Good morning. Welcome to Wesdome Gold Mines conference call to discuss the company's financial and operating results for the three and nine months ended September 30th, 2026. As a reminder, this call is being recorded. Your host for today is Trish Moran, Wesdome's Vice President of Investor Relations. Ms. Moran, please go ahead.
Thank you, operator, and good morning, everyone. Before we get started, I would like to point out that during today's call, we may make forward-looking statements as defined under Canadian securities law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Please note that all figures discussed on this call are in Canadian dollars unless otherwise noted. Our press release, MD&A, and financial statements are available both on SEDAR+ and on our corporate website, wesdome.com. With us on today's webcast is Anthea Bath, Wesdome's President and CEO, Phil Yee, our Chief Financial Officer, Tyler Mitchelson, our COO, Jono Lawrence, SVP Exploration and Resources, Raj Gill, SVP Corporate Development and IR, Kevin Lonergan, SVP Technical Services. Following management's formal remarks, we will then open the call to questions. Now over to Anthea.
Thank you, Trish. Good morning, everyone. We are reaffirming our 2026 production guidance of 180,000 oz- 205,000 oz. Our fourth quarter is expected to be our strongest of the year, with both Eagle River and Kiena finishing within their respective guidance ranges. Consolidated production is expected to be below the midpoint of guidance, with all-in sustaining costs towards the upper end of guidance. Third quarter production fell short of our expectations. I will explain what drove the shortfall and why we remain confident in our full-year outlook, then turn to our longer-term strategy. At Eagle River, throughput continued to ramp up as planned. However, one stope returned lower grades than expected, and one sill was not fully mined, reducing both grade and ounces. At Kiena, gaps in workforce planning reduced equipment utilization and productivity, delaying the mining sequence. Two high-grade stopes from Kiena Deep were shifted into Q4.
Because of this, we processed a larger share of low-grade ore from Presqu’île, impacting the overall feed grade to our mill. We have identified the causes, and we are implementing the staffing and the planning changes needed to improve execution. Our Q4 outlook is reinforced by available high-grade inventory and operating progress already achieved early in the quarter. At Eagle River, key stopes in the sequence are now confirmed and drilled off. At Kiena, improved staffing is lifting productivity, stope inventory has increased, and Presqu’île is moving into higher-grade production sequence and higher tonnage. Tyler will cover these developments in more detail. Safety performance continues to improve, with our total recordable injury frequency rate down 29% from the third quarter of last year. I would really like to thank my team for the great progress they continue to make.
Safe work, sound planning, and consistent execution remain fundamental to the company that we are building. The quarter reinforced a key lesson. As our mines grow, the operating cadence that supports them must also grow. Development, maintenance, equipment, and workforce planning must function as an integrated system to deliver a reliable supply of ore. Three years ago, we set about a deliberate strategy: rebuild our operating and technical capabilities, understand our geological systems, and then grow. We now have a stronger technical foundation, eight-year reserve-based plans at both our mines, the largest reserve base to date, and geological models that are now increasingly informing our mine plans. Our priority is to translate that foundation into consistent operating performance and disciplined growth. The technical reports we published earlier this year were the first public demonstration of that work. That work is now showing up in our operating results.
Eagle River achieved record quarterly mill throughput in Q3, and tons milled are up 20% this year across both our operations. The task now is to convert those gains into consistent ounces quarter after quarter, and we're moving up that curve, and I expect this performance to keep improving throughout 2027. The drill bit is also strengthening our confidence. We've always believed the geology at both mines was significant. What has changed now is that the concepts that were hypotheses not too long ago are being supported by real drill results. At Eagle River, high-grade structures continue beyond the current resource, supporting the potential for a larger mineralized system. We also see potential for a hub-and-spoke bulk tonnage opportunity, adding production upside to the Eagle River complex. At Kiena Deep, we're intersecting wide mineralized zones in the Norbenite Footwall, close to infrastructure.
Numerous other opportunities are becoming evident as we showcase the potential of the system at Kiena Deep. At Kiena East, reorientated drilling at Shawkey returned 106.5 m at 3.1 g/ ton, a result that warrants further drilling to establish continuity and scale. It's early days, but the results are trending in the direction we expected. We measure the progress against our strategy with four tests. First, is the exploration confirming geological continuity and near-mine opportunities close to our existing infrastructure? Second, is the step-out drilling showing that our high-grade structures continue? Third, are we confirming open-pit and underground bulk tonnage mineralization that could support meaningful expansion? Fourth, are higher volumes and better use of our infrastructure lowering our unit cost per ton? On all four, the evidence is building, and we expect 2027 to further show this progress.
Over the next year, our focus is conversion, turning exploration targets into larger, more substantial resource base. At Eagle River, we aim to demonstrate its potential as a district-scale mining complex with open pit and underground sources, similar to other operations in the region. Throughout, we'll protect our margins through cost control and disciplined planning. At Kiena, we have an active exploration program. At the Kiena Deep, we will continue to explore the Norbenite Footwall and parallel zones. At Kiena East, we'll keep testing for the scale and the breadth of the system and advance our understanding of the corridor, including Shawkey 10 and the 134 and Dubuisson zones. Finally, next year, we'll begin the global model work up at Kiena North as well. This ambition is grounded in our track record. Since 2016, Wesdome has roughly doubled production every four to six years.
We believe our existing assets provide a credible path to the next doubling and potentially more over the next 5- 10 years. Our job is to prove that step by step through drilling, through conversion, planning, and proper execution. We will pursue this growth from a position of financial strength. Our recent dividend declaration reflects our disciplined approach to allocating our owner's capital. With a debt-free balance sheet and strong liquidity, we are well-positioned to fund our growth internally while delivering consistent cash returns to our shareholders. For investors tracking our progress, the near-term milestones are our fourth quarter delivery, commercial production at Presqu’île, our upcoming 2027 guidance, our next reserve and resource update, conceptual studies on our bulk tonnage targets, and continued exploration results from both districts across the year. Our immediate priority is strong execution.
Our longer-term objective is to turn the potential of these two districts into sustained growth in cash flow and value per share. I will now turn over to Phil.
Thank you, Anthea. Good morning, everyone. Turning to Slide six, third quarter 2026 revenue was CAD 251 million. Net income was CAD 90 million, equating to CAD 0.62 per share, and EBITDA was CAD 157 million, all at higher levels than Q3 2025 results, due primarily to a 23% increase in the average gold price, partially offset by 12% decrease in ounces sold as a result of lower production at Eagle River in Q3 2026. Net cash flow from operating activities was CAD 102 million in Q3 2026, and free cash flow was CAD 52 million, equating to CAD 0.36 per share, both cash indicators lower than Q3 2025 levels. The year-over-year decrease in quarterly free cash flow reflects several factors resulting from the lower production in Q3 2026, including lower net cash from operating activities, higher mine exploration and development costs, and higher sustaining capital at Eagle River.
Year- to- date, Wesdome has generated nearly CAD 220 million in free cash flow, and with a strong fourth quarter expected, we expect full-year free cash flow to exceed last year's record of CAD 278 million. If the Canadian government's recently announced Productivity Mega Deduction program is passed, this could have a further positive impact on 2026 and future years, as the policy will be retroactive to September 15, 2026. The new federal program allows qualifying businesses to immediately expense for tax purposes 100% of the cost of eligible capital investments and Canadian development expenses in the year the asset becomes available for use or qualifying exploration drilling has been incurred, rather than depreciating it over time.
Turning to Slide seven, on a consolidated basis, all-in sustaining costs were $1,789/oz sold in the quarter, 26% higher than the Q3 2025 AISC of $1,419/oz sold. This was driven mainly by the lower volume of gold sold in Q3 2026. At Eagle River, Q3 2026 AISC was $1,843/oz sold, compared to $1,203 in the third quarter of last year. The increase reflects a 25% decrease in ounces sold, combined with a 31% increase in sustaining capital. At Kiena, Q3 2026 AISC was $1,713 per ounce sold, compared to $1,899 in the third quarter of last year. The lower AISC reflects an 18% increase in gold ounces sold, combined with a 40% reduction in sustaining capital, driven by a delay in commercial production at Presqu’île to the first quarter of 2027.
Consolidated AISC per ounce sold is expected to decrease in the fourth quarter, driven by a higher production and higher sales, combined with lower costs from supply chain initiatives. Full-year AISC per ounce sold is expected to be within the 2026 guidance range at the top end of the range. Maintaining a low AISC is a key part of Wesdome's strategy to protect our margins. Year-to-date capital spend was CAD 132 million. We expect a significant increase in capital spend in Q4 2026 as a result of the timing of equipment deliveries and growth expenditures. Our full-year total capital spend is expected to meet 2026 guidance of CAD 205 million. Wesdome is expecting higher growth capital spend in 2027 to support the company's exciting organic growth strategy at both assets.
Corporate G&A was CAD 6 million this quarter, a decrease of approximately one-third year- over- year and down about 45% from Q2. G&A is lower in Q3 2026 now that the technical reports are completed and behind us. Turning to Slide eight, we closed the third quarter with a cash balance of CAD 380 million. Our balance sheet remains debt-free, with available liquidity of CAD 735 million as of September 30th. Most notably, the CAD 380 million cash balance is after returning approximately CAD 50 million to shareholders in Q3 of 2026. This includes CAD 46 million through share repurchases under our normal course issuer bid and CAD 4.4 million through a quarterly dividend paid at the end of September.
Since launching our share buyback program last November, we have repurchased more than 7.8 million shares at an average price of CAD 24.44 for a total of approximately CAD 191 million.
As you've seen in last night's press release, the TSX has approved Wesdome's application to renew our share buyback program. Over the next 12 months, we have the optionality to buy back up to approximately 7.2 million shares, or about 5% of our public float. We are currently going through our 2027 budget process. Once we have defined the business's operating and capital requirements for next year, we will determine the appropriate allocation available to potentially continue the share buyback program. Before I hand it over to Tyler, a few items on our upcoming reporting. We are scheduled to release our year-end 2026 results a couple of weeks earlier this year, on February 24th. Concurrent with earnings, we will also be issuing our guidance for 2027. We also expect to release our 2026 mineral reserve and mineral resource update in the first half of next year.
With that, I will now turn over to Tyler to walk through our operational performance.
Thank you, Phil, and good morning, everyone. Let me start with safety. Across both sites, our total recordable injury frequency rate was 1.01 in Q3, down from 1.43 a year ago. High potential incidents, the leading indicator we watch most closely, were 0.67 in Q3 and 0.79 year- to- date, also improving year- over- year. We are encouraged by the progress and continue to emphasize it every day. Our expectation is simple and non-negotiable. Everyone goes home safely at the end of every shift. Moving to Slide 10. We produced nearly 41,300 oz in Q3 and approximately 130,000 oz in year- to- date. Operational performance in the quarter reflects the planned transition to district-scale operations as we position Wesdome as a stronger, longer-life mining company. Q3 was below our expectations. Part of that was planned for Kiena's ramp-up and Eagle River's transition to filling the mill. Part was not.
At Kiena Deep, we did not execute as well as we needed to, and I will discuss the specific drivers in detail. We are on track to finish in the lower half of our consolidated 2026 production guidance range. Turning to Slide 11. Delivering on Eagle River's low-cost, scalable potential is critical, and we are making good progress. Eagle River produced nearly 25,000 oz in Q3, up from approximately 22,000 oz in Q2. The grade averaged 10.1 g/ ton compared to 9.7 in Q2, and grades continue to reconcile well. July grades came in as anticipated at over 12 g/ ton. However, one high-grade sill was delayed, and one stope came with lower-than-expected grades. Our mining sequence and the updated reserve plan include lower-grade stopes and development ore alongside high-grade production. Throughput increased, but it did not fully offset the lower average grade.
The stopes expected to deliver a significant share of Q4 ounces are already drilled off. The sequence is now in the high-grade core, and our geology review supports the plan. The broader story is the evolution of the mine. Eagle River moving to a higher tonnage, longer-life model with more tons from the recently updated mineral reserve. Ore milled has increased every quarter this year and is up 24% year- to- date. That growth is central to filling the mill and building a larger, more valuable operation. We processed nearly 80,000 tons in Q3, a quarterly record, up from 10% in Q2, up 12% from a year ago. That is an average of almost 870 tons per day, with the rate continuing to build in Q4. That performance gives us confidence in reaching the fill-the-mill targets set out in our latest technical report.
Another benefit of increasing scale is that the more tons we move, the less any single stope shapes the result. In Q4, we expect both grade and tons to increase, and that combination is what will drive a stronger quarter at Eagle River. Grade reconciliation supports confidence in the ore body. Preparation and operating execution determine whether we will deliver those ounces on schedule. As exploration continues to succeed, we have opportunities to add high-grade material to bolster the long-term production profile of the mine. Moving to Slide 12. In Q3, cost per ton processed was CAD 511, down nearly 20% from CAD 631 in Q2. That is an increase from one year ago of CAD 495, reflecting inflationary factors impacting the industry, offset by fixed cost leverage. As we continue to scale the mine, we expect unit cost to improve.
Capital spending totaled CAD 21 million in Q3 and CAD 48 million year- to- date, against the full year plan of CAD 105 million. We expect spending to increase in Q4 when most machinery and equipment deliveries are scheduled. However, capital allocated to the camp replacement is moved into early next year because of unit availabilities. The tailings storage facility lift is progressing well and is on track for completion shortly. Turning now to Kiena on Slide 13. Kiena produced over 16,000 ounces in Q3, up 2% year-over-year, but below a strong Q2. Seasonal workforce availability impacted operations. The result was lower equipment and operator availability, impacting stope development and a planned shutdown that extended into unplanned downtime. We are addressing this in two ways. First, strengthening our workforce planning. Staffing has already improved now that the summer season is behind us.
Second is improving our contractor agreements to increase accountability, continuity, and cost control. These issues slowed the development at Kiena Deep, leaving fewer stopes ready to mine and shifting two higher-grade stopes into Q4. Grade averaged 8.2 g/ ton compared to 11.1 in the last quarter and 12.2 in Q3 2025. As expected, the mill feed blend drove most of the quarter-over-quarter change. Presqu'île contributed approximately 25% of the tons compared to 10%-15% in recent quarters. That reflected two factors: a higher share of a lower-grade ore as Presqu'île ramps up towards steady state, and the shift of two higher-grade Kiena Deep stopes into Q4. Importantly, grade is reconciling positively at both Kiena Deep and Presqu'île. The deferred Kiena Deep stopes are in the Q4 plan. Improved productivity has improved stope inventory. Presqu'île continues to ramp up and is moving into a higher-grade sequence.
The practical benefit is more places ready to mine in the sequence. If one area is delayed, another developed source of ore keeps the mill supplied. Mill throughput rose 27% year-over-year to approximately 64,000 tons, or 693 tons per day. Filling the mill is central to Kiena's strategies, and we expect tonnage to continue increasing. Kiena Deep delivered its highest monthly tonnage of the year in September at more than 800 tons per operating day, proving the mine has the capability to operate at rates that support our continued ramp-up through Q4. Presqu'île ramped up steadily through Q3 to more than 250 tons per day. We will continue to ramp up through Q4, and commercial production is now expected in Q1 2027. With Presqu'île operating and level 142 advancing, the multi-horizon model is beginning to provide greater operational flexibility and optionality.
We expect a solid Q4 at Kiena with the ramp-up of Presqu’île stope ore and the increased stope availability at Kiena Deep. Turning to Slide 14. Unit costs were CAD 492/ ton processed in Q3 compared with CAD 526 in Q2 and CAD 506 in Q3. Higher throughput drove the quarterly sequential improvement, partly offset by maintenance costs related to the extended shutdown. As Presqu’île reaches commercial production and Kiena Deep fully ramps up, we will spread the fixed cost base over significantly more tons. That provides a clear path to lower unit costs shown by the unit cost reductions at the site year- to- date. At Kiena, we are applying the same cost discipline that has driven improvement at Eagle River. The work is earlier in the cycle, so our largest gains are still ahead.
Kiena’s capital spending was CAD 29 million in Q3 and CAD 84 million year- to- date, including CAD 58 million of growth capital. We expect Kiena to finish near the upper end of its capital guidance as we invest in its future operating potential. Key Q4 spending includes continued Presqu’île development, the Kiena Deep ramp extension to level 142, and ventilation fan upgrades. The ventilation expansion is progressing well and is expected to be completed early next year. It will double our underground airflow, support higher mining rates, and improve exploration flexibility. To summarize, our Q4 forecast has us on track to deliver our consolidated full-year guidance range, albeit below the midpoint. Our focus across both operations is on labor productivity, supply chain optimization, maintenance unit cost improvements. At both mines, we are building a longer life, higher throughput operations.
Quarterly results may vary as these plans advance, but the underlying trends continue to improve. Now I will hand over the call to Jono for our exploration update.
Thank you, Tyler. Good morning, everyone. Exploration is how we grow Wesdome beyond today’s mine plan. We have 1.4 million ounces of reserves and an eight-year mine plan at both operations, so our job is to extend mine life and add to our gold inventory. Our recent news from Kiena Deep, Kiena East, and Eagle River all point the same way. There is more gold in the ground than our current models show, and with new drill platforms in place at both mines, we are well-positioned to keep building on that momentum. Let me take you through the highlights. Going to Slide 16, at Eagle River, we have four goals: replace the high-grade ounces we mine each year, grow our reserves and resources, make new discoveries in our land package, and develop a larger, lower-grade source for future production.
In 2025, we drilled areas outside our mine plan and grew our reserves and resources to the highest levels in the mine's history. This year, we are targeting the continuation of our high-grade zones laterally and deeper. This week's results show that this is working. Longer term, our hub-and-spoke strategy is to build a large bulk tonnage operation centered around the Mishi and Magnacon area. I'll come back to that shortly. Moving to Slide 17, our high-grade underground program. Three things stand out. First, we see high-grade growth potential along the length of the deposit and at depth. Second, we drilled exceptionally high-grade intercepts in an area that remains under-drilled. And third, all of these sit close to existing infrastructure. In the 800 Zone, the western extension returned high grades over increased thickness, such as 8.3 g/ ton over 10.6 m, including 143 g/ ton over 0.5 m.
That is among the thickest high-grade intersections we have seen at Eagle River outside the 300 Zone, which is our flagship working zone. In the 500 Zone, a single hole in a previously under-drilled area returned exceptionally high grades, validating the continuity of high-grade shoots. More drilling is planned to turn this into resource. In the 700 Zone, step-out holes intersected high-grade gold across an area roughly 200 m x 100 m outside our current resource model. That is potential new ounces, growth, right next to our existing workings. Between the 800 and six Central zones, we confirmed a potential new high-grade vein less than 10 m from an existing ramp. Follow-up drilling is planned for Q1. Why does all of this matter? Most of these mineralized zones are shallower than our deepest workings and close to existing infrastructure.
That could mean less development, shorter hauls, and more flexibility in what we mine and when. It is growth from an operating mine without the cost and complexity of a brand-new project. Four underground drills will keep running through the year-end and into 2027, and these results will feed into our reserve and resource update in Q2 next year. Turning to Slide 18, Mishi and Magnacon anchor our plan for shallow, bulk-scale near-mine growth. Drilling continues to show consistent mineralization, and before year-end, we will release an update comparing early growth potential against our current resource estimates and pit designs. We also expect results from newer targets east of Magnacon, called Magnacon East and Feather River, plus other surface drilling. At Dorset and Cameron Lake, geometallurgical drilling is complete, with test work, including recovery tests, beginning in Q4.
Turning now to Kiena, our objectives here mirror Eagle River: replace at grade, add new ounces per vertical meter, and advance larger bulk tonnage opportunities. In Q3, we made real progress on all three. At Kiena Deep, drilling from two new exploration developments on levels 134 and 109 led to two new discoveries. If follow-up drilling confirms continuity, especially at shallower depths, they could add ounces close to existing infrastructure. At Kiena East, our Shawkey 10 results show what a fresh look at historic drilling data can uncover. Let's discuss Kiena Deep on Slide 20, where the standout story this year is the Norbenite Footwall discovery, an area previously interpreted as barren footwall beyond the Norbenite Fault. The Norbenite Fault, a structural zone running alongside the Kiena Deep's ore body for more than 800 vertical meters, previously limited our ability to drill and test beyond this structure.
The new drilling platforms provide access to drill past that constraint. One hole from our level 134 development returned 7.8 g/ ton over 57.2 m. That is our third broad high-grade hit in this zone, and together, they trace more than 150 vertical meters of mineralization, which remains open in all directions. The basaltic host rock also offers strong ground competency, which supports stable mining. That could allow us to design significantly larger stopes. Drilling from level 109 intersected the VC zone, which could be connected to the main Kiena Deep's mineralization, and a new parallel vein. Both of these remain open, and more drilling is underway. Why does this matter? Kiena Deep appears to host multiple high-grade structures beyond what is in our resource model.
If we confirm they are continuous, they could add more ounces per vertical meter, create new mining areas, and reshape how we develop this mine. Importantly, we have only had access from these new platforms for the past six months, and in that time, we have already made these two discoveries. My message to the team has been to turn ideas into gold bars, and we are building momentum on this. We are drilling from platforms that finally give us the access we are missing. Six months in, we are just getting started. For the rest of the year, we are focused on testing the size and continuity of these zones, especially near existing infrastructure, with results feeding our next resource update. Slide 21 shows Kiena East, a group of targets east of the mine, including Shawkey 10, the historic Shawkey Mine, Zone 134, and Dubuisson.
In September, we reported Shawkey 10, with one hole returning 3.1 g/ ton over 106.5 m, including a higher-grade interval of 20.4 g/ ton over 10.8 m with visible gold. The mineralization remains open, and about 500 meters of ground toward the shoreline is still untested. A robust winter drill program is planned with three drill rigs to evaluate the continuity. What does this mean? Kiena East is a growth horizon distinct from our principal mining areas within our existing operating platform. It is early days, but repeated broad mineralization, multiple higher-grade structures, and a large prospective host have the hallmarks of a system with real scale. To wrap things up, expect more news releases before year-end, including more Kiena Deep results, Mishi surface drilling, and first results from Magnacon East and Feather River.
For Mishi, the release will aim to showcase the scale and upside potential of this growing deposit. At Kiena East, deep drilling at Shawkey 10 continues, and we are preparing the winter program to size up the system. In Q4, we begin AI-based targeting at Kiena, using this year's drilling results to guide where we go next. The Eagle River results give us confidence in this approach. At Eagle River, we plan to drill more than 145,000 m in 2026, focused on replacing high-grade ounces and exploring near the mine. Together, the work and drill programs will give us a much clearer picture of our large-scale potential at Eagle River and the continuity of our new high-grade discoveries at Kiena, all ahead of our next resource updates. Operator, you may now open the line for questions.
We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Wayne Lam with TD Securities. Your line is open. Please go ahead.
Hey, thanks. Morning, guys. Maybe at Kiena, just on the Presqu’île tonnage ramp-up into next year, is the planned contribution still targeting a run rate of about 400 tons per day? Can you provide a bit more detail on the positive reconciliation you are seeing there to date? Then with the two higher-grade stopes from Kiena Deep in Q4, should we be modeling significantly higher grades in the quarter, even with the lower-grade tonnage contribution from Presqu’île?
Okay.
Thank you.
Okay. So, hi, Wayne. Thanks for the questions. I will just quickly summarize at a high level the ramp-up of Presqu’île in the quarter four, because quarter three was really good. I think you will see, Tyler will give you an indication of next year, how it continues to ramp up to that point. But I think just importantly for Kiena Deep, what has happened here is a removal, moving on the two stopes into the next quarter, which essentially cannot be caught up properly. So essentially, the grades are much the same, I would say, more or less in the quarters, right, Tyler?
The ratio may change a bit, Wayne, but we'll get a bit more. You're not going to see, y ou'll see a bit of an improvement in overall grade, but you're going to see more tons coming through from both areas as well.
Maybe just give an indication for Presqu'île.
Go-forward basis, we'll continue to ramp up. We are 250 tons per day, and we'll ramp that up in Q3. What we're looking at for 2027 will be annually probably 110,000 tons-130,000 tons out of there, which will get you anywhere from 300 tons-400 tons per day. It's moving as predicted and as anticipated.
The reconciliation, I'll just maybe comment on that as well. Do you want to just give a quick comment there, Phil?
I think just looking at both Kiena Deep and PI, I think year- to- date, we're seeing reconciliations come in where we want, or as expected based on our model. So there's no material issues or drama there.
Okay, great. Thanks. Maybe at Eagle River, just looking into the months ahead, can you give us a bit more detail on the change in mining sequence that you've talked about in terms of bringing more low-grade and incremental ore at a lower cutoff? Is that thinking already baked into the updated mine plan, in terms of the process grades at 8.8 next year? Or can you give us an idea of how mining is shifting in real time, versus that plan?
Okay, that's a great question, Wayne, and I think we need to clarify this properly in that case. If you look at what we're doing in terms of the transitioning of Eagle River upwards, we've put the data out and we're delivering to that, and we'll keep pushing to that particular plan. We do not go out of sequence. I think what's important to notice that what you're seeing is we're in the sequence of higher grade now in this quarter. I think it's critical to say that we're really trying to maintain good execution on our operations and maintain sequence. So, it's just a matter of where you are on the mine at the moment, and right now what you'll probably see is higher grade from Eagle.
Yeah.
The overall grade for next year will definitely not be at 8.8. It's going to be a lot higher than that. So we are targeting the double-digit grade, as we told you before. The combination that you're getting in terms of average grade, in terms of the technical reports, are function of the global model addition, not a function of sequencing for the plan for this year. So it's really important that there's a distinction between the two. Your technical reports look at two key reserves. They do not look at the plan that we have in front of us, and obviously the additional drilling we've done in the year to confirm the upgrade, as well as the mine sequencing work we do to optimize the plan correctly for the outcome we want.
We are transitioning Eagle River up to a much higher tonnage mine, and as we are doing that, we are going to make sure that these plans correlate correctly as we do along the timeline.
Okay. Okay, great. Thanks for that detail. Maybe just last one. It looks like maybe there was a bit of a pause on the buyback program. Just wondering how you are looking at the pace of execution now, and if there is any appetite to increase the dividend given the growing balance sheet?
I am going to hand over to Phil, yeah?
Yeah, thanks. Thanks, Anthea. Hi, Wayne. The buyback program at this point is on pause. We are preparing our budget for 2027, and once we get a sense of how that is coming together, and what other priorities may emerge, the buyback program gives us that flexibility. In terms of the dividend at this point, again, our approach to capital allocation is going to be dependent on our budget and the same priorities. If there is an opportunity to increase the dividend, we definitely will look at it.
Okay, great. Thanks for taking my questions.
Thanks.
Your next question comes from the line of Jeremy Hoy with Canaccord Genuity. Your line is open. Please go ahead.
Good morning, Anthea and team. Thanks for taking my questions. I want to look ahead a little bit. First off, something that has been very topical across the sector, costs in 2027. Just wondering if you guys can give us any color on what to expect in 2027 and various inflationary pressures, et cetera, as we look to tweak estimates for the following year.
Great. So, hi, Jeremy.
Yeah. Hi, Jeremy. It's Phil here. Yeah, definitely there's inflationary pressures. I think for Wesdome, our biggest impact on the inflationary pressure side is with manpower, and we're actively looking at the impact for 2027 in our budget process. Priorities are to try to reduce reliance on contractors and fill key positions with permanent employees. I'd say that's probably one of the biggest potential inflationary impacts. At the same time, we're also looking at opportunities to improve efficiencies and one of the areas is supply chain. We're looking at improved pricing with suppliers, getting better control over key contracts and so forth. There's a number of initiatives underway, and the hope is that some of our potential savings will help to offset some of the inflationary pressures.
Okay, great. Thanks. I appreciate the color.
The other question I have is about the upcoming reserve and resource update, and I think you guys have done a great job of highlighting the exploration potential you have at both sites. I'm wondering-
Ahead of this resource reserve update. Can you help us provide a little guidance on how we should think about it? Is this going to be an incremental increase or something more substantial? If this one is incremental, when can we expect potentially more substantial increases following your pretty aggressive exploration program that you guys have ongoing?
It's a great question, and we're in year two of the exploration program at the moment. Next year, the resource reserve should reflect some of those outcomes. I think what's important is, when you look at what Jono has been working on, I'm talking on behalf of him, and he can comment himself, but he's been working on understanding the ore body, your step-out drilling, growing resources, and obviously adding your higher-grade reserves to the plan as well. There's a whole combination of drilling that's composing that particular story. I think we feel really excited about what we're seeing from a geological potential perspective, and the work we're doing is really leading the program from a more strategic perspective, and we're building it out in the right kind of way. Hopefully some of that reflects nicely in the resource. We're hoping to see that.
We're really hoping to see a growth in that resource side more than even the reserve side. What I see is that the progression is more around the next three to four years and how it's going to continue, and it's fully aligned in terms of how we think about the planning side as well. I don't know if that helps, but the focus of Wesdome is both short-term to maintain execution, deliver well in execution, and on long-term to build out what we know this company can become. These two run hand-in-hand in parallel. The linking between the two and how we build the one to the other is the transitioning that this team is going to have to be darn good at, and we're going to become extremely good at it over the while.
Let me tell you, I think that exploration program over the next three to five years is going to be pretty darn interesting.
Okay, great. Well, thanks, Anthea. I appreciate that color. That is helpful. I'll step back in the queue.
Your next question comes from the line of Harrison Reynolds with RBC Capital Markets. Your line is open. Please go ahead.
Morning, Wesdome team, and thanks for taking my questions. Bit of a follow-up to the cost questions so far. Looking at the three-year outlook that came with the technical reports, could you talk about your confidence in achieving the outlook as planned? With consideration to the ongoing cost pressures and the focus on more bulk tonnage mining, do you still think the range of $1,600-$1,750 an ounce AISC is a reasonable target on a go-forward basis?
Yeah, Harrison, it's Phil here. I think that's a starting point, but the world's evolving. There's, for example, the FX rate. We're watching to see how that's going to impact costs going forward. Inflation, it seems to be ramping up higher than expected, maybe even higher than what was in the three-year outlook. As I mentioned earlier, at the same time, we are looking at opportunities to offset and reduce costs as well. So, our guidance this year was a midpoint of about $1,650/oz sold. If you account for, let's say, a 5% inflation rate going into next year, you're already looking at $1,730-$1,750. If inflation's higher than that will drive it up a little bit higher. But we are actively looking to try and manage that number as best we can with some of the initiatives that we have underway.
Got it. Thank you. Appreciate the detail there. Also wanted to ask on some of these growth options at Kiena, more exploration on Kiena East and the bulk tonnage mineralization there. Can you give us your latest thinking on how this fits into the Kiena mine plan, whether it's a third source of mill feed beyond Kiena Deep and Presqu’île, or how do you imagine this fitting into the Kiena district?
Harrison, it's a great question, and the nice part is there's lots of optionality, which makes me quite excited. So we've obviously worked on this in numerous mill processing routes. We have a mine plan right now on Dubuisson. So we could mine on a conventional basis Dubuisson through the current exploration, or that level 33 drift that you're aware of, immediately at a certain tonnage level. We're choosing not to, but should we choose to see an escalational growth, we could use that as an option to start. We could also look to increase the ability within that drift and from a more mechanized mining perspective, so that's another option.
There's multiple options available to Wesdome right now to actually process this. I think we have various routes that the team has worked on in terms of how quickly we can get it into the mill, how quickly we want to get it in the mill. I think the big question that we keep asking ourself is on honoring the ore body correctly and when the right time is to do this. That will obviously determine as quickly as we get it into the mill. I think it's really important to note that Wesdome could mine that immediately and is choosing not to, but we are for good reason, because we really believe that the bulk scale potential is quite significant, which then would result in a much more significant opportunity from a value perspective for shareholders.
Got it. If I could just follow up on one more district-related question. Could you give us a sense of the timeline, switching gears to Eagle River district? Can you give us a sense of the timeline of when we might get a sense of what Mishi, Magnacon could mean to the mine plan?
Next year, we're planning on putting a conceptual study out on that, and that should hopefully give you a sense of what that looks like. Even this year, I think Jono is intending to put something out before the end of the year on what Mishi's first pit has shown. I think you should get a sense of how quickly you can grow this ore body with the work he's done. Then you should think about this from how many other potential opportunities are in the region and how his work will translate into broader value. When you look at the work he puts out, think about it as a growth rate and how quickly the growth rate was achieved, and then apply that to his other ore bodies, and then you'll get a sense of scale.
Next year, the conceptual study will give you a better, the more firm sense. This year, numbers will tell you what it can indicate towards.
Got it. Great. Thanks for taking my questions, and looking forward to the ongoing progress. Thanks so much.
Your next question comes from the line of Simon Wildsmith with Desjardins. Your line is open. Please go ahead.
Thanks, team. A few questions from me. Maybe just to start at Eagle, we saw one stope come in below expected grade. Just wondering, was this a reconciliation sort of issue, shortfall against the global model, or dilution? Just trying to maybe get a feel for how the global model has been reconciling so far this year at Eagle.
Yeah. So, I mean, everything that I think both Jono and Tyler said that the reconciliation at Eagle remains really good. So far things are looking very good. I would argue that the grades are the grades. I do not think, Tyler, if I am not mistaken, your grades look pretty much intact except for the one change that you described a little bit earlier.
Yeah. Honestly, it was a bit of an anomaly. We mined the two stopes below and the stope above, which we are mining right now, are reconciling as we expected. This one was a bit of an anomaly in the quarter, but everything else is tracking as we have expected. Year- to- date, we are tracking as expected, particularly in the 300. We have gone through all of the stopes in the sequence in Q4 and confident with what we have in there in the model. What we are seeing so far quarter- to- date is things are tracking well.
I mean, the transitioning towards this larger scale mining operation is working well.
Yeah.
It is a transition though, so as you are going through it, you are going to
Yeah.
You will see some of these things, but it is certainly moving in the right direction.
Yep.
Okay. Okay, cool. No, that helps me. Thanks. Maybe this last question. Wondering if I can ask about, can you just remind us, some of these things that are upside, Mishi, Dubuisson, the broader Kiena East, can you remind us what is already in the plan, and is there any way you can give us a target for when we could expect an update from when things could enter the plan, or what you're working on currently? It sounds like Mishi, you were getting an update next year, but maybe more at Kiena then.
So, what you would have seen in a plan before for Kiena would have been Kiena Deep, Presqu’île, Northwest, and a little bit of Dubuisson from a selective high-grade mining perspective. It is not a lot. It is, Kevin, what would it be, about 40,000, 50,000 ounces in reserve on Dubuisson in old plans?
Yeah, 16.
Yeah.
Yeah.
Exactly.
So that would have obviously changed, yeah. So, what you would have seen it, and that's going to change obviously with time. So there's no Shawkey in that. There's none of those other zones, I don't believe. Correct, Kevin, in the old plan?
No, that's it.
In the Eagle side, there's no Mishi, there's no Magnacon, there's none of that. It's only from Eagle River itself, and it's only from the traditional zones that you know. So all the growth that you've seen is outside of that.
Okay. Okay, yeah. Do you guys have a sort of I know you guys haven't put out there for maybe Kiena East. Like, it sounds like, with Dubuisson, there's potential there, but do you guys have timelines for that stuff, or is it sort of TBD at this point?
We have very aggressive timelines internally, as you can probably imagine. I think what I mean, we're obviously going to try and figure out how we can start showcasing what this looks like in the right kind of way. Jono, I'm sure, will figure out how to try and explain it a bit better. I'm not sure it'll be like a perfect science, in a way that a lot of people want to see it from a perfect resource reserve statement, and probably we show more the scale. Jono, I mean, I think next year your drilling work should translate, correct, into-
Correct.
Into something that gives a sense of what this thing could be.
Correct, Anthea. Correct. We've reviewed some of the historic data, and from an interpretation of that information, we've drilled in a different orientation, and that's brought very positive results. We've got now three drill rigs in that area, and the idea is to drill out over the winter size, scale, to see how big this system could be, with the aim then, and these are step-out holes, as you can imagine, then it would be a case of infilling it next year to get it to a level where we could call it a resource. That's, once we have an idea of that resource and size, then whether it's the end of next year or early 2029, it would not be from a shortage of drill rigs and possibilities. It's on the land. We can be very aggressive.
It's just the timing of when we could do this work.
Yeah. I mean, you can imagine that parallel to this, we would be running scenarios and mine planning work through Kevin's team. All of this is happening as we speak. It is just a matter of getting the information and the accuracy level that we can actually report it correctly.
Correct.
Okay. Okay, cool. No, that helps me. I feel like you guys are, you are working on that, so sounds good. Yeah, thanks. Thanks, team.