Lundin Mining TSE: LUN reported second-quarter 2026 revenue of more than $1.2 billion, adjusted EBITDA of $658 million and free cash flow from operations of $360 million, supported by higher realized copper and gold prices and consistent production across its three operating mines.
President and Chief Executive Officer Jack Lundin said the company produced approximately 76,900 tonnes of copper during the quarter at a consolidated cash cost of $2.11 per pound. First-half copper production totaled about 157,000 tonnes, while gold output reached approximately 65,000 ounces through June.
The company reaffirmed its full-year consolidated production guidance of 310,000 to 335,000 tonnes of copper and 134,000 to 149,000 ounces of gold. However, severe winter weather after the end of the quarter disrupted operations at the Caserones mine in Chile, leading management to expect Caserones production in the lower half of its 130,000-to-140,000-tonne annual guidance range.
Higher Metal Prices Lift Financial Results
Chief Financial Officer Teitur Poulsen said second-quarter revenue was near a record, with copper accounting for about 88% of the total. Caserones generated approximately $518 million in revenue, followed by Candelaria at roughly $476 million and Chapada at $219 million.
The company sold approximately 74,000 tonnes of copper during the quarter, below recent sales-volume levels, but this was offset by a record realized copper price of $6.51 per pound, compared with $4.40 per pound in the prior-year quarter. Gold was sold at a realized price of $4,385 per ounce.
At quarter-end, Lundin Mining had approximately 47,600 tonnes of copper subject to provisional pricing at $6.07 per pound, with most of those volumes expected to receive final pricing during the third quarter.
Adjusted operating cash flow was $495 million during the quarter, while adjusted earnings attributable to Lundin Mining shareholders were $257 million, or $0.30 per share. Poulsen said the company generated $265 million of free cash flow after working capital movements and capital investments.
Higher diesel prices added approximately $15 million in costs compared with the first quarter, equivalent to roughly $0.08 to $0.10 per pound of copper on a consolidated basis. Although quarterly cash costs of $2.11 per pound were slightly above the company’s full-year guidance range of $1.90 to $2.10 per pound, year-to-date cash costs stood at $1.88 per pound. Management maintained its full-year cost outlook.
Storm Disrupts Caserones Operations
Following the quarter, severe winter storms in Chile’s Atacama region brought more than 35 millimeters of rain to Candelaria and 3.4 meters of snow at Caserones. The storm damaged power infrastructure at Caserones, where ice buildup affected two power-line towers and power was unavailable for 12 days.
Chief Operating Officer Juan Andrés Morel said Caserones relied on backup generators to support critical activities during the disruption. Power has since been restored, with initial concentrate production expected by the end of the week and full capacity anticipated early the following week.
Before the storm, Caserones had produced 73,000 tonnes of copper in the first half and was tracking toward the upper end of its annual guidance. Management said it adjusted the mine plan to retain higher-grade material in the 2026 schedule and postponed a planned mill shutdown until early January.
Candelaria’s mining operations were briefly affected by rainfall, though the mill continued operating on stockpiled ore. Mining has since returned to full capacity. Morel said Chilean mining regulator SERNAGEOMIN inspected Candelaria’s facilities and found operations and water management were being handled as expected.
For the quarter, Caserones produced approximately 34,000 tonnes of copper, Candelaria produced about 31,000 tonnes and Chapada produced roughly 12,000 tonnes. Chapada also produced 16,000 ounces of gold, while Candelaria produced approximately 18,000 ounces.
Portfolio Investments and Vicuña Progress
During the quarter, Lundin Mining completed the acquisition of an additional 5% interest in Caserones from JX Advanced Metals, increasing its ownership to 75%. The company also acquired a 31% interest in the Los Salados copper-gold project, located about 17 kilometers south of Caserones. The transactions represented total consideration of $215 million, according to Lundin.
The company also approved construction of an additional ball mill at Chapada to improve recoveries in advance of the Saúva growth project. Construction is expected to begin before year-end, with commissioning targeted for late 2027. The ball mill is expected to cost approximately $65 million, including about $35 million of spending in 2026.
Lundin Mining spent $111 million on sustaining capital in the second quarter and $83 million on expansionary capital, including $74 million at the Vicuña project. The company maintained full-year sustaining capital guidance of $550 million and said it expects spending to increase during the second half.
At Vicuña, Lundin said Argentina approved the inclusion of the Josemaría and Filo del Sol deposits in the country’s RIGI PEELP program. The company also announced a long-term agreement with San Juan Province that consolidates existing provincial royalty and infrastructure obligations into a 3% mining royalty and a 1.5% gross-revenue infrastructure trust for the life of the mine.
The agreement includes a $250 million upfront infrastructure trust contribution, or $125 million net to Lundin Mining, subject to provincial approval and expected to close in the fourth quarter. The project would receive a five-year infrastructure trust payment holiday beginning with first production.
Management said its near-term Vicuña priorities include completing a bottom-up Stage 1 cost estimate, refining the execution plan and securing remaining sectoral permits. Lundin said it continues to target a potential Stage 1 sanctioning decision before the end of 2026.
The company ended the quarter with a net cash position of $79 million and $2.5 billion of liquidity available through its corporate revolving credit facility. Lundin Mining repurchased approximately 2.2 million shares during the quarter and said it has returned more than $1.8 billion to shareholders through dividends and buybacks since 2017.
About Lundin Mining (TSE:LUN)
Lundin Mining Corp is a diversified Canadian base metals mining company with operations in Brazil Chile Portugal Sweden and the United States of America producing copper zinc gold and nickel. Its material mineral properties include Candelaria Chapada Eagle and Neves-Corvo.
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