Coeur Mining (CDE) Q3 2026 Earnings Call: EBITDA erreicht 448 Millionen US-Dollar

Wichtigste Erkenntnisse

• Coeur Mining meldete im Jahresvergleich einen Anstieg der Goldproduktion um 45 % sowie ein Umsatzwachstum von 77 %. Dies spiegelt die Beiträge von New Afton und Rainy River infolge der New-Gold-Transaktion wider.
• Das bereinigte EBITDA stieg im Jahresvergleich um fast 70 % auf 448 Millionen US-Dollar bei einer bereinigten EBITDA-Marge von rund 46 %. Der freie Cashflow legte im Vergleich zum Vorjahr um 27 % auf etwa 240 Millionen US-Dollar zu.
• Zu den betrieblichen Beeinträchtigungen gehörten starke Regenfälle bei Rainy River und Palmarejo sowie der Ausfall eines Förderbands unter Tage bei New Afton. Nach Angaben der Unternehmensführung waren die wetterbedingten Einschränkungen bis Oktober weitgehend überwunden, und das Förderband wurde bis Mitte September repariert.
• Coeur beendete das Quartal mit liquiden Mitteln von rund 1,2 Milliarden US-Dollar und einer Gesamtliquidität von mehr als 2,1 Milliarden US-Dollar. Das Unternehmen kaufte Aktien im Wert von 111 Millionen US-Dollar zurück, was 46 % des freien Cashflows im Quartal entspricht.
• Das Management rechnet für 2026 mit einer Gold-, Silber- und Kupferproduktion nahe dem unteren Ende der Prognosespanne, während die bereinigten zurechenbaren Umsatzkosten nahe dem oberen Ende erwartet werden. Unter der Annahme der aktuellen Metallpreise soll das bereinigte EBITDA für das Gesamtjahr 2 Milliarden US-Dollar übersteigen und der freie Cashflow mehr als 1,3 Milliarden US-Dollar erreichen.
• Das Unternehmen rechnet für 2027 mit einem weiteren Rekordjahr, vor allem gestützt durch ganzjährige Beiträge von New Afton und Rainy River. Die Unternehmensleitung erklärte, dass die aktuelle Priorität auf der Integration und operativen Umsetzung liege und nicht auf größeren Übernahmen.

Zentrale Finanzdaten

Die durchschnittlich erzielten Gold- und Silberpreise gingen um 4 % bzw. 13 % zurück, während die erzielten Kupferpreise um 9 % stiegen. Auf Gold entfielen rund 66 % des Quartalsumsatzes, auf Silber 27 % und auf Kupfer 6 %.

Der Umsatz war geografisch ausgewogen verteilt: Auf Kanada entfielen 36 %, auf die USA 34 % und auf Mexiko 30 %.

Das Ergebnis nach GAAP enthielt einen Anstieg der vierteljährlichen Abschreibungen um 190 Millionen US-Dollar im Jahresvergleich bzw. 0,18 US-Dollar je Aktie, was hauptsächlich auf die Kaufpreisallokation für die erworbenen kanadischen Vermögenswerte zurückzuführen ist. Das Quartal beinhaltete zudem einen nicht zahlungswirksamen Effekt aus der Kaufpreisallokation von rund 40 Millionen US-Dollar, der primär mit der Zeitwertanpassung der Haldenbestände bei Rainy River zusammenhing. Nach Angaben des Managements ist dieser bestandsbezogene Effekt nun im Wesentlichen abgeschlossen.

Geschäftliche und operative Entwicklung

New Afton: Ein Ausfall des Hauptförderbands unter Tage Ende August schränkte die Erzversorgung ein und reduzierte die Abbau- und Verarbeitungsraten. Die Reparaturarbeiten wurden bis Mitte September abgeschlossen. Anschließend erreichte und behauptete die C-Zone ihr Abbauziel von 16.000 Tonnen pro Tag. Das Management rechnet mit höhergradigem Material, während der Abbau in die östlichen und südlichen Bereiche der C-Zone voranschreitet.

Rainy River: Starke Regenfälle verlangsamten den Tagebau in Phase 4 und führten zu einem verstärkten Rückgriff auf minderwertigere Haldenbestände. Die Abbauraten unter Tage verbesserten sich um 50 % auf rund 3.400 Tonnen pro Tag. Für kurze Zeiträume erreichte der Betrieb bereits sein Ziel von 5.000 Tonnen pro Tag; allerdings sind zusätzliche Erschließungsarbeiten und Infrastruktur erforderlich, um diese Rate bis zur zweiten Jahreshälfte 2027 dauerhaft aufrechtzuerhalten.

Rochester: Die dreistufige Zerkleinerung erreichte einen Quartalsrekord von 6,8 Millionen Tonnen bzw. 7,5 Millionen Short Tons. Die Goldproduktion stieg im Vergleich zu Q2 um 39 %, da die Gewinnung von höhergradigem Erz aus Phase 2A einsetzte. Die Silbergewinnung verlief weiterhin langsamer als erwartet, was teilweise auf sulfidisches Material zurückzuführen ist. Der Betrieb strebt einen Sulfidanteil von rund 0,3 % im verarbeiteten Material an und steuert die Mischung so, dass ein Höchstwert von 0,7 % nicht überschritten wird.

Palmarejo: Starke Regenfälle verzögerten die Lieferung von Baumaterialien für den Versatz, was den Zugang zu geplanten höhergradigen Abbaubereichen einschränkte. Da die Regenzeit weitgehend vorüber ist, stellt der Betrieb die Versatzkapazität wieder her und strebt einen größeren Beitrag aus dem höhergradigen Bereich Hidalgo an.

Las Chispas: Der Mühlendurchsatz erreichte ein Rekordniveau und glich damit die unter den Planungen liegenden Silbergehalte aus. Höhere Goldgehalte und Vorratsüberträge stützten die Entwicklung zusätzlich. Der Schwerpunkt im vierten Quartal liegt auf dem Abschluss des Übergangs zu einem einzigen Untertage-Dienstleister sowie der Verbesserung der Produktivität unter Tage.

Kensington und Wharf: Kensington verzeichnete im September seinen operativ stärksten Monat des Jahres 2026, begünstigt durch steigende Erztonnagen aus den Abbaukammern. Die Goldproduktion von Wharf stieg nach dem Umbau und der Erweiterung des Brecherkreislaufs gegenüber dem Vorquartal um 28 %. Das Management geht davon aus, dass das vierte Quartal für Wharf das stärkste des Jahres sein wird.

Prognose des Managements

Die Unternehmensleitung hielt an ihrer Produktionsprognose für das Gesamtjahr fest, geht jedoch davon aus, dass die Gold-, Silber- und Kupferförderung nahe dem unteren Ende der jeweiligen Spannen liegen wird. Die bereinigten zurechenbaren Umsatzkosten werden infolge des geringeren Produktionsvolumens nahe dem oberen Ende der Prognose erwartet.

Tatsächliche Steuerzahlungen (Cash Taxes), Investitionsausgaben, Abschreibungen, Explorationsausgaben sowie Vertriebs- und Verwaltungskosten (G&A) tendieren jeweils zum unteren Ende ihrer Prognosespannen für 2026.

Unter der Annahme der aktuellen Metallpreise erwartet das Management für das Gesamtjahr ein bereinigtes Rekord-EBITDA von über 2 Milliarden US-Dollar und einen freien Cashflow von mehr als 1,3 Milliarden US-Dollar – was in etwa einer Verdopplung gegenüber dem Vorjahr entspricht. Für das vierte Quartal wird ein deutlicher Zuwachs bei Produktion und Cashflow erwartet, gestützt durch New Afton, Rochester, Palmarejo, Kensington und Wharf.

Coeur rechnet zudem damit, im vierten Quartal Versicherungsleistungen in Höhe von 70 Millionen US-Dollar im Zusammenhang mit dem Brand bei Wharf im Vorjahr zu erhalten. Nach Angaben der Unternehmensführung sind die damit verbundenen Steuereffekte in der Prognose für die tatsächlichen Steuerzahlungen berücksichtigt. Das Unternehmen plant, im Laufe des Quartals seine zweite halbjährliche Dividende auszuschütten.

Risiken und Beobachtungspunkte

• Eine erhebliche Produktionssteigerung im vierten Quartal ist erforderlich, damit Coeur das untere Ende seiner Gesamtjahres-Produktionsprognose erreicht.
• Die Silbergewinnung bei Rochester verläuft langsamer als erwartet, und das Gesamtergebnis für das Jahr hängt teilweise vom zeitlichen Ablauf der Ausbeute sowie der Steuerung der Sulfidmischung ab.
• Rainy River muss die Flexibilität bei den Haldenbeständen wiederherstellen und gleichzeitig den Abbau unter Tage auf einem höheren Niveau stabilisieren.
• Die bei Palmarejo erwartete Verbesserung der Erzgehalte hängt von der Wiederherstellung der Versatzkapazität und dem erneuten Zugang zu den höhergradigen Hidalgo-Bereichen ab.
• Der Kostendruck bei Personal, Verbrauchsmaterialien und Auftragnehmern hält an. Die Dieselpreise lagen 32 % über Plan, was die direkten Kosten um rund 30 Millionen US-Dollar erhöhte; das Management geht jedoch davon aus, dass die Auswirkung auf das Gesamtjahr unter 2 % der jährlichen direkten Kosten bleiben wird.
• Der operative Cashflow wurde durch niedrigere Metallpreise sowie Working-Capital-Anpassungen in Höhe von 50 Millionen US-Dollar belastet, die mit dem zeitlichen Anfall von Zinsaufwendungen und jährlichen Versicherungsprämien zusammenhingen.

Höhepunkte der Analysten-Fragerunde

Die Analysten konzentrierten sich auf die Frage, ob Coeur das starke vierte Quartal liefern könne, das zur Einhaltung der Jahresprognose erforderlich ist. Das Management nannte New Afton, Rochester, Palmarejo, Kensington und Wharf als Haupttreiber, betonte jedoch, dass der erwartete Zuwachs von der Gesamtleistung des aus sieben Minen bestehenden Portfolios und nicht von einem einzelnen Standort abhänge.

Bei New Afton bestätigte das Management, dass der Abbau nach der Reparatur des Förderbands zum Zielwert von 16.000 Tonnen pro Tag zurückgekehrt sei. Die Erzgehalte der aktuellen Abzugspunkte stimmten den Angaben zufolge hinreichend gut mit den Erwartungen überein, wobei mit fortschreitendem Abbau (Cave) nach Osten und Süden höhere Gehalte erwartet werden.

Zu Rochester erklärte die Unternehmensleitung, dass sulfidisches Material in der Minenplanung berücksichtigt worden sei, der Übergang sich jedoch deutlicher abzeichne als erwartet. Das Unternehmen verfüge über die Flexibilität, Erz aus mehreren Tagebaubereichen zu mischen, der zeitliche Verlauf der Silbergewinnung bleibe jedoch eine entscheidende Variable.

Hinsichtlich der Kapitalallokation erklärte Coeur, dass man Aktienrückkäufe weiterhin opportunistisch und programmatisch fortsetzen werde, ohne sich auf einen festen Prozentsatz des freien Cashflows festzulegen. Seit Mitte Mai seien im Rahmen des vom Board genehmigten 750-Millionen-US-Dollar-Programms Aktien für mehr als 230 Millionen US-Dollar zurückgekauft worden.

Das Management beschrieb die derzeitige M&A-Priorität mit den Worten: „Kopf runter, verdauen, liefern, Fokus auf die Umsetzung“. Während Coeur potenzielle Gelegenheiten weiter beobachten werde, liege der Fokus auf der Integration der drei jüngst hinzugekommenen Betriebe und der Wahrung des bestehenden Gleichgewichts zwischen Kanada, den USA und Mexiko.

Vollständiges Transkript der Telefonkonferenz zu den Quartalsergebnissen

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Good morning, everyone, and welcome to the Coeur Mining Third Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I'd like to turn the floor over to Mitchell Krebs, Chairman, President and CEO. Please go ahead.

Mitchell J. Krebs

Hello, everyone, and thanks for joining our call to discuss our third quarter results. Before we start, please note our cautionary language regarding forward-looking statements and refer to our SEC filings on our website.

Starting off on Slide 3 with some highlights from the quarter. The company delivered sharp year-over-year increases in gold production and cash flow with the addition of the New Afton and Rainy River operations beginning in late March. The quarter was lighter than expected given lower metals prices and a handful of operational challenges, which were partially offset by strong performance at some of our other operations.

Mick will provide more details in a few minutes, but a few quick highlights were Wharf's continued progress toward returning to steady state levels, Rochester's record crushing rates and the great advances made at both New Afton and Rainy River with their respective ramp-ups.

On the challenges front, wet weather during the quarter slowed down open pit operations at Rainy River and also contributed to a delay in mining of higher grade areas at Palmarejo, while unplanned downtime at New Afton due to a conveyor belt failure late in the quarter temporarily slowed down their progress.

All that said, we ended the quarter with $1.2 billion of cash after returning nearly half of our quarterly free cash flow back to stockholders through $111 million of share repurchases, bringing the total amount to over $230 million since mid-May. We remain on track to deliver significant increases in production and cash flow in the fourth quarter to end the year around the low end of our production guidance ranges with expected record full year adjusted EBITDA exceeding $2 billion and free cash flow topping $1.3 billion, assuming current prices, roughly double last year's levels. And looking ahead to 2027, we anticipate delivering another record year, mostly driven by full year contributions from Rainy River and New Afton.

Mick, over to you.

Michael Routledge

Thanks, Mitch. As Mitch noted, the quarter included a mixture of solid progress and some short-term operational challenges. However, I'm pleased with how we've managed the integration of our 2 new Canadian operations while safely and efficiently addressing these challenges to enable the company to hit the fourth quarter with positive momentum to deliver a strong finish to the year.

Referencing Slide 4, let's talk about the sites and begin with the Canadian assets. New Afton was impacted by the failure of the main underground conveyor belt in late August, which reduced crush conveyor availability and constrained ore supply to the mill, requiring the team to temporarily mine and process at reduced rates. The conveyor was safely repaired by mid-September with surface stockpiles and lower rate mining production providing ore during the repair period.

The interruption occurred as the C-Zone ramp-up was gaining momentum, but ramp-up following the outage has resumed with mining rates achieving and sustaining the 16,000 tonne per day target. The near-term priority is to consistently maintain those mining rates while remaining disciplined with cave draw management as we progress towards higher-grade portions of the C-Zone in the East and South.

Turning to Rainy River. Unusually heavy rainfall slowed Phase 4 open pit mining, causing the operation to process more low-grade stockpiles, which affected third quarter production and correspondingly costs. Underground performance at Rainy River continued to improve during the quarter, with mining rates increasing by 50% to approximately 3,400 tonnes per day. The underground operation was targeting 5,000 tonnes per day by year-end, and the team are already hitting those levels for short periods with additional development and infrastructure work planned to provide more work fronts to consistently sustain those levels towards the second half of 2027.

The team at Rainy River continues to progress open pit mining, advance Phase 5 and stabilize underground performance at the higher targeted rates while rebuilding stockpile flexibility to maintain strong mill throughput levels during quarter 4 and into 2027.

Moving to our 5 other operations and beginning with Las Chispas. The operation continued to perform consistently. Mill throughput in the quarter recorded record levels, offsetting lower-than-planned silver grades, while higher gold grades and carryover inventory supported its solid overall performance. The fourth quarter priority is to complete the transition to a single underground mining contractor, safely improve underground productivity and deliver a strong finish to another solid year.

At Palmarejo, heavy rains disrupted the delivery of critical construction materials needed for backfilling. Reduced backfill capacity limited access to planned higher-grade areas, resulting in lower production despite maintaining some of the highest mill throughput rates they have had in years. With the rainy season behind us, the team is restoring backfill capacity with a target of increasing the contribution from the higher-grade Hidalgo area while maintaining the stronger throughput levels we achieved during the third quarter.

Turning to Rochester. The crusher circuit delivered record performance during the quarter with ore processed through all 3 stages of crushing reaching 6.8 million tonnes or 7.5 million short tonnes. Mining rates also exceeded expectations even as the team successfully completed the Phase 2a and Phase 2b expansions of Leach Pad 6, which required the operation to generate substantial amounts of overliner material during the quarter.

Rochester's gold production jumped 39% quarter-over-quarter as higher grade ore from Phase 2A begins to recover. Silver is coming off the pads more slowly than expected, which we are closely monitoring as faster recovery rates are key to achieving Rochester's full year silver production guidance. We continue to manage the blending of higher-grade sulfide ore to achieve our respective grade and recovery targets.

Moving to Kensington. Mining and milling performance improvements partially offset lower-than-planned grade. Stope ore tonnes increased steadily throughout the quarter, with September delivering Kensington's strongest operating month of the year. We expect the fourth quarter to continue this trend, supported by higher grades.

Finishing with Wharf, the mine delivered a strong bounce-back quarter with gold production increasing 28% versus the second quarter. With the completion of the ramp-up of the rebuild and expanded crusher circuit, we expect the fourth quarter to be Wharf's strongest quarter of the year.

With that, I'll turn the call over to Tom.

Thomas Whelan

Turning to Slide 7. I'll briefly run through our third quarter consolidated results and provide a few details on Coeur's financial performance and strengthening balance sheet position as we head into year-end. On a year-over-year basis, gold production jumped 45%, revenue was up 77%. Adjusted EBITDA increased nearly 70% and free cash flow was 27% higher.

On a quarter-over-quarter basis, we delivered similar financial results despite the operational headwinds detailed by Mick, persistent cost pressures, key working capital adjustments and lower realized metals prices.

Digging further into the details from the quarter, as noted on Slide 7, average realized gold and silver prices decreased by 4% and 13%, respectively, while realized copper prices increased by 9%. Gold, silver and copper represented approximately 66%, 27% and 6% of quarterly revenues, respectively.

Our revenue mix from the U.S., Canada and Mexico was a very balanced 34%, 36% and 30%, respectively. Adjusted EBITDA totaled $448 million with an adjusted EBITDA margin of approximately 46%, which was 2% higher than Q2. GAAP net income was approximately $109 million or $0.11 per share despite a $190 million increase in quarterly amortization year-over-year, representing $0.18 per share, driven by the purchase price accounting for our new Canadian assets.

The quarter included a noncash purchase price accounting impact of approximately $40 million, primarily associated with the fair value uplift of Rainy River's acquired stockpile inventory. This brings the total year-to-date impact of this noncash accounting adjustment to $265 million.

In addition to the direct and significant impact on our P&L and EBITDA, this accounting treatment has led to a material increase in reported CAS to the tune of approximately $580 per ounce to our year-to-date consolidated adjusted gold costs of $2,191 per ounce on a year-to-date basis.

The impact is even more acute when looking at Rainy River's year-to-date adjusted gold costs of $3,497 per ounce for the year, of which approximately $1,650 per ounce relates to this accounting treatment. We are pleased to report that the impact from this inventory-related noncash accounting item is now substantially complete.

Our third quarter adjusted cost applicable to sales for gold and silver decreased approximately 16% and 1%, respectively. Gold and silver costs improved quarter-over-quarter, primarily reflecting the production mix and the decreasing impacts related to the aforementioned fair value uplift of the acquired inventory related to Rainy River and New Afton.

Copper adjusted cost applicable to sales increased in tandem with the lower quarterly copper production related to the conveyor belt failure.

As highlighted on Slide 8, underlying inflationary pressures remain present across labor, consumables and contractor costs. One easy-to-understand inflationary impact are diesel costs, which represent about 10% of our total operating costs. While diesel prices are 32% higher than we planned, adding approximately $30 million to our direct costs, the overall expected impact for the year is less than a 2% increase in our annual total direct costs.

Quarterly cash flow from operating activities totaled approximately $386 million, a 25% decrease from the previous quarter, driven by lower prices and $50 million of working capital adjustments relating to timing of interest expense and annual insurance premiums, which we elected to fully fund during the quarter.

Capital expenditures peaked during the quarter at $145 million, resulting in quarterly free cash flow of approximately $240 million. It was great to once again see all 7 mines continue to contribute meaningful free cash flow despite some of the short-term operational headwinds Mick covered.

As shown on Slide 7, the balance sheet has become a strength of the company. We continue to execute aggressively on our return of capital strategy with 46% of quarterly free cash flow used for stock repurchases. Cash increased to approximately $1.2 billion, and we have total liquidity of over $2.1 billion, providing us with the flexibility to continue evaluating repurchases alongside organic investment and other capital allocation priorities.

Two important final notes on the balance sheet. We were pleased to come to a swift resolution of the insurance claim at Wharf related to last year's fire incident, which is set to provide an additional $70 million of cash during the fourth quarter. And we also look forward to paying our second semiannual dividend during the fourth quarter.

Turning to guidance, as shown on Slide 21. Mitch mentioned our expectation of landing near the low end of the full year guidance ranges for gold, silver and copper production. And as a result, we anticipate full year adjusted cost applicable to sales to be near the upper end of guidance. We also want to highlight that cash taxes, capital expenditures, amortization, exploration and G&A are all trending toward the low end of their respective guidance ranges.

One final comment relates to our integration efforts. We are extremely pleased with the significant progress made through the first 6 months since we closed the New Gold transaction with many key functions already fully integrated and working well.

With that, I'll now turn the call back to Mitch.

Mitchell J. Krebs

Thanks, Tom. As we approach the end of the year, we're focused on safely delivering the key drivers of our strong expected fourth quarter as highlighted on Slides 11 and 12, to deliver record full year results and to leave us well positioned for an even stronger 2027.

With that, let's go ahead and open it up for questions.

Operator

[Operator Instructions] Our first question today comes from Wayne Lam from TD Cowen.

Fragen und Antworten

Wayne Lam

Maybe at New Afton, a bit of an inflection this quarter with the conveyor. Just on the commentary regarding the mining rates to the 16,000 tonne per day level since the conveyor repair, does that imply that you've reached the run rate level ahead of the prior guidance by year-end? And is that being realized on the processing side? Or are there still bottlenecks at the mill that have to be optimized?

Mitchell J. Krebs

Yes. I think last quarter -- Hi Wayne, it's Mitch. Last quarter, we said the target was to get up to that 16,000 tonne a day daily mining rate by the end of October, which is basically what we accomplished despite the the short-term disruption of that conveyor belt failure. But Mick, do you want to provide any other color?

Michael Routledge

Yes. It was a great effort by the team. They did some work during that down to make sure that it was a smooth ramp-up after the shutdown, and we got back up to that 16,000 run rate pretty quickly and steadied out at that level.

Operator

And our next question comes from Cosmos Chiu from CIBC.

Cosmos Chiu

As you mentioned, Mitch, Q3 was a bit of a transitional quarter. There's a few headwinds that happened. But as you mentioned, you've kept your annual guidance intact. But that would imply a 29% increase to gold in Q4 and 36% increase in silver quarter-over-quarter in Q4.

I know on Slide 11, you list out the different drivers, but essentially, you've listed out all the different assets and how things will get better in Q4. But is there 1 or 2 key drivers that would allow you to increase production by a fairly large margin in Q4, again, 29% for gold and 36% for silver. Are there 1 or 2 or 3 or 4 key drivers in terms of the assets?

Mitchell J. Krebs

Yes. Thanks for the question. The right question to ask, we totally agree about the fourth quarter, expected to be a big step up from the first 3 quarters of the year and should be in record territory for the fourth quarter and drive those record full year record results. And you mentioned Slide 11, which I agree does a good job of highlighting where we were through the 9 months versus our full year targets.

And again, pointing to the low end of those guidance ranges. I'd say the ones that stand out most, Cosmos, in terms of a big step-up in the fourth quarter, we already talked briefly about New Afton, just where they were in the first 2 quarters since the transaction closed versus the fourth quarter. That's a big step up. But I think through the combination of the higher sustained mining and milling rates, a slight step-up in the grade profile, that combination makes us feel good about the trajectory there for New Afton.

And then you pointed, I guess, at Rochester, clearly, they need a big step up, and we have the ingredients in place there to deliver a very strong fourth quarter in terms of strong crusher performance, better grade, closer to liner. Mick did flag the sulfide material that we're encountering at the bottom of the pit there, and that's something we're managing and keeping a close watch on.

But Rochester clearly needs a strong fourth quarter, but that's the plan, and we've seen that happen there before when those ingredients are all in place. Palmarejo, I'd point to as well. That's a big step up. But given the grade challenges they've had, especially in the third quarter with the some of the headwinds that Mick mentioned and those now largely being behind them, that offers an opportunity for Palmarejo to show a step up here in the fourth quarter.

And I'll just put a plug in for Kensington as well, just driven by grade. That will be a big fourth quarter for them up into the 30,000 ounce range territory, but they've got a good plan that they're executing on to deliver that. So those are the 3 or 4 that stand out mostly to me in terms of the big step up here to deliver the kind of fourth quarter that we're expecting. Any others that you...

Thomas Whelan

I wouldn't forget about Wharf as well.

Mitchell J. Krebs

Yes. Yes. Good one. Just with Wharf, obviously, been building up each quarter here on the back of the crusher upgrades and repairs that they did earlier in the year and between those higher crushing rates and placed ounces already on the pad out there. Fourth quarter will by far be the best quarter of the year at Wharf, and that will give us another boost here in an overall -- or it should be an overall strong fourth quarter.

And it's a portfolio approach, right? It's not like any one mine is delivering this big step-up when you have 7 operations, you can kind of use the power of the portfolio to -- from across the sites to deliver on those big expected step-ups.

Cosmos Chiu

Great. Maybe focusing a little bit on Rochester. As you mentioned, the proportion of sulfide versus oxide ore, I guess, has had a bit of an impact in terms of the length of leaching at least for the silver production. Could you remind me what's the sort of optimal mix in terms of oxides versus sulfides?

And I guess the other key highlight is that the sulfidic ore might be slightly higher grade. So there is that trade-off as well. So how do you manage it? What's kind of like the best mix in terms of oxide versus sulfide ore? And are we going to see that in Q4?

Mitchell J. Krebs

Yes. It really depends on where we're mining and when in terms of encountering some of that sulfide material at the bottom of our pushbacks. Third quarter, I don't know the exact percentage, Mick, maybe you do. But as from time to time, we will encounter some of that sulfide material, which you're right, Cosmos, contains higher grade material.

Best thing to do is to blend that in and manage the overall grade profile that's going out onto the leach pad without compromising recovery rates. So Mick, anything you want to add more detail?

Michael Routledge

Yes. So the team try and limit the percentage of sulfides to 0.7 is a maximum. We're actually targeting 0.3% at the moment. And the material that's on that pad is at about 0.3%. So we're just watching that closely, managing pH levels and other things to make sure that, that blend is the right blend for recovery of the silver. The silver is there. It's just a matter of timing, Cosmos, that you mentioned. It's about the recovery curve and how flat that is depending on the level of sulfide that we have.

Cosmos Chiu

So really not a lot of sulfidic ore within the ore mix at this point in time?

Michael Routledge

Generally at 10%.

Cosmos Chiu

Perfect. Maybe turning -- switching gears to Palmarejo. As you mentioned, Mitch, lower grades in Q3. If I were to just take a look at your Palmarejo guidance for the year, grades will really have to jump in Q4 to hit guidance for the year. Could you maybe talk about -- is that a possibility in terms of that increase in grade in Q4 versus Q3?

Or Mitch, as you mentioned, this is a portfolio approach. So you're not really looking at just Palmarejo, you're looking at maybe other assets outperforming to offset some underperforming assets. Is that how we should look at 2026 guidance?

Mitchell J. Krebs

Yes. Dare I say, both are true. Definitely, the benefit of having multiple assets allows you to have some some positives and some negatives. But as we think about Palmarejo and we were just down there, the challenges that they had in the third quarter with the wet weather and some of those construction materials that allow them to do the backfill to get in and mine some of these higher-grade areas, that just got deferred into later here in the fourth quarter.

And so the team is executing the plan to get in there and start mining in those areas to give us that grade kick along with what's been great mill performance running really at record levels down there to give them a strong boost here heading into the end of the year. Mick, anything you want to add to that?

Michael Routledge

I think it's just getting on top of the geotechnical aspects now that we've got good supply of our consumables and then getting back into that central area of Hidalgo that gives that grade run.

Cosmos Chiu

Great. And then maybe one last question, geezy one. Great to see -- not great, but it's good to see that the insurance money is coming in, in Q4 for Wharf, the $70 million. I don't think there's any tax implications. Am I correct? Should I just put $70 million into my Q4 cash flow, and that's all good?

Thomas Whelan

There would be tax implications, but our guidance stands, right, in terms of cash taxes. We paid about $290 million through the first 3 quarters. And again, I tried to reference that expect overall cash taxes to be at the low end of the guidance for 2026. So -- and that was all reflected in our updated numbers.

Cosmos Chiu

So that's inclusive of that insurance money that's coming in.

Thomas Whelan

Yes.

Cosmos Chiu

So we need to tax effect that insurance money.

Thomas Whelan

Again, doing that on a one-off basis, you got to remember the whole portfolio. And in the U.S., you file one big consolidated tax returnrency. So again, it's probably a little -- I wouldn't worry about tax affecting that. I would just make sure you've got the right cash tax number for the year and again, trying to tie that into the low end of the guidance that we provided for cash taxes.

Cosmos Chiu

It's always fun to talk about taxes.

Operator

Our next question comes from Joseph Reagor from ROTH Capital Partners.

Joseph Reagor

I guess following on where Cosmos started on the guide and the implication of this very strong Q4. Was there any consideration given to potentially lowering the guidance? Or maybe can you talk to why you guys decided not to other than to just guide to kind of the low end given that now you need the strong quarter to kind of get there? And maybe that might have given the market a better barometer of what the downside risk is?

Mitchell J. Krebs

Yes. I guess a fair question. You go back to September and the Colorado Springs Conference, we took that as an opportunity to give a good operational update, and that was on the heels of adjusting guidance in Q2 coming out of the gates with the first quarter at New Afton and Rainy River. We modified the guidance at both of those locations.

And so then we took a look going into the Mining Forum of Americas and said, look, are we still good on the updated guidance at New Afton and Rainy River? Yes. The legacy operations are we still on track to at least land at the low end of the guidance ranges, and we felt like we were confident in the ability to do that. So we've just maintained the guidance ranges and have appointed people to target the low end. So that was the kind of the thought process there, Joe.

Joseph Reagor

Okay. That's fair enough. And then the other question I had was just on the buybacks. Can you give any color on how much of that was done after you kind of knew about the operational challenges? And then how much was autopilot buyback that you guys didn't discretionarily spend versus active decisions to buy back? Just because given the amount that was spent and what the quarter looked like, it feels to be a mismatch?

Mitchell J. Krebs

Yes. We don't really talk about buybacks by month or anything like that.

Thomas Whelan

It's actually in the Q. There is that detail. But again, and sorry, it catch me cold on the exact number, but we do disclose what it was by the [ Q ]. But again, I wouldn't say we upped the buyback activity per se. What we tried to do when it comes to the discretionary portion is really take advantage of down days. And so that's primarily when we executed on the down days during the quarter.

Joseph Reagor

Okay. Okay. It sounds like the rest of it was not very discretionary. So that answers the question.

Operator

Our next question comes from Harrison Reynolds from RBC.

Harrison Reynolds

I appreciate the detail provided so far. Wondering if there's any incremental commentary on mining rates and grade reconciliation, specifically as you look at the October results you've had, looking at New Afton and Rainy River, how they've progressed? And separately, are there any other residual weather impacts to note that have drifted into 4Q?

Mitchell J. Krebs

Yes. I'd say we started the fourth quarter on plan. So that's an encouraging sign that we're trending toward where we think we will by the end of the year. As far as weather, when we were just down in Palmarejo, the rains seem to have just started to fairly subside. So that was trailing a little bit into mid-October. And now that seems to be the rainy season as usual, be behind them by mid-October or so.

Up at Rainy River, that wet weather that slowed them down in the open pit also is behind them and has been really for most of October and now the same is true heading into November. So I'd say the wet weather that we experienced is behind us now at both of those places where it hit us a little bit in the third quarter.

Harrison Reynolds

Got it. And then just a follow-up on the buyback question. Looking at $111 million in Q3 at the current share price, do you expect to accelerate the buyback pace? And what's the latest thinking on the right split between buybacks and other uses of capital here?

Mitchell J. Krebs

Yes. We'll take the same approach that we've taken since mid-May of, as Tom mentioned earlier, being opportunistic when we think the stock represents great value and still have that programmatic -- that aspect of the program continue to chip away even during blackout periods. As far as -- I can't predict the future, but we're not in the business of announcing a big buyback program and then not doing anything about it.

And I think what we've done in the first 2 quarters since the Board authorized that $750 million program demonstrates that. And I think this quarter, we talked about 46% of our free cash flow being returned. I think that was a similar amount in the second quarter. Not that we want to tie ourselves to a specific percentage for the fourth quarter and beyond. But I think you can see that we're serious about trying to return capital back to shareholders while maintaining a balance of bolstering our liquidity and reinvesting back in the business at the same time.

Operator

Our next question comes from Alex Terentiew from National Bank.

Alexander Terentiew

Just got a few follow-ups. I know a bunch of the stuff has already been touched on. But at New Afton, it's great to see mining rates picking up there hitting your target. Mitch, I think you kind of mentioned gold grades are increasing as well, but like implying here, grades have been lagging a bit so far. Are those where you want them to be now? Or are you kind of seeing the grades you want heading into 2027? Is dilution from the new block zone in line with plan?

Mitchell J. Krebs

Yes. I think, Mick, I'll let you talk about that in a second here. But as far as what the grades are for where we are in that C-Zone, we're right on track. I think we've indicated that there's an expectation that as we get into the south and east portions of the cave, we expect to see a bit of a grade kick even as early as this quarter to kind of help us get to where we want to get by year-end and seeing that continue on into 2027, which should be a much more kind of steady-state year there at New Afton. But Mick, any comments on kind of overall cave health and grade profile as we go forward?

Michael Routledge

Yes. We continue to manage that carefully, of course, at the start of the grade profile aspects of the cave. It's developing well. We're at the right run rates. And the grades that we're getting from specific draw points are reconciling fairly well to what we expected. It's really just a matter of time around that ramp-up and timing to get across to those higher-grade areas.

Alexander Terentiew

Okay. No, that's good to hear. All right. And then just another question on Rochester. We chatted on sulfides already. But I just want to clarify. So like are these -- the amount of sulfides you're encountering, this is in line with plan. And I understand it's probably a little bit variable quarter-to-quarter and you get a few surprises and a few surprises on the negative and the positive side here and there.

But generally, in line with plan and also the impact on recoveries now that this is a bigger operation, you're mining at higher rates. Just wanted to kind of again get a sense of how the recoveries are factoring into your outlook.

Mitchell J. Krebs

Yes, Mick, do you want to cover that?

Michael Routledge

Yes. So we certainly saw in mine plans that we're going to encounter some of that sulfide material. It was really expected to be more of a transition zone rather than a bright line. So once we got to that area, we saw that the sulfides were really clearly higher, and it was a clear boundary. So that's why we're managing the blending to less than 10% and managing that maximum limit of 0.7% sulfides and really targeting a lower level than that.

So that's the key aspect of Rochester. We've got the tonnes available from various areas in the pit, where we've just got to manage that blend to try and high grade as far as we can because those sulfide materials are the highest grade that we have.

Alexander Terentiew

Okay. Well, it sounds good. It sounds like you have the flexibility to manage that, which is what we want to hear. Last question, Tom, is just more of a reiteration. You mentioned some numbers earlier in the presentation about guidance for the year. You recently also said cash income taxes expected to be at the lower end of your guidance. Can you just remind me what you said about capital and a bunch of other items there? Sorry, I just missed your comments.

Thomas Whelan

Yes. So cash taxes at the lower end, capital expenditures at the lower end, exploration at the lower end, G&A at the lower end. So again, all of that factored into the culmination of -- after adjusting for a more mark-to-market on the metals prices, a free cash flow number of $1.3 billion, which isn't too shabby.

Operator

[Operator Instructions] Our next question comes from John Tumazos from John Tumazos Independent.

John Tumazos

Is it fair to say that Coeur is not looking for too many acquisitions or large acquisitions as we digest the 2 transactions over the last couple of years? And are you looking to simplify the organization in any way or make things easier to manage after having a few bumps in the road?

Mitchell J. Krebs

Well, I think it's fair to say that on the M&A front, we are in a phase right now of heads down, digest, deliver, focus on execution. As you mentioned, between SilverCrest and then New Gold, we've added 3 new operations. And the 2 new Canadian operations are large operations. And so we want to make sure that we're delivering and executing on this bigger and better platform that we've created over the last few years. So that's definitely the focus.

That said, you always have to keep an eye out of what's available that fits with the strategy and continue to make us a better company. But that's not the priority right now. And I think with the portfolio constructed the way it is with 2 Canadian assets, 3 U.S. assets, 2 Mexican assets, we're happy with what we have. We're mindful of the balance across jurisdictions, across by asset and by metal. And so we want to make sure that we're maintaining a nice balance across those 3 aspects of our strategy. And so we're not looking to change or reduce or modify that structure or the composition of the portfolio right now.

Operator

And with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Mitchell Krebs for any closing comments.

Mitchell J. Krebs

Okay. Well, thanks. We appreciate everybody's time today on a busy reporting day. Just to close out, the company has never been in a stronger position than it is. We're on track for a record year, really the first year with this new expanded North American platform. Liquidity levels are building. We're returning capital to shareholders and really well positioned for an even stronger 2027.

And so we look forward to speaking with you again early next year to give you an update on our fourth quarter and full year 2026 results. With that, thanks, and have a great day.

Operator

And with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.