Lundin Gold (TSE:LUG) used its fourth-quarter and full-year 2025 earnings call to highlight record operational and financial performance at its Fruta del Norte (FDN) mine, along with progress on reserve growth and a developing expansion plan that would incorporate the nearby FDNS deposit.
Record 2025 production and throughput at Fruta del Norte
President and CEO Jamie Beck said 2025 was “an exceptional year,” pointing to steady operational delivery and ongoing optimization at FDN. The company produced approximately 498,000 ounces of gold and sold 503,000 ounces. Average head grade was 9.5 grams per tonne with 89% average recovery, and the mill processed more than 1.8 million tonnes at a record average throughput of 5,009 tonnes per day.
On safety, Smith said the company began 2025 focused on improving performance and finished the year with no lost time incidents and its lowest annual total recordable incident rate to date.
Costs, margins, and record free cash flow
Management emphasized disciplined cost performance despite higher royalty and profit-sharing impacts associated with stronger gold prices. For 2025, cash operating costs averaged $838 per ounce and all-in sustaining costs (AISC) averaged $1,015 per ounce, which Beck said resulted in a basic margin of 72%.
Chief Financial Officer Chester See said the company generated $1.0 billion of cash flow from operations and $926 million of free cash flow in 2025, supported by “modest capital spending requirements” and low capital intensity. The company ended the year with $630 million in cash after paying $664 million in dividends, and working capital of $595 million at December 31, 2025, up from $459 million a year earlier.
See also explained that cash operating costs and AISC were above the company’s 2025 guidance range primarily because guidance was based on a $2,500 per ounce gold price assumption, while average realized gold price for the year was $3,594 per ounce. He said royalties and statutory profit sharing increase reported unit costs by about $10 per ounce for every $100 per ounce increase in gold price, implying roughly a $110 per ounce impact versus a $60 per ounce assumption used in guidance.
Q4 2025: “strongest in our history”
Beck called the fourth quarter the strongest in the company’s history “on multiple measures.” Financial results cited on the call included:
- Revenue: $527 million
- Net income: $234 million
- EBITDA: $364 million
- Free cash flow: $328 million
- Earnings per share: $0.97
Beck also said the company’s AISC margin per ounce rose to $3,106 in the quarter, describing it as a quarterly record and a significant year-over-year increase.
Dividend framework and Q4 payout
The board declared a quarterly dividend of $1.15 per share, consisting of a $0.30 fixed component and a $0.85 variable component. See said the variable dividend reflected 100% of normalized free cash flow for the quarter, above the policy minimum of 50%. The total distribution was approximately $278 million, payable March 26 to shareholders of record on March 11 (with March 31 payment for shares trading on Nasdaq Stockholm).
Beck framed the dividend as part of the company’s focus on returning capital while maintaining balance sheet strength.
FDNS added to reserves; integrated expansion decision targeted for 2026
On growth, Beck and Smith highlighted a milestone: the inclusion of FDNS into mineral reserves, with underground development toward the deposit now expected to proceed. Smith said the company anticipates $30 million to $35 million of non-sustaining capital in 2026 associated with FDNS development, with further estimates to come as studies are finalized.
Management said FDNS is being integrated into a mine-to-mill expansion study evaluating options to increase throughput beyond 5,500 tonnes per day, alongside potential plant de-bottlenecking and upgrades. Smith said the company’s intention is to make “a single integrated investment decision in 2026,” informed by the most efficient mining rates at both FDN and FDNS and processing expansion options.
In the Q&A, Beck described the potential expansion as “a relatively small incremental expansion” that is “unlikely” to require a shaft. He said access would come from existing underground development moving south, and characterized the opportunity as a way to maintain consistent production levels by bringing FDNS into the plan in a complementary way. Beck also said reserve grades are expected to trend lower over time, and increased throughput would help support the production profile.
Smith told analysts that FDNS mining would differ from FDN’s transverse stoping, instead using long-hole stoping with longitudinal stopes due to stacked veins and a less massive orebody. He said this would involve narrower, less productive stopes, offset by having more stopes in production at once.
Beck said the company expects FDNS to have a “meaningful impact” over the next three to four years as it is brought into the mine plan and begins producing ounces, with additional detail to be provided later in the year.
On reserves and resources, Beck said 2025 marked the company’s largest FDN reserve and resource statement to date. Proven and Probable Reserves increased 6% year-over-year to 5.85 million ounces, reflecting the inclusion of an inaugural FDNS reserve of 0.54 million ounces and accounting for approximately 535,000 ounces of depletion. Measured and Indicated Resources rose 6% to 7.48 million ounces, including 0.77 million ounces at FDNS, while inferred resources totaled over 2.0 million ounces and included a 0.42 million-ounce inaugural inferred resource at FDN East.
Beck and Smith also discussed exploration results at FDNS, FDN East, and multiple copper-gold porphyry targets, and said the company plans a 133,000-meter exploration program in 2026. In response to a question on Bonza Sur, Beck said the company would prioritize evaluating whether higher-grade portions could be accessed from underground as development moves south, though he did not provide timing for a resource estimate.
About Lundin Gold (TSE:LUG)
Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador. Fruta del Norte is among the highest-grade operating gold mines in the world. The Company’s board and management team have extensive expertise and are dedicated to operating Fruta del Norte responsibly. The Company operates with transparency and in accordance with international best practices. Lundin Gold is committed to delivering value to its shareholders through operational excellence and growth, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact.
