Lundin Gold (TSE:LUG) reported stable operational performance for the second quarter of 2026, producing approximately 119,000 ounces of gold at its Fruta del Norte mine in Ecuador, keeping the firm firmly on track to meet its annual production guidance.
Production Targets and Operational Efficiency
CEO Jamie Beck noted that the second quarter represented the company’s lowest-production period of the year. With first-half production reaching 239,000 ounces, Lundin Gold has successfully completed 48% of the midpoint of its full-year guidance range of 475,000 to 525,000 ounces. Despite nine days of planned maintenance, the facility processed over 500,000 tonnes of ore, maintaining an average mill throughput of nearly 5,500 tonnes per day. Production is expected to accelerate throughout the second half of 2026.
COO Terry Smith reported an average head grade of 8.3 grams per tonne and recovery rates exceeding 89%. While June saw a surge in mill performance—averaging closer to 6,000 tonnes per day—the company maintains a conservative guidance of 5,500 tonnes per day for the remainder of the year. Safety metrics remained strong, with zero lost-time injuries recorded during the period.
Financial Performance and Shareholder Returns
The company posted net revenue of $478 million and $337 million in income from mining operations. Adjusted earnings reached $202 million ($0.84 per share), with an adjusted EBITDA of $347 million. Cash operating costs averaged $1,016 per ounce, while all-in sustaining costs (AISC) stood at $1,176 per ounce, yielding a robust AISC margin of approximately 73%.
Lundin Gold demonstrated a strong commitment to shareholder value, returning $293 million in cash dividends during the second quarter. The board declared a quarterly dividend of $1.08 per share—consisting of a $0.30 fixed payment and a $0.78 variable component—representing 100% of the quarter’s normalized free cash flow. This dividend is payable on September 25 to shareholders of record as of September 10.
Expansion and Exploration Outlook
Lundin Gold continues to advance its mine-to-mill expansion study, which remains on schedule for completion by the end of 2026. This initiative focuses on sustaining higher throughput rates and integrating the Fruta del Norte South (FDNS) deposit into the long-term mine plan. Underground development at FDNS is progressing, and exploration drilling continues to yield high-grade results, including intervals of 236.6 grams per tonne of gold at the FDN East ore body.
Beyond existing operations, the company has identified two additional copper-gold porphyry centers, bringing the property total to seven. Expansion at the Sandia target is ongoing, with a maiden mineral resource estimate slated for early 2027. Having completed 54,000 metres of its 133,000-metre 2026 drilling program, the company expects to ramp up regional exploration activity in the coming months.