Aura Minerals (AUGO) Q3 2026 Earnings Call Transcript

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DATE

Friday, Nov. 6, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - Rodrigo Barbosa
• Chief Financial Officer - Kleber Cardoso
• Chief Operating Officer - Glauber Luvizotto

TAKEAWAYS

• Production -- 96,000 gold equivalent ounces, representing a 27% increase compared to the second quarter and reaching a record quarterly high for the company.
• Net Revenues -- $386 million, a 15% improvement quarter over quarter driven by increased production and metal prices.
• Adjusted EBITDA -- $237 million, bringing the nine-month total to $677 million, which is already higher than the full-year 2025 performance.
• AISC -- $1,953 per gold equivalent ounce, reflecting the impact of the ongoing turnaround and operational improvements at the MSG mine.
• Ex-MSG AISC -- $1,673 per gold equivalent ounce, which management noted would place the company in the first quartile of the industry's cost curve.
• Recurring Free Cash Flow -- $124 million, reported after $34 million in gold hedge payments, supporting expansion capital and dividends.
• Dividend -- $0.72 per share, which combined with $10 million in share buybacks during the quarter, results in a trailing 12-month yield of 4%.
• Cash Balance -- $418 million, supported by a $200 million syndicated loan facility closed during the third quarter.
• Net Debt -- $179 million, with a leverage ratio of 0.2 times net debt to EBITDA.
• Era Dorada Progress -- 13.1% physical completion, with earthmoving of the operational plateau concluded and civil works for the mill and carbon-in-leach areas underway.
• MSG Production -- 24,402 gold equivalent ounces, an 85% increase compared to the previous quarter as the turnaround plan accessed higher-grade ore from underground activities.
• Borborema Production -- 23,000 gold equivalent ounces, growing 60% quarter over quarter after debottlenecking the plant with new filters and accessing higher grades.
• Aranzazu Production -- 25,000 gold equivalent ounces, a 35% increase at constant prices driven by higher ore grades and plant throughput.
• Apoena Production -- 9,000 gold equivalent ounces, up 20% compared to the second quarter as grades rose 27% while mining advanced in the Nosde pit.
• Minosa Production -- 14,000 gold equivalent ounces, a 7% decrease quarter over quarter due to a lag in leaching pad stacking.
• Almas Production -- 14,000 gold equivalent ounces, a 12% decrease compared to the second quarter as the company processed lower-grade ore following plant expansion.
• Full-Year Guidance -- 340,000 to 390,000 gold equivalent ounces, which management reiterated based on projected grade improvements across most mines in the fourth quarter.
• Mine Fleet Insourcing -- $150 to $200 per ounce expected AISC reduction, following a definitive agreement to acquire the mining fleet and workforce at three mines starting in January 2027.
• Gold Hedge Expirations -- 141,000 ounces, in remaining gold collars scheduled to expire monthly through June 2028.
• Expansion Capital Expenditures -- $63 million during the third quarter, primarily directed toward construction activities at the Era Dorada project.
• Community Engagement -- 1,500 hours of dialogue, registered at the Era Dorada project alongside the employment of 795 people, of which 89% are local Guatemalans.
• Shareholder Stake -- 10.2% capital structure, reached by Capital World Investors after they increased their position in the company during the quarter.

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RISKS

• Barbosa stated, "if you compare to the guidance of this year, you're going to see that we are above the guidance," noting that consolidated all-in sustaining cash costs were pressured by the MSG turnaround phase.
• Luvizotto warned that the Era Dorada project faces "a lot of challenge from the hydrothermal water," which requires specialized refrigeration and pumping infrastructure to manage underground temperatures.
• Barbosa noted that Minosa production fell during the quarter because "we had some challenges on piling and stacking during Q2," causing a temporary reduction in output.

SUMMARY

Aura Minerals Inc. (NASDAQ:AUGO) reported record quarterly net revenues of $386 million and production of 96,000 gold equivalent ounces. Management indicated that the company remains on track to meet its 2026 production guidance while simultaneously advancing its Era Dorada project and a turnaround at the MSG mine. The company announced a strategic agreement to insource its mining fleet at the Apoena, Almas, and Borborema operations to control inflation and reduce costs. Management reported that the balance sheet remains strong with $418 million in cash and a leverage ratio of 0.2 times net debt to EBITDA.

• The company is seeking partners for a potential geothermal power plant at Era Dorada to provide renewable energy after two to three years of operations.
• Management is conducting a zero-based budget review for 2027 to identify additional operational efficiencies and cost-reduction opportunities.
• CEO Barbosa stated, "we aim to be at 1 million ounces, and that will happen only if we continue to pursue M&A."
• The company is testing an artificial intelligence platform called AGIR at Borborema to integrate safety and environmental data for predictive risk monitoring.
• Management reported that the investment in Era Dorada will provide the first municipality in Guatemala with access to purified water once completed next year.
• The company expect its mine fleet insourcing to be fully operational by the beginning of 2027 following regulatory clearance.

INDUSTRY GLOSSARY

• AISC: All-In Sustaining Costs, a non-GAAP financial measure used in the mining industry to represent the full cost of producing an ounce of gold.
• CIL: Carbon-In-Leach, a gold recovery process where activated carbon is added to the leach tanks so that leaching and adsorption take place simultaneously.
• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization.
• GEO: Gold Equivalent Ounces, a metric used to convert the production of other metals like copper and silver into a single gold-equivalent figure.
• MSG: Mineração Serra Grande, a specific mining operation in Brazil currently undergoing an operational turnaround.
• Nosde Pit: A specific mining area within the Apoena mine complex.

Full Conference Call Transcript

Operator: Good morning, ladies and gentlemen. Welcome to the Third Quarter 2026 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at auraminerals.com/investidores. [Foreign Language] [Operator Instructions]. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Aura Executive Board and the current information available to the company. Risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur.

Investors should be aware of events related to the macroeconomic scenario and industry and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this conference, we have Rodrigo Barbosa, President and CEO; Kleber Cardoso, CFO; and Glauber Luvizotto, COO. Now I turn the conference over to Rodrigo Barbosa. You may begin the conference.

Rodrigo Barbosa: Thank you very much for all participating in this earnings call for the third quarter. Good morning all. And before I get started, just a quick reminder that you have here in your screen. Scan the QR code. We have our Aura Day happening in New York at NASDAQ on October 30 (sic) [ November 30 ] afternoon. We'll have an important update about how we are running the operations. We're going to have important updates about the turnaround on MSG, how we are developing Era Dorada, that we are also thinking and doing now this year a zero-based budget. We're going to walk you through how we are planning the budget also for next year.

There's also the transition of the mine fleet insourcing that we recently announced. So there will be several updates, including important advancements in exploration that we would like to share with the market on October 30. So please put in your agenda. And if you have availability, be there with us, that will be an important opportunity to have a more broad conversation and deep conversation about how Aura is performing and how we will perform in the next 3 to 5 years. So let's get started. If we could put the first slide in terms of the production and results.

As a quick summary and as we all do at the same time, same structure, I'm going to go through the main results and how major events that happened during the third quarter, and then Kleber is going to go more in detail about our results and cash flows. So as we disclosed to the market, we had an important improvement in operations. As I mentioned in the last quarter, first and second quarter was the weaker of the year, and we could see that production was pushed towards the second semester. So this is an important improvement on Q3, and we project another improvement to Q4.

So we should continue to grow in terms of production as we are now reaching higher grades or higher productivity in most of our mines. So we reached a production of 96,000 gold equivalent ounces. This is a 27% increase compared to the last quarter. I am going to walk you through mine by mine the 2 slides ahead, so we can understand what is going on and project what can happen on the fourth quarter. So when we see the 9 months, it's 253,000 ounces of gold equivalent. We reiterate our guidance to be between 340,000 and 390,000 ounces until the end of the year.

This higher production means also the record high, slightly above the first quarter of this year, $386 million on revenues, another 15% improvement quarter-by-quarter. That also translated in an EBITDA of $237 million. When we see the last 12 months -- the last 9 months of EBITDA, it's $677 million. This is already above what we performed in the full year of '25. And if we look at the last 12 months, it's $886 million, understanding that the fourth quarter, we should have an improvement in terms of production. In terms of all-in sustaining cash cost, we are now at $1,953. Now we start to have improvements on MSG.

There are also improvements that I'm going to walk you through that's going to happen on the other operations. So we -- although if you compare to the guidance of this year, you're going to see that we are above the guidance, but the improvements that we see happening in the fourth quarter give us a comfortable zone to meet the guidance for the full year in terms of all-in sustaining cash costs. Recurring free cash flow is strong at $124 million, enough to continue to be able to grow, develop projects, invest in exploration and also pay the dividends. So we continue to be a leveraged company and walking the talk.

We always mentioned to the market that we would be able to develop greenfield projects, invest in exploration to extend life of mine and do M&As while keeping an important dividend yield and low leverage. So this is another quarter that we show in the market that is due to the very high return and strong cash flows we have from our operations. We also declared another strong dividend, $0.72 per share. And when we add that with the $10 million of buyback that happened during Q3, it's a yield of 4% on the last 12 months. We continue to be one of the highest dividend yield in the industry while we are growing.

Additional important events, and I'm going to have a slide about that. I don't want to give details now, but Era Dorada project on time, on budget, developing according to the plan. Kleber also, we raised additional $200 million of syndicated loan that happened during this quarter and improved our cash position above $400 million. We also announced the mine fleet insourcing that will be -- will provide us an important opportunity to continue to reduce our all-in sustaining cash cost and control inflation, bravely the inflation as we will walk you through the industry all-in sustaining cash cost is going up.

We are going up slightly, but yet way below the average of the industry, which put us in the first semester of this year as on the first quartile in terms of all-in sustaining cash cost. Important event also is Capital World Investors continued to buy more shares on Aura during the third quarter and reached recently above 10% of the capital structure of Aura. So now they have 10.2% of Aura shares. Next slide. In terms of safety, we had no lost time incident during the quarter. It's a very important -- another quarter without any lost time incident.

I always mentioned that's important to combine always not important to combine, but strong results comes along with also a strong incidents and low incidents level. Important also that as we are implementing artificial intelligence all over our company, there's also important improvements that we are doing on safety standards going through artificial intelligence so that we gather more information and start acting way above when we predictably. So we can predict when and where the next event can happen or incident can happen and then prevent that. So that's all the team is working on to have these advanced tools so that we can improve even further our safety standards.

In terms of stability of structures, all of them has been gone through due diligence and inspections and all of that are under the safety levels and according to the Brazilian regulations and all the international regulations. On the left side of this slide, I will highlight the continuous growth that we've been growing since Q3 '25, actually since Q2 '25, on the last 12 months. So now we are performing 335,000 ounces of production on the last 12 months. As you can see, record high production on Q3, while we continue to see improvements that's happening in Q4 that will replace the Q4 last year with 82,000 ounces with a stronger.

So that will continue to be important upward trend in terms of production for Aura Minerals. When we go mine by mine, we had going from the bottom to the important improvement in Aranzazu. We could see that the higher grades would come during the second semester. Management is also working in higher throughput, so improving also the plant, the combination of higher grades and better performance lead us to a higher production. And a small part of this is also unfortunately due to the lower gold prices and the higher copper price. So that conversion happen and its favorable. Most of the improvement comes from productivity and grades. Apoena, we saw a slight improvement in Q3.

And again, Q4 is the quarter that we're going to have a very strong production on Apoena. In Aranzazu, we should continue to see a small improvement for Q4. Apoena will see a significant improvement in terms of production in Q4. This is just about grades that we are already reaching on the pit that we're going to go through the plant. Minosa, as I mentioned to the investors on last quarter, we had some challenges on piling and stacking during Q2 that we know that the lag -- it's a leaching pad and also the lag of while you stack and produce happens to have 30, 40, 60 days. So we knew that the production would decrease during Q3.

And now we know that it's going to increase during Q4 because all the challenges has been overcome. And now we are stacking as we projected of even a little bit above what we projected. So that will result in an improved production on Q4. Almas, we knew also that we were hitting a lower grade. The mine plan is not, as I mentioned, gold -- we are now sometimes in the very thin veins or straight veins and grade goes up, grade goes down. So it's normal for you to have a stronger and weaker quarter. What cannot be is not predictable, right? So we know that the Q3 would be weaker.

Now we know that Q4 can also be slightly better than Q3. Borborema, that's now again, we hit strong grades. And also now we have already implemented 2 new filters debottlenecking the plant. So we should see -- continue to see strong production in Borborema during Q4. MSG the turnaround is still going on, but it's important to see -- the first signs of what we were planning -- talking about gain in productivity and gaining production went to invert the top-down to bottom-up and put more and develop more underground. So we are now starting to have a small percentage of ore coming from underground on the methodology bottom-up. So that improves the grade to the plant.

And then on Q4, we will gradually improve because then we mix low grade that is on the top as an open pit with higher grade underground. And as we go in turnaround, as we advance on development of the underground tunnels, we will be more gradually to more and more increase the underground ore, which will increase average grades to the plant. And also management has been doing significant cost savings, cost restructurings and also debottlenecking the plant so that we can gain even more efficiency for next year, putting us in a position to be able to produce close to 80,000 ounces and close to $2,000 per ounce all-in sustaining cash cost.

So in terms of all-in sustaining cash costs, we had a slightly decrease from Q2 to Q3 that came mostly by MSG that showed a significant improvement, also Aranzazu going through higher grades. If we were not the MSG, all-in sustaining cash cost would be at $1,673, which is already the first quartile in the industry, although yet we see room to improve. When we look to the next quarter, we will have improvement in MSG. Aranzazu will continue to perform well. We will see a significant improvement in Apoena, good improvement in Minosa, Almas slight improvement due to the higher grades. Borborema, stable to the fourth quarter, perhaps lower cash cost as well.

So we will see fourth quarter coming down in terms of all-in sustaining cash cost, putting us on the comfortable position to meet the guidance, perhaps closer to the top end of the guidance, but yet in the guidance. And I would also highlight that when we projected the guidance, the exchange rate was different than what happened during the 9 months was for Brazil, that's more important was 5.5, while the performance was close to 5. Now we are back to 5.5.

So that only this is $80 per ounce in terms of all-in sustaining cash cost, if we were at the same exchange rate of the budget so that during the fourth quarter, we have improvements in grades, improvement in performance and also a better exchange rate in Brazil. At Era Dorada, we already reached over 13% of physical progress. The earth moving of the operational plateau is completed. We started the civil works. And as we can see on the picture in the middle, the CIL tanks start to be built. On the right side, all the infrastructure for cooling the underground as we are advancing on the underground.

It will be more and more important gradually to improve the infrastructure and also cooling machines in order to keep the temperature low. This is a hydrothermal area that has hot water, and we are pumping already hot water out of the underground while cooling so that we create the right environment for everybody to work. On the left side, on the pictures, we continue to have a very strong support from the communities. It's now over 1,500 hours of dialogue with the community members. Constant dialogue, open table with each one of them. We have Era Dorada house at the main city that people can come and make questions. So it's a full transparency project. We're hiring local people.

We are motivating new suppliers to form, we think very close to the operations. And while we will -- we are investing on the purified water to provide them first municipality in Guatemala to have access to purified water will be the communities around Era Dorada. Once we finish the investment along next year, then we'll be able to provide purified water to the communities. And the geothermal plant we continue to advance on the engineering. We are now looking for potential partners to invest in geothermal with us that can bring the know-how and operate and do a partnership with Aura.

So this project will be fully sustainable with renewable energy, renewable water and also a very strong community relations and focusing on hiring and training local people. We now have 795 people employed as of September, 89% are Guatemalan, understanding that during the construction, sometimes we have a very specialized skills doing for the underground development and also for building the plant. And we should increase -- gradually increase this percentage by hiring local people. MSG, again, a very important first quarter with just the beginning of the results of the turnaround.

We already generated $24 million on EBITDA and we continue to do advanced development on the underground activities so that we now can gradually invert top-down to bottom-up and mix more high grade from underground instead of low grade that is on the top. So we will see improvements going through the Q4. And of course, major improvement is going to come during 2027. We will go through in more detail on Aura Day. Please participate, go directly there in New York or see the video or see a live video that we will walk you through. Major achievements happening also in safety standards. So there will be important updates in the exploration.

So please attend that we can walk you through what is going on in MSG that can become very -- and has the potential and will become a very important mine for Aura Minerals from '27 and so on. With that, I turn the floor to Kleber to walk you through on the financial results.

João Cardoso: Thank you, Rodrigo. Good morning, everyone. We're going to start, as we always do, with a summary of the main financial KPIs for the reporting quarter, for the previous quarters and accumulated last 12 months at the end of each reporting period. Starting with the net revenues, we're reporting net revenues of $386 million. It's a record high that we are reporting for a single quarter. That's driven by the increase of production that Rodrigo was showing. And when we look into the last 12 months, our revenues are exceeding $1.4 billion. And we see there has been a steady progress quarter-over-quarter aligned with our growth story. When we go to adjusted EBITDA, it's a similar story.

We're reporting a strong EBITDA, $237 million this quarter, also driven by the increase in production. The last 12 months is now at $886 million and is already the 13th increase in a row of our last 12 months EBITDA, again, consistent with our growth story. Moving to the bottom of the page, in terms of net income, our net income this quarter, $135 million, coming down from previous quarter, but that's mainly because on the previous quarter, we had no cash, nonrecurring gain related to the gold hedges because of the decrease of gold prices during the second quarter.

If you exclude that noncash gain, which was much smaller this quarter, I'm going to show later, we see also an increase in net income. On the bottom of the page, we see we're coming from a $97 million adjusted net income on Q2 to $130 million now on Q3, consistent with what we see increase in EBITDA. And in terms of cash and net debt, we remain in a very comfortable position in terms of cash and balance sheet. Our net debt basically is stable throughout the quarter ending close to $180 million by the end of Q3. Our financial leverage also basically stable in a couple of quarters already at 0.2x net debt over EBITDA.

And we see a significant improvement in our cash balance and cash position, now close to $420 million at the end of the quarter with the proceeds of the syndicated loan that we closed in September, $200 million. And now we are in a good position to continue funding the growth of the company, especially at Era Dorada from now on. Now looking at the main items that explain the adjusted EBITDA and adjusted net income between adjusted EBITDA and adjusted net income in the quarter. Out of the $237 million adjusted EBITDA, Borborema was a highlight. We saw it's our -- was very strong in terms of production.

Borborema is our lowest cash cost as well, so contributing with $7 million in EBITDA. Aranzazu, also a very strong performance in Q3, combined with favorable copper prices adding another $60 million. Also coming strong Almas and Minosa for $135 million. And we highlight as well, as Rodrigo mentioned, MSG already reporting $24 million EBITDA in the quarter is still in the turnaround phase. Moving to the next items. We see depreciation and amortization, $30 million basically consistent with our expectation. If you compare to same period of last year, there is an important increase, but that's mainly related to the growth of the company. So the same period of last year, we didn't have MSG.

Borborema was not in commercial production yet, so not depreciating. So that explains the increase in depreciation. Financial expenses, we would highlight, as I mentioned before, the noncash gain within the mark-to-market of the gold hedges was much smaller this quarter, was only $13 million. And we had realized losses with gold hedges. We paid $34 million for the gold collars that were settled and paid during Q3. From now on, if you take November '26 to June 2028, we still have about 141,000 ounces in gold collars that is going to expire monthly now until mid of 2028. Income tax expense is pretty much consistent with the results of our operations.

Then we have some smaller items in other income and provisions, bringing the net income to $135 million. And then here on the right side of the page, the reconciliation that we always show, excluding some noncash items, mainly the unrealized gain in this case with gold hedges, bringing our adjusted net income to $121 million at the end of the quarter. And now here, we have all the details that explains the change in cash position throughout the quarter. So we see on the left side of the page, we start with $248 million in cash at the beginning of the quarter.

On this left half of the page is what we call the recurring free cash flow to firm, which is the free cash flow to firm generated by the 6 mines in production, not including investment for growth, not including what we paid for the hedges, we show $158 million on the top of this page. Those 6 mines generated $158 million in recurring free cash flow. The $34 million that we paid in hedges comes to the $124 million recurring free cash flow that we're reporting, although the realized losses we have is included in the recurring free cash flow. We remind you that it expires in the middle of '28. So that's going to go away after 2028.

Then here in the middle of the page, we see investment for growth, $63 million, mainly expansion of CapEx and now mainly is catching up, ramping up the investments and cash investments in Era Dorada. And to the right side is more the financial like items, mainly the proceeds -- net proceeds from debt. We received $200 million from the syndicated loan and some debt amortization. So we have net proceeds of $182 million. Dividend and share repurchase $71 million in Q3.

And then Rodrigo highlighted at the beginning, if you take the $158 million recurring free cash flow that we generated for the quarter that paid both for the losses with the hedges, also the dividends and share buybacks and also paid entirely for the expansion CapEx we had in the quarter. So with this, we end the presentation and open to questions. Thank you.

Operator: [Operator Instructions] Our first question comes from Mr. Marcelo Arazi from BTG Pactual.

Marcelo Arazi: Two questions on my side. So the first one on Era Dorada. It was very nice to see that the project has been evolving on time and within budget and with 13% physical progress. But I would like to understand a little bit more what are the main milestones and potential execution bottlenecks over the next 12 months? And especially regarding the geothermal side of the project, which remains a major concern for a few investors that we normally talk to. And if I could make a second one about the fleet insourcing announcement. So a few questions here as well. So how quickly should this benefit materialize next year?

What are the main risks associated with bringing those operations in-house? And what was actually the final trigger for Aura to decide and make this change?

Rodrigo Barbosa: Thank you, Marcelo. I can start answering here real quick, and then I will ask Kleber that can give you more details about next steps in Era Dorada and also how he sees the insource of the mine fleet upcoming in the next year with the potential also savings. The geothermal plant, I'm not sure if you ask about the geothermal plant is something that will come along the next few years. It is not -- we will not start construction anytime soon. We still need to partner and find the right partner and do the right feasibility study engineering. So that will -- once -- that will probably go into production after 2 or 3 years of operations.

In the meanwhile, we have other alternatives to supply the power. And if you were mentioning about the potential high temperature underground, Kleber can also walk you through. That's not usual conditions to have the fuel other mines in the world that run actually even in the worst conditions. It's a matter of calculating and do the proper underground infrastructure, pumping hot water and also bringing a cool air down. But Kleber can walk you through more in the detail of this situation, plus what he sees coming up in the next 12 months. Glauber?

Glauber Rosa-Luvizotto: Yes, as Rodrigo said, we are -- in terms of construction and preparation of the mining that we call the pre-operation. We are on track for that. So it's a lot of challenge from the hydrothermal water, but we have the support from the specialists and also a very robust plan to offset that point. Right now, everything that we found is as we expected, but we are still -- we are just in the beginning. So we are pumping the water because the key point is we should pump the water in advance.

We should go down with the table water to make sure that the moment that we assess that region, there is no more hot water in that region and the rock have had time to refresh. So it's what we are doing right now. So the pumps are under construction, and we are using some old -- the wells are under preparation. We are using some old ones. We are being able to reduce the table water and doing all the mine development on time. But in parallel, all the infrastructure that we have like the refrigeration plant and all the other stuff, it's already on site, under commissioning.

And I think that the main milestones in the next 12 months from the construction side we have the main equipment to arrive on site, the mill and all the other equipment and also put the mine development in the run rate. So it's -- we are considering -- right now, we have a contractor doing the underground development. We are considering as well to have part of the work made by us. So we already bought some equipment that are on time to be delivered in the end of this month and beginning of the next month.

And we have also some contingent plan to bring to the region some experts because the main point is find people with experience in the underground that there isn't much in Guatemala, but we are considering like -- we are doing like a task force to train and prepare people and have some experts to -- mainly in this beginning to put the mine on track. And the other question from the insourcing the key point is that we are seeing a lot of adjustment in the cost when we went to the market to have -- to make an assessment about the price and cost to do that primarily -- to do that with by contractor.

The costs are being significantly higher than we are practicing. And also, we feel that we are prepared to -- considering the maturity that we have in the operations, we are prepared to assume this another part of the work. But the process right now, we are in the transition to creating the company that will assume all the assets from the contractor. We have the gate to be approved on CADE. Once we have that in the beginning of next year, should be fully ours. Right now, we are in the transition phase. Everything is going well. We expect to be more efficient, mainly doing the property maintenance to make sure that we have the reliability in the fleet.

So I think that we can increase productivity from the equipment, and we can also see the impact in our cost. So for next year, in terms of cost, we have seen some reduction in the 3 mines. But most part of the reimbursement for the equipment that we are paying will be next year once we phase it in accordance with we are advancing in the contract that we did. So it's going on track.

Operator: Our next question comes from Mr. Lawson Winder from Bank of America Securities.

Lawson Winder: If I could ask about MSG, I think that would be a very helpful place to start, particularly in thinking about the growth trajectory into 2026. So what specifically changed underground at MSG during Q3 in development meters, stope availability, mining flexibility? And then what still needs to be completed before you consider the turnaround finished? And then all-in sustaining costs were, well, I mean, very high in the quarter. Like what's your latest thinking on where all-in sustaining costs can go on a run rate basis for MSG?

Rodrigo Barbosa: Well, I'll let Glauber to answer, but I can, we see all-in sustaining cash cost going close to $2,000 per ounce and production at 80,000 ounces per year probably next year, right? But Glauber can go into details how he sees the progress on Q3 and project to you what we can expect in Q4 and most importantly next year.

Glauber Rosa-Luvizotto: Yes. The key point there is the performance in mining development. So we have a combination of 2 things. So when we assume MSG is a backlog in mining development, in mining preparation, and we also decided to do the change in the mining method that require much more development in advance to go to the bottom of the panel and start to mine bottom-up. We still in preparation. So we have some areas in production already, but not fully capacity in the underground mining. It will take -- I think that 4, 5 months more to have the mine fully prepared and the reserve release in the time that is required.

In parallel, a bunch of change has been made. So we are improving the quality in the method that we mine, reducing dilution, increased mining recovery and also review all the contracts with a significant reduction in our costs. We can't see right now the reflect of how those changes will reflect because we are not in the full capacity. So I can say that we are spending more in development proportionately with what we are producing.

So once we increase production, we do not will keep the same level of mine development because once we achieve the stabilization in the mine, we can back for the full -- for the normal profile of mine development, but we are be able to feed the plant with more ore from the underground because right now, almost 50% of the ore came from some lower grade stockpiles from the surface because we are preparing the mine. But once we are putting much more room of mine in the plant with better grade, the production will increase. And also, we will be able to stabilize the mining development in the underground.

And the combination of those can give us the production close to the 80,000 ounces per year and the cash cost or the all-in sustaining cost should reduce significantly.

Rodrigo Barbosa: And again, Aura Day, we will provide a full detail on what has been done in MSG, including all the physical measurements, the speed, how we are -- the savings Glauber mentioned, have important savings can go in POR is 30%, 40%. So that I think it will be important to invite everybody to be there and see. We also bring the manager of MSG so that we can interact directly also with him.

Lawson Winder: Yes. Fantastic. I mean it's nice to see MSG improving substantially in Q3. If I could ask one more question, it would probably be on the reserve and resource update and your expectations around that globally for the entire firm, whether you anticipate replacing reserves this year mine. But then just particularly with respect to Apoena and Minosa, your 2 really short mine lives. Are you starting to see the potential to drive material expansion in mine life there?

Rodrigo Barbosa: We will share what we've been finding during the Aura Day. Apoena, yes, there are several -- now we are opening more. We are focusing a lot on the near mine. We opened a little bit on 20 kilometers, 30 kilometers. So finding very interesting interceptions that we will -- we are now finalizing all the results and be able to publish and then before the Aura Day. Honduras, it is still an unknown. This is where Minosa is where we are less optimistic about extending life of mine. But Apoena, yes, there will be important improvements, we believe.

Operator: Our next question comes from Mr. Rabi Nizami from National Bank of Canada.

Rodrigo Barbosa: Rabi, if you are talking, I think you are on mute. Yes, maybe he has some connection problems. Let us go to the next one, and then we will still reserve a room for him.

Operator: Our next question comes from Mr. Matheus Moreira from Bradesco BBI.

Matheus Moreira: Two on my side. First, on CapEx. I mean, it caught our attention here that you're tracking well below your growth CapEx guidance for this year with a little bit over $130 million disbursed year-to-date, while the low range of your guidance is of $260 million, right? So I'm just wondering how should we think of this CapEx for the fourth quarter specifically? Do you still expect to reach your guidance? Or should we see some spill out towards 2027? And does this somehow impact your time line for Era Dorada? That's my first question, and then I'll ask my second one.

Rodrigo Barbosa: Okay. There's no -- nothing is going different from the schedule, but Kleber can walk you through why you see this CapEx lower than the guidance of the year so far.

João Cardoso: Yes. Matheus, we -- the expansion CapEx, we have opportunities to be closer to the low end of the guidance or even below. That's mainly because that's actually good news. It's the negotiation we have been done with providers, so equipments for example, for the project. So we are negotiating lower down payments. So that improves our cash position at the moment. But then in terms of whatever we don't spend this year to your question, yes, that would move to 2027, the CapEx for the project itself wouldn't change. It's just a matter of having more working capital like, let's say, now in 2026 because of the negotiations that we're doing in country.

Matheus Moreira: Great. That's very clear, Kleber. Maybe if I may, a second quick question on MSG is actually a follow-up. I mean, it was encouraging to see the operational performance in the quarter, right, which was much better than we were expecting. Still, I believe, far from the operational conditions Aura wants to achieve, but definitely on track. I noticed that your production improved materially quarter-on-quarter also because of higher throughput rates. And this, in turn, was also benefited by some material you recovered from the East Pile, right? So I'm just wondering if you could provide more details on this stockpile. How big it is? What are the average grades?

And when do you expect it to run out I think you also mentioned a bit in the beginning that as underground mining activities improves, you will rely less on these stockpiles, right? So just -- but I just wanted to get a sense on how big and how relevant this stockpile can be.

Rodrigo Barbosa: Glauber, go ahead.

Glauber Rosa-Luvizotto: The stockpile is not the most relevant part of the plan to recover the production. So it's just to complement or to keep the plant fully feed once we weren't able to feed with more ore from the underground mine. But the focus is mainly to put the mine in operation, debottleneck the mine, and get some reserves released in advance to make sure that we can feed the plant with room of mine that is the highest grade that we have because the stockpile is a marginal ore that was left in the past for the other company.

We are using that as an opportunity once we have this spare capacity in the plant, but it's not the base of the plan for the growth.

Rodrigo Barbosa: Yes. The stockpile is just a buffer that we are using why we are doing the turnaround. The grades you asked can vary 0.5, 0.6, 0.7, 0.4, but it will be around this.

Operator: Our next question comes from Mr. Rabi Nizami from National Bank of Canada.

Rabi Nizami: Can you hear me now?

Rodrigo Barbosa: Yes, loud and clear.

Rabi Nizami: Apologies for that audio issue earlier. So a couple of my questions have been answered, but I'll move on to a few more. So on the CapEx run rate, you already answered that. But specifically looking at Era Dorada, how do you expect the cadence of CapEx spend of that asset to proceed into Q4 and into next year? I will let you answer that first, and then I will move on to the next one.

Rodrigo Barbosa: Yes. Kleber, go ahead.

João Cardoso: Sorry, Rabi, can you repeat the question?

Rodrigo Barbosa: The CapEx for Era Dorada, how you expect this to increase on Q4 and then next year?

João Cardoso: Yes. So in Q4, you should see an important increase. So that's normal, if you look to Borborema and Almas was the same. The first few years and first quarter is much lower than ramping up as you start hiring people and capitalizing preoperational expenses and also receiving the equipment. So in Q4 is expected to have a significant increase. So we are expecting to move towards the low end of our expansion CapEx guidance for this year. And then for 2027, we expect to expand the month to complete the project. So we're expecting to complete on budget. So there will be no -- if there is a saving in '26, that's going to have additional CapEx in '27.

Rabi Nizami: Okay. And then on Borborema, should we still expect an expansion study and a Board decision by year-end? And what's remaining there on engineering, water supply, anything else there to talk about in terms of timing?

Rodrigo Barbosa: Glauber, if you want to answer, go ahead.

Glauber Rosa-Luvizotto: Yes. We are finalizing the study. So we expect to publish it to the end of this year. Yes, the main point is make sure that we have the best arrangement for the plant and how can we do the position and expansion without impacting the production that is in the run rate. And also the water, we have some alternatives. We are just finalizing the trade-offs that we have between the options and the cost of each one and the risks for each others. And yes, we should be ready to publish it to the end of this year.

Rodrigo Barbosa: And then in the meanwhile, as we do with all our mines, as you see Almas we built then we started generating cash, then we started doing more exploration. And we are doing the same with Borborema. We started generating cash last year. We start doing more investment in exploration, geophysical ground drills. And there is an important and interesting information that we will share during our day in Borborema ahead of the feasibility study.

Rabi Nizami: Okay. Just in the short term, looking at the strip ratio of Borborema in Q3 at 4.6. Is there any guidance you can give us at this time with respect to how that evolves into Q4 and into next year?

Glauber Rosa-Luvizotto: Yes. We operate in the beginning once the mine was open when we assume. So they have the past work that they did, the strip ratio was lower, but we should run much more closer to what was the Q3, but a little bit higher for next year once we should achieve the average strip rate for the mine. So it shouldn't be that low as it was in the first semester of this year, but it should be close to what we have in the Q3 and what we expect for Q4 and next year forward.

Rabi Nizami: I'll just ask one quick one and then I'll sign off. Kleber, you discussed FX rates a bit, guidance being set at 5.5 and recently, that's turned more in your favor. Could you just comment on fuel prices as well going forward? How does that affect your costs? And what should we think about going into Q4 next year? And with that, I'll sign off.

Rodrigo Barbosa: Go ahead, Kleber.

João Cardoso: Yes. So fuel is impacting us like everyone else, but it's not a significant portion of our costs. It is depending on the operation can be between 5% or 8% of the cost matrix. So it's not negligible, but it's not that high. So FX, for example, Rodrigo was commenting. So the average for the year is being close to BRL 5.10 and our guidance was BRL 5.50, for example, last year as well. So FX has been the main impact. But yes, we're seeing some cost pressure, but that has not been the main impact in our own numbers.

Operator: Our next question comes from Mr. Guilherme Nippes from XP Inc.

Guilherme Nippes: I have 2 questions here as well. My first one is on capital allocation. Now with the balance sheet now carrying very low leverage and of course, there are the investments on Era Dorada, but how are you thinking about the next phase of capital allocation and potential new targets of investments? Are you guys still looking at copper and gold opportunities or for now you're holding and seeing what happens next? And how do you see the mix of M&A and cash returns for shareholders as well? And my second one is on the mining fleet insourcing.

If you guys also see other potential initiatives to reduce costs and all-in as you already did with the mining fleet at Apoena, Almas and Borborema. Those are my 2 questions.

Rodrigo Barbosa: In terms of M&A, we continue to see opportunities. We continue to invest time understanding what are the interesting M&A to do, invest time trying to do transactions. So M&A continues to be an important part of the story. We know very much how to get up to 600,000 or more thousand ounces of gold equivalent within the mines that we have or the mines that we're going to develop. But we want -- we aim to be at 1 million ounces, and that will happen only if we continue to pursue M&A, and we will continue to see alternatives. And it's gold and copper, right? We are not looking at other alternatives.

Whoever invest in Aura wants to be exposed to gold and copper and in the Americas, right? So we are not looking alternatives in Africa, Asia or Australia. So we prefer Americas, gold and copper. And examples are projects at Borborema, Era Dorada, Greenfield that we can develop or projects that are running like MSG that we see an angle to optimize our operations. And your second question was about our opportunities to reduce cost. We are always looking how to reduce the cost. We are always looking how to improve our operations. That's one of the reasons that, yes, we are -- we came from a few years ago, third quartile in the industry.

Now we are first quartile in terms of all-in sustaining cash cost. And we do see opportunities next year, yes, for the mine in source fleeting. We are also doing what we call a zero-based budget this year, review line by line, each of the areas, and we're already finding some opportunities, but that then we will be able to include in the guidance for next year. So we see, yes, some opportunities for cost reduction along the next years.

Operator: Our next question comes from Mr. Henrique Marques from Goldman Sachs.

Henrique Tavian Marques: Just I wanted to understand, Rodrigo, what is your priorities as we enter 2027? I believe Era Dorada will definitely be the top one for you. But I wanted to know like how you plan to spend your time in each one of your mines. I know each one of them has its own next stage, next phase. So just wanted to understand what really is the priority for you after Era Dorada. And if I may add one more question, just regarding the all-in sustaining cash cost of Apoena. I mean it was really high this quarter, and I think it was mostly related to the Nosde CapEx.

So I just want to understand if this was more of a one-off or is something that we should still see for a while? And if this was already expected to happen at this moment?

Rodrigo Barbosa: Okay. So in terms of priorities, as you mentioned, first priority is construction of Era Dorada on time on budget together with turnaround of MSG, be able to produce 80,000 ounces at $2,000 all-in sustaining cash costs. Then, of course, there's always optimizations on improvements going operations. But I would highlight then it's continue to invest in exploration and expand the life of mine so that we can increase resources and reserves. That's very interesting, significant potential for us to continue to do so. And then M&As, right? We know very much how to get to 600,000 ounces and now we want to -- we want to be able to achieve 1 million ounces.

So I invest a significant part of my time prospecting and talking and understanding what would be the potential M&A to do. We don't have a target. I want to do an M&A next year. But we do want to continue to grow through M&As, right? So in the end, it's the same strategy that we had 5 years ago, investing in Greenfield projects to increase production to increase invest in life of mine, increase resource and reserves and continue to grow through M&A. That's what we've been doing in the last 5 years, and that's what we'll continue to do in the next 3 to 5 years. And then you asked about of Apoena.

Apoena this quarter was much higher than the last quarter, but within what we projected. What happened this quarter that we significantly advanced at the Nosde Pit, while we didn't reach the high grade for the full quarter. And now we are there already. So the strip ratio has mostly been done. So we're going to see higher production and higher grades coming in on the fourth quarter. So we will see a reduction on the all-in sustaining cash cost for the fourth quarter. And for next year, we will put on the guidance as we have probably in January, February.

Operator: Our next question comes from Mr. Graham Tanaka. Please, Mr. Tanaka, from Tanaka Capital.

Rodrigo Barbosa: Mr. Tanaka, if you're talking, you are on mute. I don't think we hear him? Very well. So with that, I will conclude our earnings call. Just a quick wrap-up. Aura is walking the talk. We are growing production. We have produced 95,000 ounces. This year, we'll be on the target 340,000, 390,000. So we are developing Greenfield project at Era Dorada is coming moving according to the plan. We are doing also important investment in exploration that I invite you again to be in Aura Day so that we can walk you through more in the details of what is going on exploration.

We continue to look alternatives for lowering all-in sustaining cash costs, which we are already in the first quartile, but we are not happy. We want to -- we see opportunities to continue to decrease our all-in sustaining cash cost while we continue to see M&A. So again, thank you very much. And I didn't say important thing, right? Doing all of that, paying dividends, significant dividends to our shareholders, 4% dividend yield together with the share buyback, while we are doing all these investments in exploration, expansion and improvements, maintaining the low net debt to EBITDA level. Again, will be important day, Aura Day on November 30, New York, Nasdaq. Please be able to attend there.

So we will be able to guide you in more detail what is going on in Aura. I appreciate. Thank you.

Operator: Aura's conference is now closed. We thank you for your participation and wish you a nice day.

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