Aura Q2 2026 Earnings: Revenue Rose 76% as Mining Costs Increased

Aura Minerals (NASDAQ: AUGO) reported Q2 2026 net revenue of US$336.0 million, up 76% year over year, while net income increased to US$217.7 million from US$8.1 million; the company did not provide EPS in the release. Production rose 18% to 75,437 gold equivalent ounces (GEO), and adjusted EBITDA increased 85% to US$196.7 million. However, higher unit costs and MSG’s turnaround weighed on profitability, while a non-cash gain on gold hedges materially lifted reported net income.

Core earnings data

Higher metal prices, a 26% increase in sales volumes and contributions from Borborema and MSG drove the year-over-year revenue increase. Average realized gold and copper prices rose 35% and 41%, respectively, while sales reached 78,414 GEO.

Sequentially, the picture was weaker: revenue fell 12%, gross profit declined 16% and adjusted EBITDA decreased 19% from Q1 2026. Lower sales and a lower average realized gold price were the main drivers.

Adjusted EBITDA, adjusted net income and recurring free cash flow are non-IFRS measures used by Aura and may not be directly comparable with similarly named measures from other companies.

Business and mine performance

Total production increased 18% year over year at current metal prices, or 16% at constant prices. Growth came primarily from Borborema’s move into commercial production, the addition of MSG and higher throughput at Almas, offset by lower production at Aranzazu, Apoena and Minosa.

The operating units showed clear divergence. Almas and Borborema generated the highest mine-level adjusted EBITDA, while MSG recorded a loss as underground development and lower-grade feed affected output and costs.

Almas benefited from its plant expansion, with ore plant feed up 34% year over year. Borborema’s unusually high year-over-year growth reflects its pre-commercial status in Q2 2025; sequentially, its production fell 17% because of lower grades from planned mine sequencing.

At MSG, production fell 16% from Q1 as average grade dropped from 1.54 g/t to 0.90 g/t. Lower-grade surface and stockpile material represented a larger share of plant feed while Aura prioritized underground infrastructure and primary development. Apoena also faced lower grades during development of the Nosde pit, while Minosa was affected by higher stacking levels in its leach pad and lower plant feed.

Profitability, cash flow and balance sheet

Cash cost increased 32% year over year to US$1,513/GEO, while all-in sustaining cost rose 37% to US$1,985/GEO. MSG was the main source of pressure, reporting cash cost of US$3,852/GEO and AISC of US$5,277/GEO. Excluding MSG, Aura’s Q2 AISC was US$1,653/GEO, up 14% year over year.

Recurring free cash flow reached US$80.2 million, up 33% year over year but down 15% sequentially. Lower adjusted EBITDA, higher capital expenditures and US$37.2 million of realized losses on gold hedges outweighed favorable working-capital movements and lower taxes paid compared with Q1.

Total capital expenditure was US$84.3 million, up 68% year over year. Expansion spending accounted for US$53.5 million, primarily supporting Apoena, Era Dorada and Almas.

Aura ended the quarter with US$248.3 million in cash and US$441.2 million in gross debt. Net debt increased from US$115.2 million at the end of Q1 to US$168.0 million, reflecting capital spending and US$67.7 million of dividends and share repurchases, partly offset by free cash flow. Net debt remained equal to 0.21 times last-12-month adjusted EBITDA.

Hedge accounting lifted net income while cash settlements reduced free cash flow

The increase in reported net income was much larger than the improvement in Aura’s underlying operations. Operating income rose 93% year over year to US$175.3 million, but the company also recorded a US$126.0 million non-cash mark-to-market gain on gold hedges as the gold price declined between the beginning and end of the quarter.

At the same time, settled hedge positions generated US$37.2 million of realized cash losses, directly reducing recurring free cash flow. After excluding the non-cash hedge gain, foreign-exchange losses and deferred taxes on non-monetary items, adjusted net income was US$97.4 million—well below reported net income, though still 164% higher year over year.

Aura had 166,578 ounces covered by outstanding gold collars associated with Borborema production. These positions expire between July 2026 and June 2028 and carry ceiling prices of US$2,400 per ounce, leaving future cash results exposed to realized hedge losses when gold prices exceed those ceilings.

2026 guidance

Aura reaffirmed its full-year production, cash cost, AISC and capital expenditure guidance. Management expects second-half production of 182,000 to 232,000 GEO, making improved output and costs at MSG and Apoena important to delivering the annual targets.

For comparability with annual cost guidance, the table uses Aura’s H1 figures calculated at guidance metal prices where available.

First-half cash cost at guidance prices was above the full-year range, while AISC was near its upper end. Aura expects MSG’s turnaround, higher-grade ore at Apoena and more favorable mine sequencing at other operations to improve second-half cost performance.

Management’s outlook

Management said Era Dorada construction remained on schedule, with earthmoving 60% complete and cumulative investment of US$15.3 million through June. Aura is also advancing Almas toward annual processing capacity of 3 million tonnes and completing engineering work for a possible Borborema capacity increase.

At MSG, the company completed approximately 1,845 meters of underground development during Q2 and 3,645 meters during the first half. The investment is intended to establish infrastructure for a production increase in 2027, although the work is currently reducing production and increasing unit costs.

Recent insider transactions

The latest ten reported insider transactions supplied cover May 12 through July 2, 2026. Eight were sales, one was a purchase and one involved the conversion or exercise of a derivative security; these records do not establish the reasons for the transactions.

Across all 15 transactions in the supplied six-month summary, insiders recorded net purchases of 145,518 shares and held a total of 43.04 million shares.

Risks investors need to monitor

• Second-half cost improvement is necessary: First-half cash cost at guidance metal prices exceeded the full-year range. Achieving guidance depends on better performance at MSG, access to higher-grade ore at Apoena and favorable mine sequencing elsewhere.
• MSG’s turnaround remains an operating drag: MSG produced a Q2 adjusted EBITDA loss and reported AISC of US$5,277/GEO. Delays or weaker-than-planned improvement could pressure consolidated margins and free cash flow.
• Gold collars can reduce realized cash flow: The company recorded US$37.2 million of realized hedge losses in Q2, and outstanding Borborema collars extend through June 2028 at ceiling prices below Q2’s realized gold price.
• Expansion spending is increasing cash requirements: Q2 capital expenditure rose to US$84.3 million and net debt increased sequentially. Aura must balance Era Dorada, Almas, Apoena and MSG investments with shareholder distributions and liquidity.
• Production remains sensitive to grades and recoveries: Lower grades affected Apoena, Borborema and MSG, while leach-pad conditions reduced Minosa’s production. Continued operational variability could affect output and unit costs.

Summary

Aura’s Q2 2026 results combined higher year-over-year production, metal prices and sales with rising unit costs and weaker sequential performance. Almas and Borborema supported growth, while MSG was the main operational and cost drag. Reported net income was substantially boosted by a non-cash hedge gain, making adjusted earnings and cash flow more representative of the quarter’s underlying performance. The next test is whether second-half improvements at MSG, Apoena and other mines can bring cash costs back within full-year guidance while Aura continues its expansion program.