Discovery Mining Ltd.

Q2 revenue was $319 million, up 12% quarter-over-quarter, with $30 million contributed by Kidd. Adjusted earnings were $92.3 million, or $0.11 per share, versus $82.7 million, or $0.10 per share, in Q1 and $28.4 million, or $0.04 per share, in Q2 2025. Record gold production was 67,300 ounces, 12% higher than Q1; gold sold was 66,000 ounces. Cash cost per ounce sold was $1,387 and all-in sustaining costs were $2,154 per ounce sold; site-level operating cash costs averaged $1,878 per ounce and site-level AISC was $2,028 per ounce. EBITDA was $170 million, free cash outflow was $11 million, operating cash flow was $130 million, capex totaled $86 million, cash was $364 million, and liquidity was over $600 million at quarter-end and over $750 million after the revolver was upsized to $400 million in July. Management said they are tracking well to full-year guidance and expected unit costs to be highest in the first half and improve in the second half of 2026 as volumes build.

Tony Makuch framed the quarter as a step forward in both operations and growth, saying the company had “pretty good results” and that much of the work will show up in future quarters. He emphasized three big developments: the Kidd acquisition, strong exploration results, and continued operational investment, calling the exploration pipeline potentially an “exploration story as well on steroids.” His tone was upbeat and confident, with repeated comments that Discovery is moving from concept to reality on a multi-asset growth plan.

Alison White focused on the financial momentum and the reasons behind the quarter’s cash flow swing. She highlighted $319 million of revenue, $170 million of EBITDA, $92.3 million of adjusted earnings, $130 million of operating cash flow, and $364 million of cash, while explaining the $11 million free cash outflow was affected by a $56 million working-capital change tied to accelerated payables and by timing of Kidd cash receipts under the new offtake agreements. She also outlined planned 2026 capital spending of $195 million to $235 million for growth capital at Porcupine, plus $25 million to $35 million for capitalized exploration and $120 million to $165 million of sustaining capital, and said the company now has over $750 million of current liquidity after upsizing its revolver to $400 million.

The main analyst question focused on the negative free cash flow, the new ERP system, and how Kidd would affect cash generation and the path toward 500,000 ounces. Management said the ERP shift to a Discovery-controlled SAP instance should improve flexibility, visibility, and management accounting, while Kidd’s first quarter included a one-time timing mismatch because cash is collected one month after sales under the offtake terms. Alison said that on a go-forward basis there will still be a one-month lag, but it will be consistent, and Tony added Kidd was roughly revenue-positive in the first month with about $30 million of revenue against $19 million of costs. No other questions were asked.