Operator
Thank you for standing by. This is the Conference Operator. Welcome to the I Am Gold Second Quarter 2026 Operating and Financial Results Conference Call and Webcast. As a reminder, all participants are in 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 or then 1 on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. At this time, I would like to turn the conference over to Graham Jennings, Vice President, Business Development and Investor Relations for IM Gold. Please go ahead, Mr. Jennings.
Thank you, Operator, and welcome everyone to our conference call this morning. Joining us on the call are Bruno Adams, Prison Chief Executive Officer, Martin Denusen, Chief Financial Officer, Bruno Lemelin, Chief Operating Officer, Ankit Shah, Chief Strategy Officer, and Annie Tokyo Legacy, Chief Legal Officer. We are calling today from IAMGOLD's Toronto office, which is located on 313 Territory, on the traditional lands of many nations, including the Mississaugas of the Credit, the Anishinaabek, the Chippewa, the Haudenosaunee, and the Wendat peoples. At IAMGOLD, we believe respecting and upholding Indigenous rights is founded upon the relationships that foster trust, transparency, and mutual respect. Please note that our remarks on this call will include forward-looking statements and refer to non-IFRS measures. We encourage you to refer to the cautionary statements and disclosures on non-IFRS measures, including the presentation and the reconciliations of these measures in our most recent MD&A, each under the heading Non-GAAP Financial Measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and CEO, Renaud Adams.
Thank you, Graham, and good morning, everyone. Thank you for joining us today. It was another strong and safe quarter for IAM Gold. We produced 188,100 ounces of gold in the second quarter, bringing our year-to-date production to 371,700 ounces, positioning IM Gold firmly on track to meet our full-year guidance of $720,000 to $820,000 ounces. Our company continues to generate strong cash flow, with nearly $900 million of mine-side free cash flow produced year-to-date. This allows us to invest in our assets, strengthen our balance sheet, and return capital to our shareholders at the same time. Since December, we have repurchased more than half a billion dollars of buy and build shares. These repurchases, you know, reflect our confidence in the company's future and our view that our shares represent compelling value. That confidence is built on the growth we have across each of our mines. Over the coming quarters, we expect updated studies at Cote, Isakam, Westwood, and Milligan. Our next phase of value creation starts at Cote. The first step is the updated mine plan and the technical report, which remains on track for the end of the year. For the first time, this plan will bring the Cote and Gosling deposits together, building on the more than 20 million ounces of measured and indicated resources across the combined zone. The updated plan will define a near path to a near a near term path to increase throughput towards 40,000 tons per day through targeted the bottlenecking of the existing plant this work is expected to be low cost and high return supported by a larger reserve base and a longer mine life in parallel we're advancing trade-off study on the large studies on a larger expansion of coating we have adjusted the scope of this work to reflect the significant size and opportunity at GoTag. We are taking the time to assess the full scales of the asset, evaluating multiple scenarios to ensure that GoTag is positioned to deliver value for generations to come. At ISACAN, we continue to see strong cash flow generation, which remains a key driver of our share buyback program. In the first half of the year, we plan to release an updated mine plan that is expected to outline a mine life extension to 2035. At Westwood, our Quebec underground mine continues to redefine itself as a stable, cash-generative operation. Next year, we are excited to outline a path to extend mine life and increase underground throughput with the potential to transform Westwood into a larger, higher-throughput, lower-cost operations. And of course, at Nelligan, we are advancing one of Canada's largest emerging gold camps toward an initial economic study next year, marking an important step in defining its long-term development potential. In summary, IM Gold is performing well, generating strong cash flow, returning capital to shareholders, and building real growth for the years ahead with that let's get into the quarter starting with health and safety our total recordable injury frequency rate was 0.70 for the quarter and is tracking at 0.56 here today i would like to recognize the west the westwood team in particular whose continuous focus on on safe operations set a strong standard if they come first to us And I want to thank our teams across our operations for their ongoing commitment to safe and responsible mining. Learning to operation. IM Gold produced 188,100 ounces to our account in the second quarter. At Code 8, a tributal production was 67,300 ounces or 96,200 ounces on a 100% basis, which was made possible as the plant operated at near full capacity in June following the conveyor belt replacement and the commissioning of the second from Prussia. The Sakana-Westwood also delivers trunk waters with grades slightly above forecast. Cash costs, including royalty, were $1,289 per ounce for the quarter and $1,244 per ounce year today. For the full year, cash costs are tracking towards the upper half of our guidance range with improvement expected in the second half as cozy production increases. All in sustaining costs, including royalty, are likewise in tracking towards the upper half of the guidance range. As a reminder, A reminder, both Cote and Issacana has a royalty structure tied directly to the gold price. With the realized gold price averaging over $4,600 per ounce here today, royalties have added approximately $380 per ounce so far this year, about $55 per ounce above our guidance assumption. We continue to monitor inflation and energy market volatility closely. In the first half of the year, certain input costs increased by approximately 3% in line with our expectations. In the second quarter, oil prices were approximately $25 to $30 per barrel above our guidance assumptions, adding about $35 per ounce above our cost guidance. With that, I will pass a call over to our CFO to walk us through our financial matters.
Thank you, Renaud, and good morning, everyone. The combination of strong operating performance and a favourable gold price environment continue to generate significant cash flow during the quarter. Our capital allocation strategy is to deploy funds to sustain and optimise our operations, fund our expansion and mine life extension initiatives, and then use remaining funds for strategic opportunities and share all the returns. Net cash from operating activities totals $445.1 million during the quarter, an increase of $359.3 million when compared to the $85.8 million of cash from operating activities in Q2 2025. We used the operating cash flow to fund $115.6 million of capital expenditures, the full repayment of the remaining $100 million outstanding on the credit facility, $74 million paid to the government of Kina Faso related to the S-Account Dividend Distribution, and $147.9 million of shares repurchases under our Share Buyback Program. As you now noted, since we initiated the Share Buyback in December, IMGOLD has repurchased approximately 28 million shares for $510.4 million, which equates to approximately 45% of our mine-side free cash flow returned to shareholders a clear signal of our confidence in the value of our shares in June we further enhance our financial flexibility by amending the credit facility increasing total capacity from 650 to 850 million extending the maturity to 2030 improving cabinet terms and lowering overall borrowing cost the The amended facility also includes a further $250 million accordion feature, providing additional liquidity potential. As a result, we ended the quarter with $501.4 million in cash and cash equivalents, no amounts drawn on the revolving facility, and total available liquidity of approximately $1.35 billion. Revenues for the second quarter was $856.9 million on sales of 195,100 ounces at an average realized gold price of $4,384 per ounce. This was slightly below the quarter average as production was weighted towards the back end of the quarter. adjusted EBITDA in the second quarter was 507.1 million and adjusted net earnings attributable to equity holders of 241.6 million or 42 cents per share compared with 77.3 million and 13 cents per share in the prior period on a training 12-month basis adjusted EBITDA has increased to approximately $2.2 billion. Cash flow from operating activities, excluding working capital adjustments, was $442 million in the quarter, an increase of $315.6 million year-over-year. Mindset-free cash flow was $368.9 million in the second quarter, a $228.4 million, or 169% increase compared to Q2 2025. Year-to-date mindset-free cash flow was $893.5 million, a $613.5 million or 290% increase compared to the same period in 2025. Taken together, these results reflect the fundamental transformation of the company's financial position. Just over a year ago, iron gold carried more than $800 million of net debt. As of June 30, 2026, the company is in a net cash position with an undrawn and increasing revolving facility and a balance sheet capacity to fund growth and return capital to shareholders concurrently. And with that, I will pass the call to Bruno Lemelin, our Chief Operations Officer, to discuss our operating results and outlook.
Thank you, Martin. starting with Cote Gold. Cote produced 96,200 ounces on a 100-person basis in the quarter, bringing the year-to-date production to 170,900 ounces. Strong production is expected in the second half, putting Cote well on track to meet the production guidance of 390 to 440,000 ounces this year. The story of the quarter is really the story of June, when the plant operated at near full capacity following the conveyor belt replacement in May, and the commissioning of the second cone crusher earlier in the year. On the mining side, we moved 11.7 million tons of total material with 3.1 million tons of ore at a strip ratio of 2.8 to 1. Grade mine averaged 0.86 grams per ton. Both the strip ratio and the grade reflects where we are in the mine plan we work on pushback areas and focus on opening up a new bench to set up the second half of the year in the plant we milled 2.9 million tons we managed throughput early in the quarter ahead of the cv10 conveyor replacement in late may once the new heavier gauge belt was installed we rent the plan back to nameplate and process over 1 million tons in the month of june alone. S-grades averaged 1.12 grams per ton at recoveries of 93 percent and I would note that reconciliation between our reserve model and milk feed continues to sit well within expected tolerances. The most significant operational milestone in the quarter was discontinuing external contractor crushing by the end of June. We are already seeing the benefits as the processing costs in June averaged $17.72 per ton, down from an average of $22.5 per ton over the prior three quarters. We have seen additional operating improvement, first with better sized material now feeding the HPGR. We are seeing improved wear rates on the rollers. A longer HPGR lifespan should translate into lower maintenance costs and better crushing circuit availability going forward second the mining fleet that have been dedicated to rehandling material for the contract crusher is now being redeployed on on two mining activities combined with three new all trucks coming into service we expect mining rates to step up in the second half looking forward we anticipate the plant averaging name plate of 36 000 ton per day over the course of the year and head grades between 105 and 115 grams per tonne production is weighted to the second half on both higher throughput and higher grades turning to cost cote reported second quarter cash costs excluding royalties of 1245 dollars per ounce and audience sustained costs of 2082 dollars per ounce costs remain elevated on external contractor crushing contractor support for the conveyor repair and schedule maintenance, compounded by higher diesel prices. On a unit basis, mining costs average $4.49 per tonne mined and milling costs $20.85 per tonne mill in the quarter. Both remain above where we intend to operate, and the path to improvement is clear. On mining, the contractor crusher required significant re-ending and tied-up all-truck utilization. With the contractor phased out and three new all-trucks coming into service, that capacity returns to the pit. On mining, June's cost of 17.72 per ton gives us a real-world data point for what the circuit delivers without contracted crushing. We are targeting mining costs of $4 per ton and mining costs of $15 per ton by year end, with further reductions expected into 2027. On capital, we invested $54.6 million in the quarter on attributable basis. Capital expenditures are to be weighted to the second half on equipment delivery timing and project schedule. Putting that together for the year, we expect cash costs excluding royalties at COTI near the top end of our $900 to $1,050 per ounce guidance range, and ASIC excluding royalties at the top end of the $1,475 to $1,625 range. COTI carries a 7.5 gross margin royalties and various net smelter return royalties, costs, which accounted for $309 per ounce in our cash costs, or 20% of cash costs. Costs are expected to improve through the second half on higher production volumes, the removal of contracted crushing, improved maintenance cycles, and greater efficiencies as the pit opens up. With a clear path to higher production and lower costs, attention now turns to the next phase for COTAE. On June 1st, we announced an updated mineral resource estimate that, for the first time, combined the Cote and Gosling zones together into a single-block model. On a 100% basis, measured and indicated resources increased to 20.3 million ounces with 3.5 million ounces of inferred. This larger resource base will support our updated technical report and life-on-mine plan which we expect to release towards the end of the year the plan is expected to show a significant increase in both reserves and mine life it will also set out a near-term path to raise processing capacity beyond the current main plate of 36 000 tons per day toward a sustained rate of about 40 000 tons per day that first step comes from further development making and targeted plant improvement, not from a major new bill. It includes accelerating certain works, such as an additional verdimille. In parallel, we are evaluating longer-term expansion scenarios beyond 40,000 tons per day through technical infrastructure and permitting studies. Our objective is to determine the right scale and the right development path for coating. For a project of this size, scope, and importance, it is critical we determine the optimal long-term expansion strategy. The additional non-recurring sustaining and expansion capital we are investing today supports that work. The plant improvements provide improved ability and capacity. The phase 2 PIP pushback gives us operating flexibility in the midterm, and it also prepares the ground for a larger operation. We are reducing the risk of the bigger build well before we commit to it. We also continue to grow the resource. At Côté and Gosselin, we are drilling over 30,000 meters to test the extensions to the northeast to improve confidence in the resource and to convert inferred ounces into the educated failures. Turning to Westwood, the operation delivered another strong water producing 32,400 ounces supported by solid underground performance here today westwood has produced 68 600 ounces positioning well on track with our guidance target of 110 to 130 000 ounces underground mining total 104 000 ton at an average grade of 8.4 gram per ton with the grandzuc open pit contributed 109 000 tons of ore as waste repaying continued to position to position the pit for future production mill throughput was 287 000 tons at a blended grade of 3.75 gram per ton and recoveries of 94 throughput was lower than the prior year due to a planned mill shutdown early in the quarter but overall operating performance remains strong. Most importantly, Westwood generated $56.5 million of mine site free cash flow during the quarter and $166.5 million year-to-date. The operation continues to demonstrate the value of the technical and operational changes implemented over the past years, delivering safe and reliable production, strong margins, and meaningful cash flow generations. Turning to cost and outlook, Westwood continues to perform well across both operational and financial metrics. Cash costs were $1,606 per ounce in the quarter, and audience sustained costs were $2,163 per ounce. Year-to-date, ASIC is averaging $1,921 per ounce, which is tracking below our full-year guidance range. While we have seen modest cost increases related to additional gridding activity and higher explosive cost, overall cost performance remains strong. Looking ahead, our focus is on unlocking the next phase of value at Westwood. This year, we are investing around 30 million of expansion capital to advance exploration and development activities in the eastern extension of the mine, where gridding continues to demonstrate encouraging results including a thickening of the mineralized system. Our teams are now advancing underground development into this area and conducting bulk testing to better understand its long-term potential. We expect to publish an updated technical report in the second half of 2027. This work is expected to support an extension of mine life and evaluate the potential for more productive bulk mining methods within the eastern zone if successful this could support higher underground throughput improve mining costs and increase production over time turning to a second the operation delivered another strong quarter producing 88 400 attributable ounces an increase of 15 percent over the prior year period year to date the second has produced 183,500 ounces, putting the mine well on track with our guidance targets. Performance in the quarter continued to benefit from positive rate reconciliation as mining progressed deeper into phase seven, consistent with what we have observed in previous phases of the deposit. Mining activities totaled 12 million tons during the quarter, including 2.5 million tons of ore while waste tripping remained elevated as we continued to advance the adjacent layout. Despite the higher stripping requirements, the operation delivered solid throughput of 3.2 million tons with head rates of 1.13 grand per ton and recoveries of 88%. Most importantly, SACAN continues to generate substantial cash flows. Mine site-free cash total $162.1 million during the quarter and $464.8 million year-to-date, even after a $60.2 million tax payment. Over the last 12 months, SACAN has generated more than $800 million of mine-side free cash flow, highlighting the strength of the asset in the current gold price environment. As we look into the second half of the year, mining will remain focused on phase seven in the development of the Lao pit. While grades are expected to normalize as additional Lao ore enters the mine plan, the operation remains well positioned to achieve annual production guidance and continue generating significant free cash flow. Turning to cost, SACAM delivered than a strong quarter, cash costs excluding royalties were $1,214 per ounce, a reduction of 22% from the prior year period, and the audience sustaining costs excluding royalties were $1,691 per ounce. The improvement was driven largely by unit cost performance in the pit, where open pit mining costs fell to $4.79 per operating tank from $6.02 a year ago, as freely gained in the initial separate benches of the LAWO pit reduced both explosives and energy consumption. Mining costs also improved to $18.88 per tank as the liner replacement was completed in the first quarter this year rather than the second royalties accounted for 510 per ounce representing approximately 30 percent of cash costs and an increase of 220 dollars per ounce over the prior year period this reflects both the higher gold price and the current royalty regime in which our average royalty rate in the quarter was 12 percent against nine percent a year ago Looking beyond 2026, we intend to publish an updated technical report in the first half of 2027, which is expected to demonstrate the potential to extend ESSECAN's mine life through 2035, supported by additional phases in the ESSECAN pit and the adjacent open pits. With that, I will pass it back to Renaud.
Thank you, Bruno, and congrats to you and your teams on strong and safe operational results. Turning to growth, beyond our three operating mines, the Nelligan Mining Complex in Quebec is where we see the next chapter of this company. Nelligan now hosts 4.3 million ounces of indicated and 7.5 million ounces of inferred mineral resources. The consolidations completed last December gives us 100% ownership of one of the largest pre-production gold camps in Canada on a single contagious land package. Our focus this year is on drilling. We have budgeted approximately $24 million across the complex in 2026 with programs at Nelligan, Filibert, and Munster Lake. Roughly 45,000 meters of close to 70,000 meters are complete and we expanded the Nelligan program during the quarter from 18,000 to 24,000 meters on the strength of results a day. Mineralization remains open along strike and at depth and we expect to release drill results later this year. What makes the district compelling is not any single deposit but the relationship between them all of the primary deposit sits within 17 kilometers radius which supports the conceptual vision of a central processing facility fed from multiple or sources that is the concept our teams are working to define we expect to publish an in our inaugural technical report for the complex in the first half of 2027 which will bring this deposits together into a single development concept for the first time. Navigant has the potential to become one of the premier development projects in Canada and with the deposits still open our focus remains on growing the resource and defining the full scales of this district. Before we open the land for questions, a few closing thoughts. This was another quarter of safe, consistent execution. We remain on track for guidance. We have generated nearly 900 million of mine site free cash flow here today and we ended the quarter in the net cash position with nearly 1.4 billion of liquidity while returning over half a billion dollars to shareholders since last December. Looking ahead we have work underway across every asset. At Gotei, an updated technical report later this year integrating Gotei and Gosselin for the first time with a much larger reserve base, a longer mine life, and a near path to approximately 40,000 tons per day. The consolidated resource point to a larger operations over time and will continue to advance that work. At its account, an updated mine plan in the first half of 2027, evaluating a mine life extension through 2035. At Westwood, mine life extension and underground expansion study in the second half of 2027. And at Meligan, our inaugural technical report in the middle of next year. Each is about the same objective, understanding the full scale of what we hold, and doing it from a position of financial strength. Thank you for your continent support. Operator, you can now open the line for questions.
Operator
Thank you. We will now begin the question and answer session. To ask a question, 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 Satish Kastanathan with Bank of America Securities. Please, please go ahead.
Yeah, hi. Thanks for taking my questions. My first question is on the Cote expansion study. Could you maybe provide a bit more color on what changed over the past three months that drove the shift to a more phased approach? Are you now leaning towards a much larger expansion, maybe doubling the capacity to 70,000 to 80,000 tons per day? Or did you come across some technical findings that require more time to complete the studies?
Okay, so thanks for your questions and happy to provide more questions and Bruno, you can add to it. Not to read between beyond more than call it discipline and diligence capital allocation at this stage. It became obvious over the last few months as we advance and continue to look at the opportunity that this large resource base at Cote and Gosselin, you know, provide for potentially multiple different scenarios. And quite frankly, when you're looking at the next three years, you know, we'll be pretty much, you know, executing on the same. It doesn't really matter of the scenario. The next three years are a lot around focusing, you know, on improvement, on reducing our costs, or hitting, you know, our 36 on a very sustaining basis and then slowly ramping up to $40,000. we're going to continue. We're not going to waste our time, obviously. We're going to continue with our baselines. We're going to work on vibrations. That's all what is required to potentially. But as you mentioned, it's not so much about the, is it like a 50, 60, 70 more than we just don't want to limit ourselves on the multiple and take just more time, you know, to really assess different scenarios. So if you remember back in 2022, the company released a 43,101 at 36,000, moving towards 42,000, from which now we're sitting in about 7 million of reserves. So the opportunity here is to update this with the new projections from 36 to roughly 40. We could potentially do a little more and update our costs and so forth and just continue to assess and just pick what we think is the best. This is one of the top resource base in Canada. It's not about rushing the outcome a bit, but really take the time for proper and discipline. There is no technical challenges beyond. It's just multiple opportunities. We have mentioned recently, of course, up to very recently, the opportunity to go up to $50,000. And we were challenging ourselves that we do the dry right away at the higher throughput. So, clearly, there is opportunities at Cote that deserve a little more of discipline and look at and come up down the road with what is the best. So, again, nothing to be worried about. Definitely no technical challenges more than discipline and diligent approach. Renaud, if you want to hear anything.
Yeah, so the main objective of this technical report is also to confirm the reserve on the Gosselin side. So we will see a large expansion on the reserve side coming from that report.
And quite frankly, as Bruno mentioned, there is very low to nil differences. We will capture the massive increase of the reserve base in the short term, the 40, 50, and so forth. This is not what drives the value more than the extensions of the life of mine and the massive expansions of the extension of the reserve base and so forth. And work diligently to hit the 36 consistently and up to 40, lowering our costs, open the pit. So, again, pretty much the same execution over the next two years will use a time for environmental baseline and advance, whatever. There is some permitting that could advance as well, water dam, and so forth. So, we'll be more specific in the report, and we'll be capable to provide the next three years for this. And, again, depending on the expansion down the road, it doesn't really change the next three years anyway.
Okay. Thank you. looking forward for the update in fourth quarter. Maybe my second question is on your capital allocation priorities. Great to see continued strong buybacks. With the company now in a net cash position and generating strong pay cash flow, what is your latest thinking on buying back the 50% quarter royalty from Franco Nevada and on the initiation of dividends? And where does M&A fit into this priority list.
So, Martin, please go ahead.
Good morning, Satish. We continue to look at the buyback opportunity of that royalty at Franco, and there's many reasons why it would make sense for us. The price would be the same as the price that was set a year ago in a much lower gold price environment, and there's many other impacts, including reducing the cost structure and burden on COTA. So we continue looking at that. In the future, we can fund that with internally generated cash flow, and we have until April of next year to make that decision. So we are looking at that very closely. The price doesn't change, so there's no real reason for us to do it earlier than when it makes economic sense to do so. So on the dividend, we continue to look at this year as a good year to buy back shares, and we continue using the cash flows to fund that buyback. And then beginning of next year, as we are in that net cash position, as you mentioned, it would start making sense for us. So we are looking at that dividend starting early next year.
I don't think so. will comment on M&A at this stage. We'll remain very focused and continue to create value for our shareholders. Okay. Thank you.
Congrats on a strong quarter. Thank you.
Operator
Thank you. The next question comes from Mohamed Sidibe with National Bank. Please go ahead.
Hi. I'm taking my questions and congrats on a strong trading quarter there. Maybe just a follow-up on the expansion to the 40,000 tons per day out there. So if I recall correctly, the prior-touted expansion to 50,000 tons per day also was understood to have a doubling of the dry line, a third vertical and an increase by an order of capacity. So for this debottal necking to 40,000 tons per day, can you provide us with a little bit more color on how we should think about capital for data optimization versus the previously, call it maybe 500 million and change that was envisioned for the 50,000 ton per day case? Thank you.
Well, essentially, as I said, the most important thing is the next three years is pretty much the same scenario. So if you remove, like, the expansion and you're looking at optimizations, we have the discuss at large. This year, we're spending around $80 to $5 million in gross capitals to open the pit, prepare the pits for larger volume and so forth. We're advancing well. And you could expect this spending to continue in 27, 28. And at that point, we hope that the pit will be fully open, you know, and well, not fully open to the portfolio, but provide, you know, for larger volume mining and more efficiencies. We're also spending more sustaining capital this year to improve in some aspect and expect that to continue as well as we want to install the repeat system in the fines and the course and proper, you know, continuum of operations. This is a huge ticket item. We'll improve some infrastructure as well as we continue to expand the mine fleet. So, there would be some needs for maintenance facilities as well, improvement and so forth. And so, the next three years is really about positioning the sites to be a very strong, low-cost, long-term concept. This is the focus. So, not much of a difference to what we have. We have already discussed in the past of the next three years. And the only thing is we have mentioned that the $50,000 starting maybe $29,30 could be in the range of the $500 to $750 million of capital. This was really to bring it from $40 towards the $50. And this is what we're parking for the time being until we have a better view of what is the optimum scenario. down the road but expect the execution pretty much on the sustaining capital optimizations improvement of infrastructure and operational equipment around the crushing to continue and the growth path to on the mining side to continue so no change there the only difference so far is about the seven huts five to seven hundred million of extra capital expansion that were put, you know, for the time being that parking.
Thank you. That's very helpful. And then maybe if I can move on to Kote into the quarter, great to see the process cost improvement in June. And I think mining costs were also lower quarter. So how should we think about mining and processing costs? Specifically, I think you're pointing to about $18 per ton realized in June on the process cost front. But how can we think about that improvement into Q3 and Q4, the asset and into 2027 towards kind of your target of 4 and 15 there. Thank you. Go ahead Bruno.
Hello Mohamed, this is Bruno. First we have a program that is tracking those costs and we have like close to 31 initiatives meeting and tracking those costs and trying to get them down. I would say that the reduction or the elimination of the contracted crushing is going to help because now the the fleet like I mentioned is going to be fully dedicated to exit mining so that will increase the volume of mining so just on the volume basis that will increase that will help decreasing your unit costs also we are adding new units in the fleet And after that, our consensus improvement program has identified, like I mentioned, 31 initiatives that we're tracking. And we're very, very confident and we're feeling strong that we're going to be able to meet our $4 targets on the mining site by year end. Same thing is happening with processing. What happens is we have the second cone crusher is helping to have the best guarantee entering the HPGR so the size that goes the top end that goes to the HPGR is as per spec we expect longer life from our rollers or tires at the HPGR so in the past we used to change them twice a year now we expect to change them once a year so that's going to have a big impact on our positive impact on our maintenance costs and also availability because you don't stop you don't stop the HPGR for for nothing so increase availability improve granulimetry like and better efficiency in your maintenance cycle we have also identified identified a numerous amount of initiative from our cost improvement program, and we are very well positioned to be meeting our $15 per ton target by year end.
Great. Thanks a lot for that call. And then, in fact, if I may, a final question for Martin. Just on the income tax payment for the remaining second half of the year, how should we think about that spread for the remaining about $100, $115 million there?
Good morning, Mohamed. So for the income taxes, we made a larger payment in Q2 in Burkina, and that's normally what happens. It's your catch-up payment every year because we do pay quarterly payments, and then the future payment is based on what you expect it to be. So the income tax payments for the remaining of the year is between $35 million to $40 million per quarter, And then we also will be paying the withholding tax on the new declared dividend in Burkina FASO of $26.8 million in the third quarter. So we are still kind of like falling in that range of $205 to $215 for the year.
Great. Thanks for taking my questions.
Operator
Thank you. Thank you. The next question comes from Anita Soni with CIBC. Please go ahead.
Good morning. Congrats on a strong operational quarter. I think a lot of the questions have been asked and answered. I just wanted to, I guess, and with Bruno talking about the mining rates, I was going to ask about the stripping. How should we think about that into the back half of the year? Because I think the beginning of the year was a little lighter on the stripping side than I had expected. This is at Cote.
Yeah, the stripping ratio should be around I'd say about 2.6 tons to one.
And so that's in the back half of the year okay. Any change to the grade in the back half of the year? I know you got it to 1.05 to 1.15 but any variability like in terms of like lower than higher or higher than lower in Q3 versus Q4?
So we expect stronger head grades or grade mine in the second half of the year like I mentioned like ranging between the one of 105 to 115 ground per ton so which will help having a stronger H2 okay and then just in terms of going back to the the study could you just get you know clarify for me like in simple terms what we should expect to see in the study so a path to 40k ton per day with you know the capex associated with that and then longer term what would be what would you be including in that Q in the study that you'll release in in Q4 or I guess is it
in Q4 with Q4 results yeah we expect to release the results of the the report at the end of this year that will indicate okay how we can valorize the Goss land reserve like I mentioned the main objective of this report is is to understand okay how many reserves we have from Gosling hmm so we extend we expect a large expansion in our reserve base when you tie the quotain Gosling block model all together it's called the super bit concept so that's that's objective one at the 40,000 ton per day cadence and it's adjusted cost structure so this is
basically what we need to be expecting but also in that technical report there's a section on future opportunities and that's where we're going to also indicate what we see in the future in terms of potential expansion okay if i can ask if i could just one thing i mean the way to really looking at this let's say at the 36 to up to 40 i think it's fair to say that you maximize the depletions of cote before you have the obligations to cross you know and start mining the goslin so So you maximize potentially in pit, a co-disposal and so forth, as we have largely discussed. As you advance the throughput towards the 50 and eventually beyond the 50,000 comes the obligations to start Gosselin a little quicker to a point that a scenario like a 70,000, basically you would be mining as soon as possible both pits. So that's really where it's being played, so that capital allocations versus benefits, and we want to do like the proper, continue to work hard, you know, on the trade-offs and so forth. And again, as I mentioned, focusing on the next two, three years on optimizations, which basically is the same. But as we advance in time, the game is there. The game is about balancing capital allocations versus how fast and quicker you want to build, you want to mine Goslands, and what does that play in the capital allocations.
So this is really how we trade out.
Okay, so that was going to be my next question. With respect to the tailings capacity under the 40K time per day scenario, Is the capacity you have sufficient to what you would expect the 40K time per day scenario and the reserves that you would incorporate with this study at your end? Or would you have to do some additional permitting?
Yeah, so that will require, like right now, the TSF or the TMF has a capacity up to 233 million tons. so of course by just including Gossin you will need additional savings capacity that's what the project team is currently looking adding more capacity but also looking at other options like co-disposal like Anu mentioned so those are the kind of trade-offs that are going to be published in the technical report at the end of this year.
As a rule of thumb there is maybe somewhat around the 200 million tons of tailings that are like, where do they go? But yes, there wouldn't be any issues to find the space for. But as you increase the throughput of the mining, as you reduce your change of co-disposal, but you would just build extra capacity larger, but it's all fit.
And co-disposal meaning that you would be placing some ore within parts of the cotay pit that have been depleted and somehow sectioned off?
That is correct. That is correct. So, there is an opportunity here as cotay is depleted that not just use it for tailings, but eventually some waste as well.
Okay. That's it for my question.
Operator
Thank you. Thank you. The next question comes from Matthew Murphy with BMO Capital Markets. Please go ahead. Excuse me, Mr. Murphy, your line is open. Is your phone muted accidentally?
Operator
Please go ahead. Yes, sir. No worries.
I had a question on Essakane. You have another dividend declared, and while you're studying this MindLife extension, how much cash do you keep in Burkina, you have to let that build up a bit in the event you go forward with the extension.
Go ahead, Mark. I'm so sorry. It's not we're looking for the answer here.
Good morning, Matt. So, it's our decision how much cash we keep in Burkina. At the moment, it's depending on the timing of the year and when the tax payments and payments like that is scheduled. It's between $100 to $200 million. When we look at next year, there is more than enough cash flow for Issacan to fund all of the potential mine life extension by itself, and then still a considerable portion then left to repatriate to ungold. So the timing of the cash flow means we don't really need to build up a larger balance there. It just is sufficient as they generate cash to fund additional capital.
Got it. And then this latest dividend, like should we think about that when it comes out in regular payments that that's like a year-long process and then you look at the next dividend?
Yeah. So the current dividend that we declare, the $400 million of our portion, if the gold price average is about $4,000, it will take three quarters, maybe a bit more than three quarters for us to get there, and then we are into the new cycle almost again. At a higher gold price, it could happen faster, but we'll balance that with the funding of the mine lab extension as you referred to as well.
Operator
Thank you. The next question comes from Tanya Drkoskinek with Scotiabank. Please go ahead.
Oh, great. Good morning, everybody. Thank you for taking my question. Just so that I understand completely on this Cote and just some of your cash flow that would be going out. Renaud, I think you said that 80, 85 million of expansion capital for the next couple of years, just to keep that, get to 40,000 tons per day and maintaining that would be about, you know, for three years, that'd be about 250 million or thereabouts. And then I've got this 350 million potentially going out for Cote royalty if I was to buy that back. Should I be thinking then that that expansion of 500 to 50,000 tons per day would be something that probably you wouldn't look at spending until your 29-2030 time frame. I'm just trying to see the cash flow and what sort of things are going out.
Okay, now thanks for, and Martin, you would add to it. But the $85 million of the gross capital that I referred to, it's pretty much for the mining side of the business, right? So we have a plan to open, enlarge the pit of Cote, increase the fleet, and be more efficient. So that's on the mining side, and there's a gross capital. Some of the improvement, like we discussed, to go to the $40,000, you would definitely put repeat system and improve some aspect operational, but this is not the expansion per se. So that would continue. So to your point, you're right. So far, what is no longer on the paper, and we'll see how it goes as we continue, is the extra probably $500 to $700 million that we have accounted for starting potential in 29, over 2930, to bring it from the 40 to the 50. So that portion only is part. But anything else, expect the gross capital for the mine component to continue in 27-28 and expect our sustaining capital to have a component like this year of improvement. And the quickest we could install those repeat systems, the quicker we get to the $40,000. So that would be the priority. We may increase it to go faster, but roughly the next three years is really about limiting the capital as much as possible to the $40,000 stage. And Martin, happy to.
Yeah, thanks for now. And morning, Tanya. The fifth, like this year, we are spending about $50 million of capital to help us increase the efficiency of operation and reduce the unit cost. We include that in sustaining cost in our reporting. And we expect to continue to spend up to that amount every year, maybe a bit more in the next couple of years. And that is to fund the initiatives that Bruno also related to, to bring down the unit cost. And the payback on that is pretty good because the amount of tons in this large resource, any improvement on your dollar per ton cost pays back that capital pretty quickly. And that's why we want to make this investment in the next few years.
Okay, so that's in your $160 million plus or minus sustaining costs that you have guided for this year. I guess what I'm really trying to get at is for us to get to that $40,000, which you're going to be providing in the study, from the mining side there's something, from the processing side there's something, the allocation of growth between expansion and sustaining is sort of for the two. So how should I think of that cost for the complex, your share, for the next three years? Should I be thinking it's $160,000 plus $85,000 per annum for the next three years?
I'm afraid, Tanya, we cannot be that precise, to be very frank, because that's exactly what is the last portion that we're finding as we speak, is the capital for each block. we would be releasing those numbers you know in the fourth quarter so you'll be fully equipped to to to force in the next three years as soon as or the latest december so i would not advance too much on it and i would i would i would refer to the upcoming report which will clarify our next three years okay we'll wait for that uh maybe just now um you know i look at that complex you know
one processing facility and I see the four deposits. How should we be thinking about that from a conceptual level and a high level? Is this a camp that could do 300,000 ounces, 400,000 each from each deposit? I'm just trying to think of what could this complex do.
Yeah, the complex has definitely the resource base to eventually come up with a scenario that could be probably as high as 400 000 this is our objective here so some sort of not saying that it's a can it doesn't have any potential beyond the 2035 but it's very important to us that we find a way for the continuum here and eventually should the mine doesn't go beyond 35 so at least we have a continuum but in in in canada so we think uh we think with the the starting of Nelligan's with Philiber and with the underground of Munster Lake, the concept of the three. We're working and generating something that's between the three and the four, but we're definitely looking at towards the 400 per annum.
Okay, we'll look forward to that study as well. And then maybe just lastly, just how should I be thinking? You gave guidance on Cote for the second half of the year with higher throughput, higher grade. How does Westwood and Essekin, how do they look for Q3, Q4? Is it evenly distributed or is there anything grade or throughput that I should know about?
Great. For Essekin, it's going to be pretty much even, a little bit stronger on the Q4.
Sorry, is that for Westwood? bit stronger in q4 oh i thought you were talking about the second so yeah so for westwood it's stronger for uh for in q4 yeah then q3 yeah and now we we did have a very strong we we did have a very strong h1 at uh at westwood so h1 times two you know well we'll definitely put beyond so uh But we see an H2 that would be strong, but not necessarily stronger than the H1. And I think it's a can. We know you said that pretty much the same.
It's a can because you have the rainy season right now. So it's going to be just at that lower than Q4, not materially.
Okay. All right. Thank you.
Thank you, Sam. Appreciate it.
Operator
Thank you. The next question comes from Kerry Macaruri with Canaccord Genuity. Please go ahead.
Hey, good morning, guys. Just a quick one for me. You mentioned the performance at Cote in June. Just wondering how it's gone through, you know, we're through July now and in August. That's still running at that nameplate.
Well, it goes very well. like the the the thing that we're seeing is is the addition of the second cone crusher is giving us like great performance I called it peak performance that goes even beyond the 36,000 ton per day the name of the game is to have sustainment is to have that short term performance and to be having it like sustain over time so this is our current plan right now so that's what we've been doing in July great results but what we want to do is to be able to have that kind of performance along over the year and then we can have a good baseline for what is the next bottleneck and how we can get to the 40,000 sun per day but right now that's what we work but we really like what we see with the addition we made lately with the second cone crusher HPGR that is well aligned the interface between the mine and the mill so we see great integration between the the mine team the mill team and we see peak performance that are totally impressing us but the fact here is that we need to have those kind of performance to be sustained over time so comfortable with the 36 000 for the second half of the year
You know, everything is in place to average it, and there's a little bit of a transition, you know, getting used to not having the aggregate plans, you know, to rely on. So, it's like you rip the bandit, you know, and you learn to – we had a good month of June. Like Bruno says, we see several days, you know, with peak above. So, now it's about, you know, learning to stabilize and producing those tons. So, but the capacity is there for sure.
Which I need to mention that in August, it's our annual shutdown, so we need to take that into consideration. How long is the shutdown?
Five days. Okay, great. That's it for me. Thanks, guys.
Operator
Thank you. Thank you. This concludes the question and answer session. I would like to turn the conference back over to Graham Jennings for any closing remarks.
Thank you very much, Operator, and thanks to everyone for joining us this morning. As always, should you have any additional questions, please reach out to Renaud or myself. Thank you all, be safe, and have a great day.
Operator
Thank you. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant
