Agnico Eagle Mines Limited (AEM) Earnings Call Transcript

Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Mines Limited Q3 2026 Conference Call. [Operator Instructions] Thank you. Mr. Ammar Al-Joundi. You may begin your conference.

Thank you, operator. Good morning, and thank all of you for joining our Agnico Eagle Third Quarter 2026 Conference Call. Before we begin, I'd like to remind everyone that we will be making a number of forward-looking statements, so please keep that in mind and refer to the disclaimers at the beginning of this presentation. Next slide, please. . My team and I are pleased to report another solid operating quarter. Gold production of 814,000 ounces came in at the midpoint of our adjusted production guidance for the quarter and cash costs of $11.33 came in 1% above the top end of our cost guidance. This is no small accomplishment in a quarter where oil is $100 a barrel, where the price of diesel has almost doubled in where trade tariffs and war are challenging established supply chains and logistics. Importantly, even in this difficult environment, we remain on track to deliver our full year 2026 production and cost guidance, albeit at the lower end and the upper end of production and costs, respectively. I'm proud of and thankful to our teams for continuing to deliver what Agnico Eagle is best known for, that's reliable, consistent results even in challenging times. This quarter, we delivered solid gold production and solid cost control. When combined with gold prices averaging about $4,300 an ounce, these solid operational results have, as you would expect, allowed us to deliver another quarter of strong cash flows and strong shareholder returns. That said, the results largely in line with expectations and with no big surprises. This morning, we wanted to spend less time talking about this past quarter, and we want to spend more time talking about the substantial and important value drivers of our business going forward. One of the key differentiators of Agnico Eagle over the past 20-plus years has been our growth and, in particular, our growth per share. This morning, we want to talk about how we plan to continue this growth with our actions and our investments. These are actions and investments which are happening now aimed at growing production by 20% to 30% over the next decade and to above 4 million ounces per year, starting in the early to mid-2030s. This morning, we want to focus on that growth. I've asked Dom and Natasha to briefly recap the quarterly operating performance but to spend more time detailing some of the concrete progress we continue to make moving forward some of these key growth projects. Together, our 4 largest projects, Detour Underground, filling the mill at Malartic, Building Hope Bay and Building Upper Beaver are forecast to contribute an additional 1.3 million to 1.5 million ounces per year of long-life, high-margin ounces by the mid-2030s. We all in jurisdictions where we've been operating for decades with teams in place and, in most cases, leveraging off existing infrastructure. Again, this is not about growth for the sake of growth. This is about highly profitable growth per share with not only the best returns in the business but with the best risk-adjusted returns in the business. Some of you on the line have suggested that 1.3 million to 1.5 million ounces of additional gross production by the mid-2030s is an ambitious growth plan. It is. And yes, building mines and expanding production is not easy. But these are very good projects with exceptional returns, and we are well past the planning stage. We are actively investing in making this happen right now. And while there is a way to go Progress so far is good, very good, and you'll get a feel for that when Dom and Natasha present their sections this morning. And as we see exceptional opportunities for profitable growth, beyond these projects, Guy and his team who continue to deliver quarter after quarter some of the best exploration results in the business continue to do so to gain best return on capital, best risk-adjusted return on capital. Guy will talk a little bit more about some of these exciting drill results a little later. But before we get into all of that, Jamie will briefly review another quarter of strong financial results, another quarter of strengthening the balance sheet and increasing returns to our shareholders and another quarter of investing capital and to the best growth pipeline we've ever had and to what we believe. As Jamie likes to say at these gold prices, we can do it all. Jamie?

Thank you, Ammar, and good morning, everyone. The third quarter again demonstrated the quality, consistency and resilience of our business. We delivered solid operational results and cost control, generating free cash flow of $852 million. Gold production totaled 814,000 ounces for the quarter and was in line with our forecast. With year-to-date production of approximately 2.5 million ounces, we are well positioned to achieve the lower end of our full year production guidance. Our operational performance resulted in strong quarterly financial results including adjusted net income of approximately $1.3 billion or $2.62 per share and adjusted EBITDA of approximately $2.5 billion. Total cash costs in the third quarter were $1,133 per ounce, and all-in sustaining costs were $1,648 per ounce. Year-to-date costs remain within our full year guidance range and we continue to expect full year cost to finish within the upper end of our guidance range despite industry-wide inflationary pressures, which reflects our strong cost discipline across our operations. During the quarter, elevated diesel prices increased total cash costs by more than $30 per ounce relative to budget. While we are not immune to higher fuel costs, our exposure is significantly lower than the industry average. Given our access to grid power in Ontario and Quebec and our predominantly underground mining portfolio, which is less diesel intensive than open pit operations. Diesel currently represents approximately 11% of our operating costs. As we look ahead, our teams remain focused on productivity, operational optimization and disciplined cost management to help offset external cost pressures. Together with the quality of our asset portfolio and strong operational execution, this focus continues to support strong margins and cash flow generation. We turn to Slide 5. Our capital allocation strategy remains disciplined and balanced with a clear focus on investing in high-return growth projects, maintaining financial strength and providing strong returns to shareholders. Ultimately, our job is to make money for our shareholders, and that principle remains at the center of how we allocate capital. We continue to make tangible progress across our key value drivers at Detour Lake, Odyssey, [ OPay ] and Upper Beaver with approximately $1.6 billion invested in development capital year-to-date to advance these high-return growth projects. As the CFO of Agnico Eagle, I recognize that we're investing a record amount of our owners' capital into our growth pipeline. But I'm confident that this is the right thing to do given the quality of our growth pipeline and the potential for these projects to generate strong long-term returns for shareholders. At current spot prices, these projects are expected to generate returns of approximately 25% to 50%, while supporting our anticipated production growth of 20% to 30% beginning in the early 2030s. Importantly, we have the financial strength to fund this growth, and we believe this growth will translate into meaningful long-term value on a per share basis. With a net cash position of approximately $3.4 billion at September 30, our balance sheet provides us with the flexibility to advance our high-return project pipeline while continuing to return capital to shareholders. This quarter, strong free cash flow generation supported total shareholder returns of approximately $478 million in dividends and share repurchases, representing about 56% of free cash flow. This brings year-to-date shareholder returns to 51% of free cash flow above our initial target of 40%. Our priority remains on delivering a stable dividend and reinvesting in the business. while using share buybacks opportunistically when market conditions are attractive. At current spot gold prices and subject to the needs of the business, we now expect to return more than 50% of free cash flow to shareholders for the full year 2026 we take particular pride in our dividend track record, having paid a dividend for 43 consecutive years. Since 1983, Agnico Eagle has returned over $7 billion to shareholders through dividends and share repurchases. We are proud of this track record, we remain committed to disciplined balanced capital allocation with investments focused on generating sustainable, long-term value on a per share basis. With that, I'll turn the call over to Dom.

Thank you, Jamie. Good morning, everyone. In my section, I will cover the Quebec, Nunavut and Finland business. And the key message I would like you to take away from my remarks is the project execution is solid. So we have a resilience into our operation, and there's a strong momentum behind our project execution. As Ammar mentioned, it is happening now. First highlight on operations, Barnett pit. It is a good example of the resilience I just mentioned. On July 1, the team had a movement of the rock into the Barnett did. And within 24 hours of the rough movement, the team did the assessment and they established a safe path forward. So the plan was completed on September '27, including building Rock Catch bench, and that was done slightly ahead of the plan. So the mining restarted and we're now mining safely into the Barnett pit. Good work team. The other I like -- I would like to do for the quarter is the good work done by the Cetera team, especially the mill team. You could see this is the picture you can see there with the smoke or the vapor coming out of the Atlas. The team worked systematically over the last years to improve their mill recovery. That was not an easy challenge. And in September, we achieved the highest monthly recovery in the last 5 years. It is demonstrating the capacity of the team to address complex challenge, and it is giving us confidence as they will gradually take on the next challenge at developing Ikkari project. Turning now to the project. Next slide. Investors often ask whether we have the capacity to execute our, let's say, ambitious growth plan. The picture you're going to see in the coming slides speak for themselves. Execution is well underway and our key projects are firing on all cylinders. Starting at Malartic. We are on target for the third production via the shaft in Q2 2027 with over 70% of the construction completed. If we go on the picture on the right, it is the equipment we've used to do the shaft thinking in the last 3 years thinking that shaft so that shovel have dig a 6.5 meter diameter hole to 1.5-meter -- 1.5 kilometer deep and we completed that first phase of sinking with our team, 4 months ahead of the schedule. Moving to the bottom picture in the middle, you could see the production is -- it is the focus right now of moving -- switching gears from the thinking is to the production is. This Blair oils will be the biggest in the world with a 20-foot diameter drums and 2x12,000 horsepower motor that you could see on E-site. Moving at the top picture, you can see the operation complex, which is now completed with 300 new offices and basket for the drying for the employees, the pace plant is completed. And also Guy, we are building a brand-new modern core shaft. So keep the drill running despite the Shaft 1 potential, Shaft 2, Marban and Wasamac, we still have room at the mill. Next slide for Hope Bay. The project is moving from investment decision to a disciplined execution. It is a fourth mine we're building in Nunavut and are very happy with the team and the strong plan we have in hand. Retail engineering is now achieving 75% in the coming presentation, I'm going to move to talk more about the construction progress, where we achieved 13% at the end of September. Going to the picture. The first 2 at the top are 2 infrastructure we need to complete in 2028. This is the plan. So we're in good position. The first one is the multi-service building where we're going to commit the garage offices and the metallurgical lab. So it is the former or the old mill that was used at the time. On the right picture, it is a 37 gigawatt power plant brand new that we're building so that picture is the end of September. But today, 25% of the structural sale is already completed, and we're starting to put some planting into it. So we're in a good position. Now something I'm very, very proud and happy and we'd like to congratulate the team about the achievement of the very big cliff that we did, everything have been done on target that start from doing good engineering, procurement and expediting, having the teams going around the world to go to the supplier to make sure that quality is good and they're going to deliver on time. And also the [indiscernible] port team. We received 220,000 cubic meter of stock, which is the equivalent of 2,000 to 3,000 truckload and also the team side that unloads safely and a perfect coordination all those structures with at the Roberts Bay jetty that you could see there. And the last picture on the bottom right, it is a blade of the first turbine we're going to install in the never. That's going to be the biggest 1 into Nunavut and probably into the Arctic. You could see we've used system to lift the blade, and that was the first time in Canada that was used. This is to help us to turn the curves with those huge blade and this has been done as planned. So that's going to be a 4.2 megawatt that is going to be ready early in 2028. This is an interesting project where it's going to be operated and owned by our [indiscernible] or partners business that we're going to run that one. To conclude, we also would like to report that we renewed our IBA with the [indiscernible]. This is a very good one, win-win where we're covering the entire 80-kilometer belt, and this is going up to 2056. So Guy, we are ready for other discovery, other new gold deposits along the belt. On that, I will pass on to Natasha for the remaining presentation.

Thanks, Dom, and good morning, everyone. I'll cover the operational highlights for Ontario, Australia and Mexico. The regions delivered another strong quarter, exceeding their plans. Detour's excellent performance was a function of a few factors. We saw improved productivities. We continued mining in a high-grade portion of the deposit. And we saw some localized positive grade reconciliation as well. As expected, the operation has now transitioned into a lower base mining sequence that we anticipate to continue throughout the fourth quarter. At Macassa, we were in a higher grade sequence, but we also saw some tangible improvements from their optimization efforts in the mill. And at Fosterville, we continue to see some strong results a function of improved mine productivities and positive grade reconciliation at both the [ Robbin's Hill ] deposit and the Phoenix deposit. So the records that were achieved in the quarter, they were directly -- a direct correlation with the continuous improvement efforts that are currently underway at all of our sites. We've spoken about a few of these initiatives over the past quarters, and we see a few more on this slide. I won't go into the details, but I do want to say a quick thank you. Thank you to all the teams for their collaboration and their commitment in driving these results and we're continuously looking for ways of doing better for raising the bar and doing your best to control the things that we can control. We really, really appreciate it. Okay. Moving to the next slide, I'll give you an update on the projects in Ontario. And I'll start with Detour and the site's progress towards becoming a 1 million-ounce producer annually. And this, of course, has the Detour project -- the underground project playing a big part of this plan. This quarter was a strong one for the team. With the help of Macassa, who offered support by sending some of their delta miners, the team at Detour fully internalized the development contract for the exploration ramp. And this is a very good example of how our renal strategy enables our sites to easily collaborate and to leverage and share things like infrastructure, parts, lessons learned. In this case, sharing skill set. This internalization resulted in the team achieving a quarterly record in development performance. Now in terms of the development itself, it is currently progressing from 2 active headings with dedicated crews. It's supporting advancement of the exploration ramp and also the cost cut to access the first mineralized zones. And looking forward, the bulk sample is expected to be completed by the first half of 2027. And that data from the bulk sample will then be incorporated into the mine plan for Domain 54, and this is the area that could enable underground production as early as 2028. Now in addition to that, overburden removal for the conveyor ramp portal near the mill continued this quarter. We also advanced construction activities for some key site infrastructure, and that includes the camp expansion water and wastewater treatment facilities and the multi-service building. Now I started working with the Detour team in 2020, and I continue to be impressed by what they have accomplished. Since then, the team has doubled mineral reserves and mineral resources. They've increased mill throughput from 22 million tonnes per year to 28 million tonnes per year and is now making very good progress in the next phase of the operation with the goal of becoming a 1 million-ounce producer by the early 2030s. And in addition to that, we continue to see further potential beyond this. Now Guy is going to speak to the exploration program shortly but the continued exploration success gives us significant optionality at Detour that we're in the early stages of evaluating -- this could include higher milling capacity, potentially a larger open pit and a larger underground mine maybe than the one -- than the one that we had first envisioned. There's still a lot of work to do here, but we expect to provide you with the project outlook in 2027. Now over at [ Apabiva ]. The team progressed well on both the exploration ramp and shaft in the quarter. The ramp has advanced over 600 meters in the quarter, reaching a depth of 210 meters and achieving a fifth consecutive quarterly record in development performance. Staff thinking was also good. They delivered a solid quarterly performance, reaching a depth of just over 730 meters. We expect to reach the 760 level and then commence the shaft station excavation on 760 this quarter as well. Now following the results of the high-intensity drilling program that was done earlier this year, we're currently evaluating opportunities to expand exploration activities, which includes extending the shaft to a depth of 1,200 meters. And this will support infill drilling and potentially even grow the mineral resource at depth. So to conclude, our operations delivered another strong quarter and our projects are continuing to advance well with encouraging exploration potential emerging across our portfolio. And with that, I'll turn the call over to Guy.

Thank you, Natasha, and good morning, everyone. I'm very happy again to report some great exploration results this quarter and especially on some new projects as we got our first few results in the assets recently acquired in Finland around the Ikkari project and at the Boston deposit [indiscernible], where we have conducted our first drill campaign in Agnico Eagle acquired a project 5 years ago. But once again, Ammar also reported some great results at [indiscernible] and Detour Lake that continue to show exploration upside to go above and beyond our current plan to bring these 2 sites at [indiscernible] per year. We had another very strong quarter in terms of drilling, safely completing more than 330 kilometers of diamond drilling with more than 120 rigs for year-to-date total of 1.1 million meters well on our way to achieve our budget of 1.4 million meters of drilling, and we are in a very good position to replace and grow our global mineral reserves and resources at the end of the year, as we have now been doing for the last several years in a row. Looking now into some specific projects. On Slide 12, [indiscernible], Drilling continues around the East Goldy and Odyssey project as well as in the regional drill target around such as the [indiscernible] project. We continue to get some strong exploration results in the [indiscernible] with 2.8 grams over 34 meters at 1,950 meter, which is approximately 100 meters below the current shape and 100 meters to [indiscernible] of the current planned ultimate depth of the first shaft. In the [indiscernible], some broad intercept returning 3.8 to over 36-meter or land as well as in the Artemis that is one of the internal zone between Odyssey North and Odyssey South within the porphyry, with 9.5 gram over 18.9 meters at around 1,000 meter depth, supporting our view of significant additional exploration upside, not only in a lateral extension of the main [indiscernible] zone, but also in those internal subparallel again the restructure like the Eclipse and Artemis zone, close to the planned mine infrastructure. Now on Slide 13, at Detour Lake, the intensity drilling in Domain 54, close to the exploration ramp west of the open pit was completed, and the results are being analyzed and will be integrated as part of our year-end mineral reserve and mineral resources update exercise to be disclosed in February. Drilling is now back, continuing the resources conversion and some extension drilling towards the west and at depth. I would like to bring your attention in particular to a few holes like the drill hole 1405 in the Statoil area at the bottom of the resources pit in light blue on this graph with 11.9 grams over 5.4 meters at 580 meter depth and a few hundred meters west of this one in the west portion of the open pit again in [indiscernible] that returned a spectacular 19 grams over 26 meters at 330-meter depth, very close from the current limit of the current reserve pit. As discussed by Natasha that could be further optimized through our ongoing review of the full potential of the asset. At [indiscernible] on Slide 14, we've completed 84,000 meters of drilling year-to-date. In [indiscernible], some great result, again, up to 8.5 gram over 8.6 meter at 500-meter depth and 37-gram over 2.8 in [indiscernible] at almost 700-meter depth that demonstrate that the system remains open at depth. But I'm also very pleased to report that we have drilled at Boston this year in Q2 and Q3, we've reopened the camp, completing more than 7,500 meters of drilling in atrial holes. The highlights were pretty good at around 300 meters, both in the North and South [indiscernible] with 11-gram over 12-meter and 17 grams over 4.5 drilling this year into test deposit in proximity to the existing resources to better understand the mineralized context as well as some of the surface prospection work in the southern part of the bell where we are preparing a much more aggressive drill program in field antral program in 2027. So stay tuned for some more good news to come in exploration at home. And last but not least, Ikkari, our recently acquired project in Finland on Slide 15. Activities are ramping up smoothly with 3 rigs actually turning and pretty on 5 or 6 in the fourth quarter when we'll get access to drill platform when ground will be frozen in wetland area. Drilling to date aim to conduct a fair bit of condemnation drilling on potential new sites for waste rock and tailings storage facility to the south of the deposit as well as testing a couple of deeper hole in particular, in the LME and Ikkari deposit area. And at LME, we got some very interesting results. And in the first hall,we've got with an ONCAP average grade of 15 grams over 10-meter or 3.2-gram cap because within that intercept, it was a 1 meter sample that returned 185-gram with a structure in showing that the army is the wide open at depth as we thought when we made the acquisition, seeing at the Inter structure, some deep potential like in our well-known Kittila asset. So we are off for a good start and I can't wait to go to a site in about a week to see the team, get to see some of those drill holes at depth and discuss the plan for 2027 as we have the desire to deploy a very aggressive drug program over there in the next 3 to 5 years to tell the full potential of the belt. And on that, I will return the microphone to Ammar for some closing remarks.

Thank you, Guy. Really very exciting stuff well done as always. And thank you to the rest of the team and to all of our people for delivering another solid quarter, not just operationally but in developing these key value drivers that really are exceptional. As you can see, we continue to work hard for all our stakeholders, and we'll continue to build off the same foundational pillars that have defined our strategy and have served us well for almost 70 years. We'll continue to focus on the best mining jurisdictions based on geologic potential and political stability. We'll be disciplined with our owners' money, making investment decisions based on technical and regional knowledge, creating value through the drill bit and through smart acquisitions where and when it makes sense. We are uniquely well positioned with a high-quality project pipeline, leveraging existing assets in the best regions in the world where we believe we have a competitive advantage. We will continue to be focused on creating value on a per share basis and on being leaders in our industry and returning capital to shareholders as evidenced by over 43 years of consecutive dividend payments and increasing share buybacks. 2 years ago, we talked about an ambitious vision to meaningfully grow production per share with the clear aim of generating exceptional additional value for our shareholders. We talked about our vision to grow Detour to over 1 million ounces a year. We talked about our vision to grow Malartic to over 1 million ounces a year. We talked about the potential for Hope Bay to be over 400,000 ounces a year, and we talked about our vision to build Upper Beaver and open up a whole new mining camp. This was an ambitious plan, but we knew we had the quality of projects, the quality of teams and importantly, the conviction to make it happen. Today, our teams are transforming these visions into actions. Today, we're investing heavily into these projects. We're making good progress. We will stay focused, and we will not be distracted. We look forward to talking more about all of this with more detail at our Capital Markets Day on November 18, and I encourage all of you who can make it to attend. Thank you all again for joining us on this call and thank many of you that have, for decades, supported us and trusted us. We'll always work hard to maintain that trust, and we will never take that trust for granted. Operator, may I now ask that we open up the call for questions.

[Operator Instructions] Your first question comes from Fahad Tariq from Jefferies.

In the press release, there was a lot of commentary on the diesel cost and consumable cost inflation that you're seeing. I didn't see as much about labor cost inflation. Maybe you could touch on that as well. And how are you thinking about it for 2027?

Well, I mean, that's an excellent question, Fahad. And I would say that over the next 10 years, labor is something that is going to be right up at the top of things that resource companies and certainly mining companies and certainly Agnico Eagle are going to be focused on. We're not seeing, at this point, material increases in labor costs. The bigger challenge is an availability of high-quality labor. And the canary in the coal mine, as you know, you've been in this industry for a while, is usually on the exploration side with drillers because they tend to be more transient. So internally, things are going pretty well. We continue to have, I think, a very good very happy workforce, low turnover. We're not yet seeing material increases with our workforce, but that's an excellent question. And what I will say is we are investing a lot of time and effort thinking about how we maintain our competitive advantage with workforce over the next 10 years plus.

Okay. Great. And then just switching gears to Malartic for a moment. With the first shaft production expected in the second quarter of next year, do you expect any potential I guess, production make up for the loss of Barnett ounces. Is that possible for next year?

No, we don't see something, let's say, concrete right now. If we're doing better, maybe but I will not say it at this stage where we are with that.

Your next question comes from Richard Garchitorena from Barclays.

Just wanted to ask in terms of production at [indiscernible] in line with the plan. However, Meadowbank impacted by lower-than-expected rates. Just wondering what are the specific drivers of the lower grades and the lower mill throughput. And is this reflected in your production guidance for 2027 that you've already provided?

Richard, Dominique speaking. We're still working on the budget and to the next year. But really what happened, it is very in a specific area in the IVR pits, where we've the discrepancy between the model and what we see. Our teams are on that to update the model and to make sure that we have the right plan, but that doesn't affect at all the underground and the well pit. It's a localized area into the IVR pit.

Okay. Great. And maybe if I could just follow up on the cost question. You basically provided guidance for the upper end of your prior guidance of the $1,400 [indiscernible]. You also talked about some additional input pressures on the consumables side. Maybe if you could talk a little bit about that. And then also the And then also there's a mention of a $5 per ounce increase from U.S. retaliatory tariffs. What is that specifically? And I guess, should we just basically assume that's going to be -- if there's a trade deal, obviously, that would roll off.

Yes. So maybe -- it's Jamie here. I'll start with the last part of your question. So yes, the impact that we disclosed $5 an ounce is the impact of the tariffs on our Q4 costs. If there isn't a trade deal, we'd actually expect that impact to increase in 2027. Across the -- we tried to provide some color on what we're seeing in terms of overall cost inflation. The biggest cost increase is with respect to diesel, which now represents about 11% of our costs. And we disclosed the impact for Q3. The higher diesel price relative to what we budgeted had an impact of about $30 an ounce. That could be $50 to $60 an ounce in Q4 and for full year 2027 could be as much as $80 an ounce. So it's about a 7% increase potentially year-over-year. And then we walked through some of the other inflation pressures we're seeing across other consumables. But overall, we -- as I mentioned in my remarks, we are less exposed to diesel than the majority of our peers, just given the fact that we benefit from the majority of our production coming from Northern Ontario, Northern Quebec, where we're on the grid, clean hydroelectric and nuclear power. So I'd say this is something that's going to impact diesel pressures are going to impact the entire industry, and we are insulated somewhat from it. We are going through a budgeting process now. And obviously, our job is to do our best to try to make our operations more efficient and offset some of that inflation. And hopefully, we'll be successful in doing that.

Your next question comes from Bennett Moore from JPMorgan.

Congrats on the quarterly execution. I guess as we look at year-to-date drill results across the portfolio, replenishment or even net growth and maybe which assets may be the key driver on that front?

You broke up a little bit. I guess Guy heard better than I did. Guy, do you want to?

Yes. Well, basically, those are pretty much the one I cover. So we are anticipating good progress in reserve and resources addition, both at Monarche Detour. Hopefully, we're going to be updating our reserve at year-end. And there's also a fair bit of positive replacement at the existing operations such as Meliadine, Kittila, Macassa. So we're in pretty good shape overall in terms of reserve and resources replacement.

And then I guess on capital allocation, now targeting above 50% of free cash flow towards shareholder returns this year. Given the strong financial position, should we view this as maybe a threshold that's likely to extend into 2027?

Yes, that's a good question. I think we're well on track. On a year-to-date basis, we've returned 51% of our free cash flow, and we now target being over 50% for the full year. I think 50% is a reasonable threshold looking ahead to 2027. But again, that's something that as we work through our budgeting process and have discussions with our Board that we'll ultimately decide on and publish in conjunction with our February guidance release.

And clearly, it will also be a function of the gold price.

Your next question comes from Lawson Winder from Bank of America Securities.

Nice to hear from you, solid quarter. I wanted to ask about Detour Lake. So we've had several quarters now of suggestions about what the larger underground could be and that it could come on in early 2028. So considering that and moving parts within the other assets, is the current 2028 gold production guidance starting to look a little stale with potentially some upside?

Lawson, this is Natasha. So we're working through the budget and the life of mine and specifically the 3-year plan right now. So we should have those results by the end of this year. In the meantime, though, we do have a specific team dedicated to both understanding how much of that maybe incremental underground production we can bring in from an upper shallower area of the underground as early as 2028. And then we have another team looking at the big evaluation of what that full potential could be for Detour that looks like potentially the increase of the underground or maybe even a pushback for the open pit or potentially also an increased milling capacity. So we'll probably give you an update on that by -- in 2027.

I mean could we see some early results from the study we're expecting in mid-2027 on Detour factored into the 3-year guidance that we will get in February?

No, it's still very early stages on that, Lawson.

Okay. Well, that's very clear. And then just also with respect to Detour, and the production to date has been really solid. And it certainly seems that the mine can still reach the midpoint of the guidance despite the extended shutdown that you've announced this quarter. Does that ring true for you? And then does the additional maintenance in Q4 have any positive knock-on for 2027 production?

Yes. So yes, you're correct. This is just a preventative maintenance that we're bringing forward from next year. We're taking advantage of the shutdown that we're doing in November. It's basically a gear replacement on one of our SAs. So we have a 7-day shutdown, but we want to extend it a little bit because we have the materials, and we have the team already on site doing some work. So we just thought maybe let's take the opportunity to do it. because of Detour's strong performance this year. So yes, we expect to be -- to meet the production guidance. And for next year, we're working through the budget plan right now to factor that in.