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Aura Minerals (AUGO) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Materials· Aug 6, 2026

Source: earnings call transcript

Executive summary

Aura Minerals Q2 FY26 — Strong H2 Outlook Despite Q2 Weakness, Record LTM EBITDA

Aura Minerals reported a challenging Q2 FY26 with lower production and revenues, primarily due to planned mine sequencing and significant infrastructure investments at MSG aimed at long-term operational improvements. Despite this, the company expressed strong confidence in a robust second half, reaffirming full-year production and cost guidance. Capital allocation remains a priority, with a new dividend and a substantial share buyback program announced, alongside continued funding of growth projects from operational cash flows.

Highlights

5

  • Achieved record last 12 months (LTM) Adjusted EBITDA of $800 million, marking 12 consecutive quarters of increase.

  • Reported a record high net income of $218 million, driven by operational results and unrealized gains on gold derivatives.

  • Announced a new $60 million dividend ($0.72 per share) for Q2 FY26 and a $200 million share buyback program.

  • Significantly increased MSG's proven and probable gold equivalent reserves from 370,000 to 753,000 ounces within six months.

  • Expressed strong confidence in meeting full-year production guidance of 340,000-390,000 ounces and all-in sustaining cash cost guidance.

Concerns

5

  • Experienced weaker Q2 production of 158,000 ounces (H1 total) due to planned mine sequencing and infrastructure investments at MSG.

  • Q2 revenues were lower at $336 million, attributed to reduced production and a lower average gold price compared to Q1.

  • Reported Q2 all-in sustaining cash costs near $2,000 per ounce, primarily due to the MSG turnaround and infrastructure activities.

  • Noted a decrease in Minosa's production from 17,000 to 14,000 ounces, with expectations for weaker performance in the next two quarters.

  • Experienced a lost time incident in Borborema in March, prompting a review of safety procedures.

Guidance & targets

CategoryTargetConfidence
Full-year Production
340,000-390,000 ounces
high materiality
High
H2 Production
182,000-232,000 ounces
high materiality
High
MSG Annual Production
close to 80,000 ounces per year
high materiality
High
MSG All-in Sustaining Cash Cost
$2,000-$2,200 per ounce
high materiality
High
Borborema Plant Debottlenecking
online by Q4
medium materiality
High
Almas Plant Capacity
close to 3 million tons per year
medium materiality
High
Full-year All-in Sustaining Cash Cost
meet guidance
high materiality
High
Q2 Dividend
$60 million ($0.72 per share)
high materiality
High
Share Buyback Program
$200 million
high materiality
High
Era Dorada Production
beyond '28
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Superiore
Reported strong adjusted EBITDA within the range of $43 million to $56 million.
Adjusted EBITDA: $43M-$56M
————
Minosa
Experienced a decrease in production due to challenging stacking pad conditions, leading to slower recovery and increased working capital. Expected to have weaker production in the next two quarters before recovering in Q4. Reported strong adjusted EBITDA within the range of $43 million to $56 million.
Q1 Production: 17,000 ouncesQ2 Production: 14,000 ouncesAdjusted EBITDA: $43M-$56M
————
Almas
Showed a slight improvement in production. The plant is being upgraded to 3 million tons per year capacity, which will gradually improve production. Reported strong adjusted EBITDA within the range of $43 million to $56 million.
Adjusted EBITDA: $43M-$56M
————
Araxa
Reported strong adjusted EBITDA within the range of $43 million to $56 million.
Adjusted EBITDA: $43M-$56M
————
Apoena
Experienced lower production in Q2, but all background activities and investments in pit opening and mine development are on track to support significantly higher grades and production in Q3 and Q4.
Q1 Production: 7,000 ouncesQ2 Production: 6,000 ounces
————
MSG
Q2 production was weaker than Q1 due to infrastructure investments and underground development for the turnaround. This work is crucial for structurally changing the mine to achieve close to 80,000 ounces per year production and lower AISC by 2027. Production is expected to improve in Q3 and Q4.
Q1 Production: 9,000 ouncesQ2 Production: weaker than Q1
————
Borborema
Lower Q2 production was planned due to mine sequencing grades. Higher grades are expected in Q3, and plant debottlenecking with new filters will increase production in Q4.
Q1 Production: 17,000 ouncesQ2 Production: 14,000 ounces
————

Deals & partnerships

Unknown Sale of the San Francisco mine, which was part of the Apoena complex.

The sale of the San Francisco mine was completed, resulting in a gain for the company.

Capital programs

Era Dorada Project underway
Period spend: $15 million

Benefit:water treatment to potable level, geothermal energy

Board approved full investments. 60% of groundwork completed. Focus on local hiring (53% from Asuncion Mita, 93% from Guatemala). Includes significant water treatment improvements and final studies for a geothermal project.

Almas Plant Upgrade underway

Benefit:3 million tons per year capacity

Upgrading plant capacity from 2 million tons to 3 million tons per year, expected to finish by year-end.

Borborema Plant Debottlenecking underway

Benefit:increased production capacity

Implementing new filters to address the current bottleneck, expected to be online by Q4.

MSG Turnaround and Underground Development underway

Benefit:80,000 ounces per year production, $2,000-$2,200/ounce AISC

Significant infrastructure investments and underground development to structurally change the mine sequencing from top-down to bottom-up. Compromised short-term production for long-term stability and higher output by 2027. Underground development performance is 80-90% above last year.

Risks & headwinds

Weaker Q2 Production Q2 FY26

158,000 ounces (H1 total)

Mitigation:Planned mine sequencing and infrastructure investments at MSG for H2 recovery.

Lower Gold Price and Production Impact on Revenue Q2 FY26

$336 million Q2 revenue

Mitigation:Expected higher production in H2 and long-term constructive view on gold prices.

High All-in Sustaining Cash Costs Q2 FY26

close to $2,000 per ounce (Q2 FY26)

Mitigation:Primarily due to MSG turnaround; expected to decrease with higher production and grades in H2 and by 2027.

Minosa Production Decline Q2 FY26 and next two quarters

decrease from 17,000 to 14,000 ounces

Mitigation:Expected recovery in Q4 FY26.

Lost Time Incident March FY26

one lost time incident

Mitigation:Revised procedures and constant monitoring to achieve zero incidents.

Unfavorable Foreign Exchange Rates Ongoing

Brazil Real from BRL 5.50/USD to BRL 5/USD (10% loss)

Mitigation:Internal initiatives and cost-cutting programs to offset impact.

Higher Oil and Chemical Prices Ongoing

impact on diesel costs (5-10% of total cost)

Mitigation:Internal initiatives and cost-cutting programs to offset impact.

Potential Negative News during Era Dorada Construction Ongoing construction

unquantified

Mitigation:Significant community engagement, transparency house, and majority approval from local COCODEs.

El Nino Climate Impact Ongoing

unquantified

Mitigation:Monitoring rainfall in Central America (Era Dorada) and Honduras (open pit); not expected to jeopardize construction or significantly impact overall Aura production.

Share Price Volatility Ongoing

unquantified

Mitigation:Management believes it's natural for a high-growth company and expects volatility to be on the upside as growth is delivered.

What to watch in Q3 FY26

MSG Production Ramp-up

Q3 FY26 and Q4 FY26
Current Weaker Q2 production (9,000 oz in Q1, lower in Q2)
Target Increased production in Q3 and Q4

Why it matters

Successful ramp-up is crucial for achieving 2027 production targets and validating the turnaround strategy.

We should see improvements in Q3 and then Q4, another improvement, but most of the improvement in production will be on 2027.

Find out whether AUGO delivers this. Inve re-checks your case every morning.

Q&A highlights

How does the volatile macro environment affect M&A appetite? How does management balance growth CapEx, buybacks, and dividends, especially with the new $200M buyback program?

Management maintains M&A appetite, viewing current gold price volatility as creating more converging expectations for deals. They balance growth CapEx, dividends, and buybacks, having historically funded both growth and shareholder returns from strong cash flows. The new buyback program will split capital returns with dividends, not necessarily increasing the total payout.

“We've been able to do though, both. This company has such a high payback, right? The payback of our project is one or two years. So the equity will be maybe sometimes less than one year.”

asked by Matheus Moreira · answered by Rodrigo Barbosa

2 min read 6 chapters

Detailed narrative

Operational Performance and H2 Outlook

Aura Minerals reported a weaker first half of 2026, with 158,000 ounces produced, primarily due to planned mine sequencing and significant infrastructure investments at MSG. However, management expressed strong confidence in a substantial recovery in the second half, projecting 182,000 to 232,000 ounces for H2, bringing the full-year production within the 340,000 to 390,000 ounce guidance. This improvement is expected from higher grades at Borborema and Apoena, debottlenecking at Borborema, and the ramp-up of MSG.

MSG Turnaround and Resource Expansion

The MSG asset underwent a significant turnaround in Q2, prioritizing underground development and infrastructure over short-term production. This strategic focus has led to a substantial increase in resources and reserves, with proven and probable gold equivalent ounces doubling from 370,000 to 753,000 within six months. Measured and indicated resources grew from 1 million to 1.8 million ounces, and inferred resources from 1.4 million to over 2 million ounces. The underground development performance is 80-90% above last year, positioning MSG to produce close to 80,000 ounces per year at an AISC of $2,000-$2,200 per ounce by 2027.

Capital Allocation Strategy

The company announced a new capital allocation strategy, combining a $60 million dividend ($0.72 per share) for Q2 FY26 with a $200 million share buyback program. Management emphasized its ability to fund growth projects, dividends, and buybacks from operational cash flows, maintaining a low net debt to EBITDA ratio of 0.2x. The M&A strategy remains active, focusing on value creation through greenfield projects, resource expansion, and acquisitions, with a preference for operating assets that do not overlap with current construction timelines.

Project Development and Expansion

Era Dorada is progressing as planned, with $15 million already spent and 60% of groundwork completed. The project includes significant improvements in water treatment and a potential geothermal energy source, with 53% of employees hired from local communities. Almas is undergoing an upgrade to increase its processing capacity from 2 million to 3 million tons per year by year-end. Borborema is implementing new filters to debottleneck the plant, expected online by Q4, further boosting production alongside higher grades.

Cost Management and Inflation Headwinds

Despite facing headwinds from a less favorable Brazilian Real exchange rate (BRL 5.50/USD to BRL 5/USD) and higher oil/chemical prices, Aura Minerals is confident in meeting its full-year AISC guidance. The company employs a strategic sourcing program and internal cost-reduction initiatives across all business units to mitigate inflationary pressures. While oil prices impact diesel costs (5-10% of total cost), a comprehensive program aims to offset these effects.

Safety and ESG Commitments

Aura Minerals reported one lost time incident at Borborema in March, with the affected individual fully recovered. The company has since revised procedures and reinforced its commitment to achieving zero lost time incidents through constant monitoring and internal programs. Geotechnical structures, including tailings and underground pits, are continuously monitored by external consultants and are deemed satisfactory. Era Dorada project emphasizes local hiring and advanced water treatment to potable levels, demonstrating strong community and environmental commitment.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.