Pan American Silver Corp. (PAAS) Q3 2025 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Third Quarter 2025 Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Siren Fisekci, Vice President, Investor Relations. Please go ahead, Ms. Fisekci.

Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our third quarter 2025 results. This call includes forward-looking statements and information and references non-GAAP measures. Please see the cautionary statements in our MD&A, news release and presentation slides for the Q3 2025 results, all of which are available on our website. I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

Good morning, everyone. I'm glad you could join us to discuss Pan American's Q3 2025 results. Over the past quarter and into Q4, we have benefited from the increase in silver and gold prices and a solid performance on cost. As a result, we achieved record attributable free cash flow of $251.7 million in Q3. On September 4, we completed our acquisition of MAG Silver. While we have had only a 1-month contribution from our 44% interest in the Juanicipio mine in Mexico, we're already seeing the impact on lowering costs and improving margins, underscoring the strategic rationale for this transaction. We account for Juanicipio using the equity method, but report production, cash cost, all-in sustaining costs and capital expenditures on an attributable base to reflect our 44% interest. I'm pleased to say that we have delivered another quarter of strong financial results. Attributable revenue in Q3 was a record of $884.4 million. Net earnings were $169.2 million or $0.45 basic earnings per share. This includes a $21.7 million loss from the sale of a subsidiary and $16.3 million of income from Juanicipio. The loss from the sale of a subsidiary is primarily due to a $28.6 million reduction to the $137.4 million gain we had previously booked on December 2024 of the sale of La Arena related to net working capital adjustments. This was partially offset by a $6.8 million gain on the sale of our 80% interest in La Pepa, a noncore development stage project in Chile, which we've sold for $40 million in cash proceeds in September 2025. Adjusted earnings were $181 million or $0.48 basic adjusted earnings per share. Attributable cash flow from operations was a record of $323.6 million. Cash and short-term investments at the end of Q3 totaled $910.8 million, plus $85.8 million of cash at Juanicipio for our 44% interest. This is after spending a net of $409.3 million on the MAG acquisition, including transaction costs. With $1.7 billion of total available liquidity, we remain in a very strong financial position. Given the strong financial position and cash flow generation, I'm happy to report that the Board has approved an increase to the dividend to $0.14 per common share with respect to Q3 2025. Despite the cash balance at the end of the quarter, reflecting the impact of the cash paid for the MAG acquisition, the Board exercised its discretion with respect of the dividend this quarter given the strong cash flow being generated. While we did not repurchase any shares in Q3 due in part to the blackout associated with the MAG acquisition, we remain prepared to act opportunistically. During the first 9 months of 2025, we have returned $146.9 million in dividends and share repurchases to shareholders, and we will add another $59.1 million with the dividend payment approved yesterday. Turning now to operations. Attributable silver production in Q3 was 5.5 million ounces, including 580,000 ounces from Juanicipio's 1-month contribution. We continue to be pleased by the performance at La Colorada, where the improved ventilation conditions are allowing mine rehabilitation and development rates to accelerate, thereby increasing the number of production areas, particularly in the deep high-grade zones of Candelaria East. Silver production was impacted by lower silver grades at Huaron, reflecting increased development and reduced stope ore mining rates in order to grow the inventory of prepared high-grade stopes, which are expected to enhance future production stability and reliability beginning in mid-2027. Silver segment cash costs were $10.41 per ounce and all-in sustaining costs were $15.43 per ounce. These costs are lower than Q2 2025, already demonstrating the positive impact Juanicipio is having on reducing silver costs and improving margins, even though it has only been in our portfolio since early September. The quarter also benefited from low all-in sustaining costs at Cerro Moro due to high by-product gold production and prices compared to Q2. Partially offsetting these factors was the lower silver production at Huaron and the royalty expense at La Colorada of $8.3 million in Q3, largely payable to a third party as part of a profit-sharing agreement for mining on an adjacent concession. Attributable gold production was 183,500 ounces. As we mentioned during our Q2 call, various technical issues at Cerro Moro, Peñon, Timmins and Minera Florida, as described in our MD&A, were expected to linger into Q3, consistent with our expectation of a back-end weighted gold production. The technical issues at Cerro Moro and El Peñon also reduced silver production in Q3. Gold segment cash costs were $1,325 per ounce and all-in sustaining costs, excluding NRV inventory adjustments were $1,697 per ounce. Overall production and cost across both the silver and gold segments remain in line with our 2025 operating outlook. However, we have raised our attributable silver production guidance to 22 million to 22.5 million ounces and lowered Silver segment all-in sustaining costs to $14.50 to $16 per ounce to incorporate Juanicipio's contribution. All other cost and production guidance remain unchanged. We invested $35.3 million in capital projects this quarter, mainly at La Colorada and Jacobina. At La Colorada, we continued exploration and equipment investments to further expand access to high-grade zones in the deeper eastern extents of the Candelaria ore zone. In September, we announced new high-grade drill results and added 52.7 million ounces of silver to inferred mineral resource, which substantially extend resource potential to the East and Southeast beyond our current mining areas. This is an exciting development that offers significant synergies through a potential 2-phase development approach to our large La Colorada Skarn project. The first phase would combine development of the Skarn with the vein mine, which is expected to result in a higher grade, lower tonnage and less capital-intensive development to what was described in our 2024 PEA. The second phase would involve the cave mine expansion. This phased development approach allows an enhanced vein mine to operate in parallel, utilizing shared infrastructure synergies and enhancing overall project value. A PEA for this 2-phase development approach combined with enhanced vein mining is underway and is expected to be issued in Q2 2026. Furthermore, we are well advanced on partnership discussions that consider this enhanced development approach. At Jacobina, results from the extensive optimization study have identified a number of opportunities to relieve constraints that could potentially benefit mine life, production and operational efficiencies. These opportunities include, but are not limited to: a tailings filtration and filter stack project to relieve existing long-term tailings capacity limitations; mine paste backfill plant project to take advantage of the tailings filtration circuit, thereby enabling an increase in ore recovery in selective high-grade ore zones; and a significant process plant streamlining project to improve reliability, release throughput constraints, reduce mine operating costs and enhance gold recovery. We have recently commissioned a pilot plant on site to demonstrate the benefits that can be obtained by streamlining a planned flow sheet, which has been defined through branch scale metallurgical laboratory testing. We have also engaged a leading engineering firm to develop detailed designs, schedules and cost estimates for completing these optimization projects. We will continue to provide updates on implementing these exciting projects as these engineering efforts advance over the next year. At Escobal, the Guatemalan Ministry of Energy and Mines has held several separate working meetings with the ministries involved in the ILO 169 consultation process, representatives from the Xinka Parliament and the company. The Ministry of Mines has also made several appointments of key personnel to oversee and continue activities for the Escobal consultation process. The ministry has not provided a time line for the completion of the ILO 169 consultation, but discussions remain active and respectful. Before closing, I would like to recognize Steve Busby for his remarkable contributions to Pan American Silver over the past 22 years with 17 years spent as Chief Operating Officer. Steve is transitioning to the role of Special Adviser to the CEO, and I'm grateful we will continue to benefit from his deep technical expertise. I also want to welcome Scott Campbell as our new Chief Operating Officer. Scott brings 25 years of operational experience in Latin America, and I look forward to continuing to work closely with him as we advance our strategy. I will now be happy to take your questions together with the other members of our management team.

[Operator Instructions] First question is from Wayne Lam with TD Securities.

Just curious on the guidance increase. Would it be safe to assume that the prior guidance for Juanicipio has remained the same as under MAG previously? And just wondering if there's been some modest tweaks for within the Silver segment on the guidance. Just given the deal closing in September, I would have thought the pro forma silver guide would have been slightly higher. So just wondering if there are any other offsets from the other operations in the portfolio?

No, it's pretty similar to what MAG had. Obviously, as you can imagine, this is -- we're only in the second month really of having that operation with us. But we assume that the production should be pretty similar to what we've seen in September for the remaining months of the year.

Okay. Great. And then maybe at Huaron, just on the grades and the increase in the development ore being processed. It's been a couple of quarters now where you've encountered a bit higher dilution on the mining front. And just wondering if that maybe has also a bit a function of the reduction in the cutoff grade just in terms of the process grades come down a bit? And just curious if we should expect a bounce back in grades over the coming quarters or if that's more of an active strategy that you guys are employing to lower the cutoffs to bring in a bit more economic material?

Wayne, this is Steve. I can address that one. Yes, the initiative we started last quarter was to accelerate developments, trying to get ahead, trying to get some high-grade stopes prepared and develop an inventory of stopes to give us more reliability on production. This initiative is going to take us through all of '26 into '27. And so what you're seeing is a lot more contribution of ore from development, which is more diluted than from stope mining. And it's really an initiative to try to build inventory of stopes in the mine that will give us more flexibility in the future once we get all this development ahead of ourselves. That's what you're seeing.

Okay. Great. And then maybe just last one, just at Jacobina on the optimization studies that are being undertaken. Can you give us a bit more detail on what's being optimized on the mine or at the plant and how that might impact the future operations, if that will be on additional tonnage or lower costs and when we might be able to see the results of that?

Yes, great question. And there's a lot of work going on at Jacobina. I'll pass it on to Steve. As you heard there, Steve will retire here as the COO, but he will stick around with us with his incredible wealth of knowledge. Steve will be very important for that kind of expansion work at Jacobina. So Steve, maybe if you want to answer that question?

Sure. I'd be happy to, Wayne, great question. It's very exciting what we're seeing there. The mine itself, the -- it's pretty flexible because we're really mining 7, we'll be bringing on an eighth mining area with Maricota, and it gives us a lot of flexibility in terms of how the mine delivers ore to the plant in terms of throughput expansion, tonnage and that sort of thing. The main focus of the optimization is around the plant itself. This is an old plant. It was originally built in the '80s as a less than 4,000 tonne a day plant. And it's been piecemealed over the years. A lot of components have been added. A lot of circuits have been added to the flow sheet. And it's kind of a complex network of flow, if you will. So we see an opportunity to go into the plant and streamline that plant, remove some of the circuits we don't need, clean up some of the circuitry, try to go to bigger machines, less numbers of them, reduce maintenance costs, improve reliability, improve efficiencies and reduce costs overall, coupled with -- when we look long term at Jacobina, we really see an opportunity to go to a filter stack tailings facility. That opens up a lot of disposal space for us. Conventional tailings, we're going to run out of capacity here probably in the mid-2030s. So we want to bring a filter plant into this flow sheet. We've been working hard. We're looking at vacuum filters like we run at El Peñon. They look quite favorable, and we're kind of proposing a vacuum filter plant that would be situated down at the tailings facility, and it allow us to put a stack that we're designing down below the B2 dam, we call it. And the location of this also provides benefits to us because we can add a modular temporary paste plant and use some of the tails to build cemented paste that we can pump into the north part of the mine where some of our higher-grade mining areas are, and it allows us higher recovery of some of the higher-grade stopes that we wouldn't get without some type of cement at backfill. So that's where all this optimization is coming together. I hope you can appreciate it's a significant brownfield project in and around the plant. So it's going to be -- it's going to require some very careful planning, very careful sequencing of how we make these modifications. And that's where we're working intensely with an engineering company. And as we start to get the designs and the sequencing and the costing sorted out, we'll start to deliver truly what the value of this project is going to be overall. But we're very excited about it.

Okay. Great. That's a lot of good detail. And best of luck to you, Steve.

Thank you, Wayne.

The next question is from Fahad Tariq with Jefferies.

Maybe just on the gold guidance, which didn't change. Can you talk about how you're thinking about the fourth quarter in the context of some of the dilution that you cited at Timmins, El Peñon, some of the development delays you cited at Minera Florida? Just trying to get a sense of kind of the confidence in the fourth quarter on the gold side?

Yes. Scott Campbell here. We had our challenges certainly in Q3, but we're maintaining the guidance for Q4, and we're confident that, that will be achieved. We did have some dilution in Peñon, and we had some challenges and slight delays when it comes to ground support at both of our mines in Chile, but we're maintaining guidance and things in November have already started to look up for gold production in the southern countries.

Okay. And then maybe just switching gears to the updated development approach at La Colorada Skarn. Just in the opening remarks, you talked about the partnership discussions are well advanced. Maybe just any detail you can provide would be helpful.

Yes. Look, it's a bit -- well, the discussions are very advanced, but it's too early to share them here publicly. It's looking very interesting. I think that new approach, which we had an eye on, obviously, for a long time to see how we can advance the really high-grade part of our Skarn ore bodies. If you recall, we published a few press releases over the last couple of years with some very impressive long, very wide high-grade intercepts in 2 of the 3 Skarn ore bodies that we discovered. Really the discovery of those high-grade structures in addition that we found during 2025, and we published in September and increased our resource there by, I think, about 53 million ounces already. Really that combination of that high-grade discovery close to surface together with the high-grade wide intercepts of the core part of the Skarn really allow us to go to this phased approach and look forward here to 2 phases, as we said, smaller tonnages will still be an impressive mine, very similar silver output than the original plan we had envisioned, but obviously, higher grade, less tonnage, less capital and then go to the larger cave mine later on in time. So very interesting advances. As we indicated, we'll come out with the PEA in Q2 next year, but a very positive advance on La Colorada and looking forward here to look at those partnership agreements and involve a very strong partner for this really exciting project as well.

Okay. Great. And then maybe just lastly, is it fair to say that the partner would only be really for Phase 2? Or are you envisioning them also contributing to the CapEx and being involved in Phase 1?

I could very well envision a phased approach there, too, with a more reduced partnership option in Phase I and a larger one in Phase 2, but that still remains to be determined.

The next question is from John Tumazos with John Tumazos Very Independent Research.

We know that you produce a little bit of base metals, too. And a large differential exists with zinc at $1.44 and lead at $0.93. Why do you think the zinc price outperformed where world steel output is down a couple of percent this year? And why do you think lead lags when world auto output is strong, China trending towards 33 million cars record, et cetera?

John, look, obviously, the base metals -- and by the way, it's I think, at the moment, only about 8% of our revenue. That will, for sure, increase once we have the La Colorada Skarn in production, but it's a small part of our revenue. When you look at the base metal, I'm sure zinc is pushed and outperforming as being included in several countries in their list of critical minerals. By the way, I'm sure you have noticed that silver got included in the U.S. as well on that list. But as you know, the base metal prices really reflect the outlook on the world economy and where that's moving. And I guess there's still some people worried about where this is going over the next few years, and that's reflected in those prices. But for sure, the inclusion of zinc and critical minerals helps the price.

The next question is from Ovais Habib with Scotiabank.

Michael and Pan American congrats on a good quarter, leading to a good free cash flow as well. Scott, congrats to you on your new appointment as well. Michael, a lot of my questions have already been answered, but some follow-ups to those questions. Starting off with the question on Cerro Moro, El Peñon, Timmins and I think Minera Florida as well. Obviously, they've had some issues in terms of reconciliation, geotech issues. Do you see these issues lingering into Q4? Or have most of these issues now been resolved? Just to clarify on that front.

Ovais, and you recall in Q2 and actually some of those technical issues started, we already mentioned that they will linger into Q3, which we see. So that's obviously the reason why our production profile, especially on the gold is more back-end loaded. As Scott mentioned, we see already an uptick on those grades. So looking forward to meet those guidance goals that we have. And maybe, Scott, do you want to add a bit more color to this?

Sunil (sic) [ Ovais ], thanks for the kind sincere words. Regarding Timmins, some of the issues -- some of the geotechnical challenges we have involved the squeezing of our production drill holes in the deep central mining zone at the Bell Creek operation. We've been mitigating that through the use of casings, PVC casings and in some cases, we use a sealant or a polymer, and we've had some success with that. We're also installing additional ground support in development headings as we pass through high strain and stress areas using dynamic support. The paint backfill system at Bell Creek recently commissioned is also becoming more and more utilized. We're getting better utilization and the learning curve has really flattened out on that facility. And so we're getting some -- we're seeing a lot of success. And again, the numbers are looking favorable as we head into November, sort of halfway through Q4.

And just going into 2026, I mean, is this more in terms of getting -- obviously getting ahead of production and development and accelerating development going into 2026?

Yes. Generally, yes. At several of our operations, we've initiated additional development programs in Q4 to really give us more optionality as we head into 2026. In a couple of cases, we got behind in our development. So we had to acquire new equipment, in some cases, hire external third-party contractors to do that. Huaron and Timmins included. But yes, it's all in our best interest to really ensure our success coming up in later in -- at the end of 2025 and really into 2026.

Okay. And then just moving on to Juanicipio on the closing of the MAG transaction. Michael, is everything progressing according to your expectations? I mean, are you looking -- how involved are you with operations? And is there a push to get more exploration started around the area?

I'm incredibly happy where it stands. I think we all saw a glimpse here what Juanicipio will do for us with only 1 month in Q3, and you see the strong production, strong cash flow coming out of that operation. You can imagine that even higher metal prices right now, how well that asset is doing. Actually, I was just there like last week, and it's just again an impressive operation. And a lot of involvement on the operational teams here on all levels really from operation to metallurgy to geology to exploration, a lot of exploration going on as well. So I'm really, really happy how this has worked out so far. I'm really looking forward to see a full quarter of Juanicipio in Q4, as I said, with a combination of very favorable metal prices as well. Obviously, we come out in early January or mid-January normally, mid- to late January with the forecast for next year, which will include also our -- in our budget, our exploration spending. So you will see all the details there, Ovais, how it looks like for the production profile. But yes, it's -- I would guess it's -- I would say it's at least met or quite a bit exceeded my expectations at Juanicipio.

And my last question is on La Colorada Skarn. You're looking to announce the PEA in Q2 of next year. Is the announcement of the partnership exclusive of this event? Or you will need to see the PEA before you kind of come to some sort of terms with the partner?

No, I think we will be able to announce the partnership earlier. I think as soon as we have a document executed on that, we will release that information.

The next question is from Cosmos Chiu with CIBC.

Michael. Thank you, Steve as well, and congratulations, Scott. Maybe my first question is also on the Skarn technical report that's potentially coming out next year or not potentially, it is coming out next year. As you mentioned, Michael, you got to take a phased approach now with a higher grade lower tonnage deposit upfront. I seem to remember the Skarn deposit is centered around some high-grade centers, the 901 zone, 902, 903. So is there one particular zone that is higher grade? I don't know if you have that answer yet. Are we looking at higher-grade portions from all 3 areas? Are we looking at the upper portions of all 3 areas? How should we incorporate what I know about 901, 902 and 903 into what we can see next year?

Yes, Cosmos. The high-grade core zones are mostly 901 and 902. We are actually doing quite a bit of drilling still on 903 and some pretty interesting success here with the Skarn seems to even further extend by quite a good distance. So I think on 903, it's still out there to see if there is a high-grade zone there as well. But when you look at the press releases we put out over the last 2 years on those high-grade intercepts of the Skarn, they're all of them located in 901 and 902. But as I said, it's really the combination together with those high-grade closer to surface structures that we published in September. And then after that showed in a big increase in resources with our reserve and resource update. It's really that combination that allowed us this phased approach. As you can imagine, we were trying for a phased approach from the beginning on it with -- obviously, a very strong project, if you can do it in a phased approach, less capital upfront and increase later when you really understand an underground and you know the orebody well. And as I said earlier on, that doesn't mean that our production profile of silver will be much lower than what we had envisioned in the full large cave option. So there's less execution risk, less capital, probably faster in bringing the project on. And overall, just an exciting development at La Colorada Skarn.

Yes, that sounds great. Maybe a follow-up then. Michael, as you mentioned, with this phased approach, the possibility is that the vein mine could run parallel with both Skarn phases. So is there some thinking in terms of some of that ore from the Skarn could actually go through the current mill?

No. The current production mill capacity is around 2,000 to 2,500 tonnes a day. I mean we're talking here about a multiple of that. So we will build a new mill much larger and then have that mill build with the potential to expand down the road way bigger to the Phase 2. But yes, the current operation, the current mill is too small. But the metallurgy is very, very similar mineralization of the Skarn and the veins. So it's an easy project for us to kind of commingle the veins and the Skarn and put that through the same mill. So it's not -- the metallurgical difference is just the current mill is too small for that.

Okay. Okay. Sounds good. So it's going to be a new mill from day 1 for the Skarn, but it could still run in parallel with the potential expansion later on?

Yes, that's the exciting advance here is that, obviously, putting the cave mining a bit later allows us to continue to mine those high-grade veins, which it seems like with the exploration, we keep finding more and more of it.

Yes. Maybe I do apologize. I do have a long accounting question here. I just want to get a better understanding of the equity method of accounting for Juanicipio. I was looking at Note #9, and I could kind of follow through. My understanding is that it's 44% of what Juanicipio report 100%. So I can understand the $72 million in revenue, $11.9 million in production costs, $15.1 million in depreciation, so $45.1 million in mine operating earnings. But then it jumps to $37.1 million in net income and comprehensive income, and that's a gap that I don't really fully understand, which drives the $16 million pickup for Pan American Silver at the consolidated level. So could you maybe help me out in terms of that little gap?

Cosmos, it's Ignacio here. And if you want, we can take this offline as well. Yes, if you want, we can take this offline because there's a lot of detail. But basically, we -- this is -- the reporting requirements are -- don't require us to put all the detail in there, but some of the lines that are missing are taxes and other items that are material. But yes, basically, there's a whole bunch of other stuff there that's not included in the income and comprehensive income.

So I work it out to about 18%. Is that a good number to kind of use in terms of that difference or each quarter is a bit different?

I think let's give it a couple of quarters here because this is only 1 month of results. So I would say let's see what the next quarter looks like. And as I said, I'm happy to take this offline with you, and we can talk a little bit about.

I do apologize before asking the question. So I knew it'd be a little complicated. Any other accounting nuances that we should be aware of in terms of Juanicipio?

No, I would say, look, this is the same method that MAG used to report Juanicipio. And yes, it's a little bit tricky because we haven't had this before. And it is difficult to talk about the company performance now given that the performance of Juanicipio is buried into the equity line or the investment in Juanicipio line, both in the income statement and the balance sheet. So we've introduced a few new non-GAAP metrics, including attributable revenue, attributable free cash flow and attributable operating cash flow to help us better understand and talk about the company performance, including Juanicipio. And another thing to keep in mind is really the cash from Juanicipio doesn't -- that's sitting at the JV level is buried in the interest in Juanicipio -- investment in Juanicipio line in our balance sheet. That -- only once Juanicipio JV distributes dividends, will that cash appear in the cash and cash equivalent lines in our balance sheet.

And that cash distribution is somewhat discretionary, correct?

Yes. No, they're on the schedule. Given the transition between MAG and ourselves, it's been a little bit delayed. So it's been a couple of quarters since they haven't -- since the JV has not issued dividends, but there should be a catch-up in Q4 on that.

Okay. Great. And then maybe lastly, on the dividend. Great to see that you've increased it again the second consecutive quarter in terms of that increase. But in terms of the calculation, the $0.14 is a bit of a detour away from the matrix that you've given to us in the past in terms of dividend based on net cash. So I guess my question is, how should we not predict, but what should we expect for the next quarter? That's number one. And number two, how much of the fact that you were not able to use your NCIB in Q3, does that factor into you increasing on a discretionary basis, your dividend in Q3? And will you use the NCIB again in the future?

Yes. Look, regarding the dividends, great news. And that's really -- this is kind of a departure from our dividend policy for this quarter and this quarter only. And the reason for it is a very simple one, very strong cash flow generation. You see we nearly recovered already a large part of the $500 million that we used the cash portion that we used for the acquisition of MAG. So it was the Board's view that with this incredible strong cash flow generation, it's just the right thing to depart from the dividend policy for 1 quarter and have the shareholders participate in that a bit earlier. It has nothing to do with the blackout we were in until the transaction closed on the NCIB. We will obviously look again at the NCIB from now on and like before, make share purchases on an opportunistic way. So that is not the reason for the increase. The reason for the increase is that we look at our cash forecast. We look at a strong Q4. And it was just the right thing to have our shareholders to participate a bit earlier in that really, really strong quarter.

I agree as well. Congrats again on a very good Q3 and look forward to the rest of 2025.

The next question is from Don DeMarco with National Bank.

First off, we saw consolidated AISC guidance lowered substantially. Was there any other contributors to this other than the addition of Juanicipio?

No, it's the strong impact of Juanicipio. I mean we will be on track with what we had in our original guidance like we are on the gold side. But as we alluded to when we announced the transaction that this transaction will have a meaningful positive impact to our cash cost on the silver side. And that's really the result that you've seen only with 1 month on it, you already see that result and calculating in the advantage of having Juanicipio for a full quarter in Q4 led us to the lower guidance on our costs.

Yes. I was just going to add, Don, this is Steve. Just to a lesser extent, we are enjoying the benefit of the higher gold prices as well relative to what we use for guidance. So that is helping to offset some of the cost increases we're seeing is that byproduct gold price.

And just to remind everybody again, I said that probably every call, there's a lot of factors, important factors on our cost. There can be tailwinds or headwinds that are out of our control and one is exchange rates. Of course, when the U.S. dollar declines, normally our local currency increase and that automatically is a headwind on our cost. But as the added benefit with a lower dollar that we see higher precious metal prices. So that's kind of the system how it plays. When we see a strong dollar, we see pressure on the metal price, but we see a tailwind on our costs in local currencies and vice versa. So keep always in mind that exchange rates are an important part as well.

Okay. And we look at Minera Florida and Timmins, costs are a bit elevated in the quarter, but of course, the margins are still good. Do you have any performance criteria to identify potential divestment candidates? And can you walk us through your potential divestment pending order?

Look, I mean, we did a lot of divestments over the last few years. You probably saw we divested a project in Chile, La Pepa as well for $40 million cash in the quarter. And there's quite a few other smaller projects that are in the pipeline in the works right now by our business development team. I'm pretty happy with what we have right now on our operational side in our portfolio. So looking forward to continuing with those assets.

Okay. And then on the flip side of that, after MAG and previously the Yamana acquisition, what's a good long-term silver or gold production level that you'd like to achieve or maintain?

I think we need to see the final budget on the Juanicipio side before I can answer that question. As you can imagine, it's a very large and important part of our silver production going forward here.

Okay. Great. Well, we'll keep an eye out for guidance next year on that then. And good luck on the rest of the quarter.

This concludes the question-and-answer session. I'd like to turn the conference back over to Michael Steinmann for any closing remarks.

Thank you, operator, and thanks, everyone, for calling in. And another great quarter, record revenue of nearly $890 million, record operational cash flows of $323 million, record attributable free cash flow of nearly $252 million, very strong numbers. That obviously led us to increase for the second time in a row now since Q2 to increase the dividend. It's great to have our shareholders participate not only in increase of our share price, but also in additional return to our dividend policy. So great quarter. I'm really happy where it stands. As I said, we saw the first glimpse of what Juanicipio is able to do here in the full quarter, which will be the first full quarter in Q4. We only had 1 month of the mine in Q3, and we see already a very positive impact. And just to the last question there from Don, we will see an important impact to our silver production here from Juanicipio looking forward. So I'm very happy where we stand. looking forward to a great and strong Q4 and report that early next year, but also report our outlook for '26 and show you in detail how our guidance for that cost guidance and production guidance looks like. So thanks, everyone, for calling in, and have a good rest of the year, and we'll talk in early year, I guess, February or so for our Q4 results. Thanks, everyone.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.