Lundin Gold (TSX: LUG) second quarter results came in below the pace it set to start the year, with a weaker realized gold price doing most of the damage.
Revenue fell to $478 million from $567 million in the first quarter. Net income slipped to $220 million, or $0.91 a share, from $273 million, or $1.13. On an adjusted basis, earnings were $202 million, or $0.84 a share, against $1.13 three months earlier. Adjusted EBITDA declined to $347 million from $424 million.
Reported EBITDA of $399 million sat well above the adjusted figure, a $52 million gap created by a fair value loss on the distribution of LunR Royalties shares offset by a $127 million derivative gain.
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Operating cash flow dropped to $125 million from $370 million, and free cash flow to $96 million, or $0.40 a share, from $348.5 million, or $1.44, in the first quarter. The bulk of that swing was $221 million in statutory profit sharing and income tax payments assessed on 2025 taxable income, more than double the prior year’s payment.
Cash and equivalents ended the quarter at $507 million, down from $704 million at March 31, after $293 million in dividends. The company carries no debt. It also closed a life of mine silver stream transaction with LunR Royalties in May and distributed 50.5 million LunR shares as a special dividend-in-kind valued at $747 million.
A third quarter dividend of $1.08 a share has been declared, below the $1.21 paid in the second quarter.
Operationally, little changed. Gold production of 118,994 ounces was effectively flat against the 119,742 ounces produced in the first quarter, and the underlying drivers barely moved, with average head grade of 8.3 grams per tonne versus 8.4, recovery of 89.1% versus 89.2%, and throughput of 5,496 tonnes per day versus 5,520. Sales lagged production at 110,385 ounces, down from 115,308.
Steady output did not translate into steady unit costs. Cash operating costs rose to $1,016 per ounce sold from $987, while all-in sustaining costs climbed to $1,176 from $1,114, narrowly above the top of the full year range. The realized gold price fell to $4,359 an ounce from $4,951, reflecting a gross price of $4,525 and a negative $166 per ounce provisional pricing adjustment, a reversal from the $154 per ounce benefit recorded in the first quarter.
Management reaffirmed 2026 guidance of 475,000 to 525,000 ounces at an AISC of $1,110 to $1,170 per ounce. First-half output of 238,736 ounces represents roughly 48% of the midpoint, leaving a modest second-half skew to close.
“We delivered another solid quarter generating strong margins and substantial shareholder returns while continuing to advance our growth strategy,” President and Chief Executive Officer Jamie Beck said.
Lundin Gold last traded at $86.70 on the TSX.
