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Actuals vs. estimates
| Metric | Actual | Consensus | Surprise |
|---|---|---|---|
| Revenues from mining operations | $3.58B | $3.51B | ▲ Beat +2.1% |
| EPS(non-GAAP diluted) | $2.61 | $2.44 | ▲ Beat +7.0% |
Highlights & what matters
- Revenues from mining operations of $3.58 billion beat the $3.51 billion estimate by 2.1%, and adjusted EPS of $2.61 beat the $2.44 expected by 7.0%.
- Full-year guidance was reaffirmed but narrowed to its ends: production at the lower end of the range and costs at the upper end, with the payout target now above 50% of free cash flow against an initial 40%.
- Production of 814,000 ounces landed at the midpoint of adjusted quarterly guidance and cash costs of $1,133 per ounce came in 1% above the top of cost guidance, with elevated diesel adding more than $30 per ounce against budget.
- The call was spent on the pipeline rather than the quarter: four projects - Detour underground, filling the Malartic mill, Hope Bay and Upper Beaver - are forecast to add 1.3-1.5 million ounces a year by the mid-2030s at roughly 25-50% returns at spot.
- The one thing that matters: management deliberately traded quarterly detail for the growth case, and the number that backs it is $1.6 billion of development capital already spent this year - the commitment is in the cash flow statement, not the slides.
Guidance & KPIs
| Item | New guidance | Prior guidance |
|---|---|---|
| FY2026 production and cost guidance | 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 | — |
| FY2026 shareholder returns as a share of free cash flow | more than 50% of free cash flow to shareholders for the full year 2026 | our initial target of 40% |
| Long-term production growth | growing production by 20%-30% over the next decade and to above 4 million ounces per year, starting in the early to mid-2030s | — |
| Four largest projects' added annual production by the mid-2030s | an additional 1.3 million to 1.5 million ounces per year | — |
| Growth project returns at current spot prices | approximately 25%-50% | — |
| Odyssey/Malartic first production via the shaft | Q2 2027, with over 70% of the construction completed | — |
Management commentary
- Al-Joundi said the plan is to grow production 20-30% over the next decade to above 4 million ounces a year starting in the early to mid-2030s, and framed this call as deliberately about that rather than the quarter.
- Porter said the growth projects are expected to generate approximately 25-50% returns at current spot prices, with gold averaging about $4,300 an ounce in the quarter.
- On the July rock movement at the Barnat pit, Girard said the remediation plan including a rock catch bench was completed on September 27, slightly ahead of plan, and mining has restarted safely.
- Kittila's mill achieved its highest monthly recovery in five years in September, which management tied to confidence in taking on the Ikkari development.
- Odyssey is on target for first production via the shaft in the second quarter of 2027 with over 70% of construction complete.
Quality of earnings
- The cost overrun is fuel, not operating slippage. Cash costs of $1,133 per ounce came 1% above the top of guidance with diesel adding more than $30 per ounce versus budget; diesel is about 11% of operating costs, below the industry average given grid power in Ontario and Quebec and a mainly underground portfolio.
- Returns are funded from cash rather than the balance sheet. Free cash flow of $852 million covered $478 million of dividends and buybacks, about 56% of free cash flow, while net cash stayed at roughly $3.4 billion after $1.6 billion of year-to-date development capital.
Gotchas & watch items
- The reaffirmation is asymmetric in a way the headline does not convey: production is now expected at the lower end of the range and costs at the upper end.
- The payout policy moved without a separate announcement: returns are now expected above 50% of free cash flow for 2026 against an initial 40% target, with year-to-date returns already at 51%.
- The capital figure is the real disclosure: $1.6 billion of development capital year to date, which the chief financial officer described as a record amount of owners' capital being invested.
- There are no 2027 or 2028 production targets yet - management declined to set them pending budgets, with guidance due in February, so the 20-30% growth frame has no near-year anchor.
Last quarter's watch items: what happened
- No watch items on file from a prior quarter - this is the first tracked quarter for this company.
Next quarter: the 2-3 things that matter
- Whether full-year production lands inside the range at its low end Baseline: 814,000 ounces in Q3 2026 and approximately 2.5 million ounces year to date, guided to the lower end of full-year guidance Confirms: Q4 production that puts the full year inside the guided range Breaks: Q4 production that leaves the year short of the range low end Check in: Q4 2026. Source: Porter remarks on year-to-date production and full-year guidance
- Diesel pass-through into fourth quarter unit costs Baseline: Cash costs of $1,133 per ounce with diesel adding more than $30 per ounce against budget; diesel about 11% of operating costs Confirms: Q4 cash costs that keep the year within the upper end of the guidance range Breaks: Cash costs above the top of guidance for a second consecutive quarter Check in: Q4 2026. Source: Porter remarks on fuel costs and cost guidance
- 2027 and 2028 production targets with the February guidance release Baseline: No 2027 or 2028 targets set; $1.6 billion of development capital spent year to date on the four growth projects Confirms: Multi-year targets consistent with the 20-30% growth frame and the 1.3-1.5 million ounce project contribution Breaks: Targets deferred again, or capital raised without a corresponding volume path Check in: Q1 2027. Source: Q&A on 2027 and 2028 targets and the February guidance release