AUGO — Q2 2026 Financial Report Analysis

Higher gold prices and two new mines lifted sales 76%, but costs climbed and the record profit is mostly a hedge accounting gain

Aura Minerals runs six producing mines across Latin America: Aranzazu (copper, gold and silver, Mexico), Minosa (gold, Honduras), and four gold mines in Brazil (Apoena, Almas, Borborema and MSG). In the second quarter of 2026 (April to June) it sold 78,414 gold equivalent ounces, 26% more than a year earlier, at an average realized gold price of US$4,304 per ounce (+35%). Revenue rose 76% to US$336.0 million. Reported net income jumped to US$217.7 million from US$8.1 million, but US$126.0 million of that is a non-cash paper gain on gold hedges. Strip it out and the company's own adjusted net income was US$97.4 million: still up 164%, but less than half the headline number.

A "gold equivalent ounce" (GEO) is how Aura adds its copper and silver output to its gold output: each metal's production is converted into the number of gold ounces it is worth at current prices. That is why the company quotes production "at current prices" and "at constant prices"; a change in the copper-to-gold price ratio alone can move the GEO count at Aranzazu.

At a glance

• Revenue US$336.0M (+76% YoY): by our rough split, about two thirds of the growth came from a higher gold price, the rest from more ounces, mainly from Borborema (commercial production since Q2 2025) and MSG (not in last year's results).
• All-in sustaining cost US$1,985 per GEO (+37% YoY): what it costs to keep the existing mines producing rose faster than the gold price did, driven by the MSG turnaround (US$5,277/GEO there).
• Diluted EPS US$2.57 vs US$0.11: almost all of the jump in reported profit comes from hedge accounting; adjusted net income per diluted share works out to about US$1.15 vs US$0.49 a year ago.

Q2 2026 results

Figures are in US dollars, the currency Aura reports in, under IFRS accounting. The year-ago gold price is implied from the company's stated +35% change. Operating margin is operating income divided by revenue.

Cash cost is the cost of mining and processing an ounce; all-in sustaining cost (AISC) adds the spending needed to keep existing mines running (sustaining capital, some overhead), so it is the better measure of how much of the gold price a miner keeps. At US$1,985 against a US$4,304 realized price, Aura kept a margin of roughly US$2,300 per ounce before taxes, hedges and growth spending.

Compared with the first quarter, the picture is weaker: revenue fell 12%, adjusted EBITDA (earnings before interest, tax, depreciation and amortization) fell 19% to US$196.7 million, and production fell 8%, as the realized gold price dropped 11% from Q1 and several mines worked through lower-grade parts of their pits.

Mine by mine

Only Almas and the two new mines grew. The three legacy mines outside Almas produced 37,870 GEO, down 22% from 48,539 a year earlier, which the company attributes to planned mine sequencing rather than a problem. Two mines did most of the earning: Almas (US$56.2 million adjusted EBITDA, +127%) and Borborema (US$47.3 million). MSG had negative adjusted EBITDA of US$1.1 million in the quarter.

What the headline numbers hide

• The record profit is a hedge paper gain. In 2023, while building Borborema, Aura sold away the upside on about 80% of that mine's first three years of gold through "collars": contracts that guarantee a floor of US$1,745/oz but cap the price Aura receives at US$2,400/oz. With gold far above the cap, these contracts are a large liability. Because gold fell during Q2 (from US$4,646.60/oz to US$4,008.02/oz), the liability shrank and Aura booked a US$126.0 million unrealized gain. That gain reverses if gold rises again; a 10% gold price move changes the collars' value by about US$69.6 million, per the company's sensitivity note.
• The hedges cost real cash every quarter. Aura paid US$37.2 million in Q2 (US$70.6 million in H1) to settle collars that expired, up from US$11.7 million in Q2 2025. 166,578 ounces remain hedged, expiring between July 2026 and June 2028, and derivative liabilities on the balance sheet were about US$301 million at June 30 (US$143.4 million due within a year). That is the main reason Borborema's gold is worth less to shareholders than the spot price suggests.
• Cash conversion is fine against adjusted profit, not against reported profit. Operating cash flow of US$111.9 million was about half of reported net income but 1.15x adjusted net income. After US$84.3 million of capital spending, free cash flow was US$27.6 million, while dividends and buybacks took US$67.7 million, so net debt rose to US$168.0 million from US$115.2 million in Q1. Leverage is still low at 0.21x net debt to trailing adjusted EBITDA.
• Costs are rising faster than the company's own range. First-half AISC was US$1,906/GEO, above the full-year guidance range of US$1,720-1,865. At the metal prices used to set guidance, it is US$1,847, near the top of the range. Excluding MSG, Q2 AISC was US$1,653/GEO, still up 14% YoY on lower grades at Apoena and Aranzazu, higher sustaining spending at Almas and a stronger Mexican peso and Brazilian real (which make local costs more expensive in dollars).
• A low tax charge and a one-off helped. Income tax was 7.9% of pre-tax profit (74% in Q2 2025). Other income included the gain on selling the idle São Francisco mine (US$9.0 million price), while G&A included a one-off US$4.7 million legal provision at Apoena.
• Per-share growth is diluted. The diluted share count rose 12.7% to 84.8 million, reflecting shares issued since mid-2025, so EPS grew less than profit.

Takeaway: Aura is a gold-price story with a cap on part of its upside: higher gold lifted revenue 76% and adjusted profit 164%, but rising costs (AISC +37%), US$37 million a quarter of hedge settlements and an MSG turnaround that had negative EBITDA in Q2 mean less of each extra dollar of gold reaches shareholders than the record US$217.7 million profit suggests.

Outlook

Management kept its 2026 guidance: 340,000-390,000 GEO of production, AISC of US$1,720-1,865 per GEO including MSG, and US$386-462 million of capital spending (US$262-314 million of it on expansion, mainly Era Dorada in Guatemala, Apoena and Almas). It expects costs to fall in the second half as MSG's turnaround progresses and Apoena reaches higher-grade ore in the Nosde pit. The board declared a US$0.72 per share dividend from Q2 results and approved a buyback of up to US$200 million through June 2027.

Our read: the production target needs a much stronger second half. After 157,574 GEO in H1, reaching even the low end means about 91,000 GEO per quarter, about 21% above Q2's 75,437 and above Q1's 82,137. That depends on Apoena's grades arriving on schedule and MSG ramping up, the two mines that dragged on Q2. The cost guidance is similarly back-loaded. Capital spending ran at only 28-33% of the full-year plan in H1, so spending (and net debt) should rise in H2 while Era Dorada is built. What to watch in Q3: quarterly production above 90,000 GEO, MSG returning to positive EBITDA, and AISC moving back inside the guidance range. If gold holds near US$4,000, the hedge book will keep taking cash every quarter until mid-2028.

No previous Aura Minerals report has been published on this site, so there is no earlier outlook to check against.