Okay, jumping right into our first question, can you give us a recap of the first half of the year and remind us your outlook for the remainder of the year? I know your production weighted to the back half of the year. What are the key drivers of that growth relative to the first half?
Yeah. It was a busy first half of the year for us. The main thing that happened was we closed the New Gold transaction in late March, so the second quarter was the beginning of having two new Canadian assets at Rainy River in Ontario and New Afton out in British Columbia. Like you said, a very back half-weighted year here in 2026 but this is really the coming out year for the company after a few years of heavy lifting, investing in some internal expansions, aggressive exploration, $9 billion of M&A the last two years. Now this is sort of the first year where all of that kind of comes together, and we should produce this year about 630,000 ounces of gold, around 19 million ounces of silver and about 40 million pounds of copper.
That means our revenue mix will be about 65% gold, 30% silver, 5% copper. So that's a nice mix from seven operations, all North America, two in Mexico, three in the U.S. and now two in Canada. 2027 will be an even better year because we'll have New Gold's assets for a full 12 months. So back half of the year is really driven by some ramp-ups that are going on, not only at New Afton with a new C-Zone, that's a block caving operation, and that C-Zone is just ramping up here in the back half of 2026. At the Rainy River asset, that's an underground mine ramp-up here in the second half of the year, so that's another catalyst in the second half of the year.
Our Rochester silver and gold mine out in Nevada has a very second half-weighted year based on an expanded leach pad that we put in place in the first half of the year. So we've got a lot of material close to liner that should give us a nice surge of ounces in the back half of the year. Our Wharf mine out in South Dakota in the Black Hills, which is an amazing asset, has a very second half-weighted year as well. They had some crusher projects in the first half of the year, and now they're on a pretty rapid trajectory here for a strong second half. So you add all that stuff up and, yeah, second half's going to be very exciting for us.
Moving to the New Gold assets, and full disclosure, I used to cover New Gold, so I am very familiar with New Afton and Rainy River. Earlier last quarter, production guidance was modestly revised lower. Does that change your longer-term view of the role of these assets, and how they play out in your portfolio, or how are you thinking about those assets right now?
Yeah. No, I think what we did in the second quarter was we dialed back full year guidance just to kind of level set after having taken over the reins there really starting April first.
To give us a more achievable set of guidance numbers for 2026. I would call those sort of near term, short term related tweaks. The longer term, if both of those assets, if anything, I think we are probably more excited about them now than we were from during our due diligence. I mentioned C-Zone at New Afton that is the new cave right now. But on the back of that is K-Zone.
We put out an initial resource on that just after the transaction closed with a total resource of about 54 million tons. The current reserve at New Afton from the C-Zone is something like 35 million tons.
We will bring along that K-Zone to be ready when the C-Zone is done, probably around 2032, and that should give New Afton a really long mine life beyond into the 2040s. At Rainy River, what makes us excited is, yeah, we are in the middle of this ramp-up on the underground, but there is a lot of open pit potential still there at Rainy River. There is a beautiful 26,000 tonne a day mill that we want to keep full for as long as possible from a mix of open pit and underground material. That is probably one of the biggest value drivers that we have in the entire business. We will be spending a lot of time on unlocking that value here in coming years.
Okay. Actually, that just brings me to a question about Rainy in terms of how does the tailings dam and the tailings capacity, one of the things that was an issue with New Gold was the capital that would be required to build a new tailings facility, lots of exploration potential but where do you put it at this point?
Yeah.
Could you elaborate on that?
Yeah
of your current thinking? Yeah.
Tailings capacity there is sufficient, probably a little more than sufficient for the current life of mine, which goes out, I think, to 2035 or 2036. As we hopefully unlock some of this additional mine life
we'll have to find a place for that additional tailings. There's a few different options, and we'll have some time to figure that out, whether there's some opportunities for in-pit tailings disposal, whether we can go higher on the existing, or if we need to build something new. What's nice is with this bigger platform and the kind of cash flow that we have and the balance sheet strength that we have, we've got the flexibility to allocate capital. It's a good problem to have, right?
Because that means we're going to have a lot more mine life.
Yeah. It's something that a smaller company like New Gold was not able to work its way out of.
In terms of, let's just move to some exploration. You touched on that recent exploration update. Could you just give us an overview on that and what you found at New Afton and Rainy? Then we'll move on to San Miguel and La Union after that.
Yeah. Okay.
Sure.
Yeah. We put out an exploration release I think last week.
Featuring some new drilling results from New Afton and from Rainy River. The story at New Afton was this K-Zone. In fact, why don't I use this slide deck that we have? Oops. There we go. That's New Afton, and you can see the C-Zone where we're just ramping up the drilling results there that we've summarized in a release last week from the K-Zone. It is really about continued expansion of K-Zone and starting to do some infill drilling to improve our confidence level so that the team can really start on the engineering work, on the feasibility study work related to K-Zone so that that's ready to go when the C-Zone is exhausted in 2032 or so. So those were the results from K-Zone. We've expanded it by 300 meters.
It's looking like it's going to be not only a lot larger than C-Zone, but a lot larger than the initial resource that we put out back in March. At Rainy River, there were really two areas of focus. One was continuing to drill those underground structures where the underground now is ramping up. We plan to be at a 5,000 tonne a day underground mining rate at Rainy River by the end of the year. So there are some really good results with those structures continuing at depth.
What we also did is tested some of the potential on surface to connect the dots between these different open pits with the idea of there being the potential for some additional laybacks in coming years to provide us with those tonnes to keep that mill full, like I was talking about, and have that contribution between the open pit and the underground continue to be much more weighted to the open pit.
Do you want to talk about La Union and San Miguel?
Yeah. So La Union, we don't have a slide here, but I'll just put that up. Those are two deposits at Palmarejo. The story of Palmarejo is a really, I think, interesting one. So we started up there in 2009. It was an underground and open pit operation, and now it's been a completely underground operation for the last several years. So I said we built it in about 2008, 2009, right in the middle of the global financial crisis. One of the forms of capital that we used to finish the construction of Palmarejo was a gold stream with Franco-Nevada, which was that last piece of capital to get us over the hump there at Palmarejo. It came with a pretty expensive set of terms on the gold stream that covers the existing mining area.
What we've been doing now over the last decade or more is trying to consolidate the ground off to the east of Palmarejo that sits outside of that area of interest that the gold stream covers. Just to give you a sense of how strong of an incentive we have, inside that area, 50% of the gold that we produce, we sell to Franco-Nevada for $800 an ounce. Everybody winces when I say that usually. We are trying to build new ore sources off to the east where we can sell all the gold for the spot price. There's some stuff that's near the border of where that area of interest is that we can get into in the next couple of years. But the real prize is off further to the east, La Union and San Miguel.
We put out a release a couple of months ago that highlighted some of those results. I think the thing that we're going to have to deal with there is do we build standalone infrastructure out there and does that become a whole new operation, or do we do something with that material and haul it back to the existing Palmarejo processing mill? Either way, there's a whole other chapter at Palmarejo waiting to be unlocked, sitting off to the east.
Can we talk a little bit about Las Chispas? Sorry, I mispronounced that. But yeah, it was a strong acquisition made at a good time in 2024, just before silver and gold prices took off. What are some of the opportunities you see at that asset?
Yeah. In the middle box there, you can see the well-timed discipline acquisition. SilverCrest Metals was a $2 billion transaction that we announced in November of 2024. We closed it in February of 2025, and it brought this very high-grade, high-margin, low-cost silver and gold mine in Sonora called Las Chispas. It produces 5 million- 6 million ounces of silver a year, 50,000 to 60,000 ounces of gold a year. It was just into production for two years, so it's a nice steady state operation. I mentioned a lot of ramp-ups at our company this year. Las Chispas is not one of those. Las Chispas is like the nice Steady Eddie, half of the production first half of the year, half the production in the second half of the year. We've been having some good exploration results there. It's one of these repetitive epithermal systems.
Like I said, narrow vein, very high grade. We are just continuing to extend a lot of those veins, fill in some of those veins, connect the dots between some of those structures. It is our lowest cost asset, highest margin asset, and it was a great addition, not only from the operations standpoint but the SilverCrest balance sheet that we inherited really accelerated our de-leveraging initiatives, which we needed to do because on the back of all that heavy investment that we made over the last few years we had a stretched balance sheet. That SilverCrest transaction really helped accelerate that de-leveraging and set us up really to do the New Gold transaction because the stock did great on the heels of the SilverCrest transaction and then set us up to do the New Gold deal on the heels of that.
Wharf, let us talk about that one. You released an updated mine plan. I think it was a 65% increase in reserves, and nearly doubled the mine life to 12 years. Can you briefly touch on some of the key highlights for us there?
Yeah. I could talk all day about Wharf. It is a favorite asset. We bought that in 2015 from Goldcorp for $99.5 million, which we borrowed at the time, and we really felt uncomfortable about doing that. This is a mine that has had a five-year mine life going back 40 years. When we inherited it had a five year mine life. Fast-forward to today, we have now taken out over $650 million of free cash flow from this asset. It still had a five-year mine life up until last year, and we extended it out to 12 years based on reserves only. This thing is going to continue to generate 80,000, 90,000, 100,000 ounces of gold a year. It is very capital light, and it generates a lot of consistent, steady free cash flow for us.
We look forward now to taking advantage of this longer mine life, and our team is now having an opportunity to look at some other ways of further driving some productivity and efficiency projects there that can be justified with that longer mine life that we now have. That has been a great addition between Wharf and Las Chispas. Those are two very steady, consistent operations.
Yeah. I'm dating myself here, but I remember that asset when I covered
You remember that? Yeah.
Goldcorp from 2006 onwards, so yeah. It's a steady Ed producer.
I think when we bought it, the gold price was $1,250 an ounce.
Yeah.
It's been helpful.
The one less talked about asset is Silvertip. Can you just give us an update on your current thinking around that project and how that fits in your pipeline portfolio?
Yeah. Silvertip is a primary silver project that sits up in extreme northeastern British Columbia. Primary silver, along with some zinc and lead. High grade. It's a resource that continues to grow. We've been very successful on the exploration front. There's been a lot of stars that have aligned now with Silvertip between obviously higher prices, the resource growth, Canada's support for critical minerals projects. In Canada, silver's not on the list of critical minerals, but zinc is. [crosstalk]
We can see a real clear pathway here on the permitting front. We just need to keep growing that resource to support an attractive investment proposition there while we do the study work. We did an initial assessment earlier this year. Now we are into the pre-feasibility study phase. That will be done around year-end. We will see if that justifies moving into a feasibility study and if this is worthy of allocating some of this cash flow that we are now generating to Silvertip and have that be a nice, fairly near-term source of silver production from Canada that would push us back more toward silver having a more significant contribution to our overall revenue mix.
Just in terms of, let us move bigger picture, capital allocation, M&A. Where do your capital allocation priorities lie in terms of building, investing, and then returning capital to shareholders, and then external opportunities in terms of acquisitions and even maybe potential divestitures?
Yeah. We are now into the capital allocation game, right? With the kind of free cash flow that we are generating. Like I said, almost $1.5 billion this year and even better going forward. We are trying to strike that right balance between redeploying that back into some of these growth opportunities that we have and keep driving that return on invested capital metric higher. Last year, we had a peer-leading 26% ROIC, so we are very focused, and our long-term incentive comp is tied to ROIC and free cash flow per share. So we really want to reinvest and keep driving those metrics up and to the right. At the same time, we want to be returning capital back to shareholders. We rolled out a $750 million buyback program in May of this year.
Since then, we have done about $220 million of buybacks, so we are very active on that front. Then it is okay, I think, to build a cash buffer up so that we have got that flexibility to not only reinvest back into our operations, but I am a big believer that you set your company up for the next down cycle during an up cycle, so that you have got that flexibility and that ability to be aggressive and take advantage of the bad times when they come, and they will again. It is called a cyclical business for a reason. It is just a matter of being positioned to take advantage of that when that next time comes.
Okay. Just speaking about M&A, so far, you've been very much focused in North America. Have you ever considered looking further afield on that? Or has anything ever passed your filter that would make you want to go outside of North America?
Yeah. You go back 15 years, this company was stretched out Bolivia, Argentina, Chile, we had stuff in Tanzania. We've really kind of rolled ourselves back to just North America. Investors like that. It's sort of lower risk jurisdictional footprint. For the next three or five years, we don't see really any reason to be looking anywhere else other than the Mexico, U.S., and Canada. The political tailwinds in all three of those countries are like I've never seen. There's plenty of gold, silver, gold opportunities in those three jurisdictions, our three jurisdictions. So we'll stay focused on that. Anything that we do externally, it's all about building a better business. Scale for scale's sake is not our intent.
We want to keep up tiering the quality of our business, keep driving those financial metrics in the right direction, and delivering on the free cash flow and just keep it going.
Okay. Just in terms of commodity mix, is there something, you're more gold focused now, traditionally more of a silver producer. Could you see yourself at one point rebalancing, refocusing into the
Yeah. We are very mindful of our metals mix. We want to always maintain a significant exposure to silver. I think we are probably on the lower end of that spectrum right now, but I also think there is such a thing as too much silver exposure. It is a very volatile metal. It is hard to run a real business when the price of your product fluctuates to the extent that silver does. Managing that somewhere in the 30%-50% range is somewhere that we are comfortable with. We will always factor that into any M&A filters. But it is driven really by the financial metrics more than the commodity mix.
Okay. I have about one minute left. Is there any questions from the audience? No. Tim is flagging me on the play, so I think we are up on time. Thanks . Thanks very much.
No, thank you. Appreciate it.
It was great. Yeah.
Thanks, everybody.