Operating revenues of $510.4 million missed the $551.0 million estimate by 7.4%, and diluted EPS of $0.39 missed the $0.43 estimate.
The miss is volume: gold sold fell to 118,361 ounces from 136,473 as Young-Davidson production dropped 40% to 22,700 ounces, while the realized price rose 27% to $4,258 per ounce.
Full-year guidance, revised in July, was held at 510,000 to 560,000 ounces and AISC of $1,775 to $1,875 per ounce, with Q4 production guided to 140,000 to 160,000 ounces after Q3 AISC of $1,956.
The growth timeline slipped: Phase 3+ Shaft commissioning moves about one quarter to mid-2027, project capital is now expected about 5% above the $835 million budget, and slower PDA development will cut second-half 2027 output; the roughly one million ounce 2030 target was kept.
The one thing that matters: Q3 was the guided trough, but every growth lever now lands later. The Q4 guide puts the year at 513,500 to 533,500 ounces, the lower half of the range, and the shaft, PDA and Young-Davidson delays all push the cost step-down into the second half of 2027.
Key metrics
Metric
Reported
Prior year
Change
Gold production (ounces)
119,000
141,700
—
Average realized gold price
$4,258
$3,359
+27%
All-in sustaining costs per ounce
$1,956
$1,375
—
Free cash flow
$75.6
$130.3
—
Young-Davidson gold production (ounces)
22,700
37,900
-40%
Island Gold District gold production (ounces)
68,700
66,800
+3%
Guidance changes
Item
New guidance
Prior guidance
Q4 2026 gold production
between 140,000 and 160,000 ounces
—
2026 gold production (000's ounces)
510 - 560
—
2026 all-in sustaining costs ($ per ounce)
$1,775 - $1,875
—
Phase 3+ Shaft commissioning
mid-2027
—
Phase 3+ Shaft Expansion total project capital
approximately 5% higher than the $835 million budgeted
$835 million
Quality of earnings
Cash backs the earnings. Operating cash flow of $216.3 million ran ahead of net earnings of $165.6 million, and the $18.4 million gap to adjusted net earnings of $184.0 million is hedge losses and FX in deferred tax, both non-operating.
Free cash flow is defined generously. The $75.6 million figure adds back $86.2 million spent retiring legacy Argonaut hedges; operating cash flow less $226.9 million of capital spending was negative.
Unit costs rose on mine performance, not one-offs. Total cash costs climbed to $1,375 per ounce from $973 and AISC to $1,956 from $1,375, driven by lower grades, lower Young-Davidson mining rates and inflation.
Gotchas & watch items
Mulatos production is borrowing from past stacking: La Yaqui Grande recovery ran 143% on recovery of ounces stacked in prior periods, while tonnes stacked fell to 539,283 from 1,011,191.
Island Gold's record output masked weak grade: underground grades mined were 8.69 g/t Au versus 12.05 a year ago and below guidance on stope dilution, and Q4 relies on grades near the top of the 11.5 g/t range.
Young-Davidson is now the high-cost asset: mine-site AISC of $2,764 per ounce versus $1,476 a year ago, with an updated mine plan not due until early 2027.
Liquidity is better than the quarter-end cash shows: $160 million from the Turkish project sale arrived on October 9, after the $597.4 million September 30 balance, with a final $150 million due October 2027.