LUNDIN GOLD PROVIDES 2026 GUIDANCE AND STRATEGIC THREE-YEAR OUTLOOK HIGHLIGHTING CONTINUED GROWTH AND EXPLORATION

Lundin Gold set 2026 guidance for Fruta del Norte of 475,000–525,000 oz of gold at 5,500 tpd (8.3 g/t head grade, ~91% recovery), with cash operating costs of $900–960/oz and AISC of $1,110–1,170/oz, sustaining capital of $75–90m and a record $85m exploration program (133,000 m drilling) to extend the mine life. Management expects a development decision on the Fruta del Norte South deposit in H1 2026 and an investment decision on a mine-to-mill expansion (to evaluate throughput above 5,500 tpd) in H2 2026, while maintaining shareholder returns via a fixed $0.30 quarterly dividend plus a variable dividend of at least 50% of normalized free cash flow after the fixed payment. The company flags higher unit costs versus 2025 driven largely by a $4,000/oz price assumption (adding ~ $150/oz via royalties and statutory profit sharing), anticipates back-end weighted production and seasonal free-cash-flow variability, and frames the program as positioning Lundin for sustained cash generation and growth subject to usual forward-looking risks.

Analysis

Lundin Gold set 2026 operational guidance for Fruta del Norte targeting 475,000–525,000 ounces of gold at a steady mill throughput of 5,500 tpd, an average head grade of 8.3 g/t and average mill recovery of ~91%. Management projects cash operating costs of $900–960/oz and AISC of $1,110–1,170/oz on a notional gold price of $4,000/oz, sustaining capital of $75–90 million and a record $85 million exploration program (133,000 metres). The company commits to fixed quarterly dividends of $0.30 per share plus a variable dividend of at least 50% of normalized free cash flow after the fixed payment, signaling continued shareholder returns alongside reinvestment in growth.

The operational growth path is driven by two near-term decision points: a development decision on Fruta del Norte South (FDNS) expected in H1 2026 and a mine-to-mill expansion investment decision expected in H2 2026; results of the expansion study will determine upside to the 5,500 tpd base case. The 2026 exploration plan allocates ~100,000 metres to near-mine drilling and 25,000 metres to resource conversion, which, if successful, would underpin reserve replacement and support extended production profiles and potential throughput increases.

Unit costs are expected to be higher than 2025 largely because the company used a $4,000/oz price assumption, which it says adds roughly $150/oz to costs via increased royalties and statutory profit sharing; production and cash flow are forecast to be back-end weighted. Free cash flow will be seasonally depressed in Q2 due to statutory profit sharing and taxes; material execution risks remain and are consistent with the company’s cautionary list — including country risk in Ecuador, regulatory approvals, commodity price variability and dependence on a single high‑grade operation — making outcomes contingent on exploration and expansion results.

Key Decisions for Investors

• Monitor the FDNS development decision in H1 2026 and the mine-to-mill expansion study results in H2 2026 and adjust position if either decision materially increases required non‑sustaining capital or expands production guidance
• Assess the dividend thesis by stress-testing Lundin's normalized free cash flow against lower realized gold prices and the known Q2 cash flow hit from statutory profit sharing and taxes before allocating for income
• Treat near-term exploration and resource conversion drill results (133,000m program, 25,000m conversion) as primary catalysts for re-rating and consider incremental exposure on clear reserve upgrades
• Limit downside by sizing positions to account for Ecuador sovereign/regulatory risk and single-asset concentration, or use hedges if lacking conviction on execution and permitting timelines