Earnings Call Transcript - ORLA Q3 2025

Operator, Operator

Good morning, ladies and gentlemen, and welcome to the Orla Mining Conference Call for the Third Quarter 2025 Results. My name is Audra, and I will be your conference operator today. Please be advised that this call is being recorded. I would like to turn the meeting over to Andrew Bradbury, Vice President, Investor Relations and Corporate Development. Please go ahead, Mr. Bradbury.

Andrew Bradbury, Vice President, Investor Relations and Corporate Development

Thank you, Audra, and welcome to Orla's Third Quarter 2025 Conference Call. We will be making forward-looking statements during today's call, and I would direct you to the second and third slides of the presentation, which contain important cautionary notes regarding these forward-looking statements. All dollar amounts discussed today will refer to U.S. dollars unless otherwise indicated. The Orla executive team is on the call this morning, and I'll now pass the call to Jason Simpson, President and CEO.

Jason Simpson, President and CEO

Thanks, Andrew. Good morning, everyone. I would like to walk you through the key developments of the last quarter, a period that tested our resilience but ultimately highlighted our operational strength and diversification. Most notably, we had another strong quarter with record margins delivering cash to the balance sheet. In particular, we generated record free cash flow supported by record gold production and price. At Musselwhite, the team had an outstanding quarter of strong gold production. At Camino Rojo, a pit wall event occurred in July but a stabilization plan was enacted quickly, so the operations have rebounded nicely. The update to 2025 guidance reflects a deferral of mining higher-grade material due to the mine resequencing. We are also making impressive strides in advancing our growth projects. At Musselwhite, our growth for longer vision is focused on both near-term and longer-term opportunities for resource growth, expanded production, and mine life extension. Recent drilling has confirmed an extension of the main gold trend, indicating potential to extend the mine life and increase production from our cornerstone Canadian asset. At our Camino Rojo underground project, work is underway on delivering the preliminary economic assessment in 2026, a key development step and key development steps thereafter to advance this to a construction-ready project. This takes us to South Railroad, our heap leach project in Nevada that is now moving toward final permits and construction start with project updates to be delivered in the weeks ahead. This next building block will establish an operating presence in Nevada and take our annual production to closer to 0.5 million ounces at competitive costs. We look forward to increasing the frequency of updates as we actualize this project. Andrew Cormier, our Chief Operating Officer, will now discuss our operating performance.

Andrew Cormier, Chief Operating Officer

Thank you, Jason. Musselwhite mine milled 326,000 tonnes of ore and 329,000 tonnes at a mill head grade of 5.87 grams per tonne gold. Gold recovery rates of 95.3% resulted in production of nearly 58,000 ounces of gold. Our investment in new underground mobile equipment and preventative maintenance programs on the existing equipment are contributing positively to the working conditions and productivity. Ventilation upgrades and underground infrastructure projects remain on track for completion in early 2026. The company continues to expect steady production and cost performance from the fourth quarter. At our Camino Rojo oxide mine, mining operations were temporarily suspended in late July following an uncontrolled movement of material along the north wall of the open pit. Once again, I'm pleased to highlight zero injuries, zero equipment damage, and zero environmental impact as a result of the pit wall event. Our pit wall monitoring systems worked well, detecting the movement early and allowing us to pause mining and respond in a controlled manner. This incident validated our commitment to monitoring and safety protocols. We maintain production continuity by crushing and stacking existing stockpiles. I would like to thank our team who successfully mitigated the short-term impact, ensuring consistent processing. The current plan includes mining from surface downwards to push back and stabilize the entire north wall and reestablish safe working conditions along the north side of the pit. The north wall will be reestablished at a lower overall stope angle at single 10-meter benches based on a design that reduces the risk. During the quarter, Camino Rojo mined nearly 0.7 million tonnes of ore and 2.4 million tonnes of waste for an implied strip ratio of 3.34. A total of 1.7 million tonnes of ore was stacked at an average grade of 0.44 grams per tonne of gold, equating to an average stacking rate of approximately 18,900 tonnes per day. In addition, 1.1 million tonnes of low-grade ore were rehandled and placed on the leach pad at an average grade of 0.32 grams per tonne gold. In total, 2.8 million tonnes of ore at an average grade of 0.4 grams per tonne gold were placed on the heap leach pad during the quarter. Total quarterly production for Camino Rojo was 22,059 ounces of gold. South Railroad hit an important milestone this quarter with the Bureau of Land Management publishing the notice of intent in the Federal Register on August 13, which initiates the formal environmental impact statement process under NEPA. More recently, in November, South Railroad transitioned from participation under the FAST-41 transparency process to a FAST-41 covered project. The importance of this shift is that the FAST-41 coverage provides tools to support efficient review, reduce uncertainty, and help ensure the project meets the highest standards of environmental stewardship and regulatory compliance. In parallel, the U.S. Army Corps of Engineers Section 404 permit application, addressing wetland and surface disturbance impacts was submitted in August 2025 and deemed administratively complete. The BLM NEPA public-comment period closed on September 18, with the largest category of submissions being letters of support, reflecting strong community and stakeholder backing for the project and the U.S. Army Corps of Engineers Section 404 public-comment period ended on September 15 with no significant comments received. At the state level, the company has secured a Class I and II Air Operating Permits while water-related applications continue to progress with the Nevada Division of Water Resources. The Water Pollution Control Permit and the National Pollutant Discharge Elimination System discharge permit applications have been submitted for review in the third quarter 2025. The BLM's Record of Decision, the final permitting decision, is targeted for the second quarter of 2026. Following this approval, on-site construction on the South Railroad project would commence, and its first gold is targeted for early 2028. We continue to engage with local, state, and federal stakeholders to sustain momentum in the permitting process in the United States. Our project team continues to work with M3, our EPCM on the engineering for the projects to be prepared for on-site construction starting next year. We are planning on providing a project update in the weeks ahead, which will include a feasibility study update on the South Railroad project. The feasibility study we will release and construct honors the plan of operations submitted initially in 2020, but is significantly more advanced to a construction-ready project supported by detailed engineering, vendor pricing, and refined execution planning to enhance the overall confidence in the project. Our team is gearing up for the successful development of the South Railroad project. Etienne Morin, our Chief Financial Officer, will now discuss the financial results for the quarter.

Etienne Morin, Chief Financial Officer

Thanks, Andrew. Firstly, I'd like to mention that the transition and integration activities at Musselwhite are nearly complete. Until now, Orla continued to rely on some of Newmont's infrastructure, but this transition, data migration, and integration efforts should all be completed at the end of November. It was a very collaborative approach, and thank you to everyone involved as we reestablish a more decentralized model at Musselwhite following the closing of the acquisition. During the quarter, we sold 79,000 ounces of gold at a realized price of $3,417 per ounce, including the impact of the gold prepay, which resulted in approximately $270 million in revenue for the quarter. As a reminder, we delivered just over 12,000 ounces towards the gold prepay at an average price of $2,912 per ounce, which is captured in the total average realized price mentioned. Excluding the impact of the gold prepay, our average realized price for the quarter was $3,508 per ounce, beating the average for the quarter. Consolidated cash costs and all-in sustaining costs for the third quarter totaled $1,200 and $1,641 per ounce of gold sold, respectively. We recorded net income for the quarter of $49.3 million or $0.15 per share, and on an adjusted basis, adjusted earnings were $73 million or $0.22 per share. Cash flow from operating activities before changes in noncash working capital was $113 million or $0.13 per share for the quarter. Exploration and project development costs during the third quarter were $39 million, of which approximately $13 million was expensed and $26 million was capitalized. Our cash balance at September 30 was $327 million, with total liquidity, including the undrawn portion of our revolving credit facility of $357 million, positioning us well for future growth and capital allocation. Subsequent to the quarter end, we repaid $30 million towards our revolving facility, bringing the balance outstanding down from $120 million to $90 million. With South Railroad construction about to begin, we intend to use our strong cash position to self-fund that construction phase and continue to delever. But that being said, we frequently review our capital allocation strategy to ensure the right balance between investments for future growth, such as the South Railroad project, continued investments in exploration for new discoveries, and also considering returns to shareholders. I'd like to turn it back to Jason now to give us a quick update on our recent site tour at Musselwhite that we hosted in October.

Jason Simpson, President and CEO

Thank you, Etienne. In October, we hosted our first site tour at Musselwhite mine. It was a tremendous success that highlighted the mine's operation and the Musselwhite team's expertise and teamwork. And while we were only able to host a small number of participants, I'd like to provide a quick snapshot of what we discussed. Our tour showcased our growth for longer vision at Musselwhite. This is our commitment to continued investment in exploration and operational growth to expand production and extend the mine life for many years. We didn't just buy a mine; we invested in the future. And since closing the acquisition, we launched an aggressive 2-year program designed to begin unlocking that potential. Our first priority has been to fully embrace the growth potential of this remarkable asset. We are committed to multi-year exploration to test the mine trend extensions, significantly expand our underground resources, and ultimately identify new satellite deposits that will feed the operation for years to come. Also reinforcing team and culture. One of the most compelling things that drew us to Musselwhite was its people. Our job is to trust our team, support their needs, and empower them to succeed. We are actively reinforcing the team and the culture at Musselwhite. Since March, we have recruited an additional 200 new team members to Musselwhite to strengthen the operation and who are now embedded in making real contributions. It isn't just about incremental changes; it is about defining the next era of Musselwhite. What do some of those changes look like? First, evaluating materials handling and improving mine productivity. Also purchasing newer, lower-emission fleet, reducing ventilation demands, constraints, and improving the environment. Optimizing ventilation systems, minimizing dilution, and more broadly, establishing a decentralized structure that enables faster decision-making right at the site level. The power to act is moving closer to the ore body. The growth objective is to fill the mill. The mill has always been underutilized at Musselwhite, so it is our objective to increase mining rates and leverage this untapped mill capacity for production and cost improvements. Expanding the resource is part of this objective, which is supported by our aggressive exploration. It isn't just a list of tasks; it's a commitment to Musselwhite's long-term prosperity through strategic investment and, most importantly, through believing in the team. We are extremely proud of the work that has been done over these early months, and stay tuned for exciting updates and developments. Our Senior Vice President, Sylvain Guerard, will provide you an update on our exploration programs. Notably, the phenomenal first results from Musselwhite exploration that will feed this future vision.

Sylvain Guerard, Senior Vice President

Thank you, Jason. We are very confident in the value and future of the Musselwhite operation and the outstanding exploration upside of the property. Our exploration strategy is clear: aggressively grow our resource base to unlock opportunities that will significantly increase our annual production and extend our life of mine. In just 8 months since the acquisition, our deep directional drilling program along the mine trend has delivered exceptional first results, validating our investment thesis. This figure highlights some of these initial results. Drilling has intersected high-grade mineralization 1.6 kilometers along strike from current operations, including 4.1 meters at 15.1 grams per tonne gold with visible gold observed. Favorable geology continues another 400 meters, pointing to strong potential to extend the mineralized corridor. The program began in late May with 3 rigs active. We have completed 8,000 meters of the planned 11,000 meters in 2025, with results reported from the first 4 holes of the roughly 30-hole program in '25 and '26. Each mother hole supports 2 drill sections spaced 200 and 400 meters apart moving to consistent 200 meters spacing in 2026. The other holes will be testing mineralization 1.2 to 2 kilometers beyond current resources. Additional holes will be completed by year-end with assay results expected to be reported in early 2026. Overall, these early results confirm strong potential for resource growth supporting stronger production and a longer mine life at Musselwhite. Our underground exploration program has also delivered exciting high-grade results in access mining areas like PQ Deep, Lynx, and Redwings, supporting our resources replacement and expansion effort. To illustrate the beauty and technical challenge of our efforts, the figure shows one of the 3 drill rigs across Lake Opap successfully drilling ore to the mine trend extension 2 kilometers from the mine, an impressive technical achievement. Our near-mine surface exploration is focused on testing multiple targets within 10 kilometers of the mill as potential sources of medium-term feed. Encouraging early-stage shallow intercepts have been received from Camp Bay and Karl Zeemal, building on significant historical drill results, and evaluations to potentially advance both targets into resource categories are underway. In the third quarter alone, our combined surface and underground drilling programs completed over 21,000 meters. Our near-mine surface program was completed in October and will resume in winter once ground conditions allow while our deep directional and underground programs will continue aggressively throughout the year. We are not just maintaining; we are building for the future. In summary, we are executing a high-impact exploration program that is already delivering impressive high-grade results. Musselwhite is a cornerstone of our long-term growth, and we look forward to providing future updates as we continue to define this exciting potential. Our Camino Rojo underground exploration project continues to deliver. With the success of our initial infill program at Zone 22, we expanded drilling by 5,000 meters to a total of 20,000 meters to continue upgrading and growing the resource. We expect this expanded program to be completed by the end of this year. Our original program also continues to test multiple targets and is on track for completion in the fourth quarter. In summary, we are advancing the underground project, expanding the high confidence drilling at Zone 22, and systematically exploring our large land package for maximum value delivery. At South Carlin complex in Nevada, our team has nearly completed the full 18,000 meter drill program, with final assays and interpretation expected in the near future. We are focused on growing and expanding known resources and identifying new oxide gold mineralization both near our projected open pit and across our extensive, highly prospective land position along the prolific Carlin trend, where we see excellent upside potential. An exploration update for South Carlin complex is expected to be released before year-end. Now I would like to introduce Silvana Costa, Chief Sustainability Officer, to continue the presentation.

Silvana Costa, Chief Sustainability Officer

Thank you, Sylvain. Our commitment to environmental, social, and governance performance is a cornerstone of our strategy, and I'm proud to share key milestones from the third quarter across our sites. At South Railroad, the focus was on a comprehensive engagement program to ensure that key stakeholders have access to transparent and complete information about the project in advance of the public scoping period. Public comment events were hosted by the BLM during September. And as we expected, the great majority of submissions demonstrated strong support for the project from a broad range of stakeholder groups. At Musselwhite, we continue to foster strong relationships with communities and indigenous partners and to develop our talent pipeline. We successfully launched LEAD, our signature leadership training program. During the quarter, we trained 32 leaders across 3 workshops, investing over 500 hours into developing the Musselwhite team's capabilities. On September 30, Orla observed Orange Shirt Day or National Day for Truth and Reconciliation. At Musselwhite, we held a ceremony at the site to honor residential school survivors, their families, and communities. Most recently, we announced the launch of a $6.6 million fund with our First Nations partners dedicated to advanced education, skills development, and cultural revitalization for indigenous youth and communities across Northwestern Ontario. At Camino Rojo, we continue to advance social and environmental programs and concluded negotiations of a collective bargaining agreement. The third quarter marked the start of activities of the water, biodiversity, and climate project, which we call Pro-ABC. This multi-year, multi-stakeholder project in collaboration with the Mexican NGO in our host communities is designed to go beyond the mine footprint to promote fauna and flora conservation, water stewardship, and sustainable land-based livelihoods in the region. As we implement Pro-ABC, activities so far have focused on improving practices in animal husbandry, new investments in horticulture, environmental education initiatives, and ecological assessment work. Other milestones at Camino Rojo are the renewal of land occupation agreements with local communities and the successful negotiation of the collective bargaining agreement with the union, which was voted and approved on November 4. These achievements demonstrate our commitment to responsible gold production and to work in partnership with our host communities, indigenous partners, and the union to build a sustainable and inclusive future for all of our stakeholders. The third quarter was also a critical time in our permitting timeline for Camino Rojo. We remain optimistic about the pending approval of a permit to expand the open pit and build an exploration drift in 2026. During the quarter, our team had the opportunity to meet with Mexican environmental authorities and respond to questions about our permit application. We have maintained positive engagement with state and federal level agencies in Mexico, often with the support of the Canadian embassy. In September, Prime Minister Carney visited Mexico and met with President Sheinbaum and discussed the role of Canadian mining companies operating in the country. The visit led to the development of a new Canada-Mexico action plan which includes a commitment from both governments to work together in advancing responsible mining practices in Mexico. As part of this effort, Orla has joined other Canadian mining companies in committing to apply the Mining Association of Canada's Towards Sustainable Mining protocols at our operations in Mexico. Then at the end of October, Orla participated in a meeting in Toronto with Mexico's Minister of Environment and Natural Resources, Alicia Bárcena, alongside other Canadian miners. Minister Bárcena expressed her strong support for responsible mining, welcomed the new Canada mining collaboration, and reaffirmed her commitment to advance mining permit processes that have been delayed under the previous administration. These developments mark an important step forward in strengthening our partnership with Mexico and reinforcing Orla's leadership in responsible mining. I'd like now to pass it back to Jason for his closing remarks.

Jason Simpson, President and CEO

Thank you, Silvana. Looking towards the remainder of 2025, we have several upcoming catalysts for Orla. Notably, a project update, including our feasibility on South Railroad as we move through the permitting process toward construction, an exploration update from our prospective South Carlin complex in Nevada, and continued exploration for the underground deep directional drill program at Musselwhite to extend mineralization. This quarter was marked by operational resilience and significant advancements in our growth pipeline. Thank you to our teams in the countries where we operate, whose commitment and delivery are driving this business forward. At this point, I'd like to open the call to questions and hand the call back to the operator.

Operator, Operator

We'll go first to Cosmos Chiu at CIBC.

Cosmos Chiu, Analyst

Maybe my first question is on Musselwhite. Thanks a lot for all the details on Musselwhite, and I was on site as well. But as you mentioned today, you started a new stope in the Redwings area commissioned in September, which is great. My question is to confirm, this is in the higher portions of the ore body. Am I correct? If that's the case, that will help you in terms of increasing your throughput at the mill in terms of filling your mill strategy just because I believe this is beyond some of the constraints you might have in the sort of the material handling system. So maybe if you can touch on that, that would be great.

Jason Simpson, President and CEO

Thank you, Cosmos, for remembering our detail from the site visit, and Andrew Cormier can build on any answer that I provide. You're absolutely right; there are really two opportunities at Musselwhite, both of which we're working on. The first is these additional stopes in the upper part of the mine, Redwings as an example, as you described, to get a more efficient feed to the mill, but still at reasonable grades as you can see on the section that Sylvain provided. And then separately, there are opportunities for the higher-grade stopes, particularly at the end of this year, in the deeper part of the mine but recognizing that it takes a longer material handling process to get to surface. So with the combination of more material from the upper part of the mine and higher-grade material from the bottom part of the mine, we feel confident in the near term increasing our production throughput from Musselwhite, which, of course, builds for that long-term future that I spoke about.

Cosmos Chiu, Analyst

And Jason on that...

Jason Simpson, President and CEO

Looking further, go ahead, Cosmos.

Cosmos Chiu, Analyst

In terms of difference in grade, could you maybe share with us in terms of what that might be in terms of the difference in grade?

Jason Simpson, President and CEO

Yes, the grade in the upper part of the mine is closer to 5, whereas the grade in the bottom part of the mine is 6 to 7 or even higher as we get deeper. The grade gets better in this deposit as we get deeper. Andrew can provide some additional clarity if he has it on hand.

Andrew Cormier, Chief Operating Officer

Yes, Cosmos, consistent with our strategy, the combination of having more tonnes available to feed the mill from the upper part of the mine closer to surface and maximizing increased tonnage and grade vis-a-vis the PQ Deep's, the other component that contributed to that is the equipment fleet. So the higher-tier engines, the more efficient air consumption that they require, less emissions allows us to run more equipment down there. So that's allowing us to access those higher-grade stopes and contribute to the higher performance that we're seeing and we expect to continue.

Cosmos Chiu, Analyst

Great. I want to shift gears a bit. It's encouraging to see that on November 4, South Railroad became a FAST-41 Covered Project. As Andrew mentioned, this offers some tools for the process. However, I'm looking for more detail on what this really means, especially since the timeline for starting production in early 2028 has not changed. Can you elaborate on the significance of being a FAST-41 Covered Project in terms of certainty and the overall process?

Jason Simpson, President and CEO

Yes, even with the transparency measures of this administration, we've experienced a faster permitting process. When we submitted our Notice of Intent in mid-August, we anticipated it would take about a year, but the Bureau of Land Management has expedited that timeline to the second quarter of next year. Before we became a covered project, this administration was already moving things forward responsibly. Being a covered project allows us to access various departments, particularly the Department of Interior, which now oversees our projects to ensure they progress without delays. We have an ambitious schedule, and we're thankful for the BLM's support. However, we must work with all related and cooperating agencies, which have done an excellent job. The oversight from the Department of Interior, enabled by our status as a covered project, will be beneficial. We now have the ability to engage with the Department of Interior and all cooperating agencies to ensure we meet our permitting deadlines. Regarding the production date, I want to protect Andrew and his team's construction schedule. We aim to meet our cost and timeline goals, which depend on how quickly we can begin in the spring. The federal website indicates that the final permitting decision will be made toward the end of the second quarter. If we can speed that process up in the spring, there’s a chance we could achieve our first gold pour by late 2027. However, we officially state that we will pour our first gold in early 2028, with nearly a full year of production in that year. If permitting progresses faster as it has in the last six months, we'll keep the market informed.

Cosmos Chiu, Analyst

That's great. And maybe one last question at Camino Rojo. In Mexico, I guess we've seen recently the granting of permits not for Orla per se, but for some of your peers. Any kind of read-through in terms of the permitting needed at Camino Rojo for the permanent pushback of the pit. Silvana kind of talked about there is continual engagement with the Mexican authorities, and I believe there were some questions being asked and answered by the Mexican authorities. To the extent that you can, Jason, could you share with us some of the questions they might have?

Jason Simpson, President and CEO

Sure. Before we get to the questions that they had, maybe what I'll offer to build on what Silvana said, is engagement is important, but also delivery on the part of the Mexican government is equally important. And so now what we are having is, in addition to the engagement directly with Silvana and other Canadian mining companies, we're also seeing the delivery of permits. The one that you referred to, we're certainly aware of and would be a great example of them following through on their commitments that they made in Toronto. So I'm extremely confident in our permit being granted in the near future because of those engagements and because of that demonstrated effort on their behalf. I will acknowledge that they have a lot of permits in their backlog, but they are very aware of our permits and the importance of it. We do have production certainty into 2027, but we would like to have that permit not only for the expansion of the open pit but the continuation of Camino Rojo underground, which needs to begin with an exploration drift, which could start as early as next year, subject to Board approval. And finally, I think I heard a question there, Cosmos, about the kinds of questions that they had around our permit application. There were really two categories of question. One was around the expansion in our environmental mitigation practices that we would undertake, flora, fauna, water, and otherwise for that expansion. The second category was around the context for the underground exploration drift and, in particular, that it is an exploration drift, which will certainly serve as a future production drift, but that we would subsequently be submitting a permit for a CIL plant and underground mine to the Mexican federal authorities once we have sufficient data to do so. Part of that data is obtained from the work we do underground, not only exploration drilling but geotechnical information, hydrogeologic information, and so on that you'll appreciate are necessary for a comprehensive permit submission, which we would make for the continuation of Camino Rojo from open pit to underground.

Cosmos Chiu, Analyst

Great. Thanks, Jason and team for answering all my questions. And congrats again on a very solid Q3 and positive free cash flow.

Operator, Operator

We'll go next to Lauren McConnell at Paradigm Capital.

Lauren McConnell, Analyst

I just had a question a little bit on guidance. And going into Q4, you obviously reaffirmed 2025 guidance and mentioned costs should ease in Q4. Can you elaborate a little bit more on how quickly all-in sustaining costs at Camino Rojo should normalize and whether Q4 should still be viewed as sort of a transitional quarter? Or is it going to be back to sort of steady state levels with that remediation?

Jason Simpson, President and CEO

Yes, I would offer that clearly, Q3, there was an impact to the remediation work we're doing at Camino Rojo reflected in our all-in sustaining cost. There will still be some work in that regard through Q4 as we do a higher level of strip than we had budgeted because we're back at the top, continuing to reestablish that ramp and mine from the top down. So I think that some of that cost pressure could continue through Q4. The difference, of course, will be on the denominator in Mexico. In Canada, what I can offer is there will be some cost relief beginning towards the end of the year. By the end of this month, we should be fully extricated from the Newmont systems and the TSA payments that we make, so we should also see some cost relief. But on average, over the quarter, Lauren, I would offer that those costs are tailing off, but we'll still have a certain impact on Q4.

Lauren McConnell, Analyst

Okay. Perfect. That's helpful. And then just another question sort of around capital and your balance sheet. I mean, obviously, there was a really strong free cash flow generated this quarter. And I know you're probably within your budgeting processes right now for 2026. And obviously, with the gold price, hovering around $4,100, how are you guys sort of thinking about capital allocation between debt reduction, growth, and shareholder returns? Has that really changed with this gold price environment in the last couple of months? Yes, any color you could provide there would be really helpful.

Jason Simpson, President and CEO

Thanks, Lauren. The answer is it has changed. The gold price requires different considerations. To get through those three categories that you described, the market can expect us to continue to explore across our three properties in 2026 and frankly, an approximately equivalent investment rate on exploration. The big project next year, of course, will be the development of South Railroad. We are planning for and have sufficient balance sheet to deliver that through '26 and '27. In addition to that, because of the strong gold price and Etienne's and Andrew's management of the costs, we'll also be able to continue repaying debt probably on a more accelerated basis. Etienne described two out-of-plan debt repayments that we made this year totaling $60 million. I can't telegraph what the payments will be next year. That will be decided upon gold price, costs, and growth requirements, but predictably, we'll likely continue accelerated delivery. Finally, it's important and is an active conversation currently with the current gold price and the health of our balance sheet to begin graduating to return additional returns to investors, likely through a dividend. So that conversation is active. And once the Board approves any changes to our capital allocation strategy, we'll announce it to the market.

Andrew Mikitchook, Analyst

Lots of great questions already asked. Just a quick one about Railroad. Can you give us a little bit of an idea of what's going to be included in this project update for Railroad and the feasibility that will be folded into that? It's been years since we saw the update. And even on today's call, there was a highlight of a fairly material drill program. Is there a resource update going into this? Is it just simply updating of the development plan? What should we expect?

Jason Simpson, President and CEO

Yes, Andrew, your question is very important. Let me explain. First, the feasibility update will consider the multiple years that have passed since the original update, and we will ensure it reflects 2025 dollars. However, it will stay true to the original operations plan submitted to the American government in 2020. Regarding resources, while we have identified significant opportunities for additional oxide gold ounces in Nevada, this update will not significantly alter the gold production plan based on the 2020 operations plan, which we are updating for costs. However, there will be notable changes to our construction and operations plans. Specifically, we plan to build a crushing system that will increase recovery and produce more gold, which is particularly important given current gold prices, while also addressing any concerns about the heap leach's performance. Additionally, this crushing system will be owner-operated rather than contract-operated, and we will also transition to an owner-operated mining model. In summary, in the coming weeks, we will provide a comprehensive update on the South Railroad project, reflecting 2025 dollars and confirming it is a buildable project intended for execution in 2026 and 2027. Initially, it will only include the original oxide ounces planned for Dark Star and Pinion, with enhanced recovery. We are absolutely confident in our ability to add more ounces based on discoveries we have already communicated to the market over several years. We will also outline the cost schedule in our feasibility update, ensuring we adhere to the operations plan and do not disrupt the permitting process. We look forward to a long-term presence in Nevada.

Operator, Operator

And that concludes our Q&A session. I will now turn the conference back over to Jason Simpson for closing remarks.

Jason Simpson, President and CEO

Thank you, operator. Since there are no further questions, I would like to thank you for your time. Never hesitate to reach out to Orla for questions. This quarter was marked by operational resilience and significant advancements in our growth pipeline. So thank you once again to the teams in the countries where we operate.

Operator, Operator

And this concludes today's conference call. Thank you for your participation. You may now disconnect.