Lundin Gold Posts Record 154,000 Ounces in Q3, Weighs Expansion

Lundin Gold produced a record 154,000 ounces of gold in the third quarter, generating $331 million in free cash flow and $633 million in revenue, with an expansion investment decision set for the fourth quarter.

The Vancouver-based operator of the Fruta del Norte mine in southeast Ecuador accelerated mining and reached higher-grade ore earlier than planned, lifting output beyond any quarter in its history. President and CEO Jamie Beck said the company expects to make an investment decision in Q4 on an integrated mine and mill expansion, after advancing engineering and preparing capital estimates for development at FDNS.

Chief Operating Officer Terry Smith confirmed the company remains on track for full-year guidance of 475,000 to 525,000 ounces, with nine-month production at roughly 392,000 ounces. Fourth-quarter output will moderate, he said, as grades normalize with the mine sequence and following a planned process plant maintenance shutdown completed in early October.

What drove the record quarter?

The numbers behind the quarter were stark:

• Mined: a record 555,000 tons
• Processed: a record 535,000 tons
• Mill throughput: about 5,800 tons per day
• Head grade: 10.1 grams per ton
• Recoveries: just over 88%

Chief Financial Officer Chester See reported income from mining operations of $468 million on sales of 148,000 ounces. Year-to-date sales have trailed production because of shipment timing; the company expects to sell the majority of those ounces in the fourth quarter.

What did costs and cash returns look like?

Cash operating costs averaged $862 per ounce, while all-in sustaining costs averaged $1,037 per ounce, producing an all-in sustaining cost margin of roughly 76%, See said. Operating cash flow reached $377 million, and free cash flow of $331 million equated to $1.37 per share. Lundin Gold ended the quarter with $574 million in cash and $477 million in working capital.

The board declared a Q3 dividend of $1.14 per share — a $0.30 fixed payment plus a $0.84 variable payment — payable December 23 to shareholders of record December 8. See said the dividend represents 100% of normalized quarterly free cash flow, well above the policy minimum of 50%.

Beck said the company returned $261 million through cash dividends during the quarter, bringing the year-to-date total to $832 million, excluding its LunR equity dividend. Lundin Gold also repurchased 49,500 shares for $3 million.

How far can Fruta del Norte expand?

Smith said the expansion decision will weigh optimized mining rates at FDN and FDNS against increased processing capacity, with capital cost and timing details to follow the decision.

Beck drew a line at the project's limits. The contemplated expansion would push the operation close to what management considers the ceiling for underground material movement and the plant's SAG mill, he said. Further expansion would be more challenging and would probably require a significant new discovery.

What's new on exploration and Ecuador?

Lundin Gold discovered a new epithermal gold deposit, Quebrada Dorada, which Beck said doubles the strike length of the identified epithermal gold trend from four to eight kilometers. Two rigs are drilling there. Work also advanced at FDNS, FDN East and Bonza Sur, where results confirmed discrete higher-grade veins within a larger disseminated zone — potential for underground development. A maiden mineral resource estimate for the Sandia copper-gold porphyry deposit is planned for early 2027.

On the sovereign adjustment with Ecuador, Beck said the two sides differ on aspects of the calculation. The company is prepared to pay but wants the payment to align with its agreements. Mediation is likely to begin early in the new year, though he declined to give a timeline for resolution.

Plain takeaway: record throughput, a 76% AISC margin and a 100% free-cash-flow payout leave Lundin Gold fully funded for a Q4 expansion decision.