Metals Exploration plc (LSE:MTL) reported positive pre-tax free cash flow of US$34.5 million for the third quarter of 2026, compared with US$25.2 million in the preceding quarter, supported by increased gold production at its Runruno mine in the Philippines.
The gold production and development company generated quarterly gold revenue of US$57.7 million, up from US$47.1 million in Q2, while gold output increased to 14,108 ounces from 10,946 ounces.
Metals Exploration also extended the planned operating life of Runruno to the end of January 2027 after identifying previously stockpiled mineralised material that can be processed economically at current gold prices.
At its La India development project in Nicaragua, construction reached 75% completion, although the company revised its expected first gold pour to the first quarter of 2027 from December 2026 following the theft of essential electrical cabling during transportation.
The group ended September with US$31.8 million in cash.
Quarterly Gold Revenue Increases to $57.7 Million
Metals Exploration reported gold revenue of US$57.7 million for Q3 2026, representing an increase of approximately 22.5% from US$47.1 million in the preceding quarter.
The increase reflected higher gold sales volumes, partially offset by a lower average realised selling price.
Gold sales reached 13,500 ounces during the quarter, compared with 10,552 ounces in Q2.
The average realised gold price was US$4,273 per ounce, compared with US$4,463 per ounce in the previous quarter.
Positive pre-tax free cash flow increased to US$34.5 million from US$25.2 million, representing growth of approximately 36.9%.
Cash holdings at 30 September 2026 stood at US$31.8 million, compared with US$9.0 million at the end of June.
The company also confirmed that a US$27 million mining equipment loan from a Nicaraguan bank had been fully drawn during the quarter.
In addition, Metals Exploration utilised its gold prepayment facility through the forward sale of 2,000 ounces of gold for delivery during Q4 2026.
Runruno Gold Production Rises to 14,108 Ounces
The Runruno mine produced 14,108 ounces of gold during Q3 2026, an increase of approximately 28.9% from 10,946 ounces in Q2.
The processing plant treated 572,000 tonnes of ore, compared with 492,000 tonnes during the preceding quarter.
Average head grade improved to 0.89 grams per tonne from 0.82 grams per tonne, although the company said the quarterly grade remained below its forecast.
Gold recovery increased to 86.3%, compared with 84.4% in Q2.
Total mining production, including ore and waste, reached 3.01 million tonnes, compared with 2.93 million tonnes in the previous quarter.
Ore mined increased to 498,000 tonnes from 198,000 tonnes.
Metals Exploration attributed the improvement in operating performance partly to the mining of higher-grade material from Stage 5 of the Runruno open pit.
The company expects full-year gold production to be at the upper end of its existing 2026 guidance range of 40,000 to 48,000 ounces.
All-In Sustaining Costs Decline to $1,883 Per Ounce
Runruno’s all-in sustaining cost decreased to US$1,883 per ounce in Q3 2026, compared with US$2,019 per ounce in Q2.
The reduction of US$136 per ounce represented a quarterly decline of approximately 6.7%.
The improvement occurred alongside higher gold production, increased ore throughput and a higher recovery rate.
The company’s average realised gold price of US$4,273 per ounce exceeded its reported all-in sustaining cost by US$2,390 per ounce.
This difference does not represent a net profit margin, as the two measures do not capture all group-level expenses, financing costs or development expenditure.
The quarter’s operating performance contributed to the increase in pre-tax free cash flow generated by the Runruno operation.
Runruno Mine Life Extended to January 2027
Metals Exploration announced an extension of Runruno’s planned productive life to the end of January 2027.
The extension follows a review of historical stockpiles that identified approximately 740,000 tonnes of marginal ore and mineralised waste.
The material had previously been classified as uneconomic because its gold content fell below the cut-off grade applied when it was mined.
However, higher prevailing gold prices have made the material economically viable for processing under current conditions.
The identified material includes marginal ore grading between 0.45 and 0.55 grams of gold per tonne and mineralised waste grading between 0.30 and 0.45 grams per tonne.
The stockpiled material is located on the run-of-mine pad and within the open pit.
Because the material has already been drilled and blasted, it can be excavated and transported for processing without further primary blasting.
The company currently plans to continue the processing programme until the end of January 2027.
Management will review the duration of the programme as operations progress, with any further extension dependent on prevailing economic and operating conditions.
Runruno continues to generate cash that is being used to finance construction of the La India project in Nicaragua.
La India Construction Reaches 75% Completion
Metals Exploration reported that construction of its La India gold project in Nicaragua was approximately 75% complete at the end of Q3 2026.
Project expenditure to date reached US$152.3 million against a revised forecast of US$186 million.
The company reported progress across structural, mechanical, piping and electrical installation activities during the quarter.
The ball mill and semi-autogenous grinding mill have been placed in their final positions, with alignment completed.
Temporary lubrication systems have also been installed, allowing initial mill rotations to take place.
Installation of the main conveyor packages, pebble crusher and lime silo has been completed.
The carbon-in-leach and detoxification tanks have been installed, together with their associated bridge structures, while installation of mechanical equipment is underway.
Work on the tailings storage facility also progressed, with bulk earthworks for the initial Stage 1a dam nearing completion and liner installation underway.
Approximately 246,000 tonnes of commissioning ore had been stockpiled on the run-of-mine pad.
The company is targeting a stockpile of 500,000 tonnes by the time the processing plant is commissioned.
First Gold Pour Delayed to Q1 2027 Following Cable Theft
Metals Exploration revised its expected first gold pour at La India to Q1 2027, compared with its previous target of December 2026.
The change follows the theft of a truckload of essential low-voltage electrical cabling while it was being transported through Costa Rica.
The company said replacement cabling had been ordered.
The expected delivery and installation period is approximately six weeks, which has been incorporated into the revised project schedule.
Construction activities are continuing, with Runruno’s operating cash flow providing funding for the development.
The company did not announce a further revision to the project’s US$186 million expenditure forecast in connection with the cable theft.
Fatal Incident at La India Construction Site
Metals Exploration reported that a contractor’s employee died following an incident at the La India construction site on 19 October 2026, after the end of the reporting quarter.
The individual was engaged in work on a leach tank.
The company announced the incident on 20 October and immediately began an investigation in cooperation with the relevant authorities.
Construction activities were temporarily suspended while a site-wide safety review was undertaken.
Following the safety stand-down and approval from the relevant authorities, construction resumed across the site on 21 October.
Metals Exploration confirmed that its investigation remains ongoing.
The company said it was not currently aware of any material impact on the La India development project arising from the incident.
Management extended its condolences to the individual’s family and colleagues.
The company reported no lost-time injuries at its operations in the Philippines or Nicaragua during the third quarter itself.
La India South Drilling Identifies Gold Mineralisation
Metals Exploration continued exploration drilling across its Nicaraguan licence portfolio during Q3 2026.
At La India South, initial results from an extension drilling programme indicated that the La India vein continues down dip across the highway fault.
Drill hole LISRD004 returned an intersection of 5.90 metres grading 6.41 grams of gold per tonne and 23.31 grams of silver per tonne from a depth of 309.70 metres.
The intersection included 2.95 metres grading 11.24 grams of gold per tonne.
The company said assay results from several additional holes remained pending.
Metals Exploration also completed an exploration drilling programme at La Grecia, with results announced on 28 September 2026.
At the Teresa/Agua Caliente prospect, confirmatory drilling was approximately 64% complete, with seven of eleven planned holes drilled.
The programme is examining the down-dip continuity of previously identified mineralisation.
At San Lucas, access preparation, geological mapping and trenching continued ahead of further drilling.
The company is also considering additional drilling rigs to increase exploration and resource-definition capacity across its enlarged licence portfolio.
Philippine Exploration Programmes Continue
Metals Exploration undertook geological fieldwork at its Abra project in the Philippines during the quarter.
Activities included geological mapping and soil geochemistry at the Boliney target.
The company said the results would support further refinement of potential drilling targets.
Boliney has a historical resource estimate of 50 million tonnes grading 0.4% copper.
Metals Exploration specified that the historical estimate is not compliant with JORC or NI 43-101 reporting standards.
The company continues to engage with local communities and relevant authorities regarding planned initial drilling programmes at its Abra and Batong Buhay licences.
No new mineral resource estimate was announced for either project.
Runruno Tailings Infrastructure Work Nears Completion
Metals Exploration also provided an update on the residual storage impoundment at Runruno.
The company reported that the facility’s available water freeboard remained above the minimum design requirements.
Construction of the final in-rock spillway has been completed, with work on the upper access weir remaining before the system becomes fully operational.
Completion of the outstanding work was expected by the end of October 2026.
The company reported no outstanding material environmental compliance issues at its operations in the Philippines or Nicaragua.
Chief Executive Comments on Quarterly Performance
Darren Bowden, chief executive officer of Metals Exploration, commented on the fatal incident, operating performance and La India development schedule:
“It was with great sadness that we reported the death of a contractor’s employee in an incident at the La India construction site on 19 October 2026. Our thoughts remain with their family, friends and colleagues at this difficult time. We have launched a full investigation in cooperation with the relevant authorities, and the safety, health and welfare of everyone working on our projects remains our absolute priority.
“Q3 2026 was a strong quarter for the Group, with an improved operating performance at the Runruno mine generating positive pre-tax free cash flow of US$34.5 million and a quarter-end cash position of US$31.8 million. We are also pleased to have identified additional life at Runruno through the processing of historically marginal ore and mineralised waste that is economic at current gold prices; we have extended the mine’s productive life through to the end of January 2027 in the first instance, with the programme kept under ongoing review.
“At La India, construction continues to progress well across structural, mechanical, piping and electrical installation; however, the theft of a truckload of low-voltage cabling in transit through Costa Rica means first gold pour is now expected in Q1 2027, rather than December 2026. A purchase order for replacement cabling has already been issued.”
Outlook for Runruno and La India
Metals Exploration expects 2026 gold production at Runruno to be toward the upper end of its existing guidance range of 40,000 to 48,000 ounces.
The company plans to continue processing historical marginal ore and mineralised waste through January 2027, subject to ongoing operational and economic assessments.
At La India, construction remains underway, with first gold production now expected during Q1 2027.
The group will continue financing construction through cash generated at Runruno, supported by its existing financing arrangements.
Exploration activities are also continuing across the company’s Nicaraguan and Philippine licence areas.
Further results from La India South drilling and other exploration programmes are expected as assays and technical assessments are completed.
More About Metals Exploration
Metals Exploration plc (LSE:MTL) is a gold production, development and exploration company with assets in the Philippines and Nicaragua.
Its principal producing asset is the Runruno gold mine in the Philippines, while its La India project in Nicaragua is under construction.
The company also holds exploration interests across additional licences in both countries.
During Q3 2026, Metals Exploration produced 14,108 ounces of gold and generated US$57.7 million in gold revenue.
Positive pre-tax free cash flow reached US$34.5 million, with quarter-end cash holdings of US$31.8 million.
Runruno’s productive life has been extended to January 2027, while the first gold pour at La India is now scheduled for Q1 2027.
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