Metals Exploration Reports Q1 2026 Results and Updates Runruno Production Guidance

• Q1 2026 pre-tax free cash flow of US$29.4 million, with gold sold at an average realised price of US$4,885 per ounce
• Full-year 2026 Runruno production guidance revised to 40,000 to 48,000 ounces; the BIOX processing circuit has recovered and is operating at normal levels
• La India gold project construction reached 40% completion, ahead of the planned 35% at mid-March 2026, with first gold production on track for December 2026
• Drilling at La India South Underground returned the programme's strongest intercept at 31.18 metres grading 4.37 g/t gold, confirming high-grade mineralisation at depth
• Four new 25-year exploration concessions covering 64,400 hectares were granted post-quarter in Nicaragua, with four high-priority targets already identified within the new ground

Metals Exploration plc (AIM: MTL) is a London-based gold production, development, and exploration company with assets in the Philippines and Nicaragua. Its producing asset is the Runruno gold mine in the Philippines, which funds the construction of the La India gold mine in Nicaragua, currently under development. La India is designed to produce approximately double Runruno's current production rate once operational, with a planned mine life of 12.5 years. The company also holds exploration assets in both countries.

Q1 2026 Financial and Operational Performance at Runruno

Runruno generated gold revenue of US$52.9 million in Q1 2026 from 10,821 ounces sold at an average realised price of US$4,885 per ounce. By comparison, Q4 2025 recorded revenue of US$63.9 million from 16,009 ounces at US$3,995 per ounce. Pre-tax free cash flow for Q1 2026 was US$29.4 million, and the company closed the quarter with US$36.5 million in cash and no drawn debt.

Mining activity totalled 2.94 million tonnes of combined ore and waste, slightly above management's forecast. Ore mined was 396,000 tonnes, compared to 710,000 tonnes in Q4 2025, reflecting the transition into the new Stages 5 and 6 mining areas. Gold production for the quarter was 10,505 ounces, processed from 461,000 tonnes of ore at a head grade of 0.92 g/t and a gold recovery rate of 77.1%.

The all-in sustaining cost (AISC) - the total cost to produce an ounce of gold inclusive of sustaining capital - was US$2,067 per ounce in Q1 2026, up from US$1,584 per ounce in Q4 2025. The company attributed the increase to lower production levels as the mine moves towards end of life.

Revised FY2026 Runruno Production Guidance and Operational Challenges

Metals Exploration revised its full-year 2026 production guidance for Runruno to between 40,000 and 48,000 ounces, with the full-year AISC forecast at US$1,700 to US$2,000 per ounce. The revision reflects three distinct factors that emerged as open pit mining progressed into Stages 5 and 6.

The first was a disruption to the BIOX circuit, the biological oxidation process that uses bacteria to break down sulphide minerals and release gold that would not otherwise be recoverable through conventional processing. Ore from the new stages contained cyanide contamination, most likely originating from historical illegal underground mining in the same area, which temporarily inhibited the bacteria and reduced gold recovery. The company responded with a structured remediation programme covering pre-processing ore testing, controlled blending of clean and affected material, and laboratory trials conducted with global processing specialist Metso Corporation. 

CEO Darren Bowden confirmed: 

"I am pleased to report the BIOX circuit is now operating normally which will assist recoveries."

The second factor was a geological model downgrade. Detailed grade-control drilling in Stages 5 and 6 revealed that the flat-lying Balcony lodes are structurally more complex than the 2021 reserve model anticipated, with previously undetected faulting reducing both ore tonnage and gold grade. The third factor was the impact of historical illegal small-scale mining, which had targeted the highest-grade sections of the ore zone. While the volumetric ore loss attributable to illegal mining typically represents between 1% and 5% of total ore, the company noted that the ounce loss is disproportionately higher given that tunnelling was concentrated in the highest-grade zones. The company continues to incorporate void data into its short-term mine plans as tunnels are exposed during open pit operations.

La India Nicaragua Development Progress and Exploration Results

Construction at La India reached 40% completion during the quarter, ahead of the planned 35% at mid-March 2026. The total project budget was revised upward by 4% to US$171 million due to higher power infrastructure costs. As part of managing these costs, the company agreed a collaborative arrangement with ENATREL, Nicaragua's national electricity transmission company, to construct the required 138 kV substation for US$6.2 million, compared to ENATREL's original turnkey proposal of US$12.4 million, representing a saving of US$6.2 million. The project is funded through Runruno cash flow, supported by an undrawn US$30 million gold pre-pay facility, and first gold production remains on track for December 2026.

Key construction milestones during the quarter included the award of the structural, mechanical, piping, and electrical installation contract to local contractor Duroblock S.A., the commencement of the tailings storage facility build, the near-completion of key concrete footing pours across the site, and the stockpiling of approximately 100,000 tonnes of commissioning ore, on track towards a target of 500,000 tonnes by the commissioning date. The company also received a 25-year renewal of the main La India mining concession in March 2026, effective from January 2027. Over 1.2 million work hours were completed during the quarter with no lost time injuries.

On the exploration front, drilling at La India South Underground returned the programme's strongest result, with drillhole LIGT612 intersecting 31.18 metres at 4.37 g/t gold from 181.6 metres, including high-grade intervals of 0.48 metres at 138.4 g/t gold and 1.93 metres at 21.3 g/t gold. Step-out drilling at the North Open Pit extended the known mineralised zone by at least 30 metres on strike, while exploration drilling at the Cacao target defined a high-grade ore shoot, with drillhole CCRD043 returning 12.7 metres at 3.52 g/t gold from 270.8 metres, including 2.0 metres at 19.7 g/t gold. Post-quarter, four new exploration concessions covering 64,400 hectares adjacent to La India were granted for 25-year terms, with four high-priority targets already identified within the new ground. 

CEO Darren Bowden noted: 

"The identification of a high-grade ore shoot at Cacao, alongside continued step-out success at the North Open Pit, confirms our view that this district remains significantly underexplored."

Outlook

With Runruno's BIOX circuit restored to normal operation and an updated mine plan in place, the company's near-term focus is on meeting its revised FY2026 production guidance and continuing to fund La India construction through Runruno cash flow. Upcoming milestones include advancing the process plant towards mechanical completion, completing the tailings storage facility, and building the commissioning ore stockpile to its 500,000-tonne target ahead of the December 2026 first gold date. The company has stated that FY2027 production guidance for La India will be provided in due course. Exploration drilling across Nicaragua is ongoing, with Cacao and the La India North extension identified as priority targets in the current programme.

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