Centerra Gold Inc. Q2 2026 Earnings Call

Thank you for standing by. This is the conference operator. Welcome to the Centerra Gold second quarter 2026 conference call. 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 then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. I would like now to turn the conference over to Lisa Wilkinson, Vice President, Investor Relations and Corporate Communications with Centerra Gold. Please go ahead. Thank you operator.

Good morning everyone. Welcome to Centerra Gold's second quarter 2026 results conference call. Joining me on the call today are Paul Tomory, President and Chief Executive Officer, Ryan Snyder, Chief Financial Officer, and Mike Sylvestre, our Interim Chief Operating Officer. Other members of the executive team are available for the Q&A session. Our news published last night outlines our second quarter 2026 results and is complemented by our MD&A and financial statements, which are available on SEDAR+, EDGAR, and our website. All figures are in U.S. dollars unless otherwise noted. Presentation slides accompanying this webcast are available on Centerra's website. Following the prepared remarks, we will open the call for questions. Before we begin, I would like to remind everyone that today's discussion may include forward-looking statements which are subject to risks that could cause our actual results to differ from those expressed or implied.

For more information, please refer to the cautionary statements in our presentations and the risk factors outlined in our annual information form. We will also be referring to certain non-GAAP measures during today's discussion. For a detailed description of these measures, please see our news release and MD&A issued yesterday. I will now turn the call over to Paul Tomory.

Thank you, Lisa. Good morning everyone. We delivered another quarter of strong operational execution across the portfolio. Mount Milligan continued to perform in line with plan, delivering the third consecutive quarter on plan since the PFS was released in September of 2025. Öksüt also delivered a strong first half of 2026, resulting in a 9% increase to its gold production guidance for the year. Both sites generated robust cash flow from operations during the quarter, and we continue to see healthy operating margins, which are supported by disciplined cost management and strong operational execution, even in the lower gold price environment.

We increased our 2026 consolidated gold production guidance to 260,000-290,000 ounces, up from the previous range of 250,000-280,000 ounces, and we remain on track to achieve our 2026 copper production guidance of 50 million-60 million pounds. In the second quarter, we completed $50 million in share buybacks and approved up to $200 million in share repurchases for the full year 2026, reinforcing our commitment to shareholder returns. This reflects the strength of our balance sheet, our ability to generate cash flow, and our disciplined approach to capital allocation. We also recently extended and upsized a revolving credit facility to $600 million at better pricing, further enhancing our financial flexibility. Slide five illustrates our self-funded organic growth strategy and highlights our portfolio of high-quality assets.

Our project portfolio provides multiple opportunities for value creation, all supported by our strong balance sheet and the cash flow generated from our existing operations. We continue to invest in Mount Milligan. Last year's PFS extended the mine life to 2045 and outlined a fully funded growth capital program that supports long-term production and cash flow. Our exploration programs continue to reinforce our belief there's additional upside beyond the current mine plan. The study also includes a planned 10% increase in plant throughput beginning in 2028. At Öksüt, our focus remains on maximizing the value of what has already been a very strong operation. We're advancing work to evaluate opportunities to extend the mine life beyond the current reserve plan while increasing metal recovery from the existing leach pads through improved operation practices and solution management.

We expect to update the market on our life of mine optimization study in early 2027 with our year-end disclosures. The Goldfield project is beginning to ramp up and represents our next source of near-term gold production growth. During the quarter, we advanced engineering procurement and early site works. We've also accelerated a number of early site preparation activities and the procurement of key long-lead equipment into 2026. While these actions increase our 2026 CapEx program to between $60 million and $70 million, they reduce execution risk, secure current pricing, and support successful project delivery. The overall project remains unchanged with a capital estimate of $252 million. Looking further out, Kemess remains a project with the potential to become our second long-life gold copper cornerstone asset.

Following the positive PEA released in January, our team is focused on advancing engineering and technical work toward a PFS expected in the middle part of 2027. Finally, US Moly offers exposure to strategic minerals with the ability to generate robust cash flow to support balance sheet strength and help build our gold-focused projects. Thompson Creek achieved its highest quarterly mining rate since the restart and remains on track for first production in mid-2027. Molybdenum prices are continuing to trend well above the assumptions used in our feasibility study, reinforcing the attractive economics of the project. Together with a continued ramp up at Langeloth, we see significant opportunities to create value through an integrated U.S. molybdenum business. Most importantly, our projects are sequenced such that there's limited overlap in capital spending.

This allows us to execute our growth strategy while maintaining financial flexibility and continue to return capital to our shareholders. When we look across our portfolio, we see a high-quality asset base, a robust balance sheet, multiple organic growth opportunities across gold, copper, and molybdenum, and substantial exploration upside. We believe this positions the company to deliver meaningful long-term value for shareholders. Our key priorities remain on disciplined execution, advancing our projects, and delivering strong operational performance. I'd now like to provide an update on our sustainability initiatives. In May, we published our 2025 sustainability report, highlighting the progress we've made across our environmental, social, and governance priorities. Responsible mining remains central to how we create long-term value, and we remain committed to strengthening sustainability practices across our operations.

2025 marked a year of growth across our business, with total greenhouse gas emissions increasing by 15% year-over-year, primarily due to higher activity levels at Thompson Creek as the project advanced through its restart phase. At the same time, we advanced initiatives to reduce our environmental footprint, including the renewable diesel pilot project at Mount Milligan and the use of renewable energy credits at Öksüt. We also continued to invest in our people and communities, delivering more than 100,000 hours of health and safety training across the company last year. We worked to strengthen the local economies where we operate by increasing local procurement spending by 43% year-over-year to $191 million in 2025, expanding our partnerships with Indigenous-owned businesses in British Columbia, and investing $3.1 million in community programs and donations.

Together, these achievements reflect our ongoing commitment to responsible mining and reinforce our belief that strong sustainability performance supports the long-term success of our business and creates lasting value for our communities and for our shareholders. Before I hand it over to Mike, I'd like to welcome Kelly Strong, who will be joining Centerra as our new Executive Vice President and Chief Operating Officer in mid-August. Kelly is a seasoned mining executive, and we look forward to the experience and leadership he will bring to our operations as we continue executing on our operational strategy and advancing our pipeline. I'd also like to thank Mike for his leadership and steady guidance as interim chief operating officer over the past several months. Mike has played an important role in maintaining our operational momentum, and we appreciate his continued support as we transition to our new COO.

With that, Mike, I'll pass the call over to you to talk through our operational performance.

Thanks, Paul. It's been a pleasure working with you and the team at Centerra. I'd like to thank everyone across the organization for their hard work and dedication. It's been a really great experience working alongside such a talented team. Now looking at slide seven, which shows the operating highlights at Mount Milligan for the second quarter. Mount Milligan produced over 38,000 ounces of gold in the quarter, a 29% increase over last quarter and in line with the production profile that we previously disclosed. Copper production totaled 13.1 million pounds, reflecting plant mine sequencing as expected. Year to date, gold and copper production is in line with the PFS mine plan, and we remain on track to achieve our production guidance of between 140,000 and 155,000 ounces of gold and 50 million to 60 million pounds of copper.

As previously disclosed, gold production and sales are expected to be higher in the third quarter, reflecting planned mine sequencing. All-in Sustaining Costs on a by-product basis were $1,269 per ounce in the second quarter, impacted by higher sustaining CapEx. We reaffirm our full year Mount Milligan AISC guidance of $1,200-$1,300 per ounce. Moving on to Öksüt. Second quarter gold production was over 32,500 ounces, exceeding plan due to higher grades and enhanced operating practices. Reflecting Öksüt's strong performance through the first half of 2026, we have increased our full year gold production guidance to between 120,000 and 135,000 ounces, representing a 9% increase at the midpoint from our previous guidance.

AISC on a by-product basis was $1,952 per ounce in the second quarter, reflecting lower ounces produced and sold and higher sustaining CapEx compared to the last quarter, partially offset by lower royalty expense per ounce resulting from lower gold prices. We continue to expect Öksüt's full year AISC on a by-product basis to be within our guidance range of $1,850-$1,950 per ounce. At Thompson Creek, restart activities are advancing as planned, with approximately 52% of the infrastructure refurbishment complete. Progress being made in construction, pre-commissioning, tailings, and operational readiness activities, including ball mill refurbishment, completion of tailings dam engineering, legacy system pre-commissioning, and the recruitment of key operating personnel. In the second quarter, Thompson Creek achieved its highest mining rate since the project restarted in September 2024, with 12.4 million tons mined during the quarter, a 33% increase compared to last quarter.

Non-sustaining CapEx in the second quarter was $52 million. Since the September 2024 restart decision, capital expenditures have totaled $256 million. The project remains in line with the total capital estimate of $425 million-$450 million and is on track for first production in mid-2027. In the second quarter, commissioning activities continued at Langeloth following the provisional restart of operations in April 2026, and normal operating levels were achieved during the quarter. We have published our full year guidance at Langeloth, and we are expecting 11 million to 13 million pounds of roasted Moly production and 15 million to 17 million pounds of sales. Sales are expected to exceed production this year, reflecting the temporary suspension of operations in the first quarter. During the shutdown period, we continued to purchase third-party concentrate and produce certain finished molybdenum products to support customer deliveries.

I'll now pass it to Ryan to walk through our financial highlights for the quarter.

Thanks, Mike. Now shifting to the financials. Slide 10 details our second quarter financial results. Adjusted net earnings in the second quarter were $79 million, or $0.40 per share. Key adjustments to net earnings include $8 million of deferred income tax adjustments, reflecting the impact of foreign exchange rate movements on deferred income taxes at Mount Milligan, among other things. In the second quarter, sales were over 72,000 ounces of gold and 13.4 million pounds of copper. The average realized price was $3,437 per ounce of gold and $5.30 per pound of copper, which incorporates the existing streaming arrangements at Mount Milligan. Approximately 3.8 million pounds of molybdenum was sold in the second quarter at the Langeloth facility at an average realized price of $29.73 per pound. Consolidated all-in sustaining costs on a byproduct basis in the second quarter were $1,707 per ounce.

We remain well positioned to achieve our full-year AISC guidance of $1,650-$1,750 per ounce. Slide 11 shows our financial highlights for the quarter. In the second quarter, we generated cash flow from operations of $66 million and had a free cash flow deficit of $23 million. The lower free cash flow reflected the scheduled timing of routine statutory tax and annual royalty payments in Turkey. In the second quarter, Mount Milligan generated $118 million in cash from operations and $89 million in free cash flow. Oyu Tolgoi generated $16 million in cash from operations and $11 million in free cash flow. US Moly used $45 million of cash in operations and had a free cash flow deficit of $89 million this quarter, mainly related to spending on the Thompson Creek restart and a working capital increase at Langeloth, which was primarily driven by increasing molybdenum prices.

In June, the Turkish government announced changes that are expected to reduce the corporate income tax rate for Oyu Tolgoi from 25% to 12.5%, effective January 2027. This change in tax rate should enhance Oyu Tolgoi's long-term cash flow generation and overall value. Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation. In the second quarter, we repurchased 2.9 million shares for a total consideration of $50 million. The board has approved up to $200 million of share repurchases for the full year 2026, of which $72 million has been completed in the first six months of the year. We continue to believe that repurchasing our shares is an accretive, high return use of cash. We also declared a quarterly dividend of C$0.07 per share.

In July, we amended our credit facility to increase its capacity to $600 million with a four-year term and more favorable pricing. The credit facility remains undrawn and provides additional financial flexibility to support general corporate purposes, including working capital, investments, potential acquisitions, and capital expenditures. At the end of the quarter, our cash balance was $451 million. Incorporating the upsized credit facility, Centerra's total liquidity is over $1 billion. This strong financial position gives us the flexibility to fully fund our organic growth projects at Mount Milligan, Goldfield, Kemess, and Thompson Creek while continuing to return capital to shareholders. I'll pass it back to Paul for some concluding remarks.

Thanks very much, Ryan. We're pleased with a strong operating performance in the first half of 2026, reflecting consistent operational execution, another strong quarter at Oyu Tolgoi, and continued progress across our self-funded growth pipeline. With a strong operating base, a disciplined approach to capital allocation, and a clear line of sight to growth across each of our assets, we believe Centerra is well positioned to continue creating long-term value for our shareholders. With that, operator, we can open the call to questions.

We will now begin the question and answer session. To join the question queue, you may press star then one 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 two. We will pause momentarily to assemble our queue. Our first question today comes from Ovais Habib from Scotiabank. Please go ahead. Thanks, operator.

Good morning, Paul and Centerra team. Congrats on a good quarter and congrats on increasing the production guidance as well. Just a couple of questions from me. Just starting off with Goldfield. Obviously, it looks like you pulled forward the CapEx for Goldfield, almost doubling the CapEx for this year. Is there potential to pull forward the timeline as well, or are you sticking with the timeline for 2028?

We're sticking with the 2028 timeline for now, Aurelius. What we've done here is taken advantage of our ability to advance on some of the work. What we're looking at right now is essentially a schedule de-risking and locking in current pricing in a modestly inflationary environment. As to whether there is an opportunity to pull the project forward, that's something we're going to continue to assess. The way to look at it right now is maintaining the overall CapEx envelope and pulling it forward as a de-risking activity.

Sounds good. Okay. Just then moving on to Öksüt, I guess, in Turkey as well. Looks like the optimization study is going well, expected in early 2027. Are there any additional opportunities in Turkey the team is looking at, or is the focus North America?

With Öksüt, the principal focus of the project that whose results we intend to release with our year-end is assessing the potential for mine longevity through bringing in oxides that remain outside the current pit shell, as well as the operational efficiencies on leaching, which, by the way, contributed to the strong performance this quarter. We do have a greenfield exploration program in Turkey. We are drilling four or five different sites. Our focus in Turkey will be continued optimization at Öksüt, near mine exploration at Öksüt. There are targets proximal to the mine, as well as a greenfield program. We probably will not be doing anything bigger than that. In effect, what I would say is our Turkish future is more organically derived rather than a bigger splashier acquisition type thing.

Okay. Thanks for that. Just my last question, just the situation with the situation in Middle East. Are your existing operations witnessing any sort of inflation pressures, supply issues, any of these kind of concerns coming up on your end?

We haven't seen any of that. Turkish oil and gas comes in through pipeline from Azerbaijan, so it's not directly impacted by supplies coming out of the Middle East. In terms of inflation, I would say it's more background level. Nothing acute in Turkey. Okay, awesome.

That's it for me, Paul. Thanks so much for taking my questions.

Thanks, Aurelius. Our next question comes from Don DeMarco of National Bank.

Thank you, operator. Please go ahead.

Thank you again. Good morning, Paul and team. Yeah, I'll just echo the congratulations on the guidance increase. Nice to see that early in the year. Yeah, maybe just continuing on the last question. I see the AISC outperformance in the quarter. You avoided the inflationary trend that's in the sector. Can you comment on your fuel hedging strategy and how that factored into Q2 and the protection it might offer for the rest of the year?

Hey, Don, it's Ryan. Thanks for the question. We do hedge fuel at both Mount Milligan and Thompson Creek. It's a smaller element of our cost base in Turkey, so we don't do it there. Overall, we are about 50% hedged on our North American fuel needs through the rest of the year. A little more than that at Thompson Creek, a little less than that at Mount Milligan. It has provided some good protection. Like everybody, we've seen a little bit of a cost increase related to diesel in the unhedged positions. Even looking at a higher oil price environment, we're pretty comfortable with our cost ranges. We've sensitized that, and I think the hedging gives us good cover on diesel costs for the rest of the year.

Don, one of the reasons we're not as exposed to the higher fuel price is we generally buy electricity off the grid, usually hydroelectric, so we don't have these big islanded HFO power plants.

Our fleets are comparatively small. We have a relatively low strip ratio, so we are, comparatively speaking, less exposed simply by the nature of our assets.

Okay, thanks for that. Maybe continuing on hedging, there seems to be some longer dated gold hedges related to the Goldfield project, maybe after it comes into production. Is there any scenarios in which you'd consider buying these back? I see your liquidity has recently been upside, gives you more flexibility to consider a range of things.

Yeah, it's a good question. We put those hedges in place when we approved the project, to protect downside risk, and to make sure we could lock in a good return project at Goldfield. Obviously, metal prices have increased since then, and we'd be in a loss position on those hedges. The ceilings on those hedges are quite high. It's $4,438 in 2029 and $4,700 in 2030. If we were actually operating today, those hedges would expire kind of unused or unexecuted. We'll look at that, Don. I think for now, we're leaving those.

They lock in a good return on Goldfield, which is a good outcome for us.

If metal prices go high, Goldfield still has exposure on 80% of its ounces beyond the hedges. We're kind of comfortable in that situation.

Okay, that's helpful. The final question. Thompson Creek, I see it's on time, on budget. Can you comment on any inflationary CapEx risk as we enter the final 12 months of development, and maybe any steps that you might be taking to mitigate?

Thanks, Don. We did update our capital estimate for Thompson Creek to $425-$450. We look at that on an ongoing basis. We're comfortable we're still in that range as the capital cost to get to first production. I think the diesel hedges that were asked about are helping there. They're really reducing our fuel costs, and we've locked in some pretty good rates on diesel. The site's operating quite well. I think, as Paul mentioned in his remarks, mining rate is up. That's helping our unit costs. We're quite comfortable with the cost range that's out there. Outside of diesel hedging and trying to run the site efficiently, there's not much else we're doing from an ongoing basis. We've also purchased all the major equipment already, so there's no major items where we're still waiting for pricing that could be impacted by inflation.

Again, feel pretty good with that cost number to get us to first production.

Okay. Well, thanks a lot, Paul and Ryan. Appreciate that. Good luck with the rest of the quarter.

Thanks, Don. Thanks, Don. Our next question comes from Raj Ray of BMO.

Please go ahead. Thank you, operator.

Good morning, Paul and team. I've got three questions, if I may. First, a follow-up on Öksüt, Paul. You mentioned about the potential to bring in some incremental resources. As far as we currently understand, mine life or production is under 2029. How much potential do you have to take it much beyond 2029, given what you see in terms of your exploration potential? Secondly, Ryan, if you can give us any color on what led to the reduction in tax rates. Very unusual to see countries reducing tax rates nowadays. Moving over to Moly. It'll be good to get some idea what you're seeing from your traders in terms of the outlook for Moly, because we are hearing mixed messaging at this point. Importantly, Paul, the window seems to be opening up. Your CapEx spend is getting done.

Moly prices are strong. Just wanted to see what you're strategically thinking in terms of unlocking value from your Moly asset, because within the current portfolio, despite the fact that you are 12 months out of production, CapEx mostly spent, Moly price is high. I don't think it gets any value from investors at this point.

Thanks, Raj. I'll answer the Turkish tax rate item first, then Paul will comment on the other two. To be perfectly honest, it was a bit of a surprise to us as well. It wasn't really telegraphed. There was a public announcement in Turkey declaring this tax rate change. It applies to manufacturing as a whole, so it's not targeted to mining. Mining operations in Turkey fit within that subset. I don't have much color to add. Obviously, it's rare to have tax rates reduced and not go up, but obviously we'll be happy with that and take the benefit of that going forward. No more color on that, unfortunately.

We'll take it. It's good news.

Yeah, exactly. Yep. On the first point, Raj, on Öksüt.

The scope of what we're looking at is twofold. There's a low-grade oxide halo outside the current reserve pit, which pulls at prices well below spot. There's a natural pit extension that takes place. Now, those are, by virtue of their low grade, higher cost ounces. However, as we continue to optimize our heap operating practices, our solution management practices, that does bring into play a residual leach tail at very low cost. When you blend the high cost nature of the low grade oxides and the low cost nature of the residual leaching, we see a pretty attractive extension here. I don't want to put a number out there, but we're targeting one, two, three years, maybe not all at once, but we do see a potential for production extension there at Öksüt.

We are also ramping up drilling at proximal targets within a kilometer or two or three at Öksüt. It's too early to say whether or not anything will materialize there in terms of mine plan, but I suppose we are drilling it, which means we do see things that are interesting. There's a layer of potential at Öksüt for mine life extension, and it won't all come at once. It won't all come with this end of year update, but this end of year update will provide some extension to mine life with what we hope is a runway beyond that also. Molybdenum, your last question. Molybdenum prices are very high right now, and it's driven by both supply and demand factors. Molybdenum is in short supply. It's a byproduct, as you know, from big copper mines.

Those copper mines are really struggling to keep up their copper production, which has a direct knock on to molybdenum supply. Molybdenum is used in pipelines, nuclear, defense, aerospace, and increasingly in semiconductors as switching from tungsten takes place. We are seeing molybdenum demand robustly ahead of our internal previous projections. I'm also going to take this opportunity to introduce a member of our executive team, Hélène Timpano. She is President of US Moly, and she can give you a little bit more color on what we're seeing on our internal trading side.

Yeah. Hi, Raj. Nice to speak with you. What we're seeing is really a large market deficit developing this year, which is different than what we've seen in the last few years, which would be more of a tight market. I think fundamentally, that's contributing to the price that we're seeing today. Paul pointed to a number of different factors that are driving that deficit. It's both on the supply side and the demand side. In our own business, we have seen that pull through demand. If you look at the steel production numbers in the U.S., which is our main customer base right now, it is growing. We're seeing that in our own order book. I think when you have such a large deficit, it just is constructive for continued high prices.

It's great to know that we're 12 months away from our first production at Thompson Creek.

Hey, Helen, good to talk to you. Hope you're doing well. Just on the concentrate tightness, do you see that tightness going into 2027, or is it temporary at this point?

Yeah, we do. I think China is a large consideration in driving that additional tightness. If you look at their demand for concentrate, historically, that's been more contained to within China demand, but we're seeing them now competing for concentrates outside of China. I think that makes for tight competition at the negotiation table, but on the other hand, it's also very supportive of high prices.

Okay, thank you for that. Then Paul, anything you can share on how you're strategically thinking on the Moly business?

Well, it's interesting, right? I mean, Moly's at $32, $33. We approved the project at $20. There's been a track record right now in the market of critical minerals and metals, strategic metals companies listing quite successfully with IPOs in the U.S. market. I think there is also an increasing demand given the current U.S. administration's focus on metal self-sufficiency in these strategic areas. I would say that the overall market has become much more conducive to entities that produce metals, and in the U.S. context, ones that are domestically based. As I said to you before, we continue to monitor the market. We see very significant value in this business, and our intention is to deliver that value to our shareholders.

Though sometimes molybdenum is unpopular in a gold mining company, I think that we are confident in the value in this business, and we will, at the appropriate time, if conditions warrant, we would look for example, a sale or an IPO or something. I think that the setup is certainly becoming a lot more constructive for something like that than it has been in the last two years. I think that's what you're getting at. I'm not going to commit to an IPO or a sale here. Certainly the conditions are becoming a lot more attractive for something like that, especially when you consider the track record of other similar companies that have IPO'd in the last year, particularly in the U.S.

Yeah, Paul, that's exactly what we are seeing from our side as well. Thank you for that. That's all the questions I had.

Thanks, Raj. Our next question comes from Harrison Reynolds of RBC.

Please go ahead. Hi, good morning, Centerra team, congratulations on a strong Q2.

Wondering if you can provide a bit more color on the mine sequencing at Mount Milligan through Q3 and Q4, maybe the progress you're seeing so far in Q3 and speak a bit to your confidence level around the current guidance range.

Yeah, sure. Hi, it's Mike here, and I'll answer that question. So far we see that recovers in grade and line sequencing are all kind of remaining in line with the PFS that was published last September. We see good reconciliation with that sequencing. We see that moving forward actually into Q3 and Q4. We're not seeing any anomalies. We're quite confident in the technical report and what the next quarters will look like at Mount Milligan. Looking at strong, continued good performance.

Right. Thanks. Switching gears to the corporate credit facility and current capital allocation framework, what would be the debt priorities or uses of debt based on your current healthy cash balance and cash flow profile? Could we see debt being used for some of these concurrent project items, or is cash on hand going to be directed to buybacks while debt could be used for project development, or is it just for a margin of safety?

Thanks for the question, Harrison. It's more of the latter. It's more to give us flexibility going forward. We don't have any immediate plans to draw on the credit facility. It was a very positive market. We usually extend our facilities about a year before their maturity, which was coming up in 2027, in a very positive credit market and a very positive view on Centerra. We had the opportunity to upsize the credit facility. We took that opportunistically. In terms of usage, we're quite comfortable we can fund all our capital projects just with our cash from operations and our current balance sheet without dipping into the credit facility. As mentioned, we are going to ramp up the buybacks. We can cover that with our liquidity and future cash flow generation as well.

For now, that credit facility is more a safety net or an opportunity to use in the future. There's nothing earmarked in terms of drawing on that at present.

Harrison, I'll also comment on the buyback here. We're a little bit different than some of our peers. We believe that we represent good value. In other words, we don't think we trade at the value of our assets. We believe we trade at a discount. We view our shares as very compelling place to allocate capital, notwithstanding the fact that we have a development pipeline. I think that's what makes us a little bit different, is that we have the balance sheet to fund both a robust capital return program to shareholders as well as the development pipeline. We're working on both sides. We're working on the NAV and the denominator here on driving shareholder value. As Ryan said, the revolver is not in any way an indication that we're going to go do something with that. It was simply taking advantage of the market.

Great. Yeah, great to see you. Thanks so much for taking my questions and congratulations again on a great quarter.

Thanks. As a reminder, if there are any further questions, please press star then one.

Our next question comes from Lawson Winder of Bank of America. Please go ahead. Hi, this is Adam Smirnowski, calling on behalf of Lawson.

We just had a follow-up question on the buyback. We saw that the board authorized a $200 million buyback. We just wanted to clarify if that's what we should model for this year, or just because it's lower than the previous authorization, if it could be materially higher or lower than that amount.

You'll have note our track record is we generally buy back what we say we will. $200 million is the number to use.

Thank you very much. That's clear.

This concludes our question and answer session and wraps up our call for today. Thank you for attending. Please have a good day.