Aura Minerals (NASDAQ:AUGO) Q4 2025 Earnings Call Transcript

Aura Minerals (NASDAQ:AUGO) Q4 2025 Earnings Call Transcript February 27, 2026

Operator: Good morning, ladies and gentlemen. Welcome to Fourth Quarter 2025 Earnings Call. This conference is being recorded, and the replay will be available at the company’s website at auraminerals.com/investidores. The presentation will also be available for download. This call is also available in Portuguese. [Operator Instructions] [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. These statements may involve 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, the 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; and Kleber Cardoso, CFO. Now I will turn the conference over to Rodrigo Barbosa. You may begin the conference.

Rodrigo Barbosa: Thank you, and good morning, all. I’m super proud to be here sharing a few information, not only the results, but all the strategic advancements that Aura is pursuing. If I remind all the investors here and analysts about our strategy, we are very much executing right on track on our strategy. The strategy is, number one, to increase production through development of greenfield projects. Number two, to increase resource and reserves as we see significant potential in our current deposits to increase the reserves. And number three, continue to grow through M&A and address our daily trading volume or multiple that is still discounted compared to our peers. And doing all these 3 while we continue to pay significant dividends to our shareholders.

And I’m glad today that I will be able to walk you through that we’ve been executed in all of those 3 areas while we pay dividends. So number one, first, going to the results, and I ask to put on the first page. In terms of executing greenfield projects and also improving the results, we see, again, the company going on record high production on a quarterly basis and also on a yearly basis. On a quarterly basis, which we have already disclosed to the market, we produced 82,000 ounces gold equivalent ounces, 11% up compared to Q3 ’25 and 23% compared to Q4 last year. On annual production, 280,000 ounces of production, 9% up at constant price. And at guidance prices, excluding MSG acquisition that was not on the budget and was not on the guidance, we were very much in line with the middle and actually slightly above the middle of the guidance with the market.

The combination of higher production, cost under control and higher gold prices drove us to hit $208 million in the quarter with a gold price of $4,090, while MSG only 1 month and Borborema is still on the final phase, achieving nominal capacity. When we look to the year, we reached $548 million of EBITDA with the gold price $3,400. If I remind the investors, since ’23, we’ve been doubling the EBITDA coming from $135 million, $270 million, now $540 million. And if you take into account the last EBITDA of $208 million with the gold and put the new gold price and then put a higher production, we’ll see that we’ll be able to, during this year, perhaps maintaining this gold price, double again our EBITDA if the current gold prices continue to be as strong as it is today.

On the all-in sustaining cash cost, we are glad also to disclose to the market that we have not only reached the guidance, but we are slightly below the low end of the guidance, and we will talk more through this during the presentation. Higher gold price, cost under control, we have a very also strong recurring free cash flow of close to $100 million on last quarter, understanding that we are also investing in inventories, investing in developing the mines, which put some low grade into the inventory. So some working capital is allocated as an inventory as low grades — we leave the low grades of the mines that are entering production to the further years while we now focus on higher grades. And I will talk more about this also during the presentation.

Combination of strong cash flows. And although we acquired MSG, we continue to be in a very — and paid dividends. We continue to be at the low leverage ratio. Kleber is going to walk you through that always being able to grow without even leveraging our cash flows that coming from the operations being more than enough to fund our acquisitions and our greenfield projects, while we also count with leverage to fund those projects, freeing more cash to be distributed to our shareholders. A good news, it’s a net loss of $20 million. That means that gold price continues to appreciate. And if you take out the noncash nonrecurring losses, we’ll see that during the year, the adjusted net income was $206 million, and Kleber is going to walk you through all the details how to achieve this $200 million.

For the year 2026, we have a strong — continue to have a strong production coming from our operations and some increase in all-in sustaining cash costs, some increase also in CapEx due to positive news. We are now expanding Almas. We are coming from Almas, we built a 1.3 million tons plant. Last year, we finished above 2 million tons. We are now upgrading to 3 million tons to the plant. That means that we have to develop the mine that needs to raise the tailings then. We are also advancing in Era Dorada. We just announced Era Dorada early works. We also acquired MSG for $76 million. MSG has structurally a higher sustaining CapEx and a higher CapEx during the year of the turnaround and structurally will be higher than our average. However, the price that we paid for MSG more than justified this higher CapEx, sustaining CapEx and also higher sustaining cash cost, which we will walk you through also during the presentation.

Very important additional events. Again, we closed MSG. We got the license for early works in Era Dorada, which we already started the early works. We are now finishing all the analysis, all the studies to be able to go and approve in the Board the full construction. Yesterday, we also announced a major milestone for Borborema, which we obtained the license to move the road, reaching now 1.5 million ounces just with the reallocation of the road freeing additional 670,000 ounces of reserves into the project, while we continue to analyze during the next few weeks for the AIF or 20-F to be released by the end of March, we are updating our resource and reserves based on higher gold price, which means lower cutoff that will free more reserves into all across our operations.

Major milestones that we conquered also is after listing in NASDAQ and after the new issuance in $200 million all came from in 1 year, $1 or $2 million being traded per day, now reaching $100 million per day, addressing the low trading volume that we had now being attractive for major investors to invest in the company. And finally, not least, announcing again a very strong dividend of $0.66 per share on a quarterly basis, which gives us a yield on the last 12 months of 6.2% to our shareholders while we made acquisition, while we ramp up Borborema and while we’re doing all these growth projects. So in summary, we can see that we are very much delivering on the long-term strategy. Number one, we are increasing production and developing the greenfield projects.

Borborema last year, again, on time, on budget, commercial production in September. Then we also acquired MSG. This is the third avenue is continue to grow through M&A. Add daily trading volume. So on the third avenue, we acquired MSG, and we significantly increased daily trading volume, which is helping us to attract more bigger investors, although yet we are still discounted compared to our peers. And the second avenue to increase resource and reserves, again, with the Borborema, we increased Borborema reserves by 82% of reserves, significantly increasing cash flows of this project. And I can also walk you through a little bit the importance of this additional 670,000 ounces, which I will do during the presentation. So very much increasing production, increasing resource and reserves and address the multiple through daily trading volume and also new acquisitions.

In terms of safety, super proud. And again, now — all those numbers are putting Aura as a benchmark in the world in the sector. Not only we had the full year without any single lost time incidents, but now we’re achieving over 18 months with no lost time incidents, which put our in a benchmark in the world in terms of safety. Any well-managed company will give you strong levels of safety and also strong results. In terms of stability of the structures, again, we make reviews every quarter, every month through external consultants and all our geotechnical structures are in satisfactory levels. Next slide. So when we look on the quarterly basis on the production that we have already disclosed, now we see since Q1 2025, a constant growth on production through a combination of the ramp-up of Borborema and lastly, still not only December, the acquisition of MSG.

For the further quarters, we should see now continue to grow in terms of production on a quarterly basis as MSG now comes a full quarter and then gradually, we should also improve our production from our other operations. When we look on the guidance, we see that Aranzazu, the production, when you consider the same metal prices of the budget, we see that we were very much in line with the guidance in terms of production. I will get attention for those that are not used to looking carefully our numbers, Aranzazu, we have — we sell copper and gold concentrate. And then we convert all the copper into gold equivalent ounces. When you do that, you get just the revenues, the revenues from copper and you divide by the gold price. The higher the gold price, the lower the conversion into the gold equivalent ounces.

So when you look at the number of Aranzazu and you see the gold equivalent ounces decreasing along the last year, it’s not because we are decreasing production, but it is mostly because our gold price is appreciated, which is positive for our whole company and that conversion goes to a lower gold equivalent ounces, which also translates to higher all-in sustaining cash cost because you divide by the total cost by the gold equivalent ounces gives — and the gold equivalent ounces is lower. So that gives us a higher all-in sustaining cash cost. But that is because of a good news of gold appreciating. Apoena, we’ve been able to develop faster than where we were projecting during the year, so we could also produce above the guidance. Minosa very much in line with the guidance.

Almas also very much in line with the guidance. And Borborema is where we were a little bit below the guidance. That’s because we had the project, we had some minor issues with the agitators of the CIL tax that did not jeopardize the ramp-up. But as this drove to a lower — was driving to a lower recoveries, we decided just to put for a couple of months very low grades instead of high grades, not to lose the long term, not to lose recoveries on that project that droves the production down while we preserved those — that high-grade gold when we could finish the fix on the CIL tanks, which took us just a couple of months, not jeopardizing the ramp-up again, not jeopardizing reaching our capacity and not jeopardizing the recoveries that we reached after we changed those parts on the CIL tanks.

Next. So in terms of all-in sustaining cash cost, excluding MSG, I’m proud also to show the market that we also could not only be within the guidance, which is the next slide, but also slightly below the low end of the guidance, fulfilling what we promised to the market in terms of production and also in terms of cost. If we take out the MSG, our all-in sustaining cash cost for Q4 would have been $1,363. And as we know, as we acquired MSG, we know MSG had over $3,000 of all-in sustaining cash cost, which doesn’t scare us. I think that was the positive point on acquiring MSG was to see those high all-in sustaining cash costs and project and believe that during the turnaround of this year, we’ll be able to drive that all-in sustaining cash cost to below $2,000 for the years ahead, not this year, but for the years ahead.

Next, so just quickly going to the guidance. I just — I mentioned to you, in terms of production, very much in the middle, slightly above the middle of the guidance. On the cash cost per gold equivalent ounces also, we reached the finish the year at $1,070. The low end of the guidance was at $1,078. All-in sustaining that translates also to a lower all-in sustaining cash cost finishing $1,368 and the low end of the guidance at $1,374 and also very much in line with the guidance in terms of CapEx, understanding that there was a year that we also built Borborema and decided to move forward with the expansion of Almas, the first phase, and now we are going to the second phase of the expansion of Almas. Next. So for the 2026, an overview here of the guidance and then Kleber can go in a little bit more detail in the next slide.

But in terms of production, now we project full year of Borborema, full year of MSG, although MSG still during this year on 2026 in MSG, we are not focusing to produce the most at the lowest cost. We are focused on preparing that mine to be able to produce over 80,000 ounces per year and below 2,000 for the next years. So this year is a turnaround, although during this year, imagine that we should we projected a producing 50,000 to 60,000 ounces of production. Even if the cost is above $3,000 per year all-in, we have — the price — gold price today is $5,200. So it’s $2,200 of free cash flow margin in a turnaround year for MSG. That price converted to 50,000 or 60,000 ounces means that the free cash flow and the EBITDA will be way above this is $120 million, $130 million in this project that we acquired for $76 million in the year that yet we are not focused on production.

We are not focused on cost. We are focused on preparing that mine to higher production along the next years. In terms of — and that higher all-in sustaining cash cost, which Kleber is going to explain, is translated to — from MSG is translated to higher cash cost in our consolidated levels, higher all-in sustaining cash costs also in our consolidated levels and Kleber is going to explain that 65% to 80% of this increase is explained by MSG. And then we have other factors that we will disclose in more details during the presentation. In terms of CapEx, it’s the same situation. It’s a year that we are investing in MSG. We are expanding Almas, Almas we’re doing the pushback of the pit to fast access also the underground development. We are expanding the capacity of the plant.

We are already doing in this expansion project is not the full investment in Era Dorada, but yet already the first groundwork and the first early works. So there’s a lot of capital that’s been committed for good news, which we are expanding production, expanding to go at 600 or even above 600, preparing the company goes above 600,000 ounces of gold equivalent on the upcoming years. In terms of production, again, Aranzazu, that decrease comes from mostly metal prices, although Aranzazu is where we are more stable and getting more lower grades during the next years, while we continue to explore opportunities to decrease the cost of mine and the cost of plan to offset this slightly lower grades in Aranzazu. Borborema, the range of 65,000 to 77,000 ounces.

This is also accounts that we are working, and we should publish our new resources and reserves, the old AIF, now the 20-F by the end of March. That means that we are updating our resources and reserves and all the mine plan of the company based on the new cutoff with a higher gold price. That means with the higher gold price, we reduce the cutoff, we can free and release and convert more resources into the reserves. On the other hand, the grades — average grade goes down. But all in all, it builds value. It’s a positive news because we are now assessing grades that was not economically viable in the past with this higher gold price. We’ve been able to access more ounces on total, although it’s lower than former grades that we were projected in the past.

So that is a positive news that has — on the long term, that has minor impact on the short term. So next slide. Kleber?

João Cardoso: Yes. Sure, Rodrigo. So good morning, everyone. So let’s start with understanding the main drivers behind the impact of the increase in first in the all-in sustaining cash costs. We expect all-in sustaining cash cost in 2026 is expected to increase between $262 and $407 compared to 2025. And as we can see here on the right side on the top, the main driver for the increase by far is MSG that’s bringing up our weighted average cash cost explains 70% to 80% of this increase. Metal price effect that Rodrigo was explaining, the gold equivalent conversion because gold prices on average in ’26, if you take market projections are above the average of ’25, so accelerated more than copper price, so explains another 5% increase.

And the second impact that we have is in Almas. Almas due to mining sequencing this year, we’re doing a pushback in the mine and having higher strip ratio. So the costs and lower grades also due to mining sequencing. So the cost is the increase this year. This is not expected to be repeated, for example, in 2027. And we also have tailings dam expansion this year in Almas. So in Almas mostly nonrecurring this effect. And then other impacts are marginal. We have slightly minor worse cash costs in Minosa, for example, but better cash costs in Apoena, so they compensate each other. So then on the bottom, understanding the main increases behind the sustaining CapEx is a similar story. So 75% to 70% of the increase. We’re expecting to see an increase in ’26 compared to ’25 between $15 million and $17 million, of which about 2/3 are MSG.

First, because it’s an underground mine, so it has a higher sustaining cash cost. So we should not expect going forward to see sustaining CapEx for MSG comparable to the other open pit Brazilian mines. So it’s going to be higher. But also it’s a turnaround year as we have been communicating, we’re going to be allocating some additional capital, especially in maintenance in MSG. And Almas is the same reason Almas explains another 15% to 20% of the increase in the sustaining CapEx for the same reason. The pushback a portion of the waste is capitalized the sustaining CapEx and explain also a portion of this increase. And finally, of course, Borborema is going to be operating for a full year. In ’25, we had just 3 years of commercial production for Borborema — 3 months, sorry.

And then in ’26, we have 12 months. Of course, that brings a higher sustaining CapEx. And finally, when we look at the expansion CapEx, what is in our guidance for ’26 mainly is Almas underground development and the plant expansion that we are investing to increase the plant capacity to 3 million tonnes until the end of the year. Apoena, we have the second year of the North pushback that we are planning in ’25, ’26 to invest in the North Phase 3 pit to have higher grades from ’27. So this is the second year. In Borborema, we have a filter press expansion. So the filter press now is the current bottleneck that we have at the plant. So by expanding the filter press, we can go beyond the nominal installed capacity that we have today at the plant.

And also is going to help us prepare for potential expansion of the plant in the future. And also, we’re going to be investing in engineering studies for potential expansion now that we were able to get the permits to move the roads. Era Dorada as well, we’re investing in the early works, and we have then some other impacts such as Matupa and some investment in the projects.

Rodrigo Barbosa: Thank you. So I think one major milestone that we also achieved, again, go to the next slide, is the license that we’ve been discussing with the national authorities that we finally signed an agreement of partnerships to move the road. That is releasing 670,000 ounces of gold on the mine sequencing. Just hypothetically, if you get the gold price as of today, $5,200 and then you imagine our all-in sustaining cash cost of $1,500, which according to our mine sequencing is below this. We see — and then you multiply by the 670,000 ounces, you’ll see that the company with this is we’ll be able to generate along the years more than $2 billion, $2.5 billion pretax in this project. That’s the size of the magnitude that these additional ounces can generate.

And of course, we don’t want to go from — we already have 15, 16 years old, 16 years of life of mine, that will expand to above 20, 25. We don’t want to do this. That’s why we made the plant flexible. And now we are advancing our engineering studies and water access in order to expand the capacity of the plant perhaps up to 4 million tons that will drive us to a significantly higher production after we finish and conclude the expansion. We are now working on engineering. We are now working on water access. And we believe during the second semester, more towards the fourth quarter, we’ll be able to present a detailed and a new feasibility study for this project using now a higher capacity. While we also were doing and we should expect for the 20-F by March.

This project is very sensible to cutoff grades. So as gold price is going up, we are changing the price for cutoff, which means that we can now access, as I was mentioning, lower grades that was not economically viable in this project now becomes viable. So we should expect further increase in reserves by the end of March when we publish the new resource and reserves for the entire company, particularly here in Borborema. Again, I mentioned that we are delivering on the greenfield projects on time, on budget. Remind Borborema, the first Almas now Borborema. We are delivering on new acquisitions. We closed MSG in December. And we also told the market — we’ve been telling the market for the last many years that we had to address the daily trading volume.

And here, it is the very successful results of our listing in NASDAQ moving from TSX and listing in NASDAQ that coming from $1.52 million per day, now reaching on average in February, $100 million per day with a combination of NASDAQ plus B3. So that will also help us address the multiple. According to the analysts, we are still traded with a discount compared to our peers, and we will not only change the peers coming from the production of 300,000 ounces on average last year or this year to above 600,000 ounces. And then also with the higher daily volume and higher reputation as we are delivering on our projects, we should address this discount compared to our peers and maybe even be with a premium compared to our peers as we continue to grow.

So with that, I conclude here the more high-level analysis. Kleber is going to drive and walk you through the details of the results, and then I come back for questions.

João Cardoso: Okay. Thank you. So we start with a summary of the main financial KPIs that we are reporting for the quarter, for the year and also comparing with the previous quarters. As we — Rodrigo mentioned and we see the results here, a combination of higher gold prices in the fourth quarter and increasing production in the fourth quarter as well. There was a substantial increase in our net revenues, closing the quarter with $322 million and bringing our annual revenues beyond $920 million in 2025. The adjusted EBITDA, it’s the sixth quarter in a row that we delivered record high adjusted EBITDA at $208 million, considering Q4 average gold prices close to $4,000 per ounce. And bringing our annual EBITDA to $547 million as well and also the last 12 months, also the 6 in a row that we see increasing.

When we move to net income, we’re reporting a net loss of $20 million basically for the same reason that we reported losses in some of the previous quarters due to the sharp increase in gold prices during the quarter, which is good news, but it brings noncash losses related to our outstanding gold derivatives. Excluding those noncash losses, which amounted about $82 million in the quarter and certain other noncash items, we see that we had also an improvement in the adjusted net income, reaching $73 million in the quarter. And then in terms of cash and net debt, we see we continue in a very comfortable position in terms of balance sheet. There was some increase in our net debt in the quarter, but that’s basically because in Q4, we paid for the acquisition of MSG.

And unlike many other cases, many other companies when we make acquisitions, there are maybe some reduction in dividends. We didn’t reduce the dividends. In Q4, we kept paying dividends above our minimum dividend policy because our balance sheet allows for it. So — and then we can see, as a result, we closed the year also with a low — very low net debt over EBITDA in the last 12 months, below 0.3x. Now moving to understanding the main items between the adjusted EBITDA and net income for the quarter. If we see a breakdown of the adjusted EBITDA of $208 million, Almas and Borborema were the top performers, about $50 million in the quarter each. We highlight, of course, Borborema considering it was only the first quarter of commercial production and is almost our highest EBITDA.

So it shows all the potential that we have in this mine. Minosa and Aranzazu also coming very strong at $48 million and $41 million, respectively, Apoena delivering EBITDA of $22 million and MSG, $10 million. MSG also, I’d like to highlight for a couple of reasons. First is was just one-off, and one that we didn’t see yet any impact of any turnaround in terms of production and in terms of cost. And we already — with gold prices at much lower levels that we have today, and we already generated $10 million in a month for an investment for an acquisition that we paid $73 million. So it shows the type of returns that we should expect for this acquisition. When moving to financial expenses, I mentioned already, we had $82 million noncash losses related to the outstanding gold hedges.

And we also had $22 million realized losses related to derivatives that expired during the quarter. Income tax expenses increased compared to the previous quarters, basically because our results from the operations also increased. So it’s in the same proportion. On this quarter, we had nonrecurring other expenses that’s mostly related to provisions that we did on year-end related to potential partial nonrecoverability of certain VAT credits that we have mostly in Honduras and also in Brazil. Then with that, we see our net income of minus $20 million, but then bringing back the noncash items, mostly the unrealized losses with derivatives, we come to adjusted net income of $73 million. Now moving to understand in detail the change in the cash position during the last quarter.

We see on the left side of the page, we started the quarter with about $350 million in cash. Here on this more left side page, we can see what’s the cash flow — recurring free cash flow, which is the cash flow generated by now the 6 mines in production not including any investment to expand our business. We see we generated $94 million already deducting the realized losses with the gold derivatives. That cash was almost enough to pay for all the capital allocated to growth, the business in the last quarter. We invested $103 million, mainly the MSG acquisition and also expansion CapEx, the first steps in Almas mainly here for the underground mine development and plant expansion. And to the right side, more the financial items, highlighting, as I indicated before as well, $40 million dividend payments.

Next page. And then when we move to the year, the cash flow by the mine in production generated over $250 million in cash, which was more than enough to pay for all the investment in growth and 2025 was 1 year that we invested significantly in growth. So we invested to Borborema construction, the second year of Borborema construction, the acquisition of MSG, acquisition of Era Dorada, acquisition of Altamira shares. Investment in exploration to increase our mineral reserves and resources that was funded — entirely funded by the cash flow — recurring free cash flow from the operations. And to the right side, the more financial items, we highlight the cash we returned to our shareholders, mainly through dividends, $116 million and the net proceeds we received from the NASDAQ IPO to $100 million, and that brings our cash position close to $290 million at the end of the year.

This is the last slide, and then we open to questions. Thank you.

Q&A Session

Operator: [Operator Instructions] Our first question comes from Henrique Marques with Goldman Sachs.

Henrique Tavian Marques: So quickly on guidance. I mean, there’s still a lot to be made during 2026. So I just wanted to make sure here, what is already implied in this guidance because there are technical report updates coming up, which should impact reserves and eventually grades, which might weigh on production. But at the same time, you have some processing capacity expansion expected for this year. So I just wanted to confirm exactly try to better understand what is already implied in this 2026 guidance that you guys just released? And also on a second topic, a lot of things going on. I think that’s great, but it would be also great if you guys can just help us map everything that is going on. So just any update on timing for Era Dorada or Matupa to be taken to the Board to eventually increase the processing capacity for Almas.

What is the timing for that? And just to confirm, is Almas expansion already Board approved, the processing capacity? And lastly, just any timing for Aura to join the GDX index. Is there any prerequisite missing for that? That’s it.

Rodrigo Barbosa: Thank you for the question, Henrique. And yes, as you mentioned, a lot of going on in Aura. And again, another year that we continue to prepare the company to reach over 600,000 ounces of production. So going step by step, what you should expect. And then first question is for the budget of this year, we are not considering old gold price. We’re already using new gold price based in new cutoffs that we will update the market. So there’s this lag a little bit on what we forecast on the budget and what we will publish now by March. So we are already reducing the average grade of some of the mines based on lower cutoff and higher gold price, which is a good news because we’re going to free ounces in terms of reserves for the long term and for overall, it generates NPV for the company, although in some cases, might slightly be — drive to a lower production.

So that’s part of the question that you made that I could answer. Then there are a few things that’s going on in. So you also asked about Almas. It’s already included on the budget. It’s already included on the CapEx for us to expand the capacity and also to raise the tailings dam to prepare the tailings dam for this new capacity up to 3 million tons of the plant already preparing this to receive higher grade material as an underground while underground is not totally developed, we’ll put average and medium grade that’s already on the stockpile because the mine is working faster than the plant, and we have some important stockpile that to use on the higher capacity of the plant. While we don’t want to finish that. We go — we should finish the year or early next year at 3 million tons per year at the plant.

But we have projects to go up to 4 million tonnes, but that will depend on some more positive geological information that we are investing in the project. So we should expect this 3 million tons already hired, approved and should be implemented by early — should be already in full production by early next year or by the end of this year, while we have projects and we have ideas and have discussions to go up to 4 million tons, but that will depend on more exploration results that we are conducting as we speak right now. On this — also on this — for this year, Borborema, we are — as Kleber mentioned, we are increasing capacity of the filters that will give us a possibility to go beyond the nominal capacity that we should reach along the second semester, while, again, we are also preparing this doing engineering that’s already approved in the Board and doing now studies for water assessments to double the capacity, and we would like to be able to approve this in the Board by the end of this year for the new capacity for Borborema.

On MSG, it’s a year of turnaround. We are — although we are generating positive cash flows, we are not focusing on production and not focusing on short-term gains. We are focused on building the right plan and the right structure so that we can finish the year with a very good view that for the next years, we’ll be able to produce above 80,000 ounces with below $2,000 of all-in sustaining cash cost. So that means that we are preparing the mine, we are doing underground development and advancing. Again, if I remind the investors, one of the reasons that MSG lost productivity and lost production and the plant become idle is that they are doing — the mine 6 is they lost productivity to doing underground development and they start doing top bottom that increased dilution that reduce the speed.

So that creates a lot of complexity. So now we need to do all the proper underground development in order to do from bottom to up. That means 1 year of a lot of underground development and preparing this so that we can do the right methodology underground. And then fulfill the capacity of the plant that will drive us to produce extra ounces and significantly reduce dilution, significantly reduce also the all-in sustaining cash cost. So — and the final question you made was…

Henrique Tavian Marques: It was regarding the index, the GDX — yes, just if there’s a prerequisite missing.

Rodrigo Barbosa: No, I think we are reaching, but we need to reach for 2 consecutive quarters. And each quarter, you need to prove that your daily trading volume was higher on the last 2. So we believe we’ll be eligible for GDX, although there are some — it’s not 100% sure because there is some analysis that the team do, but we believe that we’ll be eligible to GDX by the second semester between third to fourth quarter of this year.

Operator: Our next question comes from Edgard de Souza with Itaú BBA.

Edgard de Souza: So my first question regarding the — still on the guidance, production expectations came in slightly softer than what we were expecting, in particular at Borborema. I wanted to understand, I don’t know if Glauber is connected here, but maybe if not, for sure, you can help me, Rodrigo. How much of this lower production profile in Borborema is a direct consequence of incorporating material that was previously above the cutoff? And at a broader portfolio level, how are you approaching cutoff optimization in the current gold price environment? To what extent are you trading near-term grade and free cash flow for longer life of mine and higher total value extraction, let’s put this way. Then my second question, moving to the main positive news from the release is regarding the expansion at Borborema and the road relocation.

So I wanted to understand the next steps from here. What is the expected time line for the physical relocation of the road? You mentioned that the capacity could reach around 4 million tons. How much of this incremental processing capacity could be gradually added in a brownfield scenario similar to what you did in Almas? How much of the expansion would require a more significant CapEx, maybe a new ball mill? And how should we think about water availability as a constraint until which levels can you produce with the current water availability that you have? And for which levels this would require a more significant investment for water availability there? Those are my main questions.

Rodrigo Barbosa: Okay. I will start, and then I think Glauber is here with us, he can finish. But on the production for Borborema, mostly of the reduction in production comes from a lower grade that comes from a lower cutoff, right? And then we always — we don’t — and that’s one thing that we do in our and that actually, it’s this mine that drove us to be here today with a successful story. We don’t take decisions to favor only short term. We think the company as a whole, what builds the best value, although sometimes hurts the short term. And this example of Borborema is a very good example because we know that we have a lower production. But overall, as we should see during the publications of the 20-F, we’ll see an increase in resource reserves.

So that means we are significantly increased NAV of the company, although that on the yearly — on this yearly basis means slightly lower grades, which is translated to a lower production. On the CapEx, I’ll let Glauber explain, but I’ll give an overview of the plant. It takes probably 2 years in terms of construction to relocate the road, which is the same time that we will do a next plant expansion. And the plant expansion will require a CapEx. The plant is not at 4 million tons. The plant was built for 2 million tons, flexible and prepared to receive new investments and then go to 4 million tons. But I’ll let Glauber walk you through more and what we are thinking about on this expansion. Is Glauber here otherwise or the mic is off.

Glauber Rosa-Luvizotto: Okay. Sorry. Good morning, everyone. So yes, as Rodrigo comment, so we — this drop on grade is a positive thing. In fact, it’s much more ore becoming economical right now with this new price. And what we are doing right now can bring some impact in the short term, but it is a big benefit in the long term. So in fact, we are preparing the mine for higher capacity or higher production that we are doing the engineering in the plant. In the CapEx, to answer your question. So it’s basically built a new parallel plant. So now what we are doing is the bottleneck the filter area is the constraint that we have right now to increase capacity, but we already approved. We already hired all the service and construction, and we will build — we will implement the new filters in this year.

We expect to be done in the beginning of the next semester of this year. In parallel, all the engineer to expand the plant. We don’t have the total CapEx right now, but we need to expand the CIL circuit, the mill circuit and the crusher circuit it means that everything. It’s prepared to expand because we just need to connect without impact the actual production. but it’s something that require CapEx to be done.

Rodrigo Barbosa: And in the meanwhile, we are doing all the water assessment. That’s ideas, there’s projects also to do to increase the capacity to treat gray water from the city or receive gray water from other cities. So there are a few discussions going on right now, and it takes time, but we don’t believe it’s going to be the issue.

Operator: Our next question comes from Guilherme Nippes with XP.

Guilherme Nippes: Can you hear me?

Rodrigo Barbosa: Yes.

Guilherme Nippes: Okay. So I have Two questions here on our side as well. My first one is on the reserves report. So could you guys share any key shifts, any takeaways from the reserve report? And also if you have any shifts on geological interpretation and also on long-term assumption for gold prices as well? And if you could guys share also news on the underground mining for Almas, Borborema plant expansion and the increased reserves at Matupa. So any news on the updated reserves report? And my second question is on capital allocation. Of course, you guys have a lot of projects going on, but we still see balance sheet room for — as gold prices are holding higher as well, we still see room for further acquisitions. So I would like to understand what are the priorities now? And if you guys are also looking for acquiring other assets here in Brazil as well and in Latin America as well.

Rodrigo Barbosa: Okay. Thank you for the question. Unfortunately, we cannot disclose what will be on the AIF yet. That will be published on the — by the end of March. But as you mentioned, we are working on the new cutoff for the current mines that we have that can affect some of the mines and not affecting other mines depending on the distribution of the grades in that mine. Borborema, as I mentioned, has some sensitivity to this. So it can be affected by a lower cutoff than increase, which is already translated on the budget. So we will see already the grades going down. As you mentioned, we are working on Matupa. We’re doing analysis on [ Saguis ], doing analysis also in those Pezão Pé Quente that we acquired and perhaps some of those already be able to incorporate into the X1.

So we should expect also the new report, including part of the resource and reserves of the X1 and also Pé Quente. Then underground, we continue to do underground development and also reaching the right level, then we continue to do intensify exploration. That — although we’ve been having a very important and interesting interception that confirms the underground mine, that takes more time. So we should expect more towards the end of the year that we can consolidate all the information. But we don’t want to waste time. That’s why we’re already doing all the underground development because we believe that this will become a mine, and we don’t want to waste time doing all the studies while we develop the underground. So in terms of M&A, as you mentioned, the company, it’s significantly increasing EBITDA and cash flows.

Again, if you take it back in the last 2 years, we doubled — every year, we doubled the EBITDA, ’23, $136 million, then ’24, $270 million, ’25 now $540 million with the last quarter of $210 million with the gold price $4,000 and MSG only 1 month, you can already imply that we are significantly already on the running rate above the last year. And that, of course, although we can — although we’ve been able to — if you look what has happened to our in the last 4 years, we have the highest dividend yield in the world, of our gold price. We acquired Borborema, we built Almas, we built Borborema, we acquired MSG and yet we have a low leverage. And that was with a gold price of [ 32,500 ]. Now we are with the gold price at [ 550,200 ] with higher production.

So we should expect for the upcoming years more than we’ve done in the last years in terms of we’ll be able to generate higher cash, pay more dividends. Now we have more cash also to do more acquisition. We want to continue to do acquisitions. We know very much how to get to beyond 600,000 ounces that we published last year, but that by itself is going to generate a lot of value to us, but we know that the right multiple starts when you get closer to 1 million ounces. So we want to continue to pursue growth through M&As. We are America players. We don’t feel — we have the knowledge and expertise for the other continents. But in the Americas, we like gold, and we also like copper. So we should expect from our acquisitions, either in gold and also in copper, most in countries that we feel that has democracies, some institutional — strong institutional entities.

So that give us the minimum security to invest. We also like a project that has — it’s well developed in terms of geology, maybe needs further exploration, but just to convert resources into reserves and then implement our projects that are already, as we saw brownfield that we believe that’s not perhaps the core of other companies that they might sell. So if you see an angle to buy them and reduce and generate [indiscernible], that’s what we see. Basically, what you should see for Aura for the upcoming years is what we’ve done in the last years with now higher production and higher gold price, higher cash flow, so more intensified.

Operator: Our next question comes from Marcelo Arazi BTG.

Marcelo Arazi: A few questions on my side as well. We can see that we are seeing a slightly wide range of production guidance than what we were used to. Can we say that is this related to a more conservative approach and a large number of assets or it can be read as a sign of a more challenging or more hard to predict conditions? And a second one on CapEx. Is this level of sustaining CapEx, the new reality for the company or the full year 2026 print is inflated by the turnaround project in MSG? Can this eventually impact the dividend distribution given your policy of 20% of the EBITDA minus the sustaining CapEx? And just a final one, if I can. On the Guatemala CapEx, the guidance is already accounting for the early-stage investments. But with the eventual project approval, can we expect some CapEx revision for this year?

Rodrigo Barbosa: Marcelo, for the questions. And I think for this higher all-in sustaining cash cost and higher CapEx, this is neither more challenging, neither more conservative. Actually, it’s a good news. It’s a good news that the company is being able to buy MSG for $76 million in only 1 month without — as Kleber mentioned, we have $10 million of EBITDA. MSG structurally has a lower all-in sustaining cash cost. MSG structurally has higher all-in sustaining cash cost and higher also sustaining CapEx. But that’s how we generate returns. We put this asset into our consolidated basis, affect negatively, but doesn’t mean that it’s a challenge. Actually, we see this more as an opportunity because during this year, we’ll be able to do the proper work, and we are very confident that for the upcoming years, we will see that we’ll be able to reach above 80,000 ounces and below $2,000 of all-in sustaining cash costs.

Nevertheless, in a single [indiscernible], we generate $10 million without any new — any turnaround. So — and the other increase that we have comes from positive news also again, Almas, we’ve seen a very strong opportunity to increase capacity. So that increased also our CapEx. Another factor that increased the CapEx is Era Dorada because we felt that we got the license that the former company could not get for several years. So we already started early works. And then going to the final questions that you made, we are — it is not on the CapEx, the full construction of Era Dorada. So as we go to the Board and as we approve the full construction of Era Dorada, this is when we then we will add a new CapEx for the project as we published already last year, the updated feasibility study, the CapEx of this project is close to $380 million.

Of course, it doesn’t happen in the full year. Actually, most of the CapEx goes towards the end of the investments. So — but if we approve the Board, then we will incorporate on our guidance this year. So again, the higher CapEx that you see in this year is way more as an opportunity rather than a challenge.

Marcelo Arazi: And just a quick follow-up. Could this impact the dividend distribution given your policy?

Rodrigo Barbosa: No, we’ve been able to do everything. So our policy is 20% of the EBITDA minus recurring CapEx. Actually, we’ve been able to pay 50%, 60% above the policy. And we see no reason that we affect this for the upcoming years, except that there’s some major acquisition that we believe that is super high return and super high value added, then perhaps we go to the policy, but we should expect the policy are above the policy for the upcoming quarters.

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

Lawson Winder: Could I actually start by asking maybe a bit of an expanded question on the index inclusion. So there are U.S. indices for which Aura would technically qualify like some of the Russells and are even much more widely followed than the gold indices. I mean, is there any discussion of potential inclusion or potential inclusion in the Russells on the horizon?

Rodrigo Barbosa: We are monitoring, and we have a plan this year to be included in all the indices that we can fulfill. So we already were included in about 30 different indexes. But as you mentioned, I think we have way more opportunity to reach those major indexes that can not only help with the pricing on the multiple, but we also increased significantly our daily trading volume. So definitely is in our agenda.

Lawson Winder: Okay. Fantastic. On Borborema, could you just confirm that the recoveries in Q1 ’26 to date are now hitting design capacities? And if not, what’s left? And sort of in what quarter should we think about that hitting the design recovery rates?

Rodrigo Barbosa: Glauber, do you want to answer this, but we are at the design end…

Glauber Rosa-Luvizotto: Yes, we are at the design. So it’s not an issue. In fact, to run the plant in the capacity that was designed, it hasn’t been an issue for us. So the difference in production is mainly related to the grades that we are feeding into this strategy to expand the pit with these new reserves and new cutoffs.

Rodrigo Barbosa: So just continue the answer Lawson, that was a good question. The mill is running super well. Actually, we see room in the mill to run even above capacity. CIL tanks is the same. That’s why Glauber mentioned that where we have now, although we are already at a nominal capacity, the filters are the bottleneck. Once we do the investment, the filters, then we can go beyond nominal capacity because everything else is running super well.

Lawson Winder: Okay. If I could ask about Matupa from both the point of view of CapEx and annual production. So one, you guys have been investing a fair bit in exploration into Matupa. Does that have any implications for what your anticipated annual production rates will be? Like, I mean, at least, for example, at the Investor Day, you highlighted 55,000 ounces a year from that asset. And then conversely, I mean, if that’s the case, what are we looking at in terms of a magnitude of potential increase in upfront CapEx for Matupa?

Rodrigo Barbosa: Matupa, I think we continue to have this view of 55,000 ounces. We are not changing the nominal capacity of the plant. What we are doing now is invest in exploration to expand the resource and reserves. This project has a resource of 400,000 ounces, slight below in terms of reserves. But with [indiscernible] and with also, we see a significant room to expand the resource and reserves, which then we feel that’s the right time to start the construction. And as we did with Almas, we prefer to build this project, prepare the plant to be flexible and expand because we know that we will even continue to expand resource and reserves beyond what we have today, beyond what we will publish in the AIF so that we can then increase the plant.

And understanding that if you change too much the design of the plant as of today, even though we might see an opportunity, it’s a whole different new environmental license process. So we prefer to respect what is in the license of environmental. And then during the years, talk to the agency and see opportunities to do amendments and then increase gradually the plant.

Lawson Winder: Okay. Fantastic. And if I could ask one more question just on Apoena. I mean, that mine continues to impress. You guys are planning to mine much higher grades than we had modeled at that asset in 2026. Are these higher grades now sustainable into 2027?

Rodrigo Barbosa: I think, yes, we should reach higher grades by the second semester, and then we’ll last towards a couple of years. So it will be maintained. I think we believe that we can put this mine into 50,000, 60,000 ounces of production on the running rate after the second semester of this year, if not go beyond depending on some of other exploration that we are doing at the mine. It’s a difficult mine, but full of potential.

Operator: Our next question comes from Matheus Moreira with Bradesco.

Matheus Moreira: My first question is on Almas. I would like to better understand the rationale behind the production guidance for the mine. I mean, considering the ongoing plant expansion and the fact that the mine is already operating at an annualized run rate above the published guidance, the numbers appear somewhat conservative to us. Are there maybe any operational bottlenecks or specific factors that you have already identified that could justify this more cautious approach? So that’s my first question. And my second question on M&As. I would like to hear to explore a little bit more on this topic. Within Aura’s capital allocation framework and considering that the company is now operating at a different level of cash generation than in the past, what type of assets in terms of size makes sense for the company today?

And if possible, could you comment on geographic preferences? You’ve already touched on this a little bit earlier. But in the past, you mentioned the potential expansion into North America. Does that still make sense strategically?

Rodrigo Barbosa: Thank you. So in Almas, we are operating at 2 million tons, but we will go through expansion and reach 3 million tons by the end of the year. So this is a process that is going to happen during the year. So today, we are still yet below what we expect to be until the end of the year. So that is also reflected on the production. Almas also first year started with a higher grade. So there is lower grades coming in now during this year. We will add higher grades again when we have the underground coming in. So we should expect Almas for the next year after the underground then continue to increase production together with the higher capacity. And if we have positive results on exploration, then we can even expand further to 4 million tonnes, and then we’ll see another step up.

So Almas, I think you should see that some conservative scenario during this year, but gradually continue to grow while we continue to expand capacity and then access higher grades when the underground mine come online. In terms of projects, I think we won the way to reach to 1 million ounces. I think that’s where companies start to become relevant and then also start to get a fair multiple. We know very much how to get to 600,000 ounces. So to go beyond this, we will need a few acquisitions. Of course, as you mentioned, that we are growing and we have a larger balance sheet, and we have a larger also higher production, so that a meaningful — more meaningful acquisitions should be coming online. But again, the higher the production, the higher the acquisition is the higher also the CapEx. So we will balance the internal rate of returns where is the right size, 80,000, 100,000, 150,000.

We saw sometimes even above 150,000, but that will really depend on the return we see and with the angle for Aura to generate value, right? It’s Americas, as I mentioned, and you asked about North America. I think it’s intuitive to think that down the road, Aura will expand into North America. But yet, we feel that our multiple is too discounted. We believe that in North America, there’s always — probably always be a higher multiple compared to the players in Latin America in general. However, it cannot be that high gap. So we need to narrow this gap. We have a homework to do first to narrow this gap first to then be able to do accretive acquisition and not a dilutive acquisition to our shareholders. But if something shows up that we believe that it is accretive to our shareholders, we will do.

We look and we are ready, and that’s part of our strategy.

Operator: Our next question comes from Tathiane Candini with JPMorgan.

Tathiane Candini: I think most of them were already replied. I would just like to explore maybe a little bit two more. The first one, and again, you already explored a little bit of this, but this is regarding the cost of MSG. So I know that like more long term for 2027 is to reach lower cost. I would just like to understand a little bit of the pipeline for this? Like what are the plans for reach those guidance? And if there is like any type of hurdle that you imagine that you can reach? And the second one is regarding the CapEx of Era Dorada, which again, you already explored a little bit, but I’d just like to understand how is the pipeline for getting this approved for what I understood this year. But this is like a 22-month plan. Do you have like deadlines if it’s not approved by any type of months, this could like have a little bit of an impact on 2028 production? Just trying to have a little bit more clarity on the months going forward.

Rodrigo Barbosa: Okay. So for Era Dorada, we are now analyzing our internal analysis. We did — we conducted during the last year, over 1,000 hours of dialogue with community leaders and community representatives. We brought some of the leaders also to visit our operations. So there was a very intense work on socializing this project. We moved back to underground, which drove attention from also national authorities that they understood that was a positive move. That’s why that the result of this was the license to initiate the groundwork. I think we feel now even more and more confident to go to full production. It’s our full construction. And we should expect this decision between first and second quarter this year. That’s how we are thinking.

And then it’s a moving part, right? Tathiane, as you mentioned, 22 months of construction. And depending on the date that we started, it will affect the final production for sure. And the first question you mentioned was — I forgot.

Tathiane Candini: Regarding the MSG cost, just to try to understand like what is the plan to reach the guidance for lower cost by 2027?

Rodrigo Barbosa: The plan is already under execution. We know very much how to improve efficiency. We know very much how to decrease the cost. We are now detailing in executing this plan as we speak. As I mentioned, we need to do a significant underground development because the mine today is connected to the plant. So any problem at the mine means that the plant is going to receive the ore. That’s why we’ve been seeing in the last few years, a decrease on the plant production. So it’s becoming idle. It has 20%, 30%, 35%, even 40% of idle capacity at the plant because the mine cannot fulfill. So in order to accelerate the production of the mine, we need 1 year of underground development to proper prepare the stopes, proper dual bottom-up approach.

We have prepared the mine also to receive the veins are 1, 1.2 meters .They’ll be mining at 1.80 at 2 meters. Now we want to mine at an narrow at 1.5, prepare the mine for 1.5, which means lower dilution, higher average grade. So all of those — all of those strategies already being implemented, but we need time. We need up towards the end of the year to really see that the mine will be prepared to produce at its full capacity. On the hurdle rate, as we mentioned, we believe that we can prepare this for the medium to long term to be able to produce above 80,000 ounces per year at all-in sustaining cash cost of $2,000 or below.

Operator: The Q&A section is over. We would like to hand the floor back to Rodrigo Barbosa for the company’s final remarks.

Rodrigo Barbosa: So again, thank you for the opportunity. I’m super proud, again, to be diligently executing on our strategy, diligently executing on implementing greenfield projects with the Almas on time, on budget, Borborema on time, on budget and a few others now and Era Dorada now prepared to go and hopefully, during the first quarter, second quarter, approved to implement. Also diligent execution on increasing resource and reserves. We just added 670,000 ounces of reserves, one project that’s already derisked, already invested the CapEx, already generated cash flows that will give not only an opportunity to increase the NAV, but we’ll also be able to increase production, while we continue to invest in exploration, as we mentioned, on Matupa, underground Almas and also Borborema has also potential to significantly increase.

So diligently executing also increasing resource and reserves of the company. And third, also diligently executing on acquisitions. We just acquired MSG now closed in December, then — we also addressed the daily trading volume now trading $100 million per day, while we’ve been able to pay dividends. And the higher CapEx and the sustaining CapEx we see today, as I mentioned, is not a challenge, it’s an opportunity. We increased this because the company is growing. We increased this because we see opportunity to further expand the plant. We increased this because we see an opportunity to buy one asset that has a significant potential to expand capacity in terms of MSG in terms of production and then reduce the cost. Overall, in terms of results, again, super proud.

If you take the EBITDA from ’23, you doubled to ’24, then we doubled again to $25. And if you take the EBITDA of last quarter with the gold price at $4,000, now you use $5,200 plus higher production Borborema plus higher production in MSG on the full quarter, you’ll see that we are already on the running rate also lining going towards maybe perhaps even to double or even more during this year. So very much on track and what we promised to the market, delivering results, delivering on resource reserves, delivering on strategic agenda and also strong dividend. So thank you all. And hopefully, down the road, we have a new calls with the new quarter. And then again, between first or second quarter this year, take a look on Era Dorada and see if we feel ready to go to the Board and approve.

Operator: Thank you. Our conference is now closed. We thank you for your participation and wish you a nice day.