IAMGOLD Corporation (IMG) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD Second Quarter 2026 Operating and Financial Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. At this time, I would like to turn the conference over to Graeme Jennings, Vice President, Business Development and Investor Relations for IAMGOLD. Please go ahead, Mr. Jennings.

Thank you, operator, and welcome, everyone, to our conference call this morning. Joining us on the call are Renaud Adams, President and Chief Executive Officer; Marthinus Theunissen, Chief Financial Officer; Bruno Lemelin, Chief Operating Officer; Ankit Shah, Chief Strategy Officer; and Annie Torkia Lagace, Chief Legal Officer. We are calling today from IAMGOLD's Toronto office, which is located on Treaty 13 territory on the traditional lands of many nations, including the Mississaugas of the Credit, Anishinaabe, Chippewa, Haudenosaunee, and Wendat peoples. At IAMGOLD, we believe respecting and upholding indigenous rights is founded upon relationships that foster trust, transparency and mutual respect. Please note that our remarks on this call will include forward-looking statements and refer to non-IFRS measures. We encourage you to refer to the cautionary statements and disclosures on non-IFRS measures, including the presentation and the reconciliations of these measures in our most recent MD&A, each under the heading non-GAAP financial measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and CEO, Renaud Adams.

Thank you, Graeme, and good morning, everyone. Thank you for joining us today. It was another strong and safe quarter for IAMGOLD. We produced 188,100 ounces of gold in the second quarter, bringing our year-to-date production to 371,700 ounces, positioning IAMGOLD firmly on track to meet our full year guidance of 720,000 to 820,000 ounces. Our company continues to generate strong cash flow with nearly $900 million of mine site free cash flow produced year-to-date. This allows us to invest in our assets, strengthen our balance sheet and return capital to our shareholders at the same time. Since December, we have repurchased more than $0.5 billion of IAMGOLD shares. These repurchases reflects our confidence in the company's future and our view that our shares represent compelling value. That confidence is built on the growth we have across each of our mines. Over the coming quarters, we expect updated studies at Cote, Essakane, Westwood and Nelligan. Our next phase of value creation starts at Cote. The first step is the updated mine plan and the technical report, which remains on track for the end of the year. For the first time, this plan will bring the Cote and Gosselin deposit together, building on the more than 20 million ounces of measured and indicated resources across the combined zone. The updated plan will define a near path to -- a near-term path to increase throughput towards 40,000 tonnes per day through targeted debottlenecking of the existing plant. This work is expected to be low cost and high return, supported by a larger reserve base and a longer mine life. In parallel, we are advancing trade-off studies on a larger expansion of Cote. We have adjusted the scope of this work to reflect the significant size and opportunity at Cote. We are taking the time to assess the full scale of the asset, evaluating multiple scenarios to ensure that Cote is positioned to deliver value for generation to come. At Essakane, we continue to see strong cash flow generation, which remains a key driver of our share buyback program. In the first half of the year, we plan to release an updated mine plan that is expected to outline a mine life extension to 2035. At Westwood, our Quebec underground mine continues to redefine itself as a stable cash-generative operation. Next year, we are excited to outline a path to extend mine life and increase underground throughput with the potential to transform Westwood into a larger, higher throughput, lower cost operation. And of course, at Nelligan, we are advancing one of the Canada's largest emerging gold camp toward an initial economic study next year, marking an important step in defining its long-term development potential. In summary, IAMGOLD is performing well, generating strong cash flow, returning capital to shareholders and building real growth for the years ahead. With that, let's get into the quarter. Starting with health and safety, our total recordable injury frequency rate was 0.70 for the quarter and is tracking at 0.56 year-to-date. I would like to recognize the Westwood team in particular, both continuous focus on safe operations set a strong standard. Safety come first to us, and I want to thank our teams across our operations for their ongoing commitment to safe and responsible mining. Turning to operations. IAMGOLD produced 188,100 ounces to our account in the second quarter. At Cote, attributable production was 67,300 ounces or 96,200 ounces on a 100% basis, which was made possible as the plant operated at near full capacity in June following the conveyor belt replacement and the commissioning of the second crusher. Essakane and Westwood also delivered strong quarters with grades slightly above forecast. Cash costs, including royalty, were $1,289 per ounce for the quarter and $1,244 per ounce year-to-date. For the full year, cash costs are tracking towards the upper half of our guidance range with improvement expected in the second half as Cote production increases. All-in sustaining costs, including royalty, are likewise tracking towards the upper half of the guided range. As a reminder, both Cote and Essakane has royalty structure tied directly to the gold price. With the realized gold price averaging over $4,600 per ounce year-to-date, royalties have added approximately $380 per ounce so far this year, about $55 per ounce above our guidance assumption. We continue to monitor inflation and energy market volatility closely. In the first half of the year, certain input costs increased by approximately 3%, in line with our expectations. In the second quarter, oil prices were approximately $25 to $30 per barrel above our guidance assumptions, adding about $35 per ounce above our cost guidance. With that, I will pass the call over to our CFO to walk us through our financial matters. Maarten?

Thank you, Renaud, and good morning, everyone. The combination of strong operating performance and a favorable gold price environment continued to generate significant cash flow during the quarter. Our capital allocation strategy is to deploy funds to sustain and optimize our operations, fund our expansion and mine life extension initiatives and then use remaining funds for strategic opportunities and shareholder returns. Net cash from operating activities totaled $445.1 million during the quarter, an increase of $359.3 million when compared to the $85.8 million of cash from operating activities in Q2 2025. We used the operating cash flow to fund $115.6 million of capital expenditures the full repayment of the remaining $100 million outstanding on the credit facility, $74 million paid to the government of Burkina Faso related to the Essakane dividend distribution and $147.9 million of shares repurchases under our share buyback program. As Renaud noted, since we initiated the share buyback in December, IAMGOLD has repurchased approximately 28 million shares for $510.4 million, which equates to approximately 45% of our mine site free cash flow returned to shareholders, a clear signal of our confidence in the value of our shares. In June, we further enhanced our financial flexibility by amending the credit facility, increasing total capacity from $650 million to $850 million, extending the maturity to 2030, improving covenant terms and lowering overall borrowing costs. The amended facility also includes a further $250 million accordion feature, providing additional liquidity potential. As a result, we ended the quarter with $501.4 million in cash and cash equivalents, no amounts drawn on the revolving facility and total available liquidity of approximately $1.35 billion. Revenues for the second quarter was $856.9 million on sales of 195,100 ounces at an average realized gold price of $4,384 per ounce. This was slightly below the quarter average as production was weighted towards the back end of the quarter. Adjusted EBITDA in the second quarter was $507.1 million and adjusted net earnings attributable to equity holders of $241.6 million or $0.42 per share compared with $77.3 million and $0.13 per share in the prior period. On a trailing 12-month basis, adjusted EBITDA has increased to approximately $2.2 billion. Cash flow from operating activities, excluding working capital adjustments, was $442 million in the quarter, an increase of $315.6 million year-over-year. Mine site free cash flow was $368.9 million in the second quarter, a $228.4 million or 169% increase compared to Q2 2025. Year-to-date mine site free cash flow was $893.5 million, a $613.5 million or 29% increase compared to the same period in 2025. Taken together, these results reflect the fundamental transformation of the company's financial position. Just over a year ago, IAMGOLD carried more than $800 million of net debt. As of June 30, 2026, the company is in a net cash position with an undrawn and increasing revolving facility and the balance sheet capacity to fund growth and return capital to shareholders concurrently. And with that, I will pass the call to Bruno Lemelin, our Chief Operations Officer, to discuss our operating results and outlook. Bruno?

Thank you, Maarten. Starting with Cote Gold. Cote produced 96,200 ounces on a 100% basis in the quarter, bringing the year-to-date production to 170,900 ounces. Strong production is expected in the second half, putting Cote well on track to meet the production guidance of 309,000 to 440,000 ounces this year. The story of the quarter is really the story of June when the plant operated at near full capacity following the conveyor belt replacement in May and the commissioning of the second cone crusher earlier in the year. On the mining side, we moved 11.7 million tonnes of total material with 3.1 million tonnes of ore at a strip ratio of 2.8:1. Grade mine averaged 0.86 gram per tonne, both the strip ratio and the grade reflects where we are in the mine plan. We worked on pushback areas and focus on opening up a new bench to set up the second half of the year. In the plant, we milled 2.9 million tonnes. We managed throughput early in the quarter ahead of the CV10 conveyor replacement in late May. Once the new heavier gauge belt was installed, we ramped the plant back to nameplate and processed over 1 million tonnes in the month of June alone. Head grade averaged 1.12 gram per tonne at recoveries of 93%. And I would note that reconciliation between our reserve model and mill feed continues to sit well within expected tolerances. The most significant operational milestone in the quarter was discontinuing external contractor crushing by the end of June. We are already seeing the benefits as the processing cost in June averaged $17.72 per tonne, down from an average of $22.5 per tonne over the prior 3 quarters. We have seen additional operating improvement. First, with better sized material now feeding the HPGR. We are seeing improved wear rates on the rollers. A longer HPGR lifespan should translate into lower maintenance costs and better crushing circuit ability going forward. Second, the mining fleet that had been dedicated to rehandling material for the contract crusher is now being redeployed on 2 mining activities. Combined with 3 new haul trucks coming into service, we expect mining rates to step up in the second half. Looking forward, we anticipate the plant averaging nameplate of 36,000 tonnes per day over the course of the year and head grades between 105 and 115 gram per tonne. Production is weighted to the second half on both higher throughput and higher grades. Turning to costs. Cote reported second quarter cash costs, excluding royalties of $1,245 per ounce and all-in sustaining cost of $2,082 per ounce. Costs remain elevated on external contractor crushing, contractor support for the conveyor repair and scheduled maintenance, compounded by higher diesel prices. On a unit basis, mining costs averaged $4.49 per tonne mined and milling costs $20.85 per tonne milled in the quarter. Both remain above where we intend to operate and the path to improvement is clear. On mining, the contractor crusher required significant rehandling and tied up haul truck utilization. With the contractor phased out and 3 new haul trucks coming into service, that capacity returns to the pit. On mining, June's cost of $17.72 per tonne gives us a real-world data point for what the circuit delivers without contracted crushing. We are targeting mining costs of $4 per tonne and mining cost of $15 per tonne by year-end with further reductions expected into 2027. On capital, we invested $54.6 million at Cote in the quarter on attributable basis capital expenditures are to be weighted to the second half on equipment delivery timing and project schedule. Putting that together for the year, we expect cash costs, excluding royalties at Cote, near the top end of our $900 to $1,050 per ounce guidance range and AISC, excluding royalties at the top end of the $1,475 to $1,625 range. Cote carries a 7.5% gross margin royalties and various net smelter return royalties, which accounted for $309 per ounce in our cash costs or 20% of cash costs. Costs are expected to improve through the second half on higher production volumes, the removal of contracted crushing, improved maintenance cycles and greater efficiencies as the pit opens up. With a clear path to higher production and lower cost, attention now turns to the next phase for Cote. On June 1, we announced an updated mineral resource estimate that, for the first time, combined the Cote and Gosselin zones together into a single block model. On a 100% basis, measured and indicated resources increased to 20.3 million ounces with 3.5 million ounces of inferred. This larger resource base will support our updated technical report and life of mine plan, which we expect to release towards the end of the year. The plan is expected to show a significant increase in both reserves and mine life. It will also set out a near-term path to raise processing capacity beyond the current nameplate of 36,000 tonnes per day towards a sustained rate of about 40,000 tonnes per day. That first step comes from further debottlenecking and targeted plant improvement, not from a major new build. It includes accelerating certain works such as an additional Verde mill. In parallel, we are evaluating longer-term expansion scenarios beyond 40,000 tonnes per day through technical infrastructure and permitting studies. Our objective is to determine the right scale and the right development path for Cote. For a project of this size, scope and importance, it is critical we determine the optimal long-term expansion strategy. The additional nonrecurring sustaining and expansion capital we are investing to date supports that work. The plant improvements provide improved ability and capacity. The Phase 2 pit pushback gives us operating flexibility in the near term, and it also prepares the ground for a larger operation. We are reducing the risk of the bigger build well before we commit to it. We also continue to grow the resource. At Cote and Gosselin, we are drilling over 30,000 meters to test the extensions to the Northeast to improve confidence in the resource and to convert inferred ounces into the indicated. Turning to Westwood. The operation delivered another strong quarter, producing 32,400 ounces, supported by solid underground performance. Year-to-date, Westwood has produced 68,600 ounces, positioning well on track with our guidance target of 110,000 to 130,000 ounces. Underground mining totaled 104,000 tonnes at an average grade of 8.4 grams per tonne with the guaranteed open pit contributed 109,000 tonnes of ore as waste stripping continued to position the pit for future production. Mill throughput was 287,000 tonnes at a blended grade of 3.75 grams per tonne and recoveries of 94%. Throughput was lower than the prior year due to a planned mill shutdown early in the quarter, but overall operating performance remained strong. Most importantly, Westwood generated $56.5 million of mine site free cash flow during the quarter and $166.5 million year-to-date. The operation continues to demonstrate the value of the technical and operational changes implemented over the past years, delivering safe and reliable production, strong margins and meaningful cash flow generation. Turning to cost and outlook. Westwood continues to perform well across both operational and financial metrics. Cash costs were $1,606 per ounce in the quarter and all-in sustaining costs were $2,163 per ounce. Year-to-date, AISC is averaging $1,921 per ounce which is tracking below our full year guidance range. While we have seen modest cost increases related to additional drilling activity and higher explosive costs, overall cost performance remains strong. Looking ahead, our focus is on unlocking the next phase of value at Westwood. This year, we are investing around $30 million of expansion capital to advance exploration and development activities in the eastern extension of the mine, where drilling continues to demonstrate encouraging results, including a thickening of the mineralized system. Our teams are now advancing underground development into this area and conducting bulk testing to better understand its long-term potential. We expect to publish an updated technical report in the second half of 2027. This work is expected to support an extension of mine life and evaluate the potential for more productive bulk mining methods within the Eastern zone. If successful, this could support higher underground throughput, improve mining costs and increase production over time. Turning to Essakane. The operation delivered another strong quarter, producing 88,400 attributable ounces, an increase of 15% over the prior year period. Year-to-date, Essakane has produced 183,500 ounces, putting the mine well on track with our guidance targets. Performance in the quarter continued to benefit from positive grade reconciliation as mining progressed deeper into Phase 7, consistent with what we have observed in previous phases of the deposit. Mining activities totaled 12 million tonnes during the quarter, including 2.5 million tonnes of ore, while waste stripping remained elevated as we continue to advance the adjacent Lao pit. Despite the higher stripping requirements, the operation delivered solid throughput of 3.2 million tonnes with head grades of 1.13 grams per tonne and recoveries of 88%. Most importantly, Essakane continues to generate substantial cash flows. Mine site free cash flows totaled $162.1 million during the quarter and $464.8 million year-to-date, even after a $60.2 million tax payment. Over the last 12 months, Essakane has generated more than $800 million of mine site free cash flow, highlighting the strength of the asset in the current gold price environment. As we look into the second half of the year, mining will remain focused on Phase 7 and the development of the Lao pit. While grades are expected to normalize as additional Lao ore enters the mine plan, the operation remains well positioned to achieve annual production guidance and continue generating significant free cash flow. Turning to costs. Essakane delivered a strong quarter. Cash costs, excluding royalties, were $1,214 per ounce, a reduction of 22% from the prior year period and all-in sustaining costs, excluding royalties, were $1,691 per ounce. The improvement was driven largely by unit cost performance in the pit, where open pit mining costs fell to $4.79 per operating tonne from $6.02 a year ago as 3D gain in the initial saprolite benches of the Lao pit reduced both explosives and energy consumption. Milling costs also improved to $18.88 per tonne as the liner replacement was completed in the first quarter this year rather than the second. Royalties accounted for $510 per ounce, representing approximately 30% of cash costs and an increase of $220 per ounce over the prior year period. This reflects both the higher gold price and the current royalty regime in which our average royalty rate in the quarter was 12% against 9% a year ago. Looking beyond 2026, we intend to publish an updated technical report in the first half of 2027, which is expected to demonstrate the potential to extend Essakane's mine life through 2035, supported by additional phases in the Essakane pit and the adjacent open pits. With that, I will pass it back to Renaud. Renaud?

Thank you, Bruno, and congrats to you and your teams on strong and safe operational results. Turning to growth. Beyond our 3 operating mines, the Nelligan mining complex in Quebec is where we see the next chapter of this company. Nelligan now holds 4.3 million ounces of indicated and 7.5 million ounces of inferred mineral resources. The consolidations completed last December gives us 100% ownership of one of the largest preproduction gold camps in Canada on a single contiguous land package. Our focus this year is on drilling. We have budgeted approximately $24 million across the complex in 2026 with programs at Nelligan, Philibert and Monster Lake. Roughly 45,000 meters of close to 70,000 meters are complete, and we expanded the Nelligan program during the quarter from 18,000 to 24,000 meters on the strength of results to date. Mineralization remains open along strike and at depth, and we expect to release drill results later this year. What makes this district compelling is not any single deposit, but the relationship between them. All of the primary deposit sits within 17 kilometers radius, which supports the conceptual vision of a central processing facility fed from multiple ore sources. That is the concept our teams are working to define. We expect to publish an inaugural technical report for the complex in the first half of 2027, which will bring this deposit together into a single development concept for the first time. Nelligan has the potential to become one of the premier development projects in Canada. And with the deposit still open, our focus remains on growing the resource and defining the full scale of the district. Before we open the line for questions, a few closing thoughts. This was another quarter of safe, consistent execution. We remain on track for guidance. We have generated nearly $900 million of mine site free cash flow year-to-date, and we ended the quarter in a net cash position with nearly $1.4 billion of liquidity while returning over $0.5 billion to shareholders since last December. Looking ahead, we have work underway across every asset. At Cote, an updated technical report later this year, integrating Cote and Gosselin for the first time with a much larger reserve base, a longer mine life and a near path to approximately 40,000 tonnes per day. The consolidated resource point to a larger operations over time, and we'll continue to advance that work. At Essakane, an updated mine plan in the first half of 2027, evaluating a mine life extension through 2035. At Westwood, mine life extension and underground expansion study in the second half of 2027. And at Nelligan, our inaugural technical report in the middle of next year. Each is about the same objective, understanding the full scale of what we hold and doing it from a position of financial strength. Thank you for your continued support. Operator, you can now open the line for questions.

[Operator Instructions] The first question comes from Sathish Kasinathan with Bank of America Securities.

My first question is on the Cote expansion study. Could you maybe provide a bit more color on what changed over the past 3 months that drove the shift to a more phased approach? Are you now leaning towards a much larger expansion, maybe doubling the capacity to 70,000 to 80,000 tonnes per day? Or did you come across some technical findings that require more time to complete the studies?

Okay. So thanks for your questions, and happy to provide more questions. And Bruno, you can add to it. Not to read between beyond more than, call it, disciplined and diligent capital allocation at this stage. It became obvious over the last few months as we advance and continue to look at the opportunity that this large resource base at Cote and Gosselin provide for potentially multiple different scenarios. And quite frankly, when you're looking at the next 3 years, we'll be pretty much executing on the same. It doesn't really matter of the scenario. The next 3 years are a lot around focusing on the improvement on reducing our cost, or hitting our 36,000 on a very sustaining basis and then slowly ramping up to 40,000. We're going to continue -- we're not going to waste our time line, obviously, we're going to continue with our baselines. We're going to work on migrations thus all what is required to potentially. But as you mentioned, it's not so much about the -- is it like a 50,000, 60,000, 70,000 more than we just don't want to limit ourselves on the multiple and take just more time to really assess different scenario. So if you remember back in 2022, the company released the 43-101, the 36,000 moving towards 42,000 from which now we're sitting at about $7 million of reserves. So the opportunity here is to update this with the new projections from 36,000 to roughly 40,000. We could potentially do a little more, but -- and update our cost and so forth and just continue to assess and just pick what we think is the best. This is one of the top resource base in Canada. It's not about rushing the outcome of this, but really take the time for proper and discipline in that. There is no technical challenges beyond. It's just multiple opportunities. We have mentioned recently, of course, up to very recently, the opportunity to go up to 50,000, and we were challenging ourselves, do we do the dry right away at a higher throughput. So clearly, there is opportunities at Cote that deserve a little more of disciplined look at and come out down the road with what is the best. So again, nothing to be worried about. Definitely no technical challenges, more than disciplined and diligent approach. Bruno, happy if you want to give anything.

Yes. So the main objective of this technical report is also to valorize confirm the reserve on Gosselin side. So you will see a large expansion on the reserve side coming from that report.

And quite frankly, as Bruno mentioned, there's very low to mill differences. We will capture the massive increase of the reserve base. In the short term, the 40,000, 50,000 and so forth, this is not what drives the value more than the extension of the life of mine and the massive expansion of the extension of the reserve base and so forth and work diligently to hit the 36,000 consistently and up to 40,000, lowering our costs, open the pit. So again, pretty much the same execution over the next 2 years. We'll use the time for environmental baseline and advance, whatever. There is some permitting that could advance as well, water and so forth. So we'll be more specific in the report, and we'll be capable to provide the next 3 years for this. And again, depending on the expansion down the road, it doesn't really change the next 3 years.

Okay. Looking forward for the update in fourth quarter. Maybe my second question is on the -- on your capital allocation priorities. Great to see continued strong buybacks. With the company now in a net cash position and generating strong free cash flow, what is your latest thinking on buying back the 50% Cote royalty from Franco-Nevada and on the initiation of dividends? And where does M&A fit into this priority list?

Maarten, please go ahead.

Sathish, we continue to look at buyback opportunity of that royalty at Franco, and there's many reasons why it would make sense for us. The price would be the same as the price that was set a year ago in a much lower gold price environment, and there's many other impacts, including reducing the cost structure and burden on Cote. So we continue looking at that. In the future, we can fund that with internally generated cash flow, and we have until April of next year to make that decision. So we are very -- looking at that very closely. The price doesn't change. So there's no real reason for us to do it earlier than when it makes economic sense to do so. On the dividend, we continue to look at this year as a good year to buy back shares, and we'll continue using the Essakane cash flows to fund that buyback. And then beginning of next year, as we are in that net cash position, as you mentioned, it would start making sense for us. So we are looking at that dividend starting early next year.

Any thoughts on M&A?

I don't think so. We'll comment on M&A at this stage. We remain very focused and continue to create value for our shareholders.

The next question comes from Mohamed Sidibe with National Bank.

Congrats on the strong operating quarter there. Maybe just a follow-up on the expansion to the 40,000 tonnes per day there. So if I recall correctly, the prior target expansion to 50,000 tonnes per day also was understood to have a doubling of the dry line, a third Verde mill and increased by or capacity. So for this debottlenecking to 40,000 tonnes per day, can you provide us with a little bit more color on how we should think about capital for that optimization versus the previously, call it, maybe $500 million and change that was envisioned for the 50,000 tonne per day case.

Well, essentially, as I said, the next -- the most important thing is the next 3 years is pretty much the same scenario. So if you remove like the expansion and you're looking at optimizations, we have discussed at large -- this year, we're spending around $80 million, $85 million in growth capital to open the pit, prepare the pits for larger volume and so forth. So we're advancing well. And you could expect this spending to continue in '27, '28. And at that point, we hope that the pit will be fully opened and well, not fully open to the full, but provide for larger volume mining and more efficiencies. We're also spending more sustaining capital this year to improve in some aspects, and I expect that to continue as well as we want to install the repeat system in the fines and the course and proper continuum of operations. This is a huge ticket item. We'll improve some infrastructure as well as we continue to expand the mine fleet. So there would be some needs for our maintenance facilities as well, improvement and so forth. And the next 3 years is really about positioning the sites to be a very strong low-cost long-term asset. This is the focus. So not much of a difference to what we have. We have already discussed in the past of the next 3 years. And the only thing is we have mentioned that the 50,000 starting maybe 29,000, 30,000 could be in the range of the $500 million to $750 million of capital. This was really to bring it from 40,000 towards 50,000. And this is what we're parking for the time being until we have a better view of what is the optimum scenario. But expect the execution pretty much on the sustaining capital optimization, improvement of infrastructure and operational equipment around the crushing to continue and the growth path to -- on the mining side to continue. So no change there. The only difference so far is about the $500 million to $700 million of extra capital expansion that we're for the time being.

That's very helpful. And then maybe if I can move on to Cote into the quarter. Great to see the process cost improvement in June. And I think mining costs were also lower quarter. So how should we think about mining and processing costs? Specifically, I think you pointed to about $18 per tonne realized in June on the process cost front. But how can we think about that improvement into Q3 and Q4 at the asset and into 2027 towards kind of your target of $415 million there?

This is Bruno. First, we have a program that is tracking those costs, and we have like close to 31 in meeting and tracking those costs and trying to get them down. But I will say that the reduction or the elimination of the contracted crushing is going to help because now the fleet, like I mentioned, is going to be fully dedicated to exit mining. So that will increase the volume of mining. So just on a volume basis, that will increase -- that will help decreasing your unit costs. Also, we are adding new units in the fleet. And after that, our continuous improvement program has identified, like I mentioned, 31 incentives that we're tracking. And we're very, very confident and we're feeling strong that we're going to be able to meet our $4 targets on the mining side by year-end. Same thing is happening with processing. What happens is we have -- the second cone crusher is helping to have the best granulometry entering the HPGR. So the size that goes -- the top end that goes to the HPGR is as per spec, we expect longer life from our rollers or tires at the HPGR. So in the past, we used to change them twice a year. Now we expect to change them once a year. So that's going to have a big impact on our -- positive impact on our maintenance cost and also availability because you don't stop the HPGR for nothing. So increased availability, improved granulometry like better efficiency in your maintenance cycle. We have also identified a numerous amount of incentives from our cost improvement program. And we are very well positioned to be meeting our $15 per tonne target by year-end.

Great. And then if I may, a final question for Maarten. Just on the income tax payment for the remaining second half of the year. How should we think about that spread for the remaining about $100 million and $115 million there?

So for the income taxes, we made a larger payment in Q2 in Burkina, and that's normally what happens. It's your catch-up payment every year because we do pay quarterly payments. And then the future payment is based on what you expect it to be. So the income tax payments for the remaining of the year is between $35 million to $40 million per quarter. And then we also will be paying the withholding tax on the new declared dividend in Burkina Faso of $26.8 million in the third quarter. So we are still kind of like falling in that range of $205 million to $250 million for the year.

The next question comes from Anita Soni with CIBC.

Congrats on a strong operational quarter. I think a lot of the questions have been asked and answered. I just wanted to -- I guess, with Bruno talking about the mining rates, I was going to ask about the stripping. How should we think about that to the back half of the year because I think the beginning of the year was a little lighter on the stripping side than I had expected. This is at Cote.

Yes. The stripping ratio should be around, I'd say, about 2.6 tonnes to 1.

And that's in the back half of the year. Okay. Any change to the grade in the back half of the year? I know you guided to 1.05 to 1.15. But any variability like in terms of like lower than higher or higher than lower in Q3 versus Q4?

That's correct. So we expect stronger head grades or grade mine in the second half of the year, like I mentioned, like ranging between 1.05 to 1.15 gram per tonne, so which will help having a stronger H2.

Okay. And then just in terms of going back to the study, could you just clarify for me like in simple terms, what we should expect to see in the study? So a path to 40,000 tonne per day with the CapEx associated with that? And then longer term, what would you be including in that -- in the study that you'll release in Q4? Or I guess, is it in Q4 with Q4 results?

Yes. We expect to release the results of the report at the end of this year that will indicate how we can valorize the Gosselin reserve. Like I mentioned, the main objective of this report is to understand how many reserves we have from Gosselin. So we expect a large expansion in our reserve base when you tie the Cote and Gosselin block model altogether, it's called the super pit concept. So that's objective one at a 40,000 tonne per day cadence and it's adjusted cost structure. So this is basically what we need to be expecting. But also in that technical report, there's a section on future opportunities, and that's where we're going to also indicate what we see in the future in terms of potential expansion.

If I could just add one thing, Anita. So the way to really looking at is, let's say, at the 36,000 to up to 40,000, I think it's fair to say that you maximize the depletions of Cote before you have the obligation to cross and start mining the Gosselin. So you maximize potentially in pit co-disposal and so forth as we have largely discussed. As you advance the throughput towards the 50,000 and eventually beyond the 50,000 comes the obligations to start Gosselin a little quicker to a point that a scenario like a 70,000, basically, you would be mining as soon as possible both pits. So that's really where it's being played. So that capital allocations versus benefits, and we want to do like the proper -- continue to work hard on the trade-offs and so forth. And again, as I mentioned, focusing on the next 2, 3 years on optimizations, which basically is the same. But as we advance in time, the game is there. The game is about balancing capital allocations versus how fast and quicker you want to build, you want to mine Gosselin and what does that play in the capital allocation. So this is really how we trade.

Okay. So that was going to be my next question. With respect to the tailings capacity under the 40,000 tonne per day scenario, is that -- is the capacity you have sufficient to what you would expect the 40,000 tonne per day scenario and the reserves that you would incorporate with this study at year-end? Or would you have to do some additional funding?

Yes. So that will require like right now, the TSF or the TMF has a capacity up to 233 million tonnes. So of course, by just including Gosselin, you will need additional tailings capacity. That's what the project team is currently looking, adding more capacity, but also looking at other options like disposal, like Renaud mentioned. So those are the kind of trade-offs that are going to be published in the technical report at the end of --of the 2.

As a rule of thumb, there is maybe somewhat around the 200 million tonnes of tailings that is like where do they go. But yes, there wouldn't be any issues to find the space for. But as you increase the throughput of the mining, as you reduce your change of co-deposal, but you would just build extra capacity larger, but it's all fit.