Thank you for standing by. This is the conference operator. Welcome to the TORX Resources Inc. 3rd Quarter 2026 Results Conference Call and Webcast. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. Should you need assistance during the conference call, you may reach an operator by pressing star, then zero. I would now like to turn the conference over to Sean Silvera, Senior Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, operator. And good morning, everyone. On behalf of the Torex team, welcome to our Q3 2026 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found under the invested section of our website at www.torex.com. Moving to page one, I would also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on page one of today's presentation as well as those included in the Q3 2026 MD&A. On the call today, we have Andrew Snowden, President and CEO, and Dan Rollins, CFO. Following the presentation, we will be available for the question and answer period. This conference call is being webcast and will be available for replay on our website. at www.torex.com. Last night's press release and the accompanying financial statements and MD&A are posted on our website and have been filed on CDAR+. Also note that all amounts mentioned in this call are U.S. dollars unless otherwise stated. I will now turn the call over to Andrew.

Okay, thank you, Sean, and good morning, everyone. On our last call, we talked about the step up in production that we expected in the second half of the year as we moved into higher grade areas at MediaLuna. And our third quarter delivered on that plan as shown on slide four. Production increased about 37% quarter over quarter to 132,000 ounces. And all in sustaining costs declined 27% quarter over quarter to just over $1,800 an ounce. That translated into $150 million of free cash flow for the quarter allowing for the return of $95 million to shareholders while also increasing our cash balance to $226 million. And Dan will walk through those results shortly. Turning to slide five, we remain very much on track to achieve our annual production guidance of 420 to 470,000 ounces for the year. We expect fourth quarter operating performance to continue to be strong, positioning us for a solid finish to the year. Through the first nine months, we produced approximately 329,000 ounces, representing 74% of the midpoint of our full-year production guidance. Driven by a strong Q3, year-to-day all-in sustaining costs now sit at $2,025 per ounce within our full-year guided range of $2,000 to $2,100. Our priority is to sustain the operating performance that supported that strong cost improvement this quarter into Q4 and 2027. Capital expenditures, excluding working capital, totaled $79 million during the quarter, compromising $38 million of sustaining capital, which includes leases, and $41 million of non-sustaining investments. The latter was primarily directed towards Middle and North development and drilling. Year-to-date capital expenditures were just over $200 million against unchanged four-year guidance of $300 to $320 million. Turning to slide six, both miners continued to perform above their target rates in the quarter. MediaLuna averaged approximately 8,200 tons per day, which is about 10% above design, while ELG Underground sustained more than 3,000 tons per day against its 2,800-ton target. The key improvement in this quarter was driven by planned mine sequencing as we moved into higher grade stoves. Across the Morelis complex, the average mine grade rose to about 4.6 grams per ton, gold equivalent, up from 3.7 in Q2. At the paste plant, installation of backup paste and slurry pumps will improve availability going forward, supporting backfilling needed to maintain flexibility in our mining sequence. This, coupled with our GeoMet model, also provides better visibility into the characteristics of upcoming stoaks, helping us make more informed sequencing decisions. Turning to processing on slide seven, throughput was steady in the quarter at 10,800 tons per day. Higher feed grades and improved gold recovery drove the increase in production. During the quarter, average process grades were about 4.6 grams per ton gold equivalent, up from 3.5 in Q2, while gold recovery is also improved by about 2.8 percentage points to 88%. Copper recoveries remain strong around 95%. Gold recovery continues to improve towards the 89% technical report benchmark. And as we discussed last quarter, gold recovery will vary based on all mineralogy. This quarter, we benefited from processing some higher grade material, which also had better gold recovery characteristics. Alongside flowsheet refinements, the GEOMET model is helping us better anticipate how different ore types will respond in the plant, including their expected recovery and reagent requirements. Our focus now is on using that improved understanding of the ore to manage variability, improve recovery consistency, and control reagent consumption. Putting next to slide eight and with a bit of a project update here, immediately in the north, first ore there remains on track for late this year. Following the ventilation added and haulage breakthroughs discussed last quarter, work advanced on ventilation, paste distribution, and electrical infrastructure. The remaining work includes completing those systems, receiving and installing remaining equipment, and continuing mine development, Initial production equipment has arrived and workforce hiring and training is also underway. As the mine ramps up, MediaLuna North will give us a third mining front, improving ore supply and sequencing flexibility. For 2027, we expect approximately 1,000 tons per day on average, with further ramp up towards the 2,300 ton per day design capacity in subsequent years. And at Los Reyes, drilling and field investigations are supporting the pre-feasibility study targeted for delivery in late 2027. We now have six active drill rigs and close to 100 people on site, completing close to 6,000 meters of drilling during Q3. The immediate focus is on the resource model, geotech work, and the information needed for engineering in 2027. and that work will also help us evaluate opportunities to enhance Los Reyes project economics and prepare robust permit applications. The commencement of mining at MediaLuna North will also add a third mining front, increasing operational flexibility and supporting the phased ramp up in total mine rates. And as such, Morelos will transition from being mine constrained, which we've been through 2025 and 2026, are now becoming plant-constrained, which for me is a much more comfortable place to be. Knowing this was ahead of us created the opportunity for us to assess two options to now increase throughput at our plant. Slide 9 sets out these two opportunities, the first of which is focused on debottlenecking existing infrastructure. We've recently completed studies that support an increase in plant capacity to approximately 12,000 tons per day at a very low capital intensity of about $5 million at the plant. Execution of this de-bottlenecking is expected to begin in Q1 of 2027, with the benefits of de-bottlenecking expected to be seen by the end of the year. The second opportunity is a larger plant expansion, which involves adding flotation capacity and supporting equipment to increase total capacity to 14,500 tons per day. which would match the installed capacity of the existing grinding circuit. The current capital estimate for that expansion would be about $100 million. To first allow the benefits of the debottlenecking to be realized and additional resource drilling at the San Miguel corridor to be advanced, we're targeting to be decisional there in Q1 of 2028. This will give us confidence in sustainable ore supply before committing the capital for that expansion. And together, those two projects represent a potential 35% growth in processing capacity, which would translate to approximately 50,000 of additional ounces annually from the debottlenecking and a further approximate 100,000 ounces a year from the larger expansion. Those estimates, of course, depend on achieved throughput, grade recovery, and feed availability. And this opportunity links directly to the exploration work we are undertaking, which is summarized on slide 10. The results of San Miguel to date continues to support the potential for an at least four kilometer mineralized corridor extending westward from MediaLuna towards MediaLuna West. What's particularly exciting is how our geological understanding here is evolving, including the possibility that the San Miguel Fault represents a feeder source to the larger MediaLuna system. Based on the scale of the corridor and the results we've seen so far, we believe San Miguel has a multi-million ounce gold equivalent potential. The indicative gold equivalent grades returned to date do average higher than the MediaLuna reserve grade. The corridor's proximity to existing underground infrastructure could allow us to access mineralization through additional drift development, potentially providing higher grade mill feed while leveraging the investments already made at Morelos. Drilling through 2027 will help us establish the scale and continuity of mineralization and inform the larger plant expansion decision. The intent here is to look to announce a maiden resource in Q1 of 2028 for that San Miguel corridor. At EELG Underground and the MediaLuna cluster, our programs also continue to target reserve replacement and resource growth with the year-end update expected in March 2027. And with that, Dan, I'll turn it over to you for the financial results.

Thanks, Andrew. Starting on slide 12, the strong operational performance led to robust financial results with adjusted EBITDA increasing to $344 million from $204 million in Q2, and free cash flow increasing to $150 million from $94 million over the same period. All-in sustaining costs came in at $1,803 per ounce, a 27% improvement over Q2. As a result, all-in sustaining margins increased to 58% from 46%. The improvement over the previous quarter was a result of higher mined and processed grapes as well as Improved Gold Recovery. Cyanide consumption was moderately lower than the prior quarter and remained above budgeted levels to support improved gold recoveries in the leach circuit. We expect cyanide consumption to remain at current levels through next year. Managing cyanide consumption remains a key priority for our team at site. Heading into 2027, We expect pricing pressures related to consumables to persist given the impact of the Iran conflict on energy and ammonia prices, which has a direct impact on input costs to produce key consumables such as cyanide, SMBS, and explosives. In addition, we expect sustaining capex to increase next year given the startup of MediaLuna North, as well as additional leases, including new equipment to support the displacement of an underground mining contractor at ELG Underground and adding new gear to support the ramp up of Media Luna North. In addition, we will accelerate other sustaining projects to support the increased throughput rates associated with the debottlenecking project Andrew spoke to earlier. As such, we expect all unsustaining costs in 27 to be relatively consistent with the level guided in 2026. As illustrated on slide 13, after returning 95 million to shareholders, our cash balance increased by 57 million to 226 million. Cash flow from operations before changes in non-cash working capital was 298 million, which included 54 million of income taxes paid. For Q4, tax payments are expected to be between 55 and 60 million. Accounting for changes in non-cash working capital, cash flow from operations was 231 million. Net of capex, free cash flow was 150 million, bringing the year-to-date total to 402 million. We expect operating cash flow and free cash flow to be lighter during Q4 as we make our first direct sales concentrate to a smelter. Up until today, we've been shipping primarily to traders. While we expect revenue to be recognized in Q4 when the concentrate is loaded on the vessel at the port of Manzanillo, we don't expect to receive payment on the sale until Q1 of 2027. As such, cash flow from operations during Q4 is expected to be impacted by an accounts receivable bill of around $120 million. During Q1 of 2027, will benefit from an inflow of accounts receivable in a similar amount pending final price adjustments. As we have done in previous corners, we will manage the price risk using Quartational Period Hedges or QP Hedges. Turning to slide 14, we ended September with $226 million in cash, exceeding our minimum cash target of $200 million. Available liquidity totaled $563 million, which includes $337 million available on our credit facility. Given the previously discussed timing of cash flows related to our first direct concentrate sale to a smelter, we expect our cash balance will temporarily decrease in Q4 before being bolstered in Q1-27 when the cash proceeds are received. Closing my commentary on slide 15, we have returned $271 million of capital through September, representing 77% of our $350 million target for 2026. Year to date returns include $239 million in share repurchases and $32 million in dividends. We have repurchased approximately 4.9 million shares at an average price of just over $67 Canadian per share. equivalent to approximately 5% of our shares outstanding at the start of the year. The buyback has remained active since the close of the quarter, and we are well on track to meet our stated target by year end. We will continue to balance return of capital against other capital allocation priorities, including organic growth opportunities at Morelos, developing Los Reyes, increasing our investment in value enhancing exploration and drilling across our entire portfolio, as well as maintaining a strong and flexible balance sheet. With that, Andrew, I'll hand the call back over to you.

Thank you, Dan. To close, I just wanted to make a few comments around upcoming catalysts you see summarized on slide 17. Q3 demonstrated what Morelos can deliver as higher grades and improved recovery is translated into stronger margins and cash generation. Our priority now is to sustain that performance through year end and build on it through 2027. In the near term, first ore for MediaLuna North is our next operating milestone. Adding a third mining front will improve our ore supply and sequencing flexibility, supporting Morales' transition from being mine constrained to plant constrained, and providing the opportunity to unlock additional processing capacity. We are also progressing our planned New York Stock Exchange listing to broaden our investor access, subject of course to exchange approval and listing conditions. Next, in early 2027, we expect to begin planty bottlenecking work and release our year-end reserves and resource update. Continued drilling at San Miguel will help define the longer-term opportunity in our existing infrastructure, while Los Reyes advances towards its pre-feasibility study. With a stronger balance sheet and multiple opportunities to grow from our existing asset base, we will position to fund disciplined investment while continuing meaningful returns to shareholders. Delivering consistency at Morelis and advancing these opportunities will be central to realizing that value. Thank you to our teams for their continued commitment and to everyone joining us today on the line. We'll now open up the line for questions.

We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. The first question comes from Cosmos Chu from CIBC. Please go ahead.

Hi, thanks, Andrew and Dan, and welcome, Sean. Congrats on a very strong Q3. Maybe, you know, focusing first on the production to date. As you mentioned, Andrew, you benefited from higher grades in Q3, three and a half grand per ton, just on the gold in Q3. Could you maybe talk about the sustainability of the higher grade into, say, Q4 or even into next year? And what kind of helped with those higher grades?

Thanks for the question, Cos, and good morning. For Q4, I expect that we'll continue to benefit from higher-grade stokes. We'll be kind of range-bound compared to what you saw in Q3. I think you can expect to see grade there or thereabouts in Q4, so I expect we will continue to have a strong Q4 Looking ahead to 2027, I think what you can expect to see is that we won't have the extremes I suppose that we saw here in 2026 where we had lower grade quarters of being Q1 and Q2 and high grade quarters being Q3 and Q4. You can expect much more stability in grade and much more stability in our production profile looking out through 2027. So really what I would look at is the midpoint between our first half of the year grades and the second half of the year grades would be the normal. So on a gold equivalent basis, that's about kind of four grams a ton gold equivalents. and what that will result in is an average kind of quarterly production of in the 110 to 115,000 ounce range, and that's all based on current plant throughput levels. Of course, as we execute on the de-bottlenecking program that I talked about earlier, that gives us an opportunity to step up that quarterly range, but that 110 to 115,000 ounce quarter is a good benchmark to use looking forward into 2027.

Yeah, that's great, Andrew, and certainly less volatility is always better. Maybe if I can ask about recovery, recovery also improved in Q3 to over 88%. Is that just a function of the higher grades coming in, or is it connected with what Dan had talked about, more usage of reagents, more cyanide consumption to help with the recovery? or is the higher, you know, cyanide consumption a function of the different ore mix that's coming in, maybe a little bit more copper and on that, you know, with Media Luna North coming in, how does that change the dynamics once again? So recovery, is it due to higher grades? If not, is it due to the higher consumption of cyanide and how does Media Luna North coming in change things again?

Yeah, and it's a good question, Cos. Just to start, I'll note by saying the gold recovery and gold grade contained throughout MediaLuna are not necessarily correlated. We can be working through stokes where there's higher grade and higher recovery. We can be working through stokes which are higher grade and lower recovery and likewise across the different dimensions. They're not necessarily linked. Through the course of Q3, and we'll see the same through Q4, we were accessing higher-grade stokes and some higher-recovery stokes, and so we had the benefit of both through the course of Q3. I expect we'll have the benefit of both through the course of Q4 here. But the changes that Dan mentioned, which are more on the kind of operational optimization side, is what we've been looking to do now is now we've got a good geomet model in place. Now we've got much more visibility on what's ahead of us across the media lunar mine and at what point we'll be working through some of these lower recovery stokes. The focus we have is what can we do to maximize recoveries through those lower recovery stokes and I think what you saw through particularly Q2 of this year, the solution wasn't optimal because the solution was really pumping through a lot of cyanide into the plant to be able to recover as much gold as possible. Of course, that is a solution. It just adds additional cost to our production profile. And what we're looking to do is to find that balance of what the right cyanide level is, coupled with other optimization opportunities through the plant and so we have been kind of tinkering a little bit through the flow sheet through the course of 2026 to look for opportunities to manage cyanide as optimally as we can while maximizing recoveries and so we saw improvements in that through Q3 and so we have seen a bit of a step down in cyanide. I think there's opportunities to step down cyanide even further But for now, I think the current levels you saw in Q3 are probably a good placeholder to assume that at least for the next 12 months, that's a reasonable level to assume as we continue to look for flow sheet optimization opportunities to continue to drive down costs. Great.

And then maybe one last question, looking into the future now. Great to see that you have that one slide in place, Andrew, in terms of de-bottlenecking and potential further expansion later on. In terms of that potential expansion later on, it seems like it is dependent on finding a few more ounces, especially in the San Miguel area. Would you be able to quantify for us at this point in time, like how many more ounces would you need to find to justify that potential $100 million investment? And then I also saw other targets here at Scala and El Nirenjo. They seem to be shallower, more oxidized epithermal systems. Is that open pittable? Are you trying to find more open pit stuff or underground stuff or does it really not matter?

So a few questions in there. Maybe I'll just start on the last question first and then move on to the earlier question. So in terms of our target at Morales, we're not targeting finding open pit or underground material as a strategy. We're just looking to find mineralized material to be able to add to our mine life and be able to add incrementally to either production or mine life. And so if we find Minimalized zones through open pit areas, great. We find it through underground areas, also great. And so we're not targeting one or the other. We're confident that whatever path we find, we can work through the permitting regime in Mexico to be able to get access to the permits and the environmental approvals that we require. and you're right, some of those outside deposits, Escala in particular, is an area that we're quite excited about right now. That would likely be an open pit, an open pit deposit. We're looking to try and get results out from that Escala drilling activity likely in Q1 of next year. And so we'll be able to talk more about that potential then. Just to kind of then, Cos, go back to your first question around the bigger plant expansion and what we're looking to find within the San Miguel corridor, I'll say, just to start, the balancing act here is making sure that we continue to focus on Morelos being our long-life cornerstone asset that we'll be able to mine and produce from for many years to come. And so for me, it's important that at the point in time we make that expansion decision, and we know there is potential there to drive this expansion up. We've been doing lots of work to look at what that opportunity might look like. It's important to balance off that annual production rate with making sure that we're comfortable we can maintain a long mine life. Today, give or take, our mine life is around 10 years, and I like being able to maintain a mine life of 10 years. And so I don't have an exact volume of material I would look to find to be able to support that today. That's something that we'll work through through the course of 2027. I will say the San Miguel Corridor, as I mentioned in my commentary, does have the potential to be a multi-million ounce deposit. And given its proximity to existing media lunar infrastructure, given its proximity to the existing material handling system, it's something that at least sitting here today we feel we can bring into the mine life very quickly. And so we'll drill that out through 2027. We'll see how much, what we can add to our resource base, I suppose, from that drilling that we have planned next year. And then we'll make the decision in Q1 of 2028 whether to move forward with that at that time or whether to pick that up at a later date. But that will be a Q1 28 decision.

Thanks, Andrew. I'm certainly looking forward to it. Thanks for answering all my questions. That's all I have. Thank you. Okay.

Thanks, guys.

The next question comes from Lauren McConnell from Paradigm Capital. Please go ahead.

Good morning Torex team and congratulations on such a great quarter. Just had a bit of a question on the sort of de-bottlenecking. You're obviously targeting to ramp up that plant capacity in that 10% to 15% range sort of in H2 next year. What are the principal bottlenecks being addressed and what are the key execution risks and how should we think of that ramp up? Is it a gradual ramp up starting mid-2027 or is it more of a materialized throughput that will happen closer to the end of next year?

Good morning, Lauren, and thanks for the question. The bottlenecking really, so we worked through our engineering studies through the course of, I would say, the last six months and really what that highlighted to us was a few things. One is that the bottleneck that we have today in our processing plant and that bottleneck to really realize the potential of what we've already constructed at Morellus. is relieving a bottleneck that exists within our detox circuit. And so the cyanide destruction circuit that we have within our operation. Now that bottleneck will be relieved through two different avenues, really. One is refining our operating parameters. And so part of the constraint is driven by some of the operational constraints that we have in place within that detox circuit. And so it's looking at making some operating changes within that circuit. Secondly, there are some, I would say, minor equipment updates that will be required. And I think we've estimated in the material it's approximately $5 million of capital costs. And you can think about that in terms of changing out some pipes, changing out some pumps within the detox circuit. And so collectively, that's what will deliver the de-bottlenecking, and that's what will deliver that 12,000 tons per day. In terms of timing, we're actually just in the final stages here of pulling together our plan for how we will deliver that through the course of 2027. At this point, I think a reasonable estimate to take is that the bottleneck would have been complete by the end of 2027. And so maybe we'll see some benefit right at the end of the year, but we'll have the full year benefit through the course of 2028. And so I think that's the way that you should be thinking about it at this stage.

Okay, thank you. That's really helpful. And then just a quick question on Media Luna North. It obviously remains on track for first or later this year. You're, I believe, targeting average production of around 1,000 tons per day in 2027 and then obviously eventual design capacity, I think, closer to that 2,300 tons per day. What are sort of the principal constraints governing that ramp up and how should we think about that ramp up through sort of 2027?

So really the investment that we need to make on that mine to gradually achieve those design levels over the next two years is really around underground development. So we'll look to, I think, I'll say fairly aggressively develop out that mine through the course of 2027. We're hitting one stope here at the end of the year. I think the first blast is planned for December of that stope. We'll work through, I think, mine out that first stope through December. And then into 2027, we'll kind of ramp up through the course of the year. I think the current plan is to end the year at close to 1400 tons per day. And so the average for the full year will be about 1000. So it will build up gradually. through the course of the year. And it's really just dependent on opening up that mine and investing in underground development. Otherwise, the projects will be predominantly complete at the end of this year. There may be parts of the capital investment, particularly around the paste UDS system and certain electrical work that will be complete in Q1. but otherwise it's really just underground development through the balance of the years to support ramping up to those mining rates.

Okay, that's really helpful. Thank you. And then lastly, just on that sort of larger Morelos expansion decision, you know, if we assume a positive investment decision in early 2028, you know, and I understand that you're probably still working through some of this, how long would construction take and commissioning take and when could we realistically expect and others.

And so I'll estimate right now, Lauren, that that would be between a year and 18 months to procure the parts, install and complete that expansion project. So starting Q1 2028, you can expect that maybe first half, mid 2029 will be up to that level.

Okay, wonderful. All right. Well, that's it for me. I'll let some others ask some questions. Thank you.

The next question comes from Jeremy Hoy from Canaccord Genuity. Please go ahead.

Hi, Andrew, Dan, Sean. Thanks for taking my questions. Just a quick follow-up on the larger Morelos expansion. If envisioning 14,500 tons per day, does that essentially cap out the infrastructure that you guys had proactively oversized with the Media Luna expansion, such as the conveyor in the tunnel?

I mean, I think the... More important, kind of maybe focus there, Jeremy, at least from my perspective, is it caps out the expansion of the plant. And really, that 14,500 ton per day capacity comes from the currently installed grinding circuit. And so by expanding and adding on additional flotation cells, that will bring the back end of the plant up to match what we have installed in the grinding circuit. And so your question is coming from the fact of where do we get the 14 and a half from? It's not being constrained by potential material handling investment. It's being constrained by the installed capacity in the grinding circuit at the plant. And so that's the constraint. When you get up to 14,500 tons per day, and if you're partly thinking about this through, well, where's the feed going to come from? Today, we have MediaLuna mining at 8,000 tons per day. We have ELG underground mining at 3,000 tons per day. So we have 11,000 tons per day from those two sources. Over the next year or so, MediaLuna North will ramp up to the design 2,300 tons per day. And so we'll have collectively over 13,000 tons per day of material available that we can feed the mill with. And so that can obviously fully support the debottled net case. That would not support immediately filling the mill with the current grade underground material at that rate. The base case there would be we would fill any gap or any differential with open pit stockpile that we have. And so we currently have 6 million tons on stockpile of about 1.3, 1.4 gram a ton on average. So that would be the base case. The goal, of course, though, would be to not have to use that lower grade open pit material and to fill that with underground material. And so as we prove out the potential of the San Miguel Corridor, one of the investments we'll also be looking at is what would we need to do to be able to bring more material from the MediaLuna ore body, from that MediaLuna cluster, through that material handling system. So that work's already started. I think there would likely be some type of investment to be able to support filling that larger mill with full underground material. I think the current estimate we have of that is something in the region of $50 million, which would be invested in expanding the material handling system underground, as well as changing out the motor on the existing conveyor to be able to speed up that conveyor and move more material through it. But there's a bit more work that will need to be done on that through the course of next year, but that's currently how we're thinking about it.

Just to add to that, Jeremy, additionally, we have to develop sort of a new mining front To recall, when we developed Media Luna North, that was just over $100 million of capex. One of those options could be accelerating Media Luna West and give it its further way. It may require some additional fleet, so maybe an additional $100 million to $150 million to develop that mine. But until we do the drilling at the San Miguel Corridor, we don't understand how we're going to develop that. Maybe it's a lower capital development as we just start drifting over from the southern end of Media Luna North. but really want to do the drilling to fully understand what that San Miguel corridor offers. And also important is to understand what that great potential is because that could really support even further production upside.

Okay, that's really helpful. And yeah, that's exactly where I was going with that is San Miguel, if that was additional ore going to the plant, was it going through the tunnel, was that incorporated into that 100 million estimate, etc. So appreciate that that's still being evaluated and San Miguel, you know, working to understand it. So looking forward to further detail there. The other question I have is on the reserve and resource update early next year, which won't include San Miguel, as you've said. Can we expect the gold price assumptions for reserves and resources to increase? And I'm just thinking about whether we might see a decrease in overall grade of reserves and resources that might partially offset a benefit from the de-bottlenecking exercise that will increase throughput.

Jeremy, right now it's a We'll review that as we do the work and we move into that year-end process. But where I stand right now, I think I can speak to Andrew, is we're not really interested in taking our cutoff grade lower right now, just given some of the cost pressures we've been dealing with. You know, if you take your cutoff grade lower, unless you have the ability to stockpile that material and put the higher grade material through, that would be an option. But right now, I think we'd look to maintain the cutoff grade. If that means using a higher gold price to justify that cutoff, we'll look there. When we actually did a lot of work on cutoff grade analysis, Media Luna itself and Media Luna North are fairly insensitive to metal prices so that you don't really get a lot more ounces for using a higher metal price. You could potentially get more from ELG Underground. It is definitely more sensitive. And one thing we'll look at there is their ability to, with the drilling that we're going to do this year and next year, can we look at maybe some cutoff grades Delta's there to see if we can increase the mine life while maintaining very strong margin out of that mine, which continues to be a very, very solid mine for the operation. So right now, not really looking at adding more pressure to the cost profile. We want to get that stable. Once stable, once we see the work at San Miguel Corridor, we can then evaluate how do we want to be the optimal stewards of that ore body and that enlarged ore body. So don't expect any material changes, I think, at this year end. Maybe we'll have a chance to look at that when we put up the 2028 reserve and resource update.

Okay. Excellent. Very helpful. Thanks, guys. I'll step back in the queue.

Thanks, Jeremy.

The next question comes from Don DeMarco from National Bank Financial. Please go ahead.

Hi. Thanks, Operator, and good morning, Andrew and Dan. Andrew, earlier in the call you mentioned For 2027, you're expecting maybe 110,000 to 115,000 ounces per quarter. It's a good range to go with. Do you think that will be stable throughout the year on a quarter-by-quarter basis, or is there any front-end or back-end loaded profile that we should think about?

Yeah. Good morning, Don, and good question. Look, the general approach you should think about next year is it will be relatively stable. Of course, every quarter will have some slight variability to it. We are a mining company, of course, but the There will be much more stability than you would have seen through the course of 2026. Okay.

And, you know, we saw that Media Luna underground mining rates averaged over 8,200 tons per day in Q3 versus the original 7,500 ton per day steady state target. So how sustainable are the mining rates above design? And should we now be thinking about a higher normalized mining rate to bake into the 2027?

Yeah, look, I think it would be a reasonable assumption, Don, to assume that the mine will maintain 8,000 tons per day. I think we've proven we can get there. We are pushing the mine hard right now. I think there's the opportunity to kind of soften that a little bit through the course of next year. But assuming 8,000 tons per day I think would be a good estimate from MediaLuna.

Okay. And, you know, just on the plant throughput and the bottlenecking, you know, we see the plant. is already operating above its 10,600 ton per day design rate. So what contributed to that higher throughput in Q3? And do you expect that to continue as well? You're almost pushing up against the lower limit of the range of that de Botton I can target.

Yeah, so we had a really strong quarter, of course, of the plant. We operated at 10,800 tons per day. The key driver behind that, Don, is we do have variability in our maintenance schedule month over month. And so every month we have a planned maintenance shutdown where we undertake maintenance work on the plant. That can vary between as short as kind of 24 hours and as long sometimes as 100 hours. And so we do get some variability by month and by quarter, depending on how many of the longer shutdowns there are versus how many of the shorter shutdowns there are. And so overall through a year, I still think the way the plant is designed today in that 10.6 to 10.8 thousand tons per day is how we would currently operate. and under the unconstrained deep bottleneck plant that we're talking about, and this would be after the maintenance work as well, we'll be able to achieve that 12,000 tons per day. So there is still that differential, but across the year you'll see the benefits of that looking forward.

Okay. And then just finally, maybe if you could provide a refresh on your M&A priorities and level of interest. Like I see a growing list of brownfield opportunities with the expansion and other potential things beyond that with expirations. Does this temper potential activity on the M&A front in any way?

The great thing, Don, is as you highlight, we've got a great organic growth pipeline here. We've got lots of resource potential within the Morales property that we'll be drilling very aggressively through the course of 2027 to be able to maximize what we can bring into the resource base in 2028. We've got the plant expansion opportunities that we talked about at at Morales. We have the Los Reyes build that we've talked about with the PFS coming out towards the end of 2027 as we move towards construction in the 2029 and 2030 period and first production in 2031. And we have our exploration pipeline that I also think can help generate value. And so I think the great thing about that strong organic pipeline is it does gave us flexibility as we think about M&A. I do think there continues to be value in diversifying our production profile and bringing in another operating asset to provide that risk mitigation. And so we'll continue to look for something that's either operational or close to operational to provide that diversification. But having that strong organic pipeline allows us to continue to be disciplined. And I think what you've seen from us, Don, over the past several years is we have been very disciplined as we've looked at M&A. We look at the opportunities as they arise. We form our view of value. and if the price goes beyond that view of value, then we're happy to walk away and wait for the next opportunity. And so we'll continue to do that, continue to be disciplined and this strong organic pipeline gives us the flexibility to be able to do that.

Okay, great. Well, that's all very helpful. Congrats again on the great quarter and good luck with the rest of the year.

Perfect. Thanks, Don.

As a reminder, if you have a question, please press star one. The next question comes from Simon Wildsmith from Desjardins Securities. Please go ahead.

Thanks, Aubrey, and thanks, Andrew and Dan, and welcome, Sean. And team, congratulations on the quarter. Just one question for me, and apologies, this was already answered, was having some technical issues. I just wanted to understand a little bit of the ASIC improvement. Obviously, volume supported, but we saw some mining unit costs also decrease. I know you guys have been working on the cyanide consumption issue, but just curious about the processing cost. It adds up slightly quarter over quarter. And maybe this is a better offline question, getting too detailed, but just wondering what kind of trajectory we're on there.

Yeah, on the trajectory, as we stated in our documentation, we're still targeting within that $2,000 to $2,100 in ASIC range. I'd say right now we're probably towards the lower end of that. The improvement quarter to quarter really is a reflection of the significant step up in process in mine grades we saw during the quarter, as well as the improved gold recovery. That probably was the bulk of the improvement. We also did benefit from continued improvement in the TC and RC terms being offered by traders, which continued to benefit from that. So that was a nice tailwind as well. Cyanide consumption was a little bit better, but overall consumable costs were fairly stable with the prior quarter. So I'd say that's all there. So I expect for the year, We should have a similar range within the guidance, so closer to that 2,000-bucket-end range. The question really being is the movements in the peso, which has been all over the map, was really weaker at the beginning of the year, got really, really strong as we can recently, and then this week has started to strengthen again, so we'll look to try to mitigate that. In the next year, as we mentioned, I think one of the key pressures is what you're going to see, and I think you're starting to see it across the industry, is The pressure on energy prices and ammonia prices is when new contracts are starting to be lined up for the 2027 period. Many of the manufacturers and suppliers are going to try to probably push on some of their costs and offset some of those cost pressures as new contracts roll in. So I'd expect that you'll see elevated pressure on energy and cyanide and ammonia related elements into next year. And that's one of the reasons that we expect our costs to be very consistent next year with what we've got at this year.

Okay. Okay. Yeah, that helps me a lot. Thanks. And I apologize. That was already answered. Thanks. Thanks. And congratulations again on a good quarter.

Great. Thanks, Simon.

The next question comes from Eric Windmill from Scotiabank. Please go ahead.

Oh, hi, good morning, Andrew, Dan, and Sean. Thanks for taking my question, and congratulations on the quarter. I think a lot of my questions have been answered, but maybe just one on Los Reyes. Any additional updates you can share there in terms of what's happening with the project and timing and next steps?

Yeah, good morning, Eric, and thanks for raising Los Reyes. Sometimes it gets lost in the context of the strong performance here at Morales. So I'll say everything is going to plan at Los Reyes. I don't know if you caught the commentary on the call, but we currently have six rigs operating there, both focused on resource drilling as well as geotech drilling to all support the PFS. We have close to 100 people at site right now, which is a combination of both our employees, maybe around 35 employees, and contractors all supporting that project. And so the work is very much on track to get the PFS out by the end of next year. The goal through the PFS is to really complete all of the trade-off studies that we have planned. So there's a lot of work to do, but the goal is to finish all those PFS studies. So really we're moving into the feasibility study stage. in a very planned way where the feasibility study can focus just on final engineering versus completing any trade-off studies. But in short, I would say everything is tracking very well there at this point.

Okay, great. No, I really appreciate that. And obviously it looks like positive updates in terms of security situation as well in Sinaloa and, you know, hopefully, you know, no major headlines there, headline risks.

Yeah, that's right, Eric. And we, I think, as you know, we were not on site through until May of this year because of some security challenges in the state. In our area of interest, things have continued to be calm since we, I think, touched on this last, that's our Q2 call. So through the course of Q3, everything has remained very calm. No challenges at all there in terms of delivering on our plans and priorities.

Okay, great. No, I really appreciate that. And yeah, certainly lots of great things on the go there. Look forward to the catalyst here and the ball necking out Morelos. Looks really exciting. Thanks a lot. Appreciate it.

This concludes our question and answer session. I would now like to turn the call back over to Andrew Snowden for closing remarks.

Perfect. Yeah. So thank you, everyone, for the questions. Lots of good questions there today. So I appreciate that. And thank you for your continued interest in TORET. And we're focused, of course, on delivering a strong finish to the year and advancing the opportunities ahead of us in 2027. So we look forward to continuing these discussions and to update you on our progress. Have a great day, everyone.

The conference is now concluded. You may disconnect your lines. Thank you for participating and have a pleasant day.