Aura Minerals profit hits US$218m on hedge gain

Earnings · Latin America

Aura Minerals has reported the largest quarterly profit in its history. It rests on a US$130.0 million quarter-on-quarter swing in the financial line, driven by the revaluation of gold hedging contracts rather than by mining, and the same contracts cost the company US$37.2 million in cash during the quarter.

The headline number, and the number underneath it

Aura Minerals, listed on Nasdaq as AUGO and on Brazil’s B3 exchange as AURA33, reported net income of US$217.7 million for the second quarter of 2026. That compares with US$8.1 million in the same quarter of 2025, a rise of 2,572 per cent.

The comparison is arresting. On the company’s own figures, it is also largely an accounting event.

Of that US$217.7 million, US$126.0 million was an unrealised, non-cash mark-to-market gain on outstanding gold hedges. Aura’s adjusted net income, which strips such gains out, was US$97.4 million.

Net revenue was US$336.0 million, 76 per cent above the US$190.4 million of a year earlier. Adjusted EBITDA reached US$196.7 million, up 85 per cent from US$106.2 million, on a margin of 59 per cent.

Gross profit was US$191.5 million and operating income US$175.3 million, the latter 93 per cent higher than a year before. Operating income is the figure to watch, because it is what the mines themselves earned.

Measured against analysts’ forecasts rather than against last year, the quarter fell short. Adjusted earnings of US$1.15 a share missed the Zacks Consensus Estimate of US$1.28, and revenue came in 2.47 per cent below the same consensus.

Production profile and operating costs

Total production reached 75,437 gold-equivalent ounces, 18 per cent above the second quarter of 2025 but 8 per cent below the first quarter of 2026. At constant metal prices the movements were plus 16 per cent and minus 9 per cent.

Sales totalled 78,414 gold-equivalent ounces, up 26 per cent year on year and down 4 per cent on the quarter. Almas sold more, Borborema is now in commercial production and the MSG mine has been added to the group.

First-half production of 157,574 ounces was 27 per cent higher than a year earlier and the highest first half in the company’s history. Full-year guidance of 340,000 to 390,000 ounces is unchanged.

Costs are the weak point. The all-in sustaining cost across the group rose to US$1,985 per gold-equivalent ounce, 9 per cent above the first quarter and 37 per cent above a year earlier.

Almost all of that increase came from a single mine. MSG’s all-in sustaining cost reached US$5,277 an ounce while Aura built underground infrastructure to invert the mining method; excluding MSG, the group figure was US$1,653.

Cash cost across the group was US$1,513 an ounce, 32 per cent above a year earlier and again driven by MSG. Excluding MSG it was US$1,277.

At Almas, the all-in sustaining cost was US$1,626 an ounce, 18 per cent higher on the quarter. Sustaining capital spending on the Paiol pit pushback rose from US$1.6 million to US$7.6 million.

For the first half as a whole, cash cost averaged US$1,499 an ounce and all-in sustaining cost US$1,906, both 31 per cent above the same period of 2025. Aura still expects to finish the year inside its guidance range of US$1,720 to US$1,865.

The average realised gold price was US$4,304 an ounce, 35 per cent above a year earlier but 11 per cent below the first quarter. Copper realised US$6.09 a pound, 41 per cent higher year on year.

Revenue, EBITDA and the swing in the financial result

Net revenue of US$336.0 million was 12 per cent below the first quarter, when both sales volumes and gold prices were higher.

Adjusted EBITDA of US$196.7 million was 19 per cent lower on the quarter, with the margin slipping from 64 per cent to 59 per cent. Lower realised prices, lower volumes and higher overheads all played a part.

General and administrative expenses rose 43 per cent on the quarter to US$22.5 million. That included a one-off provision of about US$4.7 million for legal contingencies at Apoena.

The financial result swung to a gain of US$61.1 million, from a loss of US$68.9 million in the first quarter and a loss of US$59.6 million a year earlier. That quarterly swing of US$130.0 million is where the record profit came from.

Cash generated by operating activities was US$111.9 million. Aura ended June with US$248.3 million of cash, gross debt of US$441.2 million and net debt of US$168.0 million, the last struck after also netting off about US$25 million of other short-term financial assets, and equal to 0.21 times trailing adjusted EBITDA.

Net debt rose by US$52.8 million over the quarter. Dividends and buybacks of US$67.7 million and expansion capital spending of US$53.5 million outran recurring free cash flow of US$80.2 million.

How a falling gold price produced a record profit

The largest single contributor to the record was not a discovery, a higher gold price or a better mine. It was an accounting entry.

Aura holds gold collars covering 166,578 ounces of future production at its Borborema mine in Brazil. They were written in 2023, hedging an estimated 80 per cent of the mine’s first three years of output at ceiling prices of US$2,400 an ounce, and they expire between July 2026 and June 2028.

Gold is now worth far more than US$2,400. Those contracts are therefore a liability, obliging Aura to deliver metal at prices well below the market.

Here is the twist. During the second quarter the gold price fell, from US$4,646.60 an ounce at the start of the period to US$4,008.02 at the end, on Aura’s own marks. Published spot series open the quarter a little lower, but the direction is the same and so, roughly, is the near-14 per cent fall.

A cheaper gold price makes that hedge liability smaller. Accounting rules require Aura to revalue its outstanding derivative positions at each reporting date, and the shrinking liability produced an unrealised gain of US$126.0 million.

So the record quarter was, in part, a consequence of gold becoming cheaper. No metal was sold to create that gain and no cash came in.

The hedges did move real money, but in the other direction. Collars that actually expired during the quarter were settled in cash at a loss of US$37.2 million, 218 per cent more than the year-earlier settlement loss.

That is the distinction worth holding on to. A mark-to-market gain is the revaluation of a contract that has not yet settled; a realised loss is money that has already left the bank account.

An operating profit is different again. It is cash earned by digging up metal and selling it, and it can be repeated next quarter if the mines keep running.

A mark-to-market gain cannot be repeated on demand. It reverses if the price moves back, it pays no wages and it funds no mine, which is why it is treated as lower-quality earnings.

Aura itself draws the line. It reports adjusted net income of US$97.4 million for the quarter, excluding the non-cash gain — still 164 per cent above the US$36.8 million reported on the same basis a year earlier, but a long way from US$217.7 million.

The gap between the two figures is US$120.3 million. That is the scale of the accounting effect inside the headline number, and the company has broken it out rather than leaving readers to guess.

The dividend, and whether the cash is there

On 5 August 2026 Aura’s board declared a dividend of US$0.72 per common share, about US$60.4 million in total.

The company had 83,836,843 common shares in issue on that date, which at US$0.72 each comes to about US$60.4 million.

Holders of Brazilian depositary receipts receive US$0.24 each, because one common share is equivalent to three receipts.

The dividend will be paid in US dollars on 28 August 2026 to shareholders on the register at the close of business on 18 August. Receipt holders are expected to be paid on or around 8 September, in reais.

The payment exceeds the minimum set by Aura’s dividend policy, which is 20 per cent of adjusted EBITDA less sustaining and exploration capital spending. The company puts the resulting yield at about 4.3 per cent over the last twelve months, counting buybacks.

Importantly, the payout is covered by cash rather than by the hedge gain. Operating cash flow of US$111.9 million comfortably exceeds the US$60.4 million distribution.

That distinction matters here more than usual, given that a large part of the reported profit never became cash at all.

A separate share repurchase programme of up to US$200 million, approved in June, runs until June 2027.

The mines behind the numbers

Aura runs six operating mines: Minosa in Honduras; Almas, Apoena, Borborema and MSG in Brazil; and Aranzazu in Mexico. It also holds development and exploration projects in Guatemala, Colombia and Brazil.

The Brazilian assets are in their expensive phase. Almas is expanding its plant, Borborema is bedding in after starting commercial production, and both carry the heavier sustaining spending typical of a mine ramping up.

MSG is the hardest case. Aura is building underground infrastructure to invert the mining method to bottom-up, which cut output 16 per cent on the quarter and pushed the mine’s all-in sustaining cost above US$5,000 an ounce.

In Mexico, Aranzazu produces copper alongside gold and silver. Copper strength against gold weakness flattered its gold-equivalent conversion, lifting reported output 14 per cent on the quarter; at constant prices the rise was 8 per cent, on higher grades.

In Guatemala, construction at the Era Dorada project is on schedule, with earthmoving 60 per cent complete and cumulative investment of US$15.3 million by the end of June.

Aura also completed the sale of the São Francisco mine, part of the Apoena complex, for US$9.0 million during the quarter.

What to watch in the second half

First-half net revenue of US$718.6 million was 104 per cent above the same period of 2025, and first-half adjusted EBITDA of US$440.5 million was 135 per cent higher.

Trailing twelve-month adjusted EBITDA reached US$802 million, which the company describes as its twelfth consecutive quarterly increase.

Guidance for the second half is 182,000 to 232,000 gold-equivalent ounces. Even the bottom of that range requires a clear step up from the 157,574 ounces produced in the first half.

Aura says it expects a stronger second half from Aranzazu, Apoena, Borborema and MSG, helped by higher grades at Apoena once development of the Nosde pit is complete.

The open questions are whether unit costs return to the guidance range and whether the mines can carry the profit without help from the derivatives book.

On the hedges, the direction of travel is uncomfortable. The collars run to June 2028 at a US$2,400 ceiling, so while gold trades far above that level Aura will keep settling them at a cash loss, whatever the mark-to-market line reports in any given quarter.

Frequently Asked Questions

How much did Aura Minerals earn in the second quarter of 2026?

Net income of US$217.7 million, against US$8.1 million a year earlier. However, US$126.0 million of that was a non-cash gain on gold hedges, and the company’s own adjusted net income was US$97.4 million.

Why is a gain on gold hedges lower quality than an operating profit?

Because it is a revaluation of contracts that have not yet settled, not cash from selling metal. It cannot be repeated at will and it reverses if the gold price moves back. Aura’s hedges also cost US$37.2 million in real cash settlements during the quarter.

What dividend did Aura Minerals declare?

US$0.72 per common share and US$0.24 per Brazilian depositary receipt, since one share equals three receipts, totalling about US$60.4 million. It is payable on 28 August 2026 to holders on the register on 18 August.

Sources: Aura Minerals Inc. – Q2 2026 and H1 2026 Financial and Operational Results (company release, 5 August 2026), Aura Minerals Inc. – Dividend declaration of US$0.72 per share and US$0.24 per BDR (company release, 5 August 2026), Zacks via Yahoo Finance – Aura Minerals Q2 earnings and revenues versus consensus estimates

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