Lundin Gold (TSX: LUG) lifted third quarter net income to US$293.8 million, or US$1.21 per share, as a sharp rise in gold sales from its Fruta del Norte mine carried earnings well past the prior quarter.
Revenue net of treatment and refining charges came in at US$633.0 million, up from US$477.7 million in the second quarter. Adjusted earnings per share rose to US$1.23 from US$0.84, while adjusted EBITDA climbed to US$480.0 million from US$346.7 million.
Cash flow grew even faster. Operating cash flow reached US$376.9 million, nearly 3 times the US$125.2 million recorded three months earlier, and free cash flow rose to US$330.9 million from US$96.0 million.
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The company ended September with US$573.6 million in cash, up from US$507.1 million at the end of June, even after paying US$261 million in dividends during the quarter. It has declared another US$1.14 per share dividend, payable in December.
The mine produced 153,736 ounces of gold, up 29% from 118,994 ounces in the second quarter. Head grade improved to 10.1 g/t from 8.3 g/t and mill throughput averaged 5,823 tonnes per day, more than offsetting a small dip in recovery to 88.3%. Gold sales totalled 148,326 ounces at an average realized price of US$4,299 per ounce.
Unit costs fell as volumes rose. Cash operating costs dropped to US$862 per ounce sold from US$1,016, and all-in sustaining costs fell to US$1,037 from US$1,176. The second-quarter AISC had sat above Lundin’s full-year guidance range of US$1,110 to US$1,170 per ounce, and the latest quarter brings the year-to-date average back inside it at US$1,102.
Through 9 months, production stands at 392,472 ounces, or roughly 78% of the midpoint of the company’s 2026 guidance of 475,000 to 525,000 ounces. Lundin kept both its production and cost guidance unchanged. It expects the fourth quarter to be the weakest of the year because of lower grades in the mine sequence and a mill maintenance shutdown completed in October. About 82,500 ounces are needed to reach the low end of the range.
One item weighed on the quarter. In September, the company received a US$154 million tax assessment from Ecuador covering 2023, including potential fines and penalties. Lundin says the assessment is inconsistent with its exploitation agreement and is working toward a resolution.
The company also expects to decide before year end on an integrated investment in the FDN South deposit and a mill expansion.
Lundin Gold last traded at $91.28 on the TSX.
