Thank you for standing by, and welcome to Titan Mining's Third Quarter 2026 Results Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question, you will need to press star one one on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call to the Director of Investor Relations, Irina Kuznetsova. Please proceed.
Thank you, operator, and thank you, everyone, for joining Titan Mining's third quarter 2026 analyst and investor update call. The third quarter saw higher zinc prices, left revenue and adjusted EBITDA well above last year, and it was followed by an important milestone for our graphite strategy. On October 7, we executed a term sheet with the U.S. Department of the Army, setting out the principal commercial terms of an Enhanced Use Lease for a proposed commercial-scale graphite processing facility at Anniston Army Depot in Alabama. I would like to draw your attention to the cautionary statements on slide two, as we will be making several forward-looking comments during our prepared remarks and likely in the Q&A as well.
On the call to assist with the presentation and answer questions are Rita Adiani, our President and CEO, Rick Pozzebon, our Chief Financial Officer, and Joel Rheault, our Vice President of Operations. I will now turn the call over to Joe to discuss the operational highlights.
Thank you, Irina. In the third quarter, Titan generated revenue of $22.6 million, up 35% year-over-year, and adjusted EBITDA of $6.2 million, more than double the same quarter last year, supported by an average provisional zinc price of $1.74 per pound, the fifth consecutive quarterly increase. Zinc remains the engine funding everything else we are doing. We produced 13.7 million payable pounds in the quarter, reflecting the timing of maintenance work and the mining sequence at Mahler and New Fold. Total cash costs were broadly in line with the second quarter, so C1 cash costs of $1.13 per pound and AISC of $1.27 per pound reflect the quarter's production volume. For the first nine months, C1 cash costs of $1.01 per pound are at the upper end of guidance, and AISC of $1.09 per pound is within guidance.
We expect higher grades and production in the fourth quarter as mining moves into new levels, and we are reaffirming full-year guidance. I'll now turn the call over to Rita to discuss our strategic initiatives and corporate developments.
Thank you, Joel. The headline development since quarter end is our commercial framework with the U.S. Army. on October 7, we executed a term sheet for an Enhanced Use Lease at Anniston Army Depot in Alabama, building on the conditional selection notices we received in the second quarter. I'll walk through the key terms on the next slide. Kilbourne continues to advance to schedule. The 40,000-ton-per-year feasibility study is fully funded and on track for completion in early 2027, with a final investment decision expected thereafter. Kilbourne is a covered project under the federal FAST-41 permitting framework, and the key federal and state permitting milestones remain on schedule. We also continue to work with EXIM on underwriting for long-term debt for the project.
On the commercial side, our demonstration facility continues to ship material to potential customers for qualification as we work to build the Kilbourne order book, and additional customer contract negotiations are underway. Our germanium work also moved forward following the district-wide enrichment confirmed in Q2. We're now defining expected germanium grades and tonnages in four of our zinc ore bodies, as well as in the number four and Edwards tailings facilities. In parallel, we continue to optimize recovery parameters at an independent lab and to define feed specifications for germanium concentrate under our cooperation agreement with Teck. Turning to the U.S. Army agreement, the term sheet we signed with the U.S. Army sets out the principal terms of an Enhanced Use Lease covering approximately 90 acres of underutilized Army property at the Anniston Army Depot.
Under the proposed structure, Empire State Mines would develop, finance, build, own, and operate a commercial-scale graphite processing facility producing value-added natural flake graphite products, including purified micronized graphite, followed by coated spherical purified graphite as customer qualifications progress. The proposed lease is an initial term of 50 years with two 25-year renewal options for a potential term of up to 100 years. Consideration would be fair market value-based rent plus participation rent once commercial operations begin, with the Army preferring that consideration be provided through in-kind improvements. The Army would also have the right of first offer on an uncommitted product capped at 10% of annual facility production, which hereby creates a product partnership with the U.S. Army. The structure is designed to accommodate project financing with customary protections for approved lenders, including mechanisms to adjust development milestones for permitting, regulatory, and other matters outside our control.
We also continue diligence on Pine Bluff Arsenal and Fort Drum in New York. Our next step is to complete a definitive Enhanced Use Lease, subject to customary conditions, while advancing the Kilbourne feasibility study in parallel. Taken together with the EXIM underwriting efforts, this framework reflects the level of federal support behind the domestic graphite supply chain, from mine and concentrator in New York to value-added processing on Army property. I will now turn the call over to Joel to provide further details on operations.
Thank you, Rita. In Q3 2026, we produced 13.7 million payable pounds of zinc, bringing nine-month production to 45.3 million pounds. We mined and milled 111,000 tons of ore at a feed grade of 7.5% zinc. Mill recovery remained strong, over 96%, producing 13,431 tons of concentrate at a grade of 59.9% zinc. Mining was focused on the Mahler, New Fold, and Mud Pond Apron zones. Quarterly production reflected the timing of maintenance work and the mining sequence, as mining in Mahler extended to the margins of the ore model and New Fold reached the extent of its current mining level. We also redeployed equipment and resources from the N2D zone to the Mud Pond Apron to prioritize near-term production, and we expect mining in N2D to resume in 2027.
Looking to the fourth quarter, we expect grades to improve as mining moves to the next level in New Fold and retreat pillar recovery begins in Mud Pond Apron and parts of Lower Mahler. Capital development continued on the New Fold and Upper Mahler up-ramps, providing access to future mining areas. We are also investing in long-term reliability with three major infrastructure projects at the shafts and the mill. As well, a new mechanical bolter and a new 42-ton haul truck are all expected to be completed and in service in the fourth quarter, and a production hoist upgrade is planned for the first quarter of 2027. We are reaffirming full-year guidance of 62 million-66 million payable pounds, C1 cash costs of $0.93-$1.01 per pound, and AISC of $1.07-$1.17 per pound.
As we flagged last quarter, sustaining capital is weighted to the second half of the year. Turning to Kilbourne, the feasibility study for the proposed 40,000-ton-per-year facility is fully funded and on track for completion in early 2027, with $9.7 million of the roughly $20.7 million budget incurred as at September 30. In the quarter, the work was focused on engineering studies, geotechnical and hydrogeology drilling and modeling, and permitting. At the demonstration facility, we are upgrading the grinding circuit to produce a concentrate exceeding 95% carbon purity in a single pass, with commissioning expected through November. Customer qualification shipments are continuing. On permitting, the FAST-41 schedule targets issuance of all federal permits by no later than August 2027.
The public comment period on our U.S. Army Corps of Engineers application is substantially complete, and our joint application for state wetland and water quality approvals has been submitted to the New York State Department of Environmental Conservation. As shown on the timeline, the feasibility study is expected to be completed in early 2027, with a final investment decision expected thereafter, subject to board approval, the results of the study, permitting, and financing. Turning to exploration, at Empire State Mine, underground drilling in Q3 totaled 10,710 feet across 27 holes on the Midway, New Fold, Mahler Main, and Mud Pond orebodies. Several holes intersected mineralization at Midway between Lower Mahler and New Fold, and holes on New Fold returned favorable results. Assay results are pending. Surface drilling moved to the regional Bend and Parish targets during the quarter, with assays pending, and our germanium evaluation continued as Rita described.
More broadly, our work to compile and digitize historic datasets continues to generate new targets, both near mine and across the district, on a land package of more than 120,000 acres in St. Lawrence County. I will now turn the call over to Rick to review the financial results.
Thank you, Joel. As mentioned, for the third quarter, we generated revenue of $22.6 million, up 35% year-over-year. This was supported by 13.7 million payable pounds, sold at an average provisional zinc price of $1.74 per pound, up 35% from a year ago and 11% from the second quarter. For the first nine months, revenue was $67.9 million, up 38% year-over-year. Adjusted EBITDA was $6.2 million in the quarter, up 111% from $2.9 million in Q3 2025. For the first nine months, adjusted EBITDA was $19.8 million, up 146% year-over-year. Graphite-related expenditures totaled $5.2 million in the quarter, $4.4 million for the Kilbourne feasibility study, and $0.7 million for the demonstration facility. Year- to- date, graphite-related expenditures have totaled $12.2 million.
Overall, for the quarter, we generated a net loss of $2.8 million, or $0.03 per share, reflecting the graphite investment and a $1.1 million non-cash fair value adjustment on warrants. As a reminder, the warrant liability valuation adjustment is driven by IFRS accounting requirements and does not reflect the underlying operating performance of our business. C1 cash costs were $1.13 per payable pound, up $0.25 over Q2. This increase is largely attributable to the temporary decline in production volume. AISC was $1.27 per pound, reflecting the planned step-up in sustaining capital to $1.9 million in the quarter. For the first nine months, C1 cash costs were $1.01 per pound, and AISC was $1.09 per pound. We expect both to be within our full-year guidance ranges.
In terms of cash flow, we generated $3.5 million in the quarter, including $2.4 million from working capital. We ended the quarter with $16.8 million of cash on hand, plus another $4.8 million of cash collateral deposited on forward sales. Available liquidity remains sufficient, with $28.6 million at quarter end, including $11.8 million of undrawn capacity under our EXIM credit facility. Our zinc operation continues to provide a strong cash-generating foundation, funding both the core business and ongoing growth initiatives, including exploration and project development. Combined with strategic financing, this enables Titan to advance multiple critical minerals opportunities while maintaining balance sheet discipline. I will now turn the call back to Rita for closing remarks.
To conclude, the third quarter demonstrated the cash-generating strength of our zinc operation in a rising price environment. Revenue increased 35%, and adjusted EBITDA more than doubled year-over-year, and net debt has improved 54% over the past year, further strengthening our financial position. At the same time, we continue to advance our graphite strategy, which included advancing the Kilbourne feasibility study, due to complete in early 2027, federal and state permitting progressing under the FAST-41 framework, and commercial framework for the U.S. Army, together with progressing on EXIM underwriting for the long-term debt financing of Kilbourne. Germanium continues to represent a compelling option to create incremental value from our existing operations, which is still not reflected in any of our business outlook.
Our focus for the remainder of the year and into 2027 is on delivering full-year guidance at Empire State Mine, completing the Kilbourne feasibility study and permitting, and working towards definitive Enhanced Use Lease for the Army as we advance towards final investment decision by the end of 2027 for the first commercial-scale graphite facility in the United States over decades. We believe Titan is well-positioned to benefit from long-term structural shifts towards secure domestic supply chains for critical materials, and we remain committed to executing our strategy in a disciplined manner that maximizes long-term shareholder value. Thank you for joining us today. We appreciate your continued interest and support, and we look forward to updating you on our progress with our year-end results. We would now be happy to take your questions.
Thank you. As a reminder, to ask a question, press star one one on your telephone and wait for your name to be announced. To remove yourself, press star one one again. One moment for our first question. It comes from Heiko Ihle with H.C. Wainwright. Please proceed.
Hi, team. It's Case filling in for Heiko today. He's on a flight, but thank you for taking our questions, and congratulations on the great quarter.
Thank you, Case. Appreciate the support.
Of course. In the report, you discuss some temporary maintenance-driven production delays, discuss that you've got the number four production shaft rail replacement, rehabilitation of the number two shaft secondary egress, and the rebuild of the mill's fine ore bin discharge chutes in Q4. Just to be clear, some additional shutdowns are bleeding over into the next quarter, right? I mean, if it is, how many days would you suggest we model for?
I think, Joel, that's a question for you.
Of the three that you mentioned, we are completing on the number two egress. That one is wrapped up. The number four shaft-rail replacement, that is going to move into phase B. We won't see any production interruptions from that. As well, the same for the phase B of the ore bin chutes. There won't be any production interruptions there. Looking at the production hoist upgrade to AC, we have already budgeted that for, I think, a one-week, so five production day shutdown in Q1, possibly. That should be all that's there, but that's already budgeted in.
Okay, great. I appreciate that. It's really helpful. I guess just to build on that last question, if you don't mind, you got the production hoist update. Just to clarify, are there any other measurable maintenance shutdown delays in 2027? If so, I guess when would they be, what for, and how long do you think they'll impact production?
There's nothing other than the hoist upgrade that will actually have any material impact on production.
Okay, great. We really appreciate that. Thank you for taking our questions. We'll hop back into queue.
Thank you. Our next question comes from the line of Tate Sullivan with Maxim Group. Please proceed.
Hi. Thank you. Good morning. First, on the germanium opportunity, you closed your remarks with that, Rita. On the potential of that opportunity, will it be separate processing lines for the germanium that you could identify in your ore bodies versus the tailings? The first question on that, please.
No, it would be one processing line which would deal with both the ore bodies with the fresh ore as well as the tailings feedstock, because the process would basically involve the same anticipated hydromet processing if we're going to be doing it on site, which as we know, as I've previously mentioned in other presentations, we're considering a dual-track pathway, which obviously involves pre-concentrating on material up to higher levels to be able to deliver into the Teck cooperation agreement, or if we decide to go down an independent route, which may be in a few years' time, we would be pursuing a hydromet facility, which would make sense largely because of the volume of the tailings.
What are the potential steps in developing the opportunity besides continuing to test the ore bodies and the tailings? Will you come out with a separate MRE on the germanium opportunity? Will you release a PFS on germanium on its own? Just trying to quantify the scale of the revenue opportunity here, what you've disclosed so far.
Yep. Thanks for the question, Tate. I think the next steps with respect to germanium is considered to be a byproduct of our zinc operation, so that is how I think you should look at it. As we do every year, as we'll be putting out our feasibility study for the graphite, the zinc resource would need to be updated because it's all one single property. Under NI 43-101 regulations, we need to have one report which goes out. You will see a germanium resource included within that report in early 2027. We will from there be moving on to doing a scoping study or a PEA, which will incorporate the results of the lab work, which is ongoing today and this quarter within the independent lab. Obviously, we'll be putting some numbers around the scale of the opportunity.
We have in parallel ongoing offtake discussions. If we are able to see the offtake path fairly developed together with governmental interest in the project, I think we will make a construction decision fairly quickly by doing some detailed engineering without having to go down the PFS pathway. The first step really will be getting out the mineral resource as part of the report updates in early 2027, and from there, out scoping some economics.
Great. Thank you for all that detail. I mean, all these projects running in tandem, moving to the graphite opportunity. With the Alabama military base access, the next step, I think you said, is a definitive lease. Fair to say minimal costs related to that effort with the coordination with the military at this point?
Correct. All the feasibility efforts which we have and the feasibility budgeting which we had done takes into account all the testing that we need to do for the downstream facility, so that is already covered. From there on, we will be entering into the Enhanced Use Lease, and then obviously the construction budgeting will be done closer to construction.
And then just on that FID by the end of 2027 would be for both Kilbourne in New York and the potential military location in Alabama?
Correct.
Or separate FIDs? Oh, it would be together. Okay.
Yeah, it's an integrated project.
Okay. Integrated FID. And then last, I think you mentioned this graphite spending of $5.2 million in the quarter that you break out, but I think you broke out some $0.7 million with the demo plant, and what was the remaining $4.4 million?
I think that is a question for Rick.
Hey, good morning, Tate. That related to the feasibility study.
Okay. Got it. Okay. Thank you very much.
Thank you. As a reminder, ladies and gentlemen, if you have a question, simply press star one one to get in the queue. As I see no further questions, I will conclude Q&A session and turn the call back to Rita Adiani for closing remarks.
Thank you, everyone, for joining us today and for all your support. We look forward to updating you towards the end of next quarter with further great results, and updating you on all our initiatives. Thank you again.
We want to thank everyone for participating, and you may now disconnect.