model this at 100% basis and then apply. Anyway, we'll take it offline. I think I'm running myself in circles on this one. Okay, thank you.
Looking good. Thank you.
Thank you for your question, Anita. Appreciate it.
Thank you. The next question comes from Fahad Tariq with Jefferies. Please go ahead.
Hi, thanks for taking my questions. On the Côté royalty buyback, can you just confirm that you're using cash on the balance sheet to fund the $525 million and not adding debt? Second, just any thoughts around how you came to the decision on the buyback now? Any internal models on the payback period, IRR, et cetera, would be helpful. Thanks.
Good morning. For the royalty, I missed part of your question. But basically, for us, we will be using cash from the balance sheet. We are going to continue to use cash as it comes in from Essakane to buy back shares as well. If there is a need, we may have to draw on a credit facility, but it would be very short-term if we have to do that. The timing for us makes sense now because then it is effective on the 1st of January next year, and it is keen for the next year. If you look at the valuation that Franco-Nevada did on the asset a year and a half ago when they bought the royalty from a third party, we are buying it at that same valuation effectively.
The gold price environment is a lot higher, so that is what is having the impact for us. The additional $150 or $150 per oz is also a big contributing factor for our decision to do this. It gives a good return. It is all dependent on gold prices, and I think having the full study later this year will help people understand that better.
Okay. On that study, can you just talk about how we should be thinking about the reserve price assumption? Also, just to confirm, will that study only show the 40,000 tons per day base case, or is there some sort of upside case that will also show higher expansion?
No, Renaud here, so to make it short now. The study, somewhat a bit of an update, kind of the new base case of 2022, where the asset was moving from 36 towards 42 with additional equipment that are currently being installed. So it is going to highlight the full resource potential, as we have discussed, Côté Gosselin, which will be turned into the reserve. We are going to use $2,100 an oz for the reserve price for the study. It does not highlight beyond, but we would highlight a production profile that give us the time to rethink and execute on time should we decide down the road to have an extension without losing the production profile. That is the objective.
On the reserve price?
$2,100 an oz.
Great. Thank you.
Thank you.
Thank you. The next question comes from Mohamed Sidibé with National Bank Financial. Please go ahead.
Good morning, Renaud and team, and thanks for taking my questions. Just wanted to ask a question on the Burkina refining order and that November 1st requirement. I think you noted that you do have a temporary exemption on that requirement. First, how long does that last? Secondly, is this requirement impacted in any way, shape, or form the cash repatriation or settlement timing that you currently have and the benefit that you have of basically taking cash out of Essakane?
Yeah. Let's here is that there's kind of nothing really new here. I mean, this refinery, the government announced, it wasn't more than a year ago, the construction of the refining with the view to give them a chance as well to refine in-house from the small scales up to the commercial. There is quite a bit of a ramp-up and so forth. There is no date on the exemption, so business as usual for the time being. Eventually down the road, there would be discussions with the refiner, and our view in this is when everything and everyone is ready, there could be a potential for us to refine in-country a portion of all. But there's quite a bit of work to be done before we get there.
In term of any change or things like that, you know, in the process, Maarten, if you want to add anything, but for the execution per se, there is no date.
Good morning, Mohamed. The real risk on the impact here is really working capital and if it delays the gold sales process. But there's very good alignment with the government in these discussions because once the gold gets exported, that's when it triggers the royalty payments to the government as well. So everybody wants to, of course, make sure that we can convert the gold into cash as quickly as we can, and that would then allow us to not have that working capital impact. If it is a bit slower, there would be some working capital, but it doesn't affect our ability to repatriate cash. It may just slow it down slightly.
Great. Thanks a lot for that, caller. Then for my second question, just on the Westwood sludge, I know that in the MD&A, there is a potential mention of the gold coming in or landing in Q4, but could you maybe give us a little bit more color on the refining, the assay timelines, and how you're working through this? Thank you.
Maarten?
The material is being shipped in batches to the external refiner, and processing has just started this week. We expect over the course of November and first half of December to finish that process so that we should at least have the assays. Because we are doing batches, we will be able to then convert it into sales as well. When we get to the end of the year, we should have a good understanding.
Great. Thanks for taking my questions, and congrats on a good quarter.
Thank you.
Thank you. The next question comes from Harrison Reynolds with RBC Capital Markets. Please go ahead.
Hi, good morning, IAMGOLD team, and congratulations on a good quarter, and appreciate all the detail provided so far. I wanted to follow up on the sludge there. Do you have any indication, early days still, but on the payabilities you might receive on the gold? Is there an opportunity to recover this material from the circuit on a go-forward basis?
Bruno, you want to give some color to that?
Yeah. So, in terms of moving forward, we have modified our standard operating procedure so this type of event don't occur again, and all future particles that could evade, like the electrowinning cell, would be captured and taken into account in every month. So, it's mostly the process has been improved with the team that when investigated this area, were able to measure area as to how we could improve the system. So, yes, the answer is yes, it's going to be managed on a monthly basis now.
The most important thing, I think, here is to know that we do not feel there's been loss of gold over those years. I think, for those of you that know the installation, while the processing facilities recover at a very high rate and function extremely well, it's not necessarily the most modern. So, there's always a gold in circuit that you expect to recover, of course, at the end of the facilities. But in this specific case, there were gold being accumulated in one specific area that we had not noticed before. This is done now, and moving forward, you should not expect any adjustment.
Got it. Thank you. On the payabilities of that material, what are your early discussions with the refiner like as it relates to how much you might get paid for the gold?
It's commercially sensitive information, so I can't give you the exact rate, but it is the same as when companies would send carbon fines or material in gold mill liners. So, it's the same that you would get normally on those prices. Mid to very high 90%.
Got it. Thank you. Just one last one. Good to see the metrics reached at Côté in September, and I appreciate the detail you gave so far. But anything you can provide on how operations trended in October? Were you able to be near nameplate throughput, and how costs were tracking on a month-to-month basis?
We do not have visibility yet on the costs for October, but operationally speaking, I could say that our trends continue. We're very, very pleased to how since September it's been operating, and the tendency and the rhythm has continued in October.
Got it. Thank you so much for taking my questions, and congrats on the quarter again.
Thank you.
Thank you. Once again, if you have a question, please press star then one. The next question comes from Delvin Xie with Scotiabank. Please go ahead.
Hello, everybody. Good morning, and congrats on a strong quarter. Thank you for taking my questions. First will be on the Q4, just based on your guidance and year-to-date. This Q4 will be a bit stronger on production, and do you have any directional color on the unit cost?
If you refer to Côté per se, as our own, of course, you've seen the productions attribute all our 400 basis to date. Definitions, we say we remain very, very confident to hit. By definition, there has to be a strong quarter, and we're very confident that the team can pull. We've achieved 1,536 in milling costs in September, and we think that we could achieve towards the $15 for the fourth quarter. This is the objective. We still have, as Bruno has mentioned earlier, mentioned that our mining costs remains a little higher, but we feel strong that while we may not totally achieve our objective, but we think you'll see an improvement in the Q4 on the mining cost, and enter 2027 well-positioned to continue. That's what I could say so far for Côté. We definitely need a strong quarter to meet.
We are fully aware of it, but as we mentioned on the throughput and so forth, so it's going well.
Right, absolutely. Thank you. Turning on to 2027, what kind of inflation assumptions should we assume, and what inflation have you seen, like among the cost? 2027 over 2026.
Yeah. Good morning, Delvin. We're going through the budget process. If we look at the impact of inflation based on the current inputs, not in the impact of drivers, we are seeing a 3%, maybe 4%, depending on the operation. So, in that range of 3%-4%, would be the inflation assumption for next year, excluding the impact of diesel. So, diesel has an impact, mainly at Côté and Essakane. Say, about 12% of the total operating cost is for diesel and energy. So, it does not have a significant impact, but it does have an impact, and we continue to look at putting in additional fuel hedges at Côté in Burkina Faso. The price is less predictable, but it also doesn't change that often because of the way that it's purchased in Burkina. So, that's kind of our main assumptions that we're seeing thus far.
Right. Absolutely. Turning to the Nelligan, the PEA coming next year. Do you have a cut-off date for the drilling, and will you be incorporating combined economics of Nelligan and Monster Lake and Philibert?
Yeah. The PEA is going to give us a preliminary idea of the economic nature of Nelligan. The plan will have to look at if we can combine Monster Lake as an underground operation, the Nelligan pit, and also Philibert altogether, and see how long of a life we have and kind of a cost structure that we can have in the area. We're working also on the general arrangement plan to locate infrastructures and how big they are going to be, and a preliminary cost of all those items. Yeah, mid-2027, we will have a pretty first glance of what Nelligan could look like.
Right. I see. Thank you. The cut-off date of drilling will be end of year or early next year?
Sorry, could you repeat that one?
Yeah, for the PEA, the cut-off date for the drilling when you kind of update your economics and your resources.
Yeah, year-end. Correct.
Okay. Right. Mm-hmm.
You would understand that every other aspect has advanced extremely. The most important was really to complete as much as possible the Philibert, and we confirmed from what we had acquired back in 2025 to incorporate it. But, of course, when it comes to overall cost and capital and so forth, and infrastructure, we've advanced enormously. As we complete the drilling, do the cut-off, and complete the resource, we'll just incorporate the work and be on time for mid-2027.
Right. I see. That is all from me. Thank you.
Thank you. The next question comes from Regina Abalina with Freedom Broker. Please go ahead.
Good morning, everyone. Thanks for taking my questions. With 2026 sustaining capital of Essakane increased from $165 million to around $200 million, should we expect stripping expenditures to remain at similar levels in 2027?
Maarten?
Good morning, Regina. We are working through our budgeting process, and we are looking at that. For Essakane, for next year, we will be spending additional capital to advance the Block 3 and mine life extension. The capital would be slightly higher, but we are just working through those numbers as part of our planning process at this point.
Thank you. At Westwood, underground mining costs increased to $320 per ton in Q3, partly due to additional stope preparation. As underground development progresses, should we expect these costs to normalize in the next year?
On the underground side, you refer obviously to Westwood. I think, and we have discussed that one largely. If you look at 2026, 2027, 2028, they should be somewhat pretty similar years, as we continue to work on the eastern and incorporation of the eastern corridor. While they will never be perfectly copy-paste, you should expect 2027 to be somewhat in the range of 2026.
Thank you.
Yeah. The all guidance for 2027, of course, will come early in 2027 for the plan of 2027. With the plan of Côté, of course, would highlight somewhat a little more than a year.
Thank you. The next question is a follow-up from Anita Soni with CIBC World Markets. Please go ahead.
Hi. Just a couple more questions. Firstly, can I go back to the Côté Gosselin study? Are you still targeting around 70%-75% conversion of the 20 million oz that you have in global mineral inventory at this point?
Well, we've released our resource update, which has highlighted the 20 million. Of course, you have to go through some sort of the depletions of the year. So if you do all the math, yes, we continue to be very confident that we could convert that to 70% +.
Yeah. Then now that you're I guess, I mean, if I'm trying to anticipate how to model Gosselin within the profile, would it be fair to say that it goes near the end of the mine life if you're going to try to sequence the tailings dam into an empty Côté pit? I'm just trying to get an understanding of that in light of the royalty, right? I think part of the economics of that-
Yeah.
-buyback of the royalty is that you are buying it ahead of the Gosselin update.
The sequence that favors the 40,000 ton per day scenario is more sequential, more linear. So we focus much more on Côté for the beginning of the life of mine, and subsequently, Gosselin comes last. And we are actually at the.
So which would create some opportunities, of course. But again, this is a kind of an updated, what we call, really new base case, and we highlighted a pretty interesting productions profile for the next years to come. But eventually, down the road, we maintain the door open, of course, to eventually go towards an extension, but this is not for this time around.
I was just trying to figure out a way to quickly model this because I am currently just using the Côté and then have some in situ value for Gosselin. But to try to show the economics on that royalty buyback, I would have to start to model Gosselin ahead of your update. But okay, thanks. And then just on the Burkina, the requirement to refine in country, how long does that exemption last? And how do you see these, I mean, early days, but what kind of things should we be thinking about if you do have to refine in country in terms of the cost and the cost impact?
On term of exemption, there is no date. I mean, they literally just inaugurated the refinery, and as I mentioned, there's also all the scale, the small-scale mining as well. We'll see. There is no date exemption, so we continue. As a matter of fact, I think we were shipping this week and so forth, and as business as usual. In term of cost per se, as mentioned, Maarten has mentioned, it's not so much about cost more than making sure we don't create further delays.
Okay. Great. Thank you. That's it for my questions.
Thank you.
Thank you. This concludes the question-and-answer session. I would like to turn the conference back over to Graeme Jennings for any closing remarks.
Thank you very much, operator, and thanks to everyone for joining us this morning. As always, if you have any additional questions, please reach out to Renaud or myself. Thank you all. Be safe. Have a great day.
This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.