Coeur Mining, Inc. ($CDE)

Good day, and welcome to the Coeur Mining's First Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mitchell Krebs, Chairman, President and CEO. Please go ahead.

Hello, everyone, and thanks for joining our call to discuss Coeur's first quarter results. I'll kick off with some highlights from the quarter, followed by an update on several key strategic priorities in the wake of the recently completed New Gold transaction. I'll then turn it over to Tom for a recap of our first quarter results before opening it up for questions with the team who's here with me. Before we start, please note our cautionary language regarding forward-looking statements and refer to our SEC filings on our website. The highlights on Slide 4 showcase our strong start despite the first quarter being the softest quarter of the year. Our record results also reflect just 11 days of contributions from the recently acquired New Afton and Rainy River mines. First quarter silver and gold production increased 18% and 11% year-over-year, respectively, driving quarterly revenue to a record $856 million. EBITDA increased 12% versus the fourth quarter and nearly fourfold year-over-year to a record $475 million. We generated a very strong $267 million of free cash flow despite over $200 million of quarter-specific and onetime items that Tom will describe in more detail shortly. These accelerating cash flows continue to supercharge our balance sheet with cash and equivalents increasing nearly 11-fold over the past year to $843 million and growing. A real shout out to the team for getting us out of the gates cleanly and safely in 2026. The production summary on Slide 5 provides the clearest portrait of what we expect will be a truly watershed year for the company. Among many other positive catalysts on tap, the remaining three quarters will reflect full contributions from New Afton and Rainy River, rising production and cash flow from Rochester and a strong rebound at Wharf now that its rebuilt crushing circuit is back up and running, thanks to a tremendous effort by the team there following a fire in the crusher building last November. Putting that all together, along with consistent performance from our three other operations and taking the midpoint of our guidance ranges, we expect to produce approximately 750,000 ounces of gold over 20 million ounces of silver and nearly 60 million pounds of copper in 2026. The two new Canadian operations are the main drivers behind an expected 80% increase in our 2026 gold production compared to last year, while also introducing copper into our metals mix and driving down our overall cost profile. The plus 20 million ounces of silver production we expect to generate this year represents about a 13% increase over last year, driven by a full year of contribution from Las Chispas, which was added in mid-February last year through the SilverCrest acquisition as well as a further expected step-up in production at Rochester. This level of silver production should keep us in the top 5 of all silver producers globally and is expected to represent over 30% of our revenue this year based on recent prices. It's also important to highlight that 100% of our 2026 gold, silver and copper production will come from North America with about 70% of our revenues coming from the U.S. and Canada. A couple of other quick updates. You likely saw on March 23 that we provided a corporate update following the closing of the New Gold transaction that laid out an enhanced financial policy, reflecting our priorities of establishing and maintaining a flexible balance sheet and reinvesting back into our assets, all while returning capital to shareholders through a substantially increased share repurchase program and an inaugural dividend, which Tom will talk more about shortly. On the integration front, we're very pleased with where we are after 7 weeks since the closing. There's been an incredible amount of planning, effort and collaboration throughout the combined organization, which deserves a big thank you. The teams are engaging in the work of integrating the two companies, and everyone is excited about the stronger and larger platform we've created and the tremendous potential that lies ahead. Before turning it over to Tom, one final note for me. We published our 2025 responsibility report on April 15, which is summarized on Slide 23. Coeur's approach has always been grounded in driving sustainable growth and long-term value creation, and we focused this year's report on clearly tying our sustainability priorities to underlying business value. Tom, over to you.

Thanks, Mitch. I'll begin with a brief review of our first quarter financial results as presented on Slide 9. Record quarterly performance in revenue, EBITDA, GAAP net income are just the latest signs of the emerging power and consistency of Coeur's combined portfolio. Key headline financial results included a seventh consecutive quarter of free cash flow and an eighth consecutive quarter of positive earnings per share. This consistent track record of positive earnings and free cash flow, along with our new dividend policy bodes well for future additional index inclusions. Our first quarter is always a little choppy with our traditionally seasonally low first quarter operating performance and significant working capital outflows. Add in the complexity of closing a transaction during the quarter, this led to a lot of moving parts in the quarterly results. We included a waterfall chart on Slide 11, where we called out quarter-specific and onetime items totaling over $200 million. However, with the tailwinds of stronger realized prices and a focus on monetizing the opening inventory balances at our newly acquired Canadian operations, we managed to achieve our second highest free cash flow in company history at $267 million. Our day 1 integration efforts have paid off, leaving us set up for a memorable 2026 as we emerge as the new go-to North American-only precious metals company. Slide 8 highlights the incredible turnaround story of our balance sheet with last 12-month adjusted EBITDA increasing by over $1 billion compared to the same point 1 year ago, and overall net cash position, along with the new modernized and materially upsized $1 billion revolving credit facility, the balance sheet and overall liquidity levels are in great shape. Of note, our cash balance increased by almost $300 million during the quarter, more than offsetting the $272 million of net debt that was assumed at the closing of the New Gold acquisition. I would also highlight that we received multi-notch upgrades from our rating agencies as we completed the acquisition, which is external validation of the immense progress and stability we have built. A couple of final notes on the balance sheet. The obligor exchange related to New Gold's 2032 bonds that we launched on the transaction closing was completed on April 22. This innovative transaction has allowed us to novate over 96% of the outstanding New Gold notes to become core notes, which will provide significant benefits, including no restrictions on our ability to return capital, additional U.S. tax shield and lower filing and compliance costs. And on April 30, we repaid the bulk of our remaining $45 million of capital leases early to further reduce our overall interest expense going forward. With our 2026 guidance reaffirmed and using our 2026 budget prices, we expect to generate more than $3 billion of EBITDA and $2 billion of free cash flow, as shown on Slide 7. Even with only 9 months and 11 days of contributions from New Afton and Rainy River. This overall confidence in the portfolio was the basis of the updated financial policy as outlined on Slide 10 for the company, including our return of capital strategy that we announced on March 23. As a brief reminder, our Board authorized capital return strategy is comprised of a $750 million buyback program, which allows for the possibility of continuous activity even during blackout periods as well as a discretionary component to allow us to execute repurchases opportunistically based on our underlying share price and valuation. We look forward to executing on this program following several months of inactivity due to blackouts. And Coeur's Board has also approved an inaugural dividend policy of $0.02 per share semiannually with payments expected in the second and fourth quarters. This amount was selected to make the dividend sustainable for the long run, even under extreme low case pricing scenarios and allows for potential dividend growth over time. Two final comments from me. Slide 12 includes our usual snapshot of inflationary pressures that we keep a close eye on every day as we manage the business. In the wake of the recent surge in oil prices, we wanted to highlight that diesel represents approximately 6% of Coeur's total operating costs, and our 2026 cost guidance assumes a diesel price of $3.19 per gallon. A 10% increase in diesel prices would typically increase our cost by about $10 million, which equates to roughly 1% to 2% increase in our CAS per unit. So while we are not immune to this cost pressure, it is less acute than most people might think. And during the March 23 call, I highlighted several accounting nuances that impact our CAS guidance with a special focus on the fair value uplift of opening inventory that arise from the purchase price allocation from the New Gold acquisition. With all of Rainy River and New Afton's Q1 2026 sales coming from opening inventory, the CAS for the quarter at those mines approach current spot prices as required under U.S. GAAP as those inventories were recorded at their fair market value. As a reminder, the associated $85 million noncash impact on CAS during the quarter from this pointy-headed accounting matter is the same concept that we saw at Las Chispas last year. Our overall company-wide adjusted gold CAS would have been $689 less per ounce to give everyone a sense of the significant accounting impact of this non-cash item, the champagne problems of having so much opening inventory. This nuance will carry throughout 2026 at Rainy River as we are fortunate to inherit an approximate 2 million tonne short-term stockpile. We will likely have some tweaks to the final noncash impact of this fair value uplift that we will clarify with our Q2 2026 interim results as we finalize new gold purchase price allocation. With that, I'll now pass the call back to Mitch.

Thanks, Tom. Before opening it up for Q&A, as shown on Slide 20, our key strategic priorities for the year ahead remain unchanged. I'm very proud to report that Coeur finished 2025 as the safest mining company among our peers in the United States for the fourth consecutive year based on MSHA data. Congratulations to the entire team for having the courage to care and for always pursuing a higher standard when it comes to our commitment to keeping everyone safe. I'm also extremely pleased to announce that both New Afton and Rainy River received the John T. Ryan Regional Safety Trophy for lowest reportable injury frequency earlier this week at the Annual CIM Conference. New Afton has received this award 11 out of the past 12 years, while Rainy River is a first-time recipient. Our leadership in the safety and environmental areas are two great examples of how we at Coeur set the bar high and then strive to exceed our expectations. As we look out over the remainder of the year, we will continue working tirelessly to complete a smooth integration of New Gold and to deliver consistent and predictable performance across our expanded and strengthened platform of seven North American operations. Another key priority will be to continue bolstering our liquidity while making the transition to returning capital to shareholders through our new share repurchase program and initial dividend policy. Carrying out the largest exploration investment in the company's history and delivering impactful results from these programs will remain a top focus over the remaining 9 months of the year. This includes continued drilling at the Silvertip project in British Columbia, where the higher silver price, Canada's strong support for critical minerals projects and our own ability to advance this one-of-a-kind silver asset are all coming together to create a potential window of opportunity. Much work remains to be done, and we look forward to sharing our progress there later in the year after the busy summer drilling season. Starting with this current quarter, we're excited to begin delivering the tremendous potential of the company that we've built through our recent investments in exploration and expansions and two well-timed high-impact M&A transactions. I can't think of a better positioned company in our sector given our production and cash flow profile, metals mix, growth, geographic footprint, trading liquidity, balance sheet and most importantly, the team to deliver it. With that, let's go ahead and open it up for questions.

[Operator Instructions] First question comes from Cosmos Chiu with CIBC.

Thanks to Tom and team for a very good presentation. Maybe my first question is on the free cash flow. You kind of touched on it, some Q1 specific items, $200 million, and it's in Slide 11. But could you maybe elaborate on it? I just want to make sure that these are nonrecurring, like it won't come up again in Q2. Maybe it will come up maybe in Q1, the Mexican taxes, but certainly won't be recurring for Q2, Q3 and Q4.

Yes. Cosmos, it's Mitch. Thanks for the question. Mitch. I'll ask Tom to say something here in a second. Just high level, and you referenced Slide 11, which is a great place to talk about this. yes, each first quarter, you're really not going to get away from the Mexican tax payments, the interest and the Rochester property tax. The others were onetime. I mean the incentive payment is variable year-to-year. Strong performance last year led to a larger annual incentive payment in the first quarter of this year. And obviously, the tax payments were higher than they've been in recent years due to the Las Chispas addition last year and just overall strong performance from both Palmarejo and Las Chispas. But Tom, anything else you want to add to that?

Yes. The only thing I would add is just the way we timed the interest on the notes, those will happen in Q1 and Q3. But the rest are only going to happen in Q1 and obviously, transaction costs that was a onetime.

Perfect. And then maybe if I can ask about the capital return program. And Mitch, great to see the dividend now in place and now the $750 million repurchase program now in place. I went through the MD&A. It doesn't seem like you've utilized the share buyback program just yet. Is there something -- is that something that you look forward to doing sometime in 2026? Is it dependent on free cash flow coming in, dependent on kind of like Coeur Mining share price levels? And I guess, number one, to confirm that hasn't been used. And number two, will it get used sometime in 2026?

Yes. Thanks for the question. Absolutely, we look forward to enacting that enhanced repurchase program. We've been constrained with blackouts from the New Gold transaction from first quarter. Those now will lift after today. So we look forward to becoming more active here starting in the second quarter and beyond on that repurchase program.

Understood. Sorry to come back to this PPA in terms of purchase price accounting to inventory. But I'm just trying to wrap my head around it. I understand it's been marked up to market and -- but the New Afton number over $4,000 in CAS, again, Rainy River over $4,000 in CAS, that seems fairly high. So is it going to be -- as we go into Q2, Q3 and Q4, is it going to be dependent on sort of how much is being drawn out of inventory versus how much fresh or you are going to be kind of supplementing the inventory production with. That's going to be a determinant in terms of what CAS is going to look like each and every quarter. And the -- I guess, 11 days of over $4,000 an ounce CAS was just a function of it being all inventory and maybe just anomaly over 11 days.

Yes, you got it. And no need to apologize for the question. You made Tom's day.

Sure. So let's go asset by asset. So New Afton Think of that is pretty much we flushed everything out there from the opening width and finished goods through that -- those first 11 days. So that $20 million impact, which was $2,560 on the CAS and $310 on copper because it's a co-product, that should kind of be in the rearview mirror. But again, as I referenced at Rainy, it's a champagne problem. We inherited, just to give you a sense, like 30,000 ounces of gold in finished goods and door balances at the end of the quarter on acquisition and as well as I referenced a 2 million tonne stockpile. So that's well over $400 million of fair value of gold. And so as I mentioned, we're finalizing that purchase price allocation exercise here in the second quarter as we're allowed to. So $65 million of that flowed through. So there'll be a continuing impact through Q2 and Q3. And as we get a little bit more visibility on exactly how quickly we'll draw that down and through that stockpile, we'll be able to give you a little bit more guidance. But it's -- I just want to keep going back to. This is just pointy-headed accounting. It definitely impacts our earnings, but it doesn't impact free cash flow.

Great. And maybe one last question. In terms of operations. Q1, Rochester and Wharf were impacted by certain issues, maintenance sort of at Rochester and of course, the fire at Wharf -- just to confirm, it sounds like the issues are behind you. It sounds like everything is -- all the fixes have now been put in place. And so for Q2, Q3 and Q4, should we expect sort of a more normalized level in terms of tonnage, in terms of throughput at Rochester and Wharf?

Yes, I'll start, Cosmos, and then Mick, you can clean up anything that needs to be cleaned up. If you go back, Cosmos, to the guidance that we put out in February in that investor deck, we laid out the production profile by quarter, by mine. And like for Wharf, you can see the first quarter was by far the weakest and then continuing strength throughout the rest of the year. And then looking at our results here from the first quarter, you can see Wharf was actually just a little ahead of that profile that we laid out back in February. And so the team has done an amazing job there of getting back up and going. And so we feel good about that continued progression through the remaining 3 quarters of the year to land within that full year guidance range that we put out back in February. Similar story at Rochester, it was a little ahead of plan when you look at expected first quarter versus actual. When you think about some of the things going on, on the ground there from a crushing standpoint, of course, the first quarter has fewer days in it than any other quarter. There was some scheduled downtime for maintenance. There was a lot of overliner being crushed in the first quarter to go out on to the Phase 2 Stage 6 leach pad. So a few of those things were going on in the first quarter, but we expect to see things continue to build there as well through the year to land within the guidance ranges that we put out last in February. Mick, anything I failed to mention?

No, perfect. I both say building momentum throughout the year as per that quarterly breakdown in the plan. And particularly at Wharf, team did a fantastic job at that recovery curve and got really a couple of weeks ahead, and we're already right on plan for Wharf for the year. Rochester, we knew that was going to be a shorter quarter, a little bit less grade, and we see that picking up throughout the year. And yes, right on plan, so we're happy.

Congrats on getting the deal done and a strong start to 2026.

The next question is from Joseph Reagor with ROTH.

Some of them were just answered, but I did have one question, which is probably for Tom. On the balance sheet, the deferred income tax jumped from $300 million to $3.15 billion. I'm assuming that's all related to deferred income tax that New Gold had on their balance sheet previously, but is there anything we should think about there? And then with the accounting around the change in the notes, is there any impact to deferred income account -- deferred income tax accounting?

Well, I'm blushing with all the accounting questions. It was exciting. Thanks. So on the debt, a good suit observation. It's carried on the books at $425 million, but the face value is only $400 million. Again, the rules require you to estimate the fair value. And so just given that higher coupon that those notes bear at 6 versus sort of what our market rate would be, you record that a little higher value. But the bigger impact is what you talked about that deferred tax liability. So again, this is all driven by the accounting rules. So for the purchase or the mineral interest that we've acquired and all the various equipment, et cetera, et cetera, those -- that's been recorded at a very high value, obviously, as we went through our valuation exercise. But the tax basis of those assets remains at whatever New Gold's tax basis was. So that creates a difference between the accounting value and the book value. And you just take that difference in those values, multiply it by the Canadian tax rate and there you have it. So that liability is going to reverse over time, similar to what we saw out at Las as Chispas last year, where we had a large tax liability, and that's just going to reverse slowly but surely as the accounting values and the book values get closer and closer. But that will take literally 10 years to reverse out. But thanks for the question. I hope I gave you a good explanation. This isn't like additional hidden taxes in New Gold's books or anything like that. It's just driven by the accounting for the purchase price.

That was very helpful. And then just kind of big picture, you guys do have a plan of how to redeploy capital. But if you look at the balance sheet, slightly net cash as of the end of the quarter. How aggressive do you guys want to be on reducing the rest of the debt?

Yes. I think both of the notes, the New Gold notes and then our 5 and 8, pretty low interest, pretty patient, pretty flexible. As you think about allocating capital to the highest returns, those aren't going to be anywhere near the top of the list. So for now, we're fine and comfortable leaving them alone, letting cash build up a bit, getting to probably a more appropriate level of overall liquidity and then keep looking for ways to reinvest the excess cash back into the business. We talked about our largest exploration program in company history. So we're being aggressive on that front. We'll look at things like Silvertip, towards the Kay Zone out there in the future. But as far as those outstanding notes, we're comfortable leaving those alone for now at least.

The next question is from Josh Wolfson with RBC.

I guess my questions are on the New Gold assets. I know there's not a huge amount of data here to go through given the short period between closing and the end of the quarter. First question just on Rainy. Within the data that was reported, production looks relatively good. Grade was lighter relative to what, I guess, the recent tech report would have discussed. I think it was something like 1.2, 1.3 grams and the process material is only 0.9. How should we think about the quarters going forward? Or is there some change maybe on stockpile processing versus what the tech report says?

Yes. Sure, Josh. Thanks for the question. I'll start and you guys can fill in. But I think on Rainy River specifically, yes, late -- second half of last year, Rainy River had some really high-grade open pit material that drove some exceptional performance in the third quarter and the fourth quarter. Our grade profile this year reflects a lower grade open pit profile and -- but increasing over the year. And then, of course, the other big theme there is seeing the underground mining rates step up over time and transition to more of a balance in the second part of the year between open pit and underground. So as far as those open pit grades in particular, yes, a little bit lower, I think, according to plan to start the year, like you said, Josh, very small data set there with just the 11 days, but that should build a bit over the remainder of the year.

Yes. I would -- again, just I would point back to the guidance in February where we gave it by quarter. You'll see actually Rainy should have a bit stronger second quarter than third quarter and then a pretty solid fourth quarter based on the mine plan as it stands. But yes, it's going to be a very significant free cash flow generator and really excited.

And just from a tech report perspective, clearly, the tech report grades are on an annual basis, and we try and break that out into that quarterly profile to help show how we're going to perform from one quarter to the next. So certainly, from -- after we closed the deal for Q2 to Q4, we expect it to be around the grade profile that was [indiscernible]

Got it. Okay. Good to hear. And then on New Afton, with the C-zone, I guess, final drawbell lot done, how should we be thinking about the ramp-up there? Is there anything you can walk us through in terms of expectations maybe -- I know we have the production volumes, but just maybe more at a high level, just understanding execution risks and how the company is managing that?

Yes. Yes. also a back half year expected there at New Afton on the back of that C-zone ramp-up with B-zone now behind them as of the end of last year. The target there is to be approaching that 16,000 tonne per day throughput as we end the second quarter. I think we -- we started at the end of March and early April, more around 11,000 tonnes per day. So we'll be targeting that 16,000 tonnes a day here in coming months, and that will drive a much stronger back half of the year there to land within the gold and copper guidance ranges that we issued. But Mick, anything else there?

Yes. Mitch nailed it. But since the close, it's been -- it actually trended up a little bit. So it's definitely gaining momentum. We've got around that 13,000 average post close alone. So it's getting stronger, but we certainly want to get it up towards that 16,000 tonnes per day. I expect that to be in and around the end of Q2, the way it's trending at the moment.

The next question is from Brian MacArthur with Raymond James.

Can I just go back to the -- I hate to do this the accounting again. You talked about how everything at New Afton flushed, which is good. But then you made a comment, too, that you had 30,000 ounces on the books of gold as well as material on the pad at March 31. Those 30,000 ounces, is that going to be additional cash flow that you liberate out of working capital over the next few quarters, i.e., it's over and above the guidance of production that you've given this year for Rainy River, just so I'm clear on this?

I'll go ahead. No, that -- the guidance includes the monetization of the stockpile and the work in process. So no, they stick with the guidance that's in there. The key, of course, is that those ounces that come out of the inventory are going to be at the higher CAS rate, but it's not obviously going to impact the free cash flow.

Right. So you're just going to bring them out. So it's just -- there's no extra cash being liberated is what I'm really getting at here?

Correct. Yes, correct.

Perfect. Second thing, you also made a comment about with restructuring the new Gold deck, it helped your tax structures. Sorry, I didn't quite hear that clearly. Is that U.S. tax structure? Or by doing that, does that help you on your Canadian side as well?

Again, so this obliger exchange that closed on the 22nd of April. What that does is it will novate the 2032 New Gold bonds out of the Canadian entity and into the U.S. entity. So we'll get that tax shelter in the -- against our U.S. income.

Not the Canadian assets, correct? Just additional U.S. Okay. That's what I was trying to figure out.

And again, this is going to make -- it's going to make the rating agencies' lives easier because they're not going to have to rate two bonds. And most importantly, it's removed -- we've got full financial flexibility around return of capital because if not, it was going to be a little cumbersome to deal with those with those two different indentures. And so great work by our treasury team to -- and our legal team who executed that extremely swiftly, and we're really pleased to have seen such a large uptick on the amount of folks who took advantage of it.

[Operator Instructions] Next question is from Wayne Lam with TD Securities.

Just a couple of follow-up questions. First one, some really good color that you guys have provided on the overall diesel exposure. But just more specifically at Rochester, that would seem to be where you'd have the most exposure just given the scale of the mine. So just wondering what kind of cost pressures you might be seeing there, specifically on the energy front. And then just wondering if you had any more detail on the timing of planned maintenance activities on the crusher through the year?

Yes. Thanks, Wayne. I appreciate the questions. Tom and Mick I'll throw it over to you on the Rochester specific diesel question. And then maybe you can also hit Wayne's second question around maintenance timing relating to the crusher out there.

Yes. So on the diesel front, yes, we've got, of course, the biggest exposures are the open pits, so Rochester, Wharf and Rainy River. And -- but the overall impact around the total cost, and Tom can weigh in on the percentages here, but it's not too significant. We're not seeing too much from Q1 flowing through into Q2. But clearly, we're watching that very carefully. On Rochester's maintenance program, the bigger shutdown is really towards the early part of Q4 of this year, where we're going to do some work around feeders on the secondary of the crusher. After that, which is also built into the profile and the plan. So you'll see that in the quarterly profile. So that projection is accurate. The rest of them are really just short routine maintenance shutdowns, 1, 2, 3 days to change cores and other bits and pieces that are all planned and will continue each year.

And Wayne, the only thing I'd add is absolutely Rochester and Rainy River are the two assets where we spend the most money to produce all the amazing amounts of gold and silver that we're forecasting. So -- but we've got a team that are laser-focused on monitoring this robust monthly reviews, cost reviews, kind of looking out ahead, understanding when contracts are expiring to keep a really close eye on that. So I feel really comfortable that we're monitoring it as best we can. And so far, so good.

Okay. Perfect. And maybe just a follow-up on that one, sorry. You said there was maintenance planned in Q4, and that is already baked into the quarterly guidance where you have a big -- a pretty big step change in production in the last quarter of the year?

Correct.

Okay. Perfect. And then I guess my only other question was just on the labor cost front. Again, a lot of good detail on the inflation that you guys are seeing. But just wondering what kind of exposure or maybe a breakout on the labor cost pressures that you're seeing between the U.S. operations versus Mexico?

Yes. I'll start, Wayne. It's Mitch. Just that inflationary cost pressure slide that we have in the deck, Slide 12, that bottom left bar chart that shows the year-over-year increase of something like 15%. A decent amount of that is incentive comp higher year-over-year. I just wanted to flag that. As far as labor pressures in Mexico versus the U.S., I think where we're seeing it more is in the U.S. context versus Mexico. But Tom, do you want to provide any more detail or context?

Yes. I mean, general levels of turnover, we can recruit and we need to recruit. We haven't got any shortfalls in labor availability, just that general mining turnover and recruitment performance is normal. So yes, not feeling too much pressure there at the moment. And from a cost perspective, as Mitch said, we're focused on that, and we're seeing a little bit of increase in cost, but not unusual for Mexico.

And this is -- the first quarter is the quarter where you implement annual incentive -- or it's not annual incentive, base increases. And so those have happened. And typically, if you really under egg the pudding in terms of salary increases, people get their bonus and then head off the other way. So I think we're feeling really comfortable for now. And for what it's worth, we do, do a sort of a midyear review just to make sure that we're keeping an eye on labor rates because as we all know, you need the bodies to deliver all this production safely and profitably.

Good point, Tom. And Nick, on the turnover rates, we haven't seen an uptick at all. In fact, we've seen things go the other way.

Okay. Perfect. Well, hopefully, we see the same year-over-year share price performance, so you'll be paying out those incentive bonuses again next year. Congrats, guys.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Krebs for any closing remarks.

Okay. Well, thank you for your time and all the great questions today. We look forward to getting back together again this summer to talk about our second quarter results, which should really start to reflect the power of the platform, and we can share our progress on what should be a record-breaking 2026. Thanks again for your time. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.