Aura Minerals (AUGO) Q3 2026 earnings review
Aura Minerals hits record output, but mining costs stay high
Aura Minerals pushed gold and copper output to a record while unit mining costs stayed above its full-year plan. Third-quarter production rose 29% from a year ago to 95,557 gold equivalent ounces (or 11% by our math from mines owned a year ago), and higher metal prices lifted profit excluding one-offs by 77% to $121 million. Chief executive Rodrigo Barbosa kept all full-year targets unchanged, which by our math leaves a steep fourth-quarter cost drop to $1,738 per ounce just to reach the top of the annual cost range.
| Production (and from mines owned a year ago) | 95,557 GEO +29% from a year ago (+11% ex-MSG by our math) |
|---|---|
| Revenue | $386.0M +56% from a year ago (+33% ex-MSG by our math) |
| All-in sustaining cost per ounce | $1,953 / GEO 9M at $1,921 vs $1,720–$1,865 full-year plan |
| Full-year 2026 outlook | Unchanged 340k–390k GEO output; $1,720–$1,865/GEO cost |
⚖️ Verdict: 🟢 Bullish
The story got better because the troubled Serra Grande mine turned profitable and Borborema hit record output, easing the biggest operational worry from last quarter. Serra Grande nearly doubled output from the second quarter, cut unit costs by 31%, and swung from a cash loss to $24 million in cash profit, while a new Brazilian fleet buyout targets $150 to $200 per ounce in savings starting in 2027. One caution: nine-month unit costs still sit above the full-year ceiling at five of Aura's six mines, and gold price hedges drained $34 million in cash.
The question now is whether fourth-quarter gold grades can pull full-year unit costs down inside the $1,720 to $1,865 per ounce target range. Either richer ore at Almas and Apoena dilutes fixed mining expenses enough to offset a stronger Brazilian real, or full-year costs finish above the ceiling despite record output. Fourth-quarter production and unit cost results will settle it.
🐂 Bull Case
Borborema and MSG Lift Output to a Record
Aura Minerals, a gold and copper miner operating across Latin America, measures output in gold equivalent ounces (GEO), which converts copper and silver into gold units. "Production was the highlight of the quarter: a new record of 96k GEO, taking us to 253k GEO year-to-date," chief executive Rodrigo Barbosa said. Output rose 29% from a year ago, or 11% by our math from mines owned a year ago.
- Borborema (a Brazilian gold mine ramped up in late 2025): record 22,842 GEO, up 60% from last quarter as gold grades rose 42%
- Mineração Serra Grande, or MSG (a Brazilian gold mine acquired in December 2025): 13,321 GEO, up 85% from last quarter, with operating cash profit (Adjusted EBITDA) swinging from a $1.1 million loss to a $24.4 million gain
- Aranzazu (a Mexican copper and gold mine): 24,920 GEO, up 39% from last quarter on richer copper zones
The jump at MSG matters because second-quarter losses there had raised doubts about Aura's underground overhaul. In the third quarter, crews mined the first section using the safer bottom-up method and cut MSG's all-in sustaining cost (AISC, a measure of total mine operating and maintenance cost per ounce) by 31% to $3,647 per GEO.
What to watch: fourth-quarter output at MSG, as underground ore takes a larger share of plant feed before a full fleet renewal begins in January 2027. Another step up toward 20,000 GEO would confirm the mine is ready for its 2027 target of around 80,000 ounces.
Higher Metal Prices and Cash Flow Fund Returns
Aura sells refined gold in Brazil and Honduras and copper-gold concentrate in Mexico, so its revenue tracks metal markets closely while exposing profit to any commodity downturn. Average realized gold prices rose 24% from a year ago to $4,202 per ounce, and copper prices climbed 45% to $6.46 per pound. Revenue grew 56% to $386.0 million, or 33% by our math excluding the acquired MSG mine.
Higher prices and volumes pushed recurring free cash flow (operating cash flow after mine maintenance and hedge settlements, but before new mine construction) up 66% from a year ago to $123.5 million. That cash paid for $55.2 million of expansion projects, $60.4 million of dividends, and $10.3 million of share buybacks during the quarter.
What to watch: fourth-quarter dividend and buyback spending as construction bills rise at Era Dorada, Aura's gold project in Guatemala. Holding net debt near 0.20 times annual cash profit while funding both construction and shareholder payouts would show the balance sheet can carry both commitments.
🐻 Bear Case
Unit Costs Still Run Above the Full-Year Plan
"Led by a record quarter at Borborema and the continued turnaround at MSG, this operational strength translated into solid financials," Barbosa said. Yet Aura's all-in sustaining cost (AISC) remains above its full-year target of $1,720 to $1,865 per GEO, and gross margin slipped 3 percentage points from a year ago to 58%. Cost of goods sold — the direct expense of running the mines and mills — rose 2.7 percentage points of revenue, driven by 2.3 points of higher mine depletion and amortization.
- Third-quarter AISC: $1,953 per GEO, down 2% from last quarter but up 40% from a year ago (up 20% to $1,673 excluding MSG)
- Nine-month AISC: $1,921 per GEO, or $1,909 at the outlook's metal price assumptions — 2% above the top of the full-year range
- Apoena (a Brazilian gold mine) third-quarter AISC: $3,554 per GEO, up 33% from last quarter as pit development spending doubled to $7.6 million
- Currency headwind over nine months: a stronger Brazilian real added about 8% to Brazilian unit costs, and a stronger Mexican peso added about 5% at Aranzazu
"While 9M 2026 AISC exceeded guidance, the Company expects costs to trend lower in Q4 2026, driven by higher expected production," the miner wrote. By our math, merely touching the $1,865 top of the full-year range requires fourth-quarter AISC to drop to about $1,738 per GEO at the middle of the volume plan, and reaching the midpoint requires $1,501.
What to watch: fourth-quarter consolidated AISC when full-year results arrive in early 2027. A full-year reading above $1,865 per GEO would mean currency inflation and pit development costs outweighed the fourth-quarter volume surge.
Fourth-Quarter Targets Ask Too Much of MSG and Apoena
Aura kept its full-year production plan at 340,000 to 390,000 GEO while managing simultaneous expansions and turnarounds across its portfolio. Nine-month output of 253,131 GEO equals 246,000 GEO when recalculated at the metal prices used in the annual plan, leaving 94,000 GEO in the fourth quarter to reach the bottom of the range and 119,000 GEO to hit the middle.
Almas and Borborema have already delivered more than 80% of their low-end targets, so consolidated production should reach the lower half of the company range. However, two mines sit far behind their individual plans: MSG has produced 29,087 GEO against a 50,000 to 60,000 GEO plan, and Apoena has produced 20,094 GEO against a 37,000 to 44,000 GEO plan.
By our math, hitting the bottom of their individual ranges requires MSG output to jump another 57% from the third quarter to 20,913 GEO, and Apoena to more than double from 6,865 GEO to 16,906 GEO. Aura said access to higher-grade ore at Apoena's Nosde pit finished in the third quarter and will feed the plant in the fourth.
What to watch: fourth-quarter mine-by-mine production against the individual full-year ranges. A shortfall at MSG below 50,000 GEO for 2026 would leave a steeper climb toward Aura's stated goal "to bring MSG to an annual production of around 80koz" in 2027.
Borborema Gold Collars Drain $34 Million of Cash
When Aura financed the Borborema mine in 2023, it locked in gold price collars — derivative contracts that cap the selling price at $2,400 per ounce on about 80% of the mine's first three years of output. Because spot gold now trades above $4,200 per ounce, Aura must pay cash to settle expiring contracts every quarter.
Those cash settlements cost $33.6 million in the third quarter, nearly double the $17.1 million paid a year ago, and reached $104.2 million over the first nine months of 2026. By our math, the company settled about 35,500 ounces between March and September, leaving 148,496 hedged ounces expiring through June 2028 and a $287.3 million liability on the balance sheet.
What to watch: quarterly realized cash losses on gold collars over the next seven quarters. As long as gold stays near $4,200 per ounce, settlements will keep taking roughly $30 million to $40 million a quarter out of operating cash flow.
👓 Other Themes
Era Dorada Build Advances on Schedule
At Era Dorada, Aura's underground gold project in Guatemala, overall physical progress reached 13.1% in the third quarter, with engineering at 46.6% and construction at 7.6%. Crews finished earthmoving for the main plateau and invested $32.8 million during the quarter, bringing nine-month project spending to $48.1 million as the site prepares for equipment installation.
Aura Buys Out Its Brazilian Mining Contractor
On October 2, Aura agreed to buy the contractor company operating the mining trucks and crews at Apoena, Almas and Borborema for R$612 million (about $118 million, including up to R$250 million in cash and the rest in assumed equipment leases). Targeting a January 2027 transition after antitrust review, Aura estimates bringing fleet work in-house will act "to reduce all-in sustaining costs (AISC) by US$150 to US$200 per ounce of gold sold, on a weighted-average basis across the three operations, beginning in 2027".
💲 Other KPIs
Profit excluding non-cash derivative swings and foreign-exchange translation rose 24.4% from last quarter and 76.5% from a year ago. Reported net income fell 38.0% from the second quarter to $135.0 million only because non-cash mark-to-market gains on gold collars dropped from $126.0 million in the second quarter to $12.7 million in the third.
Total borrowings rose 43.1% from last quarter after Aura drew a new $200 million five-year bank loan paying interest at the benchmark rate plus 2.70%. Because the loan proceeds sat in the bank at quarter-end, cash jumped 68.4% to $418.2 million and net debt rose only 6.4%, keeping net debt at 0.20 times trailing twelve-month cash profit.
Inventories on the balance sheet have climbed 23.0% since December 2025, led by long-term low-grade ore stockpiles at Borborema and Almas that grew from $58.6 million to $94.0 million. Building those stockpiles and waiting for value-added tax refunds tied up $20.0 million of working capital cash in the third quarter and $72.0 million over nine months.
🔮 Guidance
Unchanged. The full-year plan still calls for output to grow about 30% at the middle of the range. By our math, after producing 253,131 GEO in the first nine months at current prices (or 246,000 GEO at the plan's baseline metal prices), Aura needs 86,869 to 94,000 GEO in the fourth quarter to hit the 340,000 low end, and 111,869 to 119,000 GEO to reach the 365,000 midpoint.
Unchanged. The target still sets direct production costs roughly 20% above 2025 levels due to the addition of MSG. With nine-month cash costs at $1,460 per GEO ($1,452 at baseline prices), reaching the $1,411 top of the range requires fourth-quarter cash costs to fall to about $1,299 per GEO by our math, down 7% from the third quarter's $1,395.
Unchanged. Management kept the full-year cost range intact even though nine-month AISC of $1,921 per GEO sits above the ceiling at five of the six mines (all except Borborema). By our math, landing inside the top of the range requires fourth-quarter AISC to drop to about $1,738 per GEO on higher fourth-quarter gold grades at Almas and Apoena.
Unchanged. The investment budget still plans for $262 million to $314 million of expansion projects, $105 million to $123 million of mine maintenance, and $19 million to $25 million of exploration. Because nine-month spending reached only $225.0 million (53% of the midpoint), hitting the middle of the full-year plan would require $199.0 million of spending in the fourth quarter alone, more than double the third-quarter pace.
❓ Key Questions
Will Apoena and MSG meet their individual 2026 production targets?
At nine months, Apoena sits at 54% of its 37,000 GEO low end and MSG sits at 58% of its 50,000 GEO low end. Management kept the table unchanged without saying whether Borborema and Almas will have to cover a shortfall at those two mines.
When will Aura approve the full Borborema plant expansion?
Barbosa noted that "the Almas and Borborema expansions are progressing" and Aura spent $7.7 million of expansion capital at Borborema in the third quarter, but the release still gave no capacity target, total budget or timeline following the highway relocation agreement.
Will full-year 2026 capital spending land below the $386 million floor?
Expansion spending totaled $131.7 million over nine months against a full-year plan of $262 million to $314 million. Spending the remaining $130 million to $182 million in a single quarter at Era Dorada and Almas looks steep while Era Dorada remains On schedule.
How will fleet leases from the contractor buyout affect 2027 debt?
Aura will pay up to R$250 million ($48 million) in cash and assume around $70 million of equipment leases and contingent obligations when the R$612 million contractor buyout closes in January 2027, but did not state the exact lease interest rate or repayment schedule.