TSX, NASDAQ STOCKHOLM:
LUG
OTCQX:
LUGDF
2025
ANNUAL
REPORT
CORPORATE INFORMATION
BOARD OF DIRECTORS
Jack Lundin, Chairman
Vancouver, Canada
Carmel Daniele
London, United Kingdom
Gillian Davidson
Edinburgh, United Kingdom
Ian Gibbs
Vancouver, Canada
Melissa Harmon
Denver, USA
Ashley Heppenstall
London, United Kingdom
Jamie Beck
Vancouver, Canada
Scott Langley
Toronto, Canada
Angelina Mehta
Montreal, Canada
OFFICERS
Jamie Beck
President & Chief Executive Officer
Chester See
Chief Financial Officer
Terry Smith
Chief Operating Officer
Sheila Colman
Vice President, Legal and Sustainability
Andre Oliveira
Vice President, Exploration
Brendan Creaney
Vice President, Corporate Development and Investor
Relations
OFFICES
CORPORATE HEAD OFFICE
Lundin Gold Inc.
Four Bentall Centre
1055 Dunsmuir Street, Suite 2800
Vancouver, BC V7X 1L2
Telephone: 604-689-7842
Toll Free: 1-888-689-7842
Facsimile: 604-689-4250
REGIONAL HEAD OFFICE
Aurelian Ecuador S.A., a subsidiary of Lundin Gold Inc.
Av. Amazonas N37-29 y UNP Edificio Eurocenter, Piso 5
Quito, Pichincha Ecuador
Telephone: 593-2-299-6400
COMMUNITY OFFICE
Calle 1ro de Mayo y 12 de Febrero, esquina
Los Encuentros, Zamora-Chinchipe, Ecuador
STOCK EXCHANGE LISTINGS
The Toronto Stock Exchange Trading Symbol: LUG
Nasdaq Stockholm Trading Symbol: LUG
SHARE REGISTRAR AND TRANSFER AGENT
Computershare Investor Services Inc. 510 Burrard Street,
3rd Floor Vancouver, BC V6C 3B9
Telephone: 1-800-564-6253
AUDITOR
PricewaterhouseCoopers LLP 250 Howe St, Suite 700
Vancouver, BC V6C 3S7
Telephone: 604-806-7000
ADDITIONAL INFORMATION
Further information about Lundin Gold is available by
contacting:
Brendan Creaney, Vice President, Corporate Development
and Investor Relations
Telephone: 604-806-3089
Toll Free: 1-888-689-7842
Lundin Gold Ecuador
Four Bentall Centre
1055 Dunsmuir Street, Suite 2800
Vancouver, BC V7X 1L2
Canada
Av. Amazonas N37-29 y UNP Edificio Eurocenter,
Piso 5
Quito, Pichincha, Ecuador
Telephone: 604-689-7842
Toll Free: 1-888-689-7842
Telephone: 593-2-299-6400
www.lundingold.com
@LundinGold
@LundinGoldEC
@LundinGold
Lundin Gold Ecuador
@lundingoldec
Lundin Gold
2025 Annual Report
4
TABLE OF CONTENTS
5
CEO Letter
1
7
Management’s Discussion and Analysis
2
35
Sustainability Statement
3
121
PwC Limited Assurance Sustainability Statement
4
124
Financial Statements
5
149
PwC Financial Statements Audit Report
6
2025 Annual Report
5
CEO LETTER
Dear Fellow Shareholders,
2025 was a year of exceptional performance for Lundin Gold, driven by strong operational execution, record financial results, an
outstanding safety record, and continued success across our exploration programs. As I step into the role of President and Chief
Executive Officer, I am pleased to build on the strong foundation established by Ron Hochstein and the entire Lundin Gold team,
and to lead the Company forward with a continued focus on disciplined operations, environmental and social responsibility, and
longterm value creation.
At our Fruta del Norte (“FDN”) mine, disciplined execution and continuous improvement once again delivered results that
reinforce the Tier 1 quality of this worldclass asset. Following the successful completion of the process plant expansion early in
the year, average throughput reached 5,009 tonnes per day, supporting annual gold production of 498,315 ounces in line with
our elevated guidance range.
Strong operating performance, combined with a historically high gold price environment, delivered record financial results
across all key metrics. During the year, we sold 503,330 ounces of gold at an average realized gold price¹ of $3,594 per ounce,
generating record revenues of $1.78 billion. Despite higher royalties and statutory employee profitsharing associated with
stronger gold prices, disciplined cost control resulted in Cash Operating Costs¹ of $838 per ounce sold and All-In Sustaining Cost¹
(“AISC”) of $1,015 per ounce sold, maintaining FDN’s position as a low cost, high margin operation.
These results translated into record Free Cash Flow¹ of $926 million in 2025, demonstrating the exceptional cash-generating
capability of our business. Over the course of the year, our strong balance sheet and financial flexibility enabled us to return
$664 million to shareholders through an enhanced dividend framework, including the introduction of a variable dividend linked
to normalized free cash flow that supplements our fixed dividend, reinforcing our commitment to meaningful capital returns.
Exploration remains central to Lundin Gold’s long-term strategy. In 2025, we executed our largest exploration program to
date, completing 121,519 metres of drilling across resource conversion and near mine targets. A central focus was FDN South
(“FDNS”), where continued drilling success supported the declaration of an initial Mineral Reserve. Based on the strength of
these results, we made the development decision for FDNS in early 2026, advancing it as a key component of Fruta del Norte’s
long-term mine plan.
Our Mineral Reserve and Mineral Resource update also included an initial Inferred Mineral Resource at FDN East, further
highlighting the prospectivity of the immediate mine area. In addition, early 2025 marked an important milestone with the
discovery of multiple coppergold porphyry systems near FDN. Earlystage drilling, surface mapping, and geophysical work at
targets including Sandia, Trancaloma, and Castillo confirmed the presence of large, mineralized porphyry systems consistent
with longlife, bulktonnage deposits.
While these systems remain at an early stage of evaluation, their discovery underscores the exceptional geological endowment
of the district and materially expands the long-term development optionality of our land package. Together with our highgrade
epithermal systems, these discoveries provide the foundation for Lundin Gold to build a broader district scale organic growth
platform.
Building on this strong operational and exploration foundation, we enter 2026 with a clear path for further improvement.
With the process plant expansion complete, we expect to deliver average throughput of 5,500 tonnes per day while targeting
improved recoveries, supporting our 2026 production guidance of 475,000 to 525,000 ounces of gold. In parallel, we have
initiated a minetomill expansion study to evaluate opportunities to increase throughput beyond 5,500 tonnes per day over the
longer term, focused on maximizing the value of existing infrastructure and future resource growth.
For the first time, Lundin Gold’s annual report includes our sustainability statement prepared in accordance with European
Sustainability Reporting Standards (ESRS) introduced under the EU Corporate Sustainability Reporting Directive. Our
sustainability statement presents our material sustainability-related impacts, risks, and opportunities (IROs), the processes we
use to identify and manage them, our alignment with the EU Taxonomy, and our performance across all material topics. The
rigour of the ESRS framework — and in particular its double materiality lens, which requires us to assess both how sustainability
matters affect our business and how our business affects the world around us — has deepened our understanding of those
relationships, informed our strategy, and reflects the maturity of our approach to responsible mining.
Sustainability is embedded in our operations and is key to our success. We continue to build on our strong record of responsible
mining in Ecuador, with a focus on safety, environmental stewardship, and constructive engagement with our host communities.
Last year marked the successful completion of our 2021–2025 Sustainability Strategy — a five-year commitment that set
1
Please refer to pages 18 to 21 in the Company's MD&A for the year ended December 31, 2025 for an explanation of non-IFRS measures used.
2025 Annual Report
6
ambitious targets across safety, environment, and social performance. I am proud to report that we closed that chapter with
results that met or exceeded what we set out to achieve.
Our safety performance reached a new milestone, with zero fatalities and a TRIR of 0.22 — a more than 65% improvement
year-over-year — reflecting the deep culture of care that our people at Fruta del Norte have built. On climate, we maintained
a Scope 1 and 2 GHG emissions intensity of 0.10 tCO₂e per ounce of gold produced, stable despite higher throughput, and
implemented an ISO 50001 Energy Management System at FDN reflecting our commitment to efficiency improvements in the
years ahead. By year end, we had 17.9 hectares of land in active restoration over the strategy period, exceeding our original
restoration target one year early. We delivered $36 million in local procurement in 2025 alone, while maintaining a workforce
that is 93% Ecuadorian, with 53% of employees hired from local and regional communities.
These results give us a strong foundation from which to launch our 2026–2030 Sustainability Strategy, which builds on this
record while reflecting the deeper understanding of our impacts, risks, and opportunities that the ESRS framework has brought.
Finally, I would like to recognize our former CEO Ron Hochstein for his decade of transformational leadership. Ron’s vision,
discipline, and commitment to responsible mining were instrumental in building Lundin Gold into the company it is today. I
am grateful for the strong platform he leaves behind and for the dedication of the Lundin Gold workforce, whose performance
remains the foundation of our success.
Looking ahead, my priorities are clear: safe and reliable operations, disciplined capital allocation, continued exploration success,
and consistent returns to shareholders. With a Tier 1 asset, a strong balance sheet, and a highly capable team, Lundin Gold is
exceptionally well positioned to deliver enduring value in the years ahead.
Thank you for your continued trust and support.
Yours truly,
Jamie Beck
President and Chief Executive Officer April 23, 2026
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
7
MANAGEMENT’S DISCUSSION AND ANALYSIS
INTRODUCTION
This Management’s Discussion and Analysis (“MD&A”) of Lundin Gold Inc. and its subsidiary companies (collectively, “Lundin Gold”
or the “Company”) provides a detailed analysis of the Company’s business and compares its financial results for the three months
and year ended December 31, 2025 with those of the same period from the previous year.
This MD&A is dated as of February 19, 2026 and should be read in conjunction with the Company’s audited consolidated financial
statements and related notes thereto for the fiscal years ended December 31, 2025 and 2024. The audited consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board (“IFRS Accounting Standards” or “IFRS”). References to the “2025 Year” and “2024 Year” relate to the
years ended December 31, 2025 and December 31, 2024, respectively.
Other continuous disclosure documents, including the Company’s news releases, quarterly and annual reports and
annual information form, are available through its filings with the securities regulatory authorities in Canada at
www.sedarplus.ca
.
Lundin Gold, headquartered in Vancouver, Canada, is committed to positive and long-lasting impact on our host communities, while
delivering significant value to stakeholders through operational excellence, cash flow generation, focused growth and returning
capital to shareholders. Lundin Gold currently operates its 100% owned Fruta del Norte (“Fruta del Norte” or “FDN”) gold mine
in southeast Ecuador, which is one of the highest-grade gold mines in production in the world today. The Company also owns a
portfolio of highly prospective exploration properties close to FDN.
HIGHLIGHTS
Record operating and financial performance underpin another outstanding year for Lundin Gold. Plant throughput averaged
5,009 tonnes per day (“tpd”) with the completion of the process plant expansion project in early 2025, and mine throughput
reached 5,021 tpd through continuous operational improvement. As a result, Lundin Gold achieved its 2025 upwardly revised
production guidance with annual gold production of 498,315 ounces (“oz”). With annual sales of 503,330 oz at an average
realized gold price of $3,594 per oz sold, the Company generated record free cash flow
1
of $926 million supported by low cash
operating costs1 and all-in sustaining costs (“AISC”)1 of $838 and $1,015 per oz sold, respectively.
While record-high gold prices have significantly strengthened the Company’s financial performance, they have also resulted
in higher royalties and statutory profit sharing payable to employees, which in turn impact both cash operating costs1 and
AISC1. For every $100 per oz increase in gold price, these metrics are estimated to increase by approximately $10 per oz. The
Company’s guidance was based on a gold price assumption of $2,500 per oz while average realized gold price1 during the 2025
Year was $3,594 per oz – an increase of $1,094 per oz. Notwithstanding the approximate $110 per oz impact on unit costs, the
Company sustained strong margins and operating performance, reflecting both the quality of FDN and the team’s continued
focus on efficiency and cost discipline.
On the Company’s exploration programs, results continue to demonstrate significant potential at the Company’s highly
prospective land package. A record 121,519 metres were drilled across the conversion and near-mine programs, marking the
district’s largest annual drill program since FDN’s discovery. The conversion program at FDN South (FDNS) identified high grade
zones within the vein system with additional mineralized zones intercepted outside the existing geological model. The Resources
and Reserves estimate for FDN and FDNS was released on February 17, 2026. The near mine program’s underground drilling
focused on expanding FDNS and FDN East deposits, while surface drilling targeted the recently discovered copper-gold porphyry
corridor which hosts Trancaloma and Sandia.
Pursuant to the Company’s dividend policy, Lundin Gold has declared cash dividends totaling $1.15 per share, comprised of the
fixed quarterly dividend of $0.30 per share and the variable quarterly dividend of $0.85 per share, to be paid at the end of the
first quarter of 2026, representing 100% of normalized free cash flow.
¹
Refer to “Non-IFRS Measures” section.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
8
The following two tables provide an overview of key operating and financial results achieved during 2025 compared to the same
periods in 2024.
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Tonnes ore mined
501,301
405,529
1,832,695
1,671,849
Tonnes ore milled
484,950
427,030
1,828,225
1,690,865
Average mill throughput (tpd)
5,271
4,642
5,009
4,620
Average mill head grade (g/t)
8.7
11.3
9.5
10.5
Average recovery
88.3%
87.1%
89.0%
87.8%
Gold ounces produced
119,483
135,241
498,315
502,029
Gold ounces sold
124,041
131,175
503,330
495,374
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Revenues ($’000)
526,596
341,791
1,782,940
1,193,050
Income from mining operations ($’000)
373,402
215,208
1,226,337
703,386
Earnings before interest, taxes, depreciation, and
amortization ($’000)1
363,788
232,223
1,235,810
1,021,373
Adjusted earnings before interest, taxes, depreciation, and
amortization ($’000)1
363,788
232,223
1,235,810
779,549
Net income ($’000)
234,205
129,147
792,151
426,050
Basic income per share ($)
0.97
0.54
3.29
1.78
Cash provided by operating activities ($’000)
358,405
192,021
1,023,029
662,390
Free cash flow ($’000)1
328,197
163,767
925,799
304,208
Free cash flow per share ($)1
1.36
0.68
3.84
1.27
Average realized gold price ($/oz sold)1
4,299
2,664
3,594
2,462
Cash operating cost ($/oz sold)1
947
709
838
712
All-in sustaining costs ($/oz sold)1
1,193
879
1,015
875
Adjusted earnings ($‘000)1
234,205
129,147
792,151
421,596
Adjusted earnings per share ($)1
0.97
0.54
3.29
1.76
Dividends paid per share ($)
0.80
0.20
2.75
0.60
Following the buy out of the stream loan credit facility (the “Stream Facility”) and offtake agreement (the “Offtake”) from
Newmont Corporation at the end of the second quarter of 2024, there were no adjustments between net income and adjusted
earnings1 as well as earnings before interest, taxes, depreciation, and amortization (“EBITDA”)1 and adjusted EBITDA1 during
2025.
Operating and Financial Results During the Year ended December 31, 2025
•
FDN achieved annual gold production of 498,315 oz, comprised of 324,485 oz in concentrate and 173,830 oz as doré, which
meets the Company’s 2025 elevated guidance.
•
A total of 1,832,695 and 1,828,225 tonnes of ore was mined and processed, respectively. 2025 average mill throughput
exceeded 5,000 tpd, demonstrating the benefits of the process plant expansion project completed in Q1 2025. The mine
also ramped up progressively throughout the year keeping pace with the mill.
•
The average grade of ore milled was 9.5 grams per tonne (“g/t”) with improved average recoveries of 89.0% when compared
to the 2024 Period.
•
The Company sold a total of 503,330 oz of gold, consisting of 331,305 oz in concentrate and 172,025 oz as doré at an
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
9
average realized gold price2 of $3,594 per oz sold for total revenues from gold sales of $1.81 billion. Net of treatment and
refining charges, revenues for 2025 were $1.78 billion.
•
Average realized gold price1 was positively impacted by rising gold prices on provisionally priced gold sales, which include
$3,426 per oz of gross price received and a favourable impact of $168 per ounce from adjustments to provisionally priced
sales.
•
Cash operating costs and AISC for 2025 were $838 and $1,015 per oz of gold sold, respectively. These figures reflect the
impact of higher accrued royalties and statutory profit sharing payable to employees which were driven by record-high
average realized gold prices1. AISC1 also includes sustaining capital costs related to the expansion of the tailings storage
facility.
•
The Company generated record cash from operating activities of $1.02 billion and free cash flow1 of $926 million or $3.84
per share. The strong free cash flow enabled the Company to return $664 million to shareholders through dividends and
resulted in a cash balance of $630 million at December 31, 2025.
•
Earnings before interest, taxes, depreciation, and amortization1 (“EBITDA”) were $
1.24 billion while income from mining
operations was $1.23 billion which, after deducting corporate, exploration, and taxes, resulted in net income of $792
million for the quarter or $3.29 per share.
Operating and Financial Results During the Fourth Quarter of 2025
•
Focus on Operational Excellence programs led to the highest quarterly mine production since the beginning of operations
with 501,301 tonnes of ore mined.
•
The mill processed 484,950 tonnes of ore at an average throughput of 5,271 tpd despite lower mill operating hours due
to unplanned maintenance activities at the mill. This was also a quarterly record since the beginning of operations. The
average grade of ore milled was 8.7 g/t with average recoveries of 88.3%.
•
Gold production was 119,483 oz which was comprised of 78,577 oz in concentrate and 40,906 oz as doré.
•
Gold sales totaled 124,041 oz, consisting of 81,348 oz in concentrate and 42,693 oz as doré, resulting in gross revenues
of $533 million at an average realized gold price of $4,299 per oz. Net of treatment and refining charges, revenues for the
quarter were $527 million.
•
Average realized gold price1 includes $4,
133 per oz of gross price received and a favourable impact of $166 per ounce from
adjustments to provisionally priced sales.
•
Cash operating costs and AISC were $947 and $1,193 per oz of gold sold, respectively. The increase in both metrics
compared to previous quarters is due to the impact of higher accrued royalties and statutory profit sharing payable to
employees which were driven by record-high average realized gold prices1. Furthermore, AISC1 was impacted by the timing
of sustaining capital expenditures incurred.
•
The Company generated cash from operating activities of $358 million and free cash flow1 of $328 million, or $
1.36 per share.
•
EBITDA1 was $364 million while income from mining operations was $373 million which, after deducting corporate,
exploration, and taxes, resulted in net income of $234 million for the quarter or $0.97 per share.
Capital Expenditures
Sustaining capital expenditures1
•
Total sustaining capital spent during the year was $60.3 million, of which $23.1 was spent during the fourth quarter.
•
Construction of the fifth tailings dam raise reached 85% completion and is on track for completion during the first quarter
of 2026.
•
Key sustaining capital projects completed or advanced substantially during 2025 include enhancements to camp facilities,
construction of an administration building, commissioning of four additional diesel generators, mobile equipment rebuilds
or replacement, as well as other operational infrastructure improvements.
Non-sustaining capital expenditures1
•
Non-sustaining capital expenditures1 of $20.9 million were incurred during the 2025 Year, of which $4.3 million was incurred
during the fourth quarter, for growth-oriented investments such as the process plant expansion, conversion drilling, and
associated permitting and study expenditures not related to current operations.
1
Refer to “Non-IFRS Measures” section.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
10
•
The 2025 conversion drilling program was focused on FDNS, located in the southern portion of the FDN deposit. During the
year, the conversion drilling program completed approximately 25,634 metres across 187 holes, of which approximately
6,811 metres across 56 holes were drilled in the fourth quarter. As at the date of this MD&A, two underground rigs are
active in the conversion drilling program.
•
The completed holes confirmed the mineralization continuity and indicated higher grade zones within the vein system.
Some conversion drill holes also intercepted mineralized zones outside of the existing geological model.
•
Drilling results up to November 1, 2025 were incorporated in the geological and the mineral resource model, and the
maiden Mineral Resources and Reserves estimate for the FDNS deposit was announced on February 17, 2026.
•
A complete table of results received to date can be found in Lundin Gold’s press releases dated May 4, September 2,
November 1, 2025 and February 17, 2026.
Health, Safety and Community
Health and Safety
•
During the fourth quarter there were no Lost Time Incidents (“LTIs”) and three Medical Aid Incidents (“MAIs”) and for the
2025 Year, the Company recorded no LTIs and nine MAIs.
•
The Total Recordable Incident Rate (“TRIR”) across exploration and operations was 0.22 per 200,000 hours worked during
2025, representing the lowest annual TRIR ever achieved by Lundin Gold.
Community
Lundin Gold’s community investment initiatives continued to advance throughout Q4 2025. The Company’s flagship well-being
program, delivered through Educación para Compartir, continued to demonstrate strong community participation across its mental
health counselling, youth sports academy, and English education streams. In addition, the 2025 university preparation program
concluded successfully with placements of local students in public institutions across Ecuador. During the quarter, the Company
launched a school meals initiative serving over 1,200 students in Los Encuentros in partnership with the Lundin Foundation,
integrating local agricultural suppliers into the program’s delivery model.
Local government partnerships with Yantzaza and Los Encuentros advanced through support agreements targeting rural
infrastructure, basic service infrastructure, community well-being, and livestock and local farmers initiatives. Key commitments
during the quarter included waste management system improvements, livestock trade infrastructure, street lighting and
electrical infrastructure, and community childcare facility enhancements.
The community dialogue roundtable process remained active, facilitating engagement among local stakeholders, government
representatives, and Company personnel. The Lundin Foundation’s supplier development program continued strengthening
local business capacity while supporting procurement objectives.
The partnership with Shuar Indigenous Peoples advanced through the Lundin Foundation, including the implementation of a
Shuar-owned tire distribution enterprise to supply FDN and ongoing support for cocoa and sugar cane production projects with
Shuar communities.
Exploration
Near-Mine Program
During the year, the Company completed a total of 95,885 metres across 196 holes from surface and underground, of which
approximately 27,019 metres across 60 holes were drilled in the fourth quarter.
The underground near mine drilling program focused on the FDNS deposit, which remains open for expansion in the main
extensions and where one underground rig is currently turning. At FDN, one rig is currently exploring the mineralization
continuity at depth. The underground drilling program also continues to advance at FDN East where one rig is currently exploring
the central portion of the target and another rig is testing the east extension of this vein system. As at the date of this MD&A,
four underground rigs are active in the near mine drilling program.
The surface near mine drilling program advanced the recently discovered copper-gold mineralization at both the Trancaloma
and Sandia targets. Furthermore, surface drilling continues to explore the Castillo target, in distinct sectors along the south
extension of the Suarez Basin, and the recently discovered Chontas target. As at the date of this MD&A, 11 surface rigs are
drilling with four at Sandia, one at Trancaloma, one at Castillo, one at Chontas and four targeting new discoveries.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
11
•
At Sandia, located two kilometres from FDN, drilling results confirmed and expanded the recently discovered copper-gold
mineralization. The completed drill holes helped define the western limit of the deposit and extended a wide zone of
copper-gold porphyry mineralization along the northwestern direction both near surface and at depth.
•
At Trancaloma, located four kilometres from FDN, results of the drilling program confirmed the lateral and vertical continuity
of the copper-gold porphyry mineralization. In the southeastern portion of the target, drilling confirmed the extension of
the mineralization and indicated areas for further expansion along this direction.
•
At Castillo, drilling confirmed the continuity of the high-grade copper-gold mineralization along the southwestern direction
and identified potential new areas for further drilling under the Suarez Basin cover.
•
At Chontas, located approximately ten kilometres south of FDN, the drilling program identified another occurrence of wide,
shallow, copper-gold porphyry mineralization, and indicated areas for further expansion in this new sector.
•
An exploratory drilling program is underway to define additional exploration targets underneath the Suarez Basin cover.
The program is systematically testing the presence of hydrothermal alteration horizons and epithermal deposits pathfinder
elements hosted in the Suarez Basin sediments, which could potentially indicate gold epithermal systems at depth.
•
The near-mine exploration program continues to advance in unexplored areas close to FDN. A systematic exploration
program employing geochemical and geophysical surveys and geological mapping continues to cover unexplored sectors
in the near mine area.
A table of fourth quarter 2025 near mine results received to date can be found in Lundin Gold’s press release dated February
18, 2026.
Regional Program
The Company advanced its multi-year regional exploration program during 2025. The program is expected to cover approximately
54,000 hectares on 23 of the Company’s concessions along the Zamora Copper Gold Belt, a high potential geological setting
which hosts the Fruta del Norte mine and several large copper-gold projects. 2026 is the first year of drill testing targets with
8,000 metres planned. The exploration program continues to advance in the Gamora district, located 65 kilometres north of
FDN and approximately 4 kilometres north of the Mirador copper-gold mine. Furthermore, exploration activities started at the
Guacamayo District, located 17 kilometres south of FDN.
The Gamora district comprises multiple exploration sectors that exhibit geological features similar to those found in copper-gold
porphyry systems. Additional geochemical sampling program results were received from distinct parts of the district during the
fourth quarter and supported the identification of additional potential targets for further evaluation. At the Guacamayo district,
geological mapping followed by soil and rock sampling was completed in the central portion of the concession. Furthermore,
the recently acquired airborne geophysics data (Radiometric and Magnetic), which covered most of the regional concessions,
were processed and supported the selection of additional potential exploration targets.
Corporate
•
Effective November 7, 2025, Mr. Ron Hochstein stepped down as President, CEO, and Director of the Company, and was
succeeded by Mr. Jamie Beck.
•
Lundin Gold completed its new five-year sustainability strategy (2026-2030) to coincide with the expiry of its prior five-year
strategy. Anchored by the vision of “Transforming lives through responsible mining”, the strategy is built on five strategic
pillars: Shared Prosperity, Stakeholder Trust, Responsible Governance, Environmental Stewardship and Valued Workforce.
With ambitious targets for 2030 and beyond, this strategy will guide Lundin Gold’s legacy as a leading gold company, a
trusted community partner, and a driver of long-term local prosperity.
•
The Company amended its dividend policy by increasing the existing quarterly fixed dividend from $0.20 to $0.30 per share
and introducing a new variable quarterly dividend based on at least 50% of the Company’s normalized free cash flow during
the preceding quarter less the Fixed Dividend paid during such period. During 2025, the Company paid out a total of $664
million in dividends as follows:
•
Special dividend on June 9, 2025 for a total of $100 million;
•
Quarterly fixed dividends for a total of $289 million; and
•
Quarterly variable dividends for a total of $275 million.
•
With the release of its 2025 year end results, the Company has declared quarterly dividends totaling $1.15 per share,
comprised of the fixed dividend of $0.30 per share and variable dividend of $0.85 per share, payable on March 26, 2026
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
12
(March 31, 2026 for shares trading on Nasdaq Stockholm) to shareholders of record at the close of business on March 11,
2026. Pursuant to the Company’s dividend policy, the variable dividend was calculated based on 100% of the Company’s
normalized free cash flow during the fourth quarter of 2025, after deducting the fixed dividend paid, which exceeds the
policy’s minimum threshold of 50%.
SUMMARY OF ANNUAL FINANCIAL RESULTS
(Expressed in thousands of U.S. dollars,
except share and per share amounts)
2025
2024
2023
Revenues
$
1,782,940
$
1,193,050
$
902,518
Income from mining operations
1,226,337
703,386
435,180
Derivative gain (loss) for the year
-
243,737
(32,069)
Net income for the year
792,151
426,050
179,457
Basic income per share
$
3.29
$
1.78
$
0.76
Diluted income per share
3.27
1.76
0.75
Weighted-average number of common shares outstanding
Basic
241,033,793
239,312,029
237,026,367
Diluted
242,510,385
241,426,325
239,151,461
Additions to property, plant and equipment
$
81,157
$
90,231
$
49,164
Total assets
1,787,158
1,527,481
1,468,209
Long-term debt (current and long-term)
-
-
305,647
Working capital
594,654
458,944
346,859
Year ended December 31, 2025 compared to the year ended December 31, 2024
During 2025, net income of $792 million was generated compared to net income of $426 million during 2024. The increase in
net income is principally attributable to higher revenue generated from an increase in oz. sold and higher average realized gold
price1.
Income from mining operations
Income from mining operations increased to $1.23 billion during 2025 compared to $703 million in 2024. This increase is
primarily attributable to an increase in average realized gold price1 from $2,462 to $3,594 per oz sold which increased revenues
from $1.19 billion to $1.78 billion, partially offset by a resulting increase in royalties.
Exploration
Exploration costs were $59.5 million during 2025 compared to $41.2 million during 2024 with the increase being driven
by the expansion of the near-mine exploration program following positive results to date. In addition, the Government of
Ecuador introduced a new mining supervision and control fee which is intended to fund oversight activities carried out by
the Mining Regulation and Control Agency. This became effective June 2025 and resulted in additional $3.2 million of costs.
Corporate administration
Corporate administration costs of $64.4 million were incurred during 2025 compared to $34.5 million during 2024. This change
is mainly due to significant increase in the fair value of share units expected to settle in cash in future periods, subject to the
continued discretion of the Company’s board of directors. During 2024, a one-time special levy was charged by the Government
of Ecuador of $1.9 million to strengthen security amid rising violence in the country.
Finance expense
No finance expense was incurred during the 2025 Year following the buy out of the Stream Facility and Offtake at the end of
the second quarter of 2024. Finance expense of $267 million incurred during 2024 was mainly due to the buy out of the Stream
Facility and Offtake which resulted in a one-time finance expense of $236 million.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
13
Derivative gains or losses
With the Company in a debt free position, no derivative gains or losses are recognized. During the 2024 Period, a derivative
gain of $244 million was recorded on the statement of operations which was mainly due to the buy out of the Stream Facility
and Offtake.
Income taxes
Income tax expense of $331 million was recognized during 2025, which is comprised of current income tax expenses of $426
million offset by deferred income tax recovery of $95.0 million, compared to $208 million during 2024. The change is mainly
attributable to an increase in net income before tax resulting from a higher average realized gold price3.
In addition to corporate income taxes in Ecuador which are levied at a rate of 22%, income tax expense includes a 5% Ecuadorean
withholding tax on the anticipated portion of net income generated from FDN to be paid in the form of dividends, and an accrual
for the portion of profit sharing payable to the Government of Ecuador, which is calculated at a rate of 12% of the estimated net
income for tax purposes for the year. The employee portion of profit sharing payable, calculated at a rate of 3% of net income for
tax purposes, is considered an employee benefit and is included in operating expenses. The effective tax rate for 2025 reflects
the impact of the Company’s international structure.
Corporate income tax instalment payments are due monthly based on a percentage of monthly revenues with residual income
taxes owed, if any, due in April of each year. In addition, the government and employee portion of profit sharing are payable
annually in April. The Company may elect to make additional tax payments in advance in Ecuador from time to time.
SUMMARY OF QUARTERLY FINANCIAL RESULTS
The Company’s quarterly financial statements are reported under IFRS Accounting Standards as applicable to interim financial
reporting. The following table provides highlights from the Company’s financial statements over the past eight quarters
(unaudited).
2025
2025
2025
2025
Q4
Q3
Q2
Q1
Revenues
$
526,596
$
447,119
$
452,880
$
356,345
Income from mining operations
$
373,402
$
305,228
$
314,161
$
233,546
Net income for the period
$
234,205
$
207,715
$
196,731
$
153,500
Basic income per share
$
0.97
$
0.86
$
0.82
$
0.64
Diluted income per share
$
0.96
$
0.86
$
0.81
$
0.63
Weighted-average number of common shares outstanding
Basic
241,392,452
241,285,625
240,984,033
240,460,033
Diluted
242,774,352
242,746,896
242,475,579
241,992,389
Additions to property, plant and equipment
$
27,331
$
22,029
$
16,878
$
14,919
Total assets
$
1,787,158
$
1,638,974
$
1,618,899
$
1,613,365
Working capital
$
594,654
$
576,799
$
562,273
$
551,032
3
Refer to “Non-IFRS Measures” section.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
14
2024
2024
2024
2024
Q4
Q3
Q2
Q1
Revenues
$
341,791
$
323,087
$
301,431
$
226,741
Income from mining operations
$
215,208
$
203,184
$
171,757
$
113,237
Derivative gain (loss) for the period
$
-
$
-
$
261,668
$
(17,931)
Net income for the period
$
129,147
$
135,715
$
119,291
$
41,897
Basic income per share
$
0.54
$
0.57
$
0.50
$
0.18
Diluted income per share
$
0.53
$
0.56
$
0.49
$
0.17
Weighted-average number of common shares outstanding
Basic
240,101,527
239,737,300
239,129,917
238,255,452
Diluted
242,320,782
241,890,593
241,031,608
239,968,974
Additions to property, plant and equipment
$
35,044
$
28,019
$
17,467
$
9,701
Total assets
$
1,527,481
$
1,364,106
$
1,396,496
$
1,508,987
Long-term debt
$
-
$
-
$
-
$
326,791
Working capital
$
458,944
$
357,410
$
253,587
$
413,528
Three months ended December 31, 2025 compared to the three months ended December 31, 2024
The Company generated net income of $234 million during the fourth quarter of 2025 compared to $129 million during the
same quarter in 2024. Net income was generated from the recognition of revenues of $527 million which resulted in income
from mining operations of $373 million as well as finance income of $6.1 million. This is offset by exploration costs of $19.7
million, stock-based compensation expense of $20.5 million, income tax expense of $99.9 million, and other expenses totalling
$5.2 million.
During the fourth quarter of 2024, net income was generated from the recognition of revenues of $342 million which resulted in
income from mining operations of $215 million as well as finance and other income of $14.5 million. This is offset by exploration
costs of $13.8 million, stock-based compensation expense of $10.5 million, income tax expense of $72.4 million, and other
expenses totalling $3.8 million.
Income from mining operations
During the fourth quarter of 2025, the Company generated revenues of $527 million from the sale of 124,041 oz of gold and income
from mining operations of $373 million. This compares to revenues of $342 million from the sale of 131,175 oz of gold and income
from mining operations of $215 million in the same quarter in 2024. The increase is primarily attributable to an increase in average
realized gold price4.
Exploration expense
Exploration costs were $19.7 million in the fourth quarter of 2025 compared to $13.8 million during the same period in 2024.
The increase is attributable to the continued expansion of the near-mine exploration program following positive results to date.
Corporate administration
Corporate administration costs increased from $14.3 million during the fourth quarter of 2024 to $24.3 million during the
fourth quarter of 2025. The increase is mainly attributable to an increase in expenses relating to cash-settled share units and its
fair value adjustment which reflect the increase in the Company’s share price during the fourth quarter of 2025.
Finance income
Finance income increased from $2.9 million during the fourth quarter of 2024 to $6.1 million during the fourth quarter of 2025
as the Company’s increased cash balance, partially offset by a declining yield on the Company’s treasury investments.
4
Refer to “Non-IFRS Measures” section.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
15
Other expense (income)
Other expense of $1.3 million was recognized during the quarter compared to other income of $11.6 million in the fourth
quarter of 2024. During 2024, the other income is mainly driven by foreign exchange gains or losses derived from the quantum
of U.S. dollar cash held by Canadian group entities and movements in the foreign exchange rate. As the functional currency of
the Canadian entities is the Canadian dollar, a strengthening of the U.S. dollar against the Canadian dollar during the period
generates an unrealized gain in terms of Canadian dollars. Effective January 1, 2025, the functional currency for these Canadian
group entities was changed from Canadian dollars to U.S. dollars in order to reflect its financing structure. During 2025, other
expense is mainly driven by foreign exchange movements during the year and its impact on the Company’s liabilities and
expenses that are denominated in Canadian dollars.
LIQUIDITY AND CAPITAL RESOURCES
As at December 31, 2025, the Company had cash of $630 million and a working capital balance of $594 million compared to
cash of $349 million and a working capital balance of $459 million at December 31, 2024.
The change in cash during the 2025 Year was primarily due to cash generated from operating activities of $1.02 billion and
proceeds from the exercise of stock options and anti-dilution rights totalling $18.9 million. This is offset by dividends paid of
$664 million and capital expenditures of $97.2 million.
Trade receivables
Trade receivables mainly represent the value of concentrate sold as at period end for which the funds are not yet received.
Revenues and related trade receivables for concentrate sales are initially recorded at provisional gold prices. Subsequent
determination of final gold prices can range from one to four months after shipment depending on the customer. For sales that
are provisionally priced at period end, an estimate of the adjustment to trade receivables is calculated based on the expected
month when the final gold price is forecast to be determined and the related forward price of gold at the end of the reporting
period. At December 31, 2025, this resulted in an estimated increase of $33.8 million ($5.1 million at December 31, 2024) to
trade receivables reflecting rising gold prices during the period.
Consistent with industry standards, concentrate sales have relatively long payment terms and are not fully settled until
concentrate is received by the customer and related final assays confirmed, generally two to five months after the export sale
occurs.
VAT receivables
Subject to the submission of VAT claims and their acceptance by the applicable authorities, VAT paid in Ecuador by the Company
after January 1, 2018 are being refunded or applied, based on the level of export sales in any given month, as a credit against
taxes payable. A portion of the VAT recoverable has been reclassified as current assets based on the Company’s assessment of
the estimated time for processing VAT claims during the next twelve months.
Inventories
Gold inventory is recognized in ore stockpiles and in production inventory, comprised principally of concentrate and doré at
site or in transit to port or to the refinery, with a component of gold-in-circuit. The increase in gold-in-circuit inventory due to
higher throughput and timing of production. The variations in doré and concentrate are mainly the result of timing of shipments
around period end. In addition, there has been an increase in the value of materials and supplies due to requirements for
additional spares following completion of the process plant expansion project.
Investment activities
Investment activities during 2025 are comprised principally of major capital expenditures including the fifth tailings dam
raise, commissioning of diesel-powered generators, construction of camp and administration buildings, mine fleet overhaul,
wastewater treatment plants, and conversion drilling. In addition, costs were incurred relating to the process plant expansion
project.
Liquidity and capital resources
The Company generated strong operating cash flow during 2025 and expects to continue to do so in 2026 and beyond based
on its production and cost guidance. With no debt and strong gold prices, the Company expects to generate significant free
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
16
cash flow1 which will support the exploration programs, planned capital expenditures, growth initiatives, and regular dividend
payments under its dividend policy.
TRANSACTIONS WITH RELATED PARTIES
During the year ended December 31, 2025, the Company incurred $0.9 million (2024 – $1.3 million), primarily relating to office
rental and related services provided by Namdo Management Services Ltd. (“Namdo”), a company associated with a director of the
Company. In addition, the Company entered into transactions with its largest shareholder, Newmont Corporation, as presented in
Note 17 in the Notes to the audited consolidated financial statements for the year ended December 31, 2025.
FINANCIAL INSTRUMENTS
The Company’s financial instruments include cash, cash equivalents and certain receivables, which are categorized as financial
assets at amortized cost, and accounts payable and accrued liabilities, which are categorized as financial liabilities at amortized
cost. The fair value of these financial instruments approximates their carrying values due to the short-term nature of these
instruments. Further, provisionally priced trade receivables of $199 million (December 31, 2024 - $156 million) are measured at
fair value using quoted forward market prices.
The Company’s financial instruments are exposed to a variety of financial risks by virtue of its activities.
Currency risk
Lundin Gold is a Canadian company, with foreign operations in Ecuador. Revenues generated and expenditures incurred in
Ecuador are primarily denominated in U.S. dollars. However, equity capital, if needed, is typically raised in Canadian dollars. As
such, the Company is subject to risk due to fluctuations in the exchange rates of foreign currencies. Although the Company does
not enter into derivative financial instruments to manage its exposure, the Company tries to manage this risk by maintaining
most of its cash in U.S. dollars.
Credit risk
Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual
obligations. The majority of the Company’s cash is held in large financial institutions with a high investment grade rating. The
Company is also subject to credit risk associated with its trade receivables. The Company manages this risk by only selling to
reputable customers with strong financial statements.
Concentration of credit risk
Cash and cash equivalents are held with high quality financial institutions. Substantially all of the Company’s cash and cash
equivalents held with financial institutions exceed government-insured limits. The Company has established a treasury policy
that seeks to minimize its credit risk by entering into transactions with investment grade creditworthy and reputable financial
institutions and by monitoring the credit standing of those financial institutions. The Company seeks to limit the amount of
exposure with any one counterparty in accordance with its established treasury policy.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. Cash flow forecasting
is performed regularly to monitor the Company’s liquidity requirements to ensure it has sufficient cash to always meet its
operational needs. In addition, management is actively involved in the review, planning and approval of significant expenditures
and commitments.
Commodity price risk
The Company is subject to commodity price risk from fluctuations in the market prices of gold and silver. Commodity price
risks are affected by many factors that are outside the Company’s control including global or regional consumption patterns,
the supply of and demand for metals, speculative activities, the availability and costs of substitutes, inflation, and political and
economic conditions. The Company has not hedged the price of any commodity at this time. The fair value of a portion of the
Company’s trade receivables are impacted by fluctuations of commodity prices.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
17
COMMITMENTS
Significant capital and other expenditures contracted as at December 31, 2025 but not recognized as liabilities are as follows:
Capital
expenditures
Other
2026
$
25,785
$
476
2027
-
476
2028 onward
-
5,319
Total
$
25,785
$
6,271
The Company’s sales are subject to a 5% net smelter royalty payable to the Government of Ecuador and a 1% net revenue
royalty payable to third parties.
OFF-BALANCE SHEET ARRANGEMENTS
During the years ended December 31, 2025 and December 31, 2024 there were no off-balance sheet transactions. The Company
has not entered into any specialized financial arrangements to minimize its currency risk.
OUTSTANDING SHARE DATA
As at the date of this MD&A, there were 241,715,318 common shares issued and outstanding. There were also stock options
outstanding to purchase a total of 1,280,956 common shares, 378,779 restricted share units with a performance criteria,
179,610 restricted share units, and 63,372 deferred share units.
OUTLOOK
Gold production at FDN for 2026 is estimated to be between 475,000 to 525,000 oz based on an average throughput rate of
5,500 tpd. Head grade is estimated to average 8.3 g/t, with fluctuations expected during the year as different sections of the ore
body are mined. Average mill recovery for the year is estimated at 91%.
Cash operating costs
1
5
are estimated to range between $900 and $960 per oz of gold sold in 2026. AISC1 for 2026 is expected
to range between $1,110 and $1,170 per oz of gold sold and to fluctuate quarterly based on sustaining capital activities. Unit
costs are anticipated to be higher compared to 2025, primarily attributable to increased royalties and statutory employee profit
sharing resulting from the higher assumed gold price of $4,000 per oz. This assumption adds approximately $150 per oz to unit
costs compared to our 2025 guidance which was based on a gold price of $2,500 per oz.
Sustaining capital expenditures
1
for 2026 is projected to range between $75 million and $90 million. This investment will
fund several key initiatives that support the long-term performance of the operation. A major component of this capital is
the completion of the fifth raise of the tailings storage facility, which began in 2025, and commencement of the sixth raise
including development of a new quarry. These raises are designed to provide additional storage capacity to accommodate
higher throughput and extended mine life. Guidance also includes expenditures for infrastructure enhancements and mobile
equipment overhauls or replacements.
Following the recent inclusion of FDNS into Mineral Reserves, underground mine development toward the deposit is planned
to proceed. The mine to mill expansion study is examining how incorporating FDNS into the broader mine plan could support
sustaining higher processing throughputs and contribute to increased production over time. The Company now expects to
make a single, integrated investment decision in 2026, informed by analysis of the most efficient mining rates at both FDN and
FDNS and options for increasing processing capacity beyond 5,500 tpd. The anticipated non-sustaining capital costs associated
with the initial FDNS development in 2026 is expected to be $30 - $35 million. Further details on future spending towards the
integrated expansion will be provided as this opportunity is further advanced and finalized.
2026 is set to be a landmark year for Lundin Gold, featuring the largest exploration program in the Company’s history with
133,000 metres of drilling planned. The near-mine exploration program will account for approximately 100,000 metres,
combining surface and underground drilling aimed at extending the mine life of FDN. This investment will target high-grade
epithermal gold deposits and advance exploration of the promising copper-gold porphyry corridor, building on the strong
results achieved to date.
1
Refer to “Non-IFRS Measures” section.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
18
In addition to near-mine efforts, the regional program will focus on the Company’s extensive and highly prospective land
package surrounding FDN and beyond. Following reconnaissance work completed in 2025, 8,000 metres of drilling is planned on
advanced targets identified within this underexplored district, marking an important step in unlocking new growth opportunities.
Separately, 25,000 metres of resource conversion drilling is anticipated in 2026 to support the updating of Mineral Reserve
and Resource estimates. The total investment in our 2026 exploration program is estimated at $85 million, underscoring the
Company’s commitment to growth through exploration.
Under its dividend policy, the Company anticipates continuing to declare quarterly minimum dividends of $0.30 per share,
equivalent to approximately $300 million annually based on currently issued and outstanding shares, plus a variable dividend
equal to an amount based on at least 50% of the Company’s normalized free cash flow, after the deduction of the fixed dividend.
NON-IFRS MEASURES
This MD&A refers to certain financial measures, such as average realized gold price per oz sold, EBITDA, adjusted EBITDA,
cash operating cost per oz sold, all-in sustaining cost, sustaining capital expenditures, non-sustaining capital expenditures,
free cash flow, free cash flow per share, and adjusted earnings, which are not recognized under IFRS Accounting Standards
and do not have a standardized meaning prescribed by IFRS Accounting Standards. These measures may differ from those
made by other companies and accordingly may not be comparable to such measures as reported by other companies.
These measures have been derived from the Company’s financial statements because the Company believes that they are of
assistance in the understanding of the results of operations and its financial position.
Average realized gold price per oz sold
Average realized gold price is a metric used to better understand the gold price realized during a period. This is calculated
by disaggregating revenues for the period between gross gold sales before provisional pricing impact, mark-to-market on
provisionally priced sales, and silver revenues less treatment and refining charges.
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Gross gold sales before provisional pricing
impact
$
512,606
$
361,777
$
1,724,598
$
1,222,457
Gain (loss) on provisionally priced trade
receivables
20,643
(12,300)
84,657
(2,700)
Silver revenues
7,957
3,927
23,153
14,825
Less: Treatment and refining charges
(14,610)
(11,613)
(49,468)
(41,532)
Revenues
$
526,596
$
341,791
$
1,782,940
$
1,193,050
Gold oz sold
124,041
131,175
503,330
495,374
Average realized gold price (per oz sold)
Gross gold sales before provisional pricing
impact
$
4,133
$
2,758
$
3,426
$
2,467
Gain (loss) on provisionally priced trade
receivables
166
(94)
168
(5)
Average realized gold price
4,299
2,664
$
3,594
$
2,462
Silver revenues
64
30
46
30
Less: Treatment and refining charges
(118)
(89)
(98)
(84)
Revenues
$
4,245
$
2,605
$
3,542
$
2,408
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
19
EBITDA and Adjusted EBITDA
Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is a metric used to better understand the financial
performance of the Company by computing earnings from business operations without including the effects of capital structure,
tax rates and depreciation. Adjusted EBITDA is EBITDA excluding items which are considered not indicative of underlying
business operations.
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Net income for the period
$
234,205
$
129,147
$
792,151
$
426,050
Adjusted for:
Finance expense
-
-
-
266,542
Finance income
(6,077)
(2,875)
(22,863)
(16,289)
Income tax expense
99,916
72,415
331,391
208,067
Depletion and depreciation
35,744
33,536
135,131
137,003
EBITDA
$
363,788
$
232,223
$
1,235,810
$
1,021,373
Special government levy
-
-
-
1,913
Derivative gain
-
-
-
(243,737)
Adjusted EBITDA
$
363,788
$
232,223
$
1,235,810
$
779,549
Adjusted Earnings and adjusted basic earning per share
Adjusted earnings and adjusted basic earnings per share can be used to measure and may assist in evaluating operating earning
trends in comparison with results from prior periods by excluding specific items that are significant, but not reflective of the
underlying operating activities of the Company. For the 2024 Year, these included a special one-time government levy; derivative
gains or losses from accounting for the Stream Facility at fair value; one-time finance expense incurred on buy out of the Stream
Facility and Offtake; and related income tax effects. Adjusted basic earnings per share is calculated using the weighted average
number of shares outstanding under the basic method of earnings per share as determined under IFRS Accounting Standards.
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Net income for the period
$
234,205
$
129,147
$
792,151
$
426,050
Adjusted for:
Finance expense on buy out of
Stream Facility and Offtake
-
-
-
235,575
Special government levy
-
-
-
1,913
Derivative gain
-
-
-
(243,737)
Deferred income tax expense
-
-
-
1,795
Adjusted earnings
$
234,205
$
129,147
$
792,151
$
421,596
Basic weighted average shares
outstanding
241,392,452
240,101,527
241,033,793
239,312,029
Adjusted basic earnings per share
$
0.97
$
0.54
$
3.29
$
1.76
Cash operating cost per oz
Cash operating cost per oz sold, combined with revenues, can be used to evaluate the Company’s performance and ability to
generate operating income and cash flow from operating activities. Cash operating costs include operating expenses and royalty
expenses.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
20
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Operating expenses
$
87,500
$
72,581
$
318,743
$
283,527
Royalty expenses
29,975
20,471
102,819
69,158
Cash operating costs
$
117,475
$
93,052
$
421,562
$
352,685
Gold oz sold
124,041
131,175
503,330
495,374
Cash operating cost per oz sold
$
947
$
709
$
838
$
712
All-in sustaining cost and sustaining capital
AISC provides information on the total cost associated with producing gold and has been calculated on a basis consistent with
historic news releases by the Company.
The Company calculates AISC as the sum of total cash operating costs (as described above), corporate social responsibility costs,
treatment and refining charges, accretion of restoration provision, and sustaining capital expenditures, less silver revenue, all
divided by the gold oz sold to arrive at a per oz amount. Sustaining capital expenditures is defined as cash basis expenditures
which maintain existing operations and sustain production levels.
Other companies may calculate this measure differently as a result of differences in underlying principles and policies applied.
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Cash operating costs
$
117,475
$
93,052
$
421,562
$
352,685
Corporate social responsibility
557
470
2,063
2,119
Treatment and refining charges
14,609
11,613
49,467
41,532
Accretion of restoration provision
190
205
760
821
Sustaining capital expenditures
23,058
13,937
60,268
51,215
Less: silver revenues
(7,957)
(3,927)
(23,153)
(14,825)
All-in sustaining cost
$
147,932
$
115,350
$
510,967
$
433,547
Gold oz sold
124,041
131,175
503,330
495,374
All-in sustaining cost per oz sold
$
1,193
$
879
$
1,015
$
875
Sustaining capital expenditures and non-sustaining capital expenditures
Capital expenditures are classified into sustaining capital expenditures and non-sustaining capital expenditures. Sustaining
capital expenditures includes expenditures required to maintain ongoing production and operations. Non-sustaining capital,
which is excluded from the calculation of AISC1, comprises growth-oriented investments such as new projects, expansions,
conversion drilling, and associated permitting and study expenditures not related to current operations.
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Sustaining capital expenditures
$
23,058
$
13,937
$
60,268
$
51,215
Non-sustaining capital expenditures
4,273
21,107
20,889
39,016
Capital expenditures
$
27,331
$
35,044
$
81,157
$
90,231
Free cash flow and free cash flow per share
Free cash flow is indicative of the Company’s ability to generate cash from operations after consideration for required capital
expenditures, including related VAT impact, necessary to maintain operations and interest and finance expense paid on its debt
obligations. Free cash flow is defined as cash flow provided by operating activities, less cash used for investing activities and
interest and finance expense paid.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
21
Three months ended
December 31
Year ended
December 31
2025
2024
2025
2024
Net cash provided by operating activities
$
358,405
$
192,021
$
1,023,029
$
662,390
Net cash used for investing activities
(30,208)
(28,254)
(97,230)
(93,504)
Interest paid
-
-
-
(3,688)
Finance charge paid
-
-
-
(260,990)
Free cash flow
$
328,197
$
163,767
$
925,799
$
304,208
Basic weighted average shares outstanding
241,392,452
240,101,527
241,033,793
239,312,029
Free cash flow per share
$
1.36
$
0.68
$
3.84
$
1.27
CRITICAL ACCOUNTING ESTIMATES
The Company’s material accounting policies are presented in Note 3 in the Notes to the audited consolidated financial statements
for the year ended December 31, 2025.
The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further
periods if the review affects both current and future periods.
Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end
of the reporting period that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities in the event that the actual results differ from assumptions made, relate to, but are not limited to, the following:
Mineral reserves and resources
The Company estimates its Mineral Reserves and Resources based on information compiled and reviewed by qualified persons
as defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). The
estimation of mineral reserves and resources requires judgment to interpret geological data and metallurgical testing, design
of appropriate mining methods, recovery methods and establishment of a life of mine production schedule. The estimation of
recoverable reserves is also based on assumptions such as capital costs, operating costs and metal pricing. New geological data
or changes in the above assumptions may change the economic viability of reserves and may, ultimately, result in the reserves
being revised. Changes in the reserve or resource estimates may impact the valuation of property, plant and equipment and
mineral properties, the depletion and depreciation of property, plant and equipment and mineral properties, utilization of tax
losses and decommissioning and site restoration provisions.
Assessment of impairment indicators
Management applies significant judgement in assessing whether indicators of impairment exist for a cash generating unit which
would necessitate impairment testing. Internal and external factors such as significant changes in the use of the asset, commodity
prices, foreign exchange rates, capital and production forecasts, mineral reserve and resource quantities, and discount rates are
used by management in determining whether there are any indicators. As at December 31, 2025, management did not identify
any impairment indicators on the Company’s mineral properties, property, plant and equipment.
Deferred taxes
Deferred tax provisions are calculated by the Company while the actual amounts of income tax expense are not final until tax
returns are filed and accepted by the relevant authorities. Judgment is required in assessing whether deferred tax assets and
certain deferred tax liabilities are recognized on the balance sheet, in interpreting applicable tax laws, and what tax rate is
expected to be applied in the year when the related temporary differences reverse. Deferred tax liabilities arising from temporary
differences are recognized unless the reversal of the temporary differences is not expected to occur in the foreseeable future
and can be controlled. Assumptions about the generation of future taxable profits and repatriation of retained earnings depend
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
22
on management’s estimates of future production and sales volumes, gold prices, reserves and resources, operating costs,
decommissioning and restoration costs, capital expenditures, dividends and other capital management transactions. These
estimates and judgments are subject to risk and uncertainty and could result in an adjustment to the deferred tax provision and
a corresponding credit or charge to profit.
Decommissioning and site restoration provisions
The Company has obligations for site restoration and decommissioning related to Fruta del Norte. The future obligations for
decommissioning and site restoration activities are estimated by the Company using mine closure plans or other similar studies
which outline the requirements that will be carried out to meet the obligations. The provision for decommissioning and site
restoration is remeasured at the end of each reporting period for changes in estimates or circumstances. Changes in estimates
or circumstances include changes in legal or regulatory requirements, increased obligations arising from additional mining and
exploration activities, changes to cost estimates, and changes to risk-free interest rates.
QUALIFIED PERSON
The technical information relating to Fruta del Norte contained in this MD&A has been reviewed and approved by Terry Smith
P. Eng, Lundin Gold’s COO, who is a Qualified Person in accordance with the requirements of NI 43-101. The disclosure of
exploration information contained in this MD&A was prepared by Andre Oliveira P.Geo, Vice President, Exploration of the
Company, who is a Qualified Person in accordance with the requirements of NI 43-101.
FINANCIAL INFORMATION
The report for the three months ended March 31, 2026 is expected to be published on or about May 6, 2026.
DISCLOSURE CONTROLS AND INTERNAL CONTROLS OVER FINANCIAL REPORTING
Disclosure controls and procedures
Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by
the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded,
processed, summarized and reported within the time periods specified in the securities legislation and include controls and
procedures designed to ensure that information required to be disclosed by the Company in its annual filings, interim filings or
other reports filed or submitted under securities legislation is accumulated and communicated to the Company’s management,
including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.
Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design
and operation of the Company’s disclosure controls and procedures. As of December 31, 2025, the Chief Executive Officer and
Chief Financial Officer have each concluded that the Company’s disclosure controls and procedures, as defined in NI 52-109 -
Certification of Disclosure in Issuer’s Annual and Interim Filings, are effective to achieve the purpose for which they have been
designed.
Internal controls over financial reporting
Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance with IFRS Accounting Standards. Management is also
responsible for the design of the Company’s internal control over financial reporting in order to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with IFRS Accounting Standards.
The Company’s internal controls over financial reporting include policies and procedures that: pertain to the maintenance of
records that, in reasonable detail accurately and fairly reflect the transactions and disposition of assets; provide reasonable
assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with IFRS
Accounting Standards and that receipts and expenditures are being made only in accordance with authorization of management
and directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of assets that could have a material effect on the financial statements.
Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design
and operation of the Company’s internal controls over financial reporting. As of December 31, 2025, the Chief Executive Officer
and Chief Financial Officer have each concluded that the Company’s internal controls over financial reporting, as defined in NI
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
23
52-109 - Certification of Disclosure in Issuer’s Annual and Interim Filings, are effective to achieve the purpose for which they
have been designed.
Because of their inherent limitations, internal controls over financial reporting can provide only reasonable assurance and may
not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
RISK FACTORS
There are a number of factors that could negatively affect Lundin Gold’s business and the value of its common shares, including
the factors listed below. The following information pertains to the outlook and conditions currently known to Lundin Gold that
could have a material impact on the financial condition of the Company. Other factors may arise that are not currently foreseen
by management of Lundin Gold that may present additional risks in the future. Current and prospective security holders of
Lundin Gold should carefully consider these risk factors.
Fiscal Risk
Due to fiscal pressures, the government may seek additional revenue from the mining sector through new or increased
taxes, royalties, tariffs, tolls, or other fiscal measures, which could significantly increase the Company’s costs and reduce cash
flow. There is a risk that the government may impose new taxes, increase existing tax rates, modify fiscal terms including
royalty arrangements, or reinterpret existing tax laws in ways that increase the Company’s tax burden. While the Company
has protections under its Exploitation Agreement and Investment Protection Agreement, the government may nonetheless
attempt to apply new fiscal measures to the Company’s operations or challenge the scope of these contractual protections.
Tax regimes in Ecuador may be subject to differing interpretations and are subject to change without notice. The Company’s
interpretation of tax law as applied to its transactions and activities may differ with that of the tax authorities. Tax authorities
may challenge or revise the taxation applicable to the Company’s operations, which could result in significant additional taxes,
penalties and interest. Such challenges materially impact the Company’s cash flow forecasts, operating costs and AISC.
There is also a risk of restrictions on the repatriation of earnings from Ecuador to foreign entities or an increase to withholding
tax rates, both of which could impact the Company’s cash flows and capital allocation strategy.
The Company’s operating subsidiary pays VAT on goods and services required for Fruta del Norte and is eligible to receive a
credit that may be applied against other taxes. However, the tax authority in Ecuador may deny the Company’s VAT claims or
unduly delay the processing of VAT refunds, which could have a material adverse effect on Lundin Gold’s financial position or
cash flow.
Community Relations
The Company’s relationships with communities near where it operates and other stakeholders are critical to ensure the future
success of Fruta del Norte and the exploration and development of the Company’s other concessions. The Company’s mineral
concessions, including Fruta del Norte, are located near local communities, including those of Indigenous Peoples. Some of these
groups have been opposed to mining activities from time to time in the past, and such opposition may affect the operations at
Fruta del Norte and the Company’s exploration and development activities on its other concessions in the short and long term.
The Company prioritizes sourcing goods and services locally, where possible. The Company’s local procurement activities and
employment, however, may not meet the expectations of local communities which may negatively impact community relations.
Furthermore, local communities may be influenced by external entities, groups or organizations opposed to mining activities. In
recent years, anti-mining nongovernmental organization (“NGO”) and Indigenous Peoples’ activities in Ecuador have increased.
These communities, NGOs and Indigenous Peoples have taken such actions as civil unrest, road closures, work stoppages and
legal challenges. Such actions may have a material adverse effect on Lundin Gold’s operations at Fruta del Norte and on its
exploration activities and on its financial position, cash flow and results of operations. While the Company is committed to
operating in a socially responsible manner, there can be no assurance that the Company’s efforts in this respect will mitigate
this potential risk.
Mining Operations
The Company’s operations can be subject to risks and hazards that are inherent in the mining industry, including, but not limited
to, unanticipated variations in grade and other geological problems, geotechnical incidents such as falls of ground underground,
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
24
subsidence or landslides, accidents, underground conditions, backfill quality or availability, metallurgy, variability of ore types
and other processing issues, critical equipment or process failure, the lack of availability of input materials and equipment,
disruption to power supply, labour force disruptions, supply chain/logistics disruptions, force majeure events, unanticipated
transportation disruptions or costs, consumable prices or availability and weather conditions, any of which can materially and
adversely affect, among other things, the safety of personnel, production quantities and rates, costs and expenditures, and
contractual obligations.
Consequently, there is a risk that Fruta del Norte may encounter problems or be subject to delays or suspensions resulting from
these operating risks which could occur and may have material adverse consequences for Lundin Gold, including its operating
results, cash flow and financial condition.
Security Situation
While the security situation in Ecuador has not materially impacted the Company to date, ongoing security challenges and
the government’s response could disrupt operations, transportation and logistics, affect employee safety and mobility, lead to
theft or damage to property, work stoppages, blockades of its mining operations and create operational uncertainty. Ecuador
has experienced increased organized crime and illegal mining, both of which have been identified as national security threats.
Criminal organizations have been linked to illegal mining operations in the province of Zamora Chinchipe, where Fruta del Norte
is located, and the government has deployed military forces to combat illegal mining in the province and other affected regions.
The presence of criminal organizations in the region poses security risks to the Company’s employees and contractors, including
kidnapping, extortion and other criminal activities.
Waste Disposal/Tailings
The Company recognizes that tailings management is one of the most material environmental issues for mining companies
globally. Mining operations generate residual materials from mining and processing in the form of tailings containing chemicals
and metals. The tailings are stored in an engineered Tailings Storage Facility (“TSF”) and maintaining the integrity of the TSF
requires appropriate engineering design, quality construction, quality control, ongoing operating discipline with respect to
maintenance and monitoring, in addition to effective governance processes. The TSF may be subject to ground movements,
deteriorating ground conditions, or extraordinary weather events.
The Company conducts extensive maintenance and monitoring, engages external consultants and incurs significant costs to
maintain the TSF. Furthermore, the Company is advancing the alignment of its tailings management practices with the Global
Industry Standard on Tailings Management (GISTM). Despite these measures, unanticipated failures or damage as well as
changes to laws and regulations may occur that could cause injuries, production loss, environmental damage which may affect
nearby communities, a loss event in excess of insurance coverage, reputational damage, potential for a temporary shutdown
of a portion or all of the operations at Fruta del Norte, or other materially adverse effects on the Company’s operations and
financial condition resulting in significant monetary losses, restrictions on operations and/or legal liability.
In order to meet production estimates, the Company must complete successive raises of the TSF to meet tailings capacity
requirements, which may not occur according to schedule. In addition, successive raises of the TSF depend on the timely
availability of suitable construction material. The development, permitting, and operation of new quarries are subject to social,
permitting, and operational factors that may affect the quality or quantity of required construction material. An inability to
secure or delays in developing or accessing suitable construction material, could impede the Company’s ability to complete
TSF raises according to schedule, resulting in potential cost escalation, operational delays, or constraints on future production.
Additionally, in the future, a new tailings location may be required. The Company’s ability to establish a new tailings location
relies on a number of factors, which will include permitting, and identifying an appropriate location. The Company’s inability to
do so may make potential expansion of FDN not possible or not economically viable.
Environmental Compliance
All of Lundin Gold’s exploration, development and production activities are subject to extensive environmental regulation. These
regulations address, among other things, the emissions into the air, discharges into water, management of waste, management
of tailings, management and shipment of hazardous substances, protection of natural resources, antiquities and endangered
species and reclamation of lands disturbed by mining operations.
Some laws and regulations may impose penalties for environmental contamination, which could subject the Company to
liability for the conduct of others or for its own actions that followed all applicable laws at the time such actions were taken.
Environmental legislation is evolving in a manner that will result in stricter standards and enforcement, increased fines and
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
25
penalties for non-compliance, potential for a temporary shutdown of a portion or all of the operations at Fruta del Norte
until non-compliance is corrected, more stringent environmental assessments of proposed projects and mine closure plans
and a heightened degree of responsibility for companies and their officers, directors and employees. Any future changes in
environmental regulation could adversely affect the Company’s ability to conduct its operations.
The Company may need to address contamination at Fruta del Norte or its exploration properties in the future, either for
existing environmental conditions or for leaks or discharges that may arise from the Company’s ongoing operations and
activities or from those of third parties, such as contractors, artisanal and illegal miners or others accessing Lundin Gold’s
properties. Contamination from hazardous substances at any of Lundin Gold’s properties may subject it to material liability
for the investigation or remediation of contamination, as well as for claims seeking to recover for related property damage,
personal injury or damage to natural resources.
Illegal Mining
Illegal mining activity on and near the Company’s mineral concessions is increasing rapidly and could disrupt operations, limit
exploration and expansion opportunities, pose safety risks to employees and contractors, and strain community relations.
Illegal mining occurs on and near some of Lundin Gold’s mineral concessions in Ecuador. While the Company monitors illegal
mining activity and is required to report it when discovered, it relies on government authorities to control and police illegal
operations. Illegal mining activity has increased in Ecuador recently due to rising gold prices, lack of economic opportunities,
increased organized crime, and limited government enforcement capacity.
Illegal mining operations could interfere with the Company’s activities, damage infrastructure, block access roads, or
contaminate water sources. Such activities could disrupt operations at Fruta del Norte or the Company’s exploration programs
and could result in personal injury or death. Environmental damage from illegal mining, such as pollution of water sources
and contamination of land, could affect nearby communities and ecosystems. The Company could face regulatory action, legal
liability, remediation costs, and reputational harm arising from illegal mining activities on or near its concessions, even where
the Company is not responsible for such activities. The Company’s monitoring and reporting activities may also strain relations
with local communities, some members of which engage in illegal mining.
Infrastructure
Mining operations, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable
roads, bridges, ports and power sources are important elements of infrastructure, which affect capital and operating costs. The
lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay
or otherwise adversely impact the Company’s exploration, development or operating activities. If adequate infrastructure is not
available in a timely manner, there is a risk that (i) the operations at Fruta del Norte will not achieve anticipated production, (ii) the
operating and capital costs associated with Fruta del Norte will be higher than anticipated, or (iii) the Company’s exploration and
development activities will not be carried out as anticipated, or at all. Furthermore, unusual or infrequent weather phenomena,
including those caused by climate change, sabotage, community uprisings, NGO activities, government or other interference in
the maintenance or provision of necessary infrastructure could adversely affect the operations at Fruta del Norte, cash flow and
Lundin Gold’s financial position.
Forecasts Relating to Production and Costs
Lundin Gold provides estimates of future production (including production rate, gold grade and milling recovery estimates) and
future costs for Fruta del Norte, including cash operating cost, AISC and capital cost estimates. No assurance can be given that
production-related and financial-related estimates will be achieved. Estimates are based on, among other things: the accuracy of
Mineral Reserve and Mineral Resource estimates and related information, analyses and interpretations (including with respect
to any updates or anticipated updates); the accuracy of assumptions, including assumptions about Lundin Gold’s business and
operations and that no significant event will occur outside of normal course of business and operations and assumptions about
commodity prices (including the price of gold); ore grades and recovery rates, ground conditions, metallurgical characteristics; the
accuracy of estimated rates and costs of mining and processing and mill availability; the completion of future expansion projects;
and, the receipt and maintenance of permits.
Failure to achieve production, gold grade, cash flow and capital and operating cost estimates could have an adverse impact on
the Company’s future cash flows, earnings, results of operations and financial condition. The Company’s economic performance
forecasts, including cash flow forecasts and costs, may be impacted by the production outlook. Failure to meet production
targets will have an adverse effect on cash flows, earnings and the Company’s overall financial condition. Actual production
rate, gold grade, milling recovery, cash flow and costs may vary from estimates for a variety of reasons, including, among other
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
26
things: variations in grade, tonnage, dilution, metallurgical and other characteristics; short-term operating factors relating to
the Mineral Reserves; changes in commodity prices (primarily the price of gold); expansion plans and decisions; risks and
hazards associated with mining; natural phenomena and adverse environmental conditions; unexpected geological conditions;
supply chain disruptions affecting mining and milling operations; plant and equipment repairs, maintenance and failure; and
other risks which impact operations and financial performance outlined in these “Risk Factors”.
Land Acquisition and Surface Rights
The Company’s exploration activities and development plans depend on securing and maintaining surface rights and access to
strategic land, which may be difficult to obtain or retain due to competing interests, Indigenous Peoples’ rights, and deficiencies
in land title systems.
Securing and maintaining such rights has become increasingly challenging. Market conditions have driven increases in land
costs in Ecuador, and certain lands are subject to competing claims or occupation by third parties, such as artisanal and illegal
miners and local community members. These factors may limit the Company’s ability to acquire necessary land rights and
surface access on commercially reasonable terms or within required timeframes or may result in challenges to land rights the
Company currently holds.
Rights of Indigenous Peoples to land are receiving increased legal recognition in Ecuador, and Indigenous Peoples may assert
rights over lands the Company requires for its operations, development plans or exploration activities. Requirements for
consultation from Indigenous Peoples may affect the Company’s ability to access or retain land. Evolving laws and judicial
interpretations regarding Indigenous Peoples’ rights add further uncertainty to land acquisition, use, and retention.
Ecuador’s land registry system contains gaps and deficiencies that create uncertainty regarding land ownership and the validity
of surface rights. The Company may face challenges to land titles or surface rights it holds or seeks to acquire. Such disputes can
be costly and time-consuming to resolve and may delay or prevent the Company’s planned activities.
Inability to secure or maintain necessary land rights, delays in land acquisition, or successful challenges to the Company’s
surface rights could restrict exploration activities, limit development opportunities, and materially affect the Company’s growth
plans and operations.
Indigenous Consultation Requirements
Ecuador’s constitutional and legal requirements for consultation with Indigenous Peoples and impacted communities could
delay or prevent the Company from obtaining permits and approvals necessary for the development of new areas of the La
Zarza concession, regional exploration activities, and other operations and development activities. There is also legislative and
judicial uncertainty regarding consultation processes and requirements in the country.
While the Company has developed strong relationships with the Shuar Indigenous communities in the region, this does not
guarantee successful or timely completion of any consultation processes that may be required. If consultation is required,
delays in the process, opposition from Indigenous communities or other stakeholders, or the inability to reach agreement could
prevent or delay the Company’s ability to obtain necessary permits and approvals. Such delays or denials could adversely affect
the Company’s future growth plans and ability to advance its projects.
Mineral Reserves and Resources
Mineral Reserve and Mineral Resource figures are estimates, and there is a risk that any of the Mineral Resources and
Mineral Reserves identified by the Company will not be realized. Until a deposit is actually mined and processed, the quantity
of Mineral Resources and Mineral Reserves and grades must be considered as estimates only. In addition, the quantity of
Mineral Resources and Mineral Reserves may vary depending on, among other things, precious metal prices and operating
costs. Any material change in quantity of Mineral Resources, Mineral Reserves or percent extraction of those Mineral
Reserves recoverable by underground mining techniques may affect the economic viability of any project undertaken by
Lundin Gold. In addition, there is a risk that metal recoveries during production do not reach anticipated rates.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability, and there is a risk that they will
never be mined or processed profitably. Further, there is a risk that Inferred Mineral Resources may not ever be converted to
Proven or Probable Mineral Reserves as a result of continued exploration.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
27
Fluctuations in gold prices and operating costs, results of drilling, metallurgical testing and the evaluation of studies, reports
and plans subsequent to the date of any estimate may require revision of such estimate. Any material reductions in estimates of
Mineral Reserves could have a material adverse effect on Lundin Gold’s results of operations and financial condition.
Furthermore, Mineral Reserves must be replaced to maintain production levels over the long-term. Mineral Reserves can be
replaced by expanding known ore bodies, locating new deposits or making acquisitions. Exploration is highly speculative in
nature. Once a site with mineralization is discovered, it may take several years from the initial phases of drilling until production
is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to
establish proven and probable Mineral Reserves and to construct mining and processing facilities. As a result, there is no
assurance that current or future exploration programs will be successful or that new commercial mining operations will be
developed. Depletion of Mineral Reserves may not be offset by discoveries or acquisitions and could lead to a lower Mineral
Reserve base.
Regulatory Compliance and Government Approvals
The Company’s exploration, development, and operating activities depend on obtaining, maintaining, and renewing various
permits, licences, and mineral rights, and on complying with extensive and evolving legal and regulatory requirements, all of
which involve significant costs and reliance on government authorities. Obtaining, maintaining, and renewing such approvals
requires significant time and expense, and depends on the discretion of governmental bodies and their ability to process
applications and issue approvals on a timely basis. Government work stoppages, capacity constraints, or delays may impact
the Company’s ability to obtain or renew required approvals. Changes to regulations and policies may impose additional
requirements or alter the terms on which approvals are granted.
Compliance with applicable laws and regulations involves significant ongoing costs for monitoring, reporting, permitting,
environmental management, health and safety programmes, and operational adjustments. Changes to laws or new
interpretations of existing requirements may impose additional compliance obligations and costs.
The Company may fail to comply with legal or regulatory requirements or may interpret them differently than regulators.
Non-compliance could result in revocation or suspension of mineral rights and permits, enforcement actions including orders
to cease or curtail operations, requirements for corrective measures, civil or criminal fines and penalties and compensation
obligations to affected parties.
Delays in obtaining required approvals, denial of approvals, imposition of unfavourable terms, loss of existing mineral rights or
permits or failure to comply with regulatory requirements may materially affect the Company’s operations, ability to advance
projects, and financial condition.
Dependence on a Single Mine
The only material property interest of the Company is Fruta del Norte. Unless the Company acquires additional projects,
property interests or advances its exploration properties, any adverse developments affecting Fruta del Norte could have a
material adverse effect upon the Company and would materially and adversely affect the profitability, financial performance
and results of operations of the Company. While the Company may seek to acquire and develop additional projects and mineral
properties that are consistent with its business objectives, there can be no assurance that Lundin Gold will be able to identify or
develop suitable additional projects or mineral properties or, if it does identify suitable opportunities, that it will have sufficient
financial resources to acquire and develop such projects or properties or that such projects or properties will be available on
terms acceptable to the Company or at all.
Climate Change and Extreme Weather Events
Extreme weather conditions and climate-related events could damage critical infrastructure, disrupt operations, cause safety
incidents, and require significant capital investment to address.
Climate change may result in more frequent and severe extreme weather events, including severe storms, floods, droughts,
landslides, and extreme temperatures. Such events could damage critical infrastructure including roads, bridges, ports, and
power supply systems, and disrupt operations and production at Fruta del Norte. Both excessive water from extreme precipitation
and floods, and insufficient water from droughts, pose operational risks to the Company. Excess water could cause landslides
or breaches of containment facilities, while water scarcity could constrain processing operations and affect hydroelectric power
generation, which is a primary source of electricity for the Company’s operations. Reduced hydroelectric power availability
could lead to increased reliance on diesel generators, higher operating costs, and potential production disruptions. Extreme
temperatures could impact equipment operation and personnel safety, leading to injuries, equipment damage, and production
disruptions.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
28
The Company depends on regular supply of electricity, diesel, and other consumables to operate efficiently, and relies on
service providers to transport materials and products. Extreme weather could limit availability or increase prices for these
goods and services, resulting in higher costs or production disruptions.
Addressing extreme weather occurrences and adapting operations to changing climate conditions may require significant
capital investment. Despite the Company’s efforts to assess and mitigate climate-related risks, the Company cannot be certain
that it has adequately assessed these risks or that its mitigation efforts will be effective.
Shortages of Critical Resources
Disruptions in the supply of products or services required for the Company’s activities could adversely affect the Company’s
operations, financial condition and results of operations. This may be the result of industry-wide shortages of certain goods
or services, interruption in supplier operations or in transportation methods of certain goods, interruptions in international
logistics, the risk of failure of certain long-lead items or the failure to obtain necessary permits for the supply of regulated goods.
The Company’s costs may also be affected by the prices of commodities and other inputs it consumes or uses in its operations.
The prices and availability of such commodities and inputs are influenced by supply and demand trends and logistics issues
affecting the mining industry in general and other factors outside the Company’s control. Increases in the price of materials
consumed in the Company’s mining and production activities could materially adversely affect the Company’s results of
operations and financial condition.
Exploration and Development Risks
The Company has the rights to mineral concessions targeted for exploration in Ecuador, outside of Fruta del Norte. The
exploration for and development of new mineral deposits involve significant risks which, even with a combination of careful
evaluation, experience and knowledge, may not be eliminated. Few exploration properties are ultimately developed into
producing mines. Whether a mineral deposit will be commercially viable depends on a number of factors, including but not
limited to: the particular attributes of the deposit, such as quantity and quality of the minerals, metallurgy and proximity to
infrastructure and labour; mineral prices, which are highly cyclical; and government regulations, including regulations relating
to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, legal proceedings, community acceptance
and environmental protection. There is a risk that the exploration and development expenditures made by Lundin Gold will not
result in any new discoveries of other mineral occurrences or new estimates of Mineral Resources or Mineral Reserves.
Control of Lundin Gold
As at the date hereof, Newmont Corporation and Nemesia S.a.r.l., a private corporation controlled by trusts settled by the
late Adolf H. Lundin, are control persons of Lundin Gold. As long as these shareholders maintain their significant positions in
Lundin Gold, they will have the ability to exercise influence with respect to the affairs of Lundin Gold and significantly affect the
outcome of matters upon which shareholders are entitled to vote.
As a result of the holdings in the Company of control persons, there is a risk that the Company’s securities are less liquid and
trade at a relative discount compared to circumstances where these persons did not have the ability to influence or determine
matters affecting Lundin Gold. Additionally, there is a risk that their significant interests in Lundin Gold discourages transactions
involving acquisition of another property or entity or involving a change of control of Lundin Gold, including transactions in
which an investor, as a holder of the Company’s securities, would otherwise receive a premium for its Company’s securities over
the then-current market price.
Information Systems and Cyber Security
The Company depends upon information systems and other digital technologies for controlling operations, processing
transactions and summarizing and reporting results of operations (“IT systems”). The secure processing, maintenance and
transmission of information is critical to the Company’s operations. These IT systems or those of Lundin Gold’s suppliers could
be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches, defective
software updates and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical
plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company’s operations also depend on the timely
maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to
mitigate the risks of failures. Any of these and other events could result in IT system failures, delays and/or increase in capital
expenses. The failure of IT systems or a component of information systems could, depending on the nature of any such failure,
adversely impact the Company’s reputation and results of operations.
Cybersecurity risks have increased in recent years as a result of the proliferation of new technologies and the increased
sophistication of cyber-attacks and data security breaches, as well as due to international and domestic political factors including
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
29
geopolitical tensions, armed hostilities, war, civil unrest, sabotage and terrorism. The rapid development and adoption of
artificial intelligence technologies may further increase the complexity and severity of cybersecurity and information systems
risks, including through more advanced and automated cyber-attacks and new operational dependencies. Human error
can also contribute to a cyber incident, and cyber-attacks can be internal as well as external and occur at any point in the
Company’s supply chain. Although to date the Company has not experienced any material losses relating to cyber-attacks or
other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The
Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of
these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices
designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain
a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to
modify or enhance protective measures or to investigate and remediate any security vulnerabilities.
Inherent Health and Safety Risk
Exploration and mining development and operating activities represent inherent safety hazards and maintaining the health
and safety of the Company’s employees and contractors is of paramount importance to the Company. Health and safety hazard
assessments are carried out regularly throughout the lifecycle of the Company’s activities, and robust policies, procedures
and controls are in place. Notwithstanding continued efforts to adhere to the Company’s “zero harm” policy, safety incidents
may still occur. Significant potential risks include, but are not limited to, surface or underground fires, rock falls underground,
geotechnical incidents, blasting accidents, vehicle accidents, unsafe road conditions or events, fall from heights, working with
helicopters, working at remote sites, contact with energized sources, and exposure to infectious or occupational disease.
Employees involved in activities in remote areas may also be exposed to attacks by individuals or violent opposition by local
communities that may place the employees at risk of harm. Any incident resulting in serious injury or death could result in
litigation and/or regulatory action (including, but not limited to, suspension of exploration or development activities and/or
fines and penalties), or otherwise adversely affect the Company’s reputation and ability to meet its objectives.
Human Rights
The Company is committed to upholding and respecting the United Nations (“UN”) Declaration of Human Rights, the UN
Guiding Principles on Business and Human Rights, and to honouring our commitment as a signatory of the UN Global Compact.
Notwithstanding the Company’s efforts to conduct its activities in a manner consistent with those principles, Lundin Gold may
not be able to identify and assess all potential human rights impacts of its business. Any potential human right violations either
internally or externally, such as through third party business relationships, corruption, unequal treatment of ethnic minorities,
gender discrimination, use of child labour, land use rights, supply chain sourcing, could have a material adverse impact on the
Company’s reputation, as well as present legal and financial risks arising from failing to respect and/or reinforce human rights.
Measures to Protect Biodiversity, Endangered Species and Critical Habitats
Ecuador is a country with a diverse and fragile ecosystem and the national government, regional governments, Indigenous
Peoples and NGOs are vigilant in their protection of endangered species and critical habitats. The existence or discovery of an
endangered species or critical habitats at Fruta del Norte or any of its exploration concessions may have a number of adverse
consequences to the Company’s plans and operations. The existence or discovery of an endangered species or critical habitat
at Fruta del Norte or the Company’s exploration concessions could also ignite NGO and local community opposition to the
Company’s activities, which could impact its plans and operations and the Company’s financial condition and global reputation.
Furthermore, despite the measures taken by the Company to preserve biodiversity which may be impacted by its activities,
there remains a risk that Lundin Gold may, directly or indirectly, harm the biodiversity in the areas that the Company operates
or within the vicinity of the operations. As a result of heightened scrutiny, any of these events could result in liability for the
Company and a loss of reputation which may lead to increased challenges in developing and maintaining government and
community relations, decreased investor confidence, and act as an impediment to the Company’s overall ability to advance its
projects, or to access financing in the future.
Global Economic Conditions
Global financial markets are experiencing extreme volatility as a result of a number of factors including geopolitical instability,
inflation, increased interest rates and unprecedented government debts, including in Ecuador. Events in global financial markets,
and the volatility of global financial conditions, will continue to have an impact on the global economy. Many industries, including
the mining sector, are impacted by market conditions. Some of the key impacts of financial market turmoil include devaluations
and high volatility in global equity, commodity price volatility, foreign exchange risk and a lack of market liquidity. Financial
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
30
institutions, including institutions where the Company’s cash and cash equivalents are held, may be forced into bankruptcy
or need to be rescued by government authorities. The Company’s access to financing or its own cash balance may also be
negatively impacted by liquidity crises. These factors may impact the Company’s ability to obtain equity or debt financing and,
where available, to obtain such financing on terms favourable to the Company.
Increased levels of volatility and market turmoil could have an adverse impact on the Company’s operations, planned growth,
profitability and the trading price of the Company’s common shares.
Competition for New Projects
The mining industry is very competitive, particularly with respect to properties that produce, or are capable of producing, gold,
and in particular of a quality and concentration comparable to Fruta del Norte. As the Company faces significant and increasing
competition from a number of large established companies, some of which have greater financial and technical resources
than the Company, for a limited number of suitable acquisition opportunities, the Company may be unable to acquire such
mining properties which it desires on terms it considers acceptable. As a result, there can be no assurance that the Company’s
growth strategy will be successful in acquiring new Mineral Reserves to replace or expand current Mineral Reserves or that the
Company will be able to maintain production levels in the future.
Availability of Workforce and Labour Relations
Lundin Gold’s operations at Fruta del Norte depend upon the efforts of its employees, and the Company’s operations would
be adversely affected if it failed to maintain satisfactory labour relations. The Company’s labour force is not unionized, and the
introduction of a labour union could result in a disruption to production and/or higher costs and reduced flexibility. In addition,
relations between the Company and its employees may be affected by changes in labour and employment laws. Changes in
such legislation or in the relationship between the Company and its employees may have a material adverse effect on the
Company’s business, results of operations, financial condition or prospects.
The Company’s gold production and its exploration and development activities depend upon the efforts of Lundin Gold’s
employees and contractors. The Company competes with mining and other companies on a global basis to attract and retain
employees at all levels with appropriate technical skills and operating experience necessary to operate its mines. The conduct of
the Company’s operations is dependent on access to skilled labour. Access to skilled labour may prove particularly challenging
for Lundin Gold given the remote location of Fruta del Norte and local laws which impose thresholds for the representation of
certain groups of people on Lundin Gold’s workforce in Ecuador. Shortages of suitably qualified personnel could have a material
adverse effect on the Company’s business and results of operations.
Key Talent Recruitment and Retention
Recruiting and retaining qualified personnel is critical to Lundin Gold’s success. Lundin Gold is dependent on the services
of key executives, including its President and Chief Executive Officer, and other highly skilled and experienced executives
and personnel focused on managing Lundin Gold’s interests. The number of persons skilled in the financing, development,
operations and management of mining properties is limited and competition for such persons is intense. The inability of Lundin
Gold to successfully attract and retain highly skilled and experienced executives and personnel could have a material adverse
effect on Lundin Gold’s business, financial condition and results of operations.
Gold Price
The Company’s earnings, cash flow, ability to pay dividends and financial condition are subject to risk due to fluctuations in
the market price of gold. Gold prices have historically fluctuated widely and in recent years the volatility of the gold price
has increased. The price of gold is affected by numerous factors beyond Lundin Gold’s control, including levels of supply and
demand, global or regional consumptive patterns, level of investment activity, purchases or sales by government central banks,
increased production due to new mine developments and improved mining and production methods, speculative activities
related to the sale of metals, availability and costs of investment substitutes, international economic and political conditions,
interest rates, currency values and inflation.
A dramatic decline in the gold price could cause Fruta del Norte’s operations to be uneconomic. Depending on the price of gold,
the Company’s cash flow may be insufficient to meet its operating needs and capital expenditures, and as a result the Company
could experience financial difficulties and may decrease or suspend some or all of mining activities or otherwise revise its mine
plan and exploration and development plans. In addition, there is a time lag between the shipment of gold and final pricing,
and changes in pricing can impact the Company’s revenue and working capital position. Any of these factors could result in a
material adverse effect on the Company’s results of operations and financial condition.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
31
The estimation of economically viable identified Mineral Reserves requires certain assumptions, including gold price. A revised
estimate of identified Mineral Reserves due to a substantial decline in the gold price could result in the decrease in the estimates
of the Company’s Mineral Reserves, subsequent write downs and negative impact on mine life.
Market Price of the Company’s Common Shares
The market price of the Company’s common shares may experience significant volatility due to factors beyond the Company’s
control, which could result in substantial losses for investors regardless of the Company’s operational performance.
Securities of mineral companies have always experienced substantial volatility, often based on factors unrelated to the financial
performance or prospects of the companies involved. These factors include macroeconomic conditions in North America and
globally, and market perceptions of the attractiveness of particular industries or sectors. The price of the Company’s common
shares is also likely to be significantly affected by changes in gold price, or its financial condition, dividend policy or results of
operations and exploration activities on its projects.
Other factors unrelated to the performance of the Company that may have an effect on the price of the Company’s common
shares include: the size of the Company’s free float, exclusion from market indices which limit the ability of some institutions to
invest in the Company’s common shares, and the evaluation of the Company’s performance and practices by third party rating
agencies on environmental, social, and governance matters, which may limit the ability of some institutions or other investors
to invest in the Company’s common shares. Share price volatility may expose the Company to securities litigation, which could
result in substantial costs and damages and divert management’s attention and resources.
Social Media and Reputation
As a result of the increased usage and the speed and global reach of social media and other web-based tools used to generate,
publish and discuss user-generated content and to connect with other users and organization of opposition, companies today
are at much greater risk of losing control over how they are perceived in the marketplace. Damage to reputation can be the
result of the actual or perceived occurrence of any number of events, and could include any negative publicity (for example,
with respect to handling of environmental matters or Lundin Gold’s dealings with community groups), whether true or not. The
Company places a great emphasis on protecting its image and reputation but does not ultimately have direct control over how
it is perceived by others. Reputation loss may lead to increased challenges in developing and maintaining community relations,
maintaining a positive relationship with government authorities, decreased investor confidence and an impediment to the
overall success of Fruta del Norte in Ecuador, thereby having a material adverse impact on financial performance, cash flows
and growth prospects.
Insurance and Uninsured Risks
Exploration, development and production operations on mineral properties involve numerous risks including, but not limited
to, unexpected or unusual geological operating conditions, rock bursts, cave-ins, fires, floods, landslides, earthquakes and other
environmental occurrences, risks relating to the transportation of employees or dangerous goods to site, risks relating to the
storage and shipment of precious metal concentrates or doré bars, and political and social instability. Such occurrences could
result in damage to mineral properties, damage to underground development, damage to production or infrastructure facilities,
personal injury or death, environmental damage to Lundin Gold’s properties or the properties of others, delays in operations or
the ability to undertake exploration and development, monetary losses and possible legal liability. Should such liabilities arise,
they could reduce or eliminate future profitability and result in increasing costs and a decline in the value of the Company’s
common shares.
Although Lundin Gold maintains insurance to protect against certain risks in such amounts as it considers reasonable and
commercially available, its insurance policies do not cover all the potential risks associated with a mining company’s operations.
The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance
coverage may not always be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks
such as environmental pollution or other hazards as a result of exploration, development and production may not be available
to the Company on acceptable terms. Lundin Gold might also become subject to liability for pollution or other hazards which it
may not be insured against or which the Company may elect not to insure against because of premium costs or other reasons.
Insurance limits currently in place may also not be sufficient to cover losses arising from insured events. Losses from any of
the above events may cause the Company to incur significant costs that could have a material adverse effect upon its financial
performance and results of operations.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
32
Dividends
The payment of dividends on the common shares will depend upon the financial requirements of the Company to finance
future growth, the financial condition of the Company, and other factors which the Board may consider appropriate in the
circumstance. There can be no assurance that Lundin Gold will continue to pay dividends in the future.
Internal Controls
Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are
properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and
reported. A control system, no matter how well designed and operated, can only provide reasonable, not absolute, assurance
with respect to the reliability of financial reporting and financial statement preparation.
The Company is reliant on the good character of its employees and is subject to the risk that employee misconduct could occur.
Although the Company takes precautions to prevent and detect employee misconduct, these precautions may not be effective,
and the Company could be exposed to unknown and unmanaged risks or losses. The existence of our Code of Business Conduct
and Ethics, among other governance and compliance policies and processes and training, may not prevent incidents of theft,
dishonesty or other fraudulent behaviour nor can Lundin Gold guarantee compliance with legal and regulatory requirements.
Such misconduct could result in unknown and unmanaged damage or losses, including regulatory sanctions and serious harm
to the Company’s reputation. If material employee misconduct occurs, Lundin Gold’s business, results of operations, financial
condition and the value of its common shares could be adversely affected.
Conflicts of Interest
Certain directors and officers of Lundin Gold are or may become associated with other mining and/or mineral exploration and
development companies, which may give rise to conflicts of interest. Directors who have a material interest in any person who is
a party to a material contract or a proposed material contract with the Company are required, subject to certain exceptions, to
disclose that interest and generally abstain from voting on any resolution to approve such a contract. In addition, directors and
officers are required to act honestly and in good faith with a view to the best interests of the Company. Some of the directors
and officers of the Company have either other full-time employment or other business or time restrictions placed on them and,
accordingly, the Company will not be the only business enterprise of these directors and officers. Further, any failure of the
directors or officers of the Company to address these conflicts in an appropriate manner or to allocate opportunities that they
become aware of to the Company could have a material adverse effect on the Company’s business, financial condition, results
of operations, cash flows or prospects.
Violation of Anti-Bribery and Corruption Laws
The Company’s operations are governed by, and involve interactions with, many levels of government in numerous countries.
The Company is required to comply with anti-corruption and anti-bribery laws, including the Canadian and Ecuadorian Criminal
Codes, the Canadian Corruption of Foreign Public Officials Act and the U.S. Foreign Corrupt Practices Act, as well as similar
laws in other countries in which Lundin Gold conducts its business. In recent years, there has been a general increase in both
the frequency of enforcement and the severity of penalties under such laws, resulting in greater scrutiny and punishment
to companies convicted of violating anti-corruption and anti-bribery laws. Furthermore, a company may be found liable for
violations not only by its employees, but also by its contractors and third-party agents. Although Lundin Gold has adopted steps
to mitigate such risks, such measures may not always be effective in ensuring that the Company, its employees, contractors and
third-party agents will comply strictly with such laws. If the Company finds itself subject to an enforcement action or is found to
be in violation of such laws, this may result in significant penalties, fines and/or sanctions imposed on the Company resulting in
a material adverse effect on the Company’s reputation and results of its operations.
Claims and Legal Proceedings
Lundin Gold may be subject to claims or legal proceedings in multiple jurisdictions covering a wide range of matters that arise
in the ordinary course of its current business or the Company’s previous business activities which could materially adversely
impact Lundin Gold.
Reclamation Obligations
Reclamation requirements are designed to minimize long-term effects of mining exploitation and exploration disturbance by
requiring the operating company to control possible deleterious effluents and to re-establish to some degree pre-disturbance
landforms and vegetation. Lundin Gold is subject to such requirements in connection with its activities at Fruta del Norte and
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
33
may be liable for actions and activities and disturbances caused by artisanal and illegal miners on the Company’s property. Any
significant environmental issues that may arise, however, could lead to increased reclamation expenditures and could have a
material adverse impact on Lundin Gold’s financial resources. Furthermore, environmental hazards may exist on the properties
in which Lundin Gold holds interests which are unknown to Lundin Gold at present and which have been caused by previous or
existing owners or operators of the properties.
There can also be no assurance that closure estimates prove to be accurate. The amounts recorded for reclamation costs are
estimates unique to a property based on estimates provided by independent consulting engineers and Lundin Gold’s assessment
of the anticipated timing of future reclamation and remediation work required to comply with existing laws and regulations.
Actual costs incurred in future periods could differ from amounts estimated. Additionally, future changes to environmental
laws and regulations could affect the extent of reclamation and remediation work required to be performed by Lundin Gold.
Any such changes in future costs could materially impact the amounts charged to operations for reclamation and remediation.
Finally, the timing of the funding of such closure costs may be impacted by changes in laws and regulations and adversely affect
the financial condition of the Company.
Expropriation and Nationalization
While the Company has protections against expropriation in its Investment Protection Agreement and the bilateral investment
treaty between Canada and Ecuador, the government of Ecuador could nonetheless expropriate or nationalize the Company’s
mineral concessions, operations, and infrastructure through direct seizure, cancellation of mineral rights, or other actions
that deprive the Company of ownership or control. While international law requires compensation for expropriation, such
compensation may not reflect fair market value, may be subject to prolonged disputes, or may not be paid. The government
could also force renegotiation of the Company’s contractual arrangements under threat of expropriation, potentially on
significantly less favourable terms.
Any expropriation, nationalization, or forced renegotiation could result in total or partial loss of the Company’s investment in
Ecuador, materially and adversely affecting the Company’s business, financial condition, and share price.
Pandemics, Epidemics or Infectious Disease Outbreak
Disruptions caused by pandemics, epidemics or infectious disease outbreaks in locations where Lundin Gold operates or globally
could materially adversely affect the Company’s business, operations, financial results and forward-looking expectations.
Possible impacts of pandemics, epidemics or infectious disease outbreaks may include mandated or voluntary closures of
operations, illness among the Company’s workforce, restricted mobility of personnel, interruptions in the Company’s logistics
and supply chain, delay at or closure of the Company’s refining and smelting service providers and global travel restrictions, all
of which could disrupt the Company’s operations and negatively impact its financial performance of the value of its common
shares. The ultimate economic viability of the Company’s business is impacted by its ability to operate Fruta del Norte and/or
to maintain adequate liquidity through potential sources of financing.
Disruptions related to pandemics, epidemics or infectious disease outbreaks could have the effect of heightening many of the
other risks outlined in these “Risk Factors”.
FORWARD LOOKING STATEMENTS
Certain of the information and statements in this MD&A are considered “forward-looking information” or “forward-
looking statements” as those terms are defined under Canadian securities laws (collectively referred to as “forward-looking
statements”). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases
such as “believes”, “anticipates”, “expects”, “is expected”, “scheduled”, “estimates”, “pending”, “intends”, “plans”, “forecasts”,
“targets”, or “hopes”, or variations of such words and phrases or statements that certain actions, events or results “may”,
“could”, “would”, “will”, “should” “might”, “will be taken”, or “occur” and similar expressions) are not statements of historical
fact and may be forward-looking statements.
By their nature, forward-looking statements and information involve assumptions, inherent risks and uncertainties, many
of which are difficult to predict, and are usually beyond the control of management, that could cause actual results to be
materially different from those expressed by these forward-looking statements and information. Lundin Gold believes that the
expectations reflected in this forward-looking information are reasonable, but no assurance can be given that these expectations
will prove to be correct. Forward-looking information should not be unduly relied upon. This information speaks only as of the
date of this MD&A, and the Company will not necessarily update this information, unless required to do so by securities laws.
LUNDIN GOLD INC.
Management’s Discussion and Analysis
Year Ended December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
34
This MD&A contains forward-looking information in a number of places, such as in statements pertaining to the Company’s 2026
production outlook, including estimates of gold production, grades, recoveries and AISC; commodity price assumptions, operating
plans; expected sales receipts and cash flow forecasts, its estimated capital costs and sustaining capital expenditures and the
benefits of related investments; the recovery of VAT; plans with respect to mine development and process expansion; benefits of
the Company’s community programs; the Company’s declaration and payment of dividends pursuant to its dividend policy; the
timing and the success of its drill program at Fruta del Norte and its other exploration activities; and estimates of Mineral Resources
and Reserves at Fruta del Norte, FDNS, and FDN East.
Lundin Gold’s actual results could differ materially from those anticipated. Factors that could cause actual results to differ
materially from any forward-looking statement or that could have a material impact on the Company or the trading price of
its shares include risks relating to: fiscal risk; community relations; mining operations; security situation; waste disposal and
tailings; environmental compliance; illegal mining; infrastructure; forecasts relating to production and costs; land acquisition
and surface rights; indigenous consultation requirements; Mineral Reserve and Mineral Resource estimates; regulatory
compliance and government approvals; dependence on a single mine; climate change and extreme weather events; shortages
of critical resources; exploration and development; control of Lundin Gold; information systems and cyber security; health and
safety; human rights; measures to protect biodiversity, endangered species and critical habitats; global economic conditions;
competition for new projects; availability of workforce and labour relations; key talent recruitment and retention; gold price;
market price of the Company’s shares; social media and reputation; insurance and uninsured risks; dividends; internal controls;
conflicts of interest; violation of anti-bribery and corruption laws; claims and legal proceedings; reclamation obligations;
expropriation and nationalization; and pandemics, epidemics or infectious disease outbreak.
2025 Annual Report
35
1
Note: Surnorte S.A. operates through entities incorporated in Singapore and has no employees or physical office beyond its registered legal address.
SUSTAINABILITY STATEMENT
GENERAL INFORMATION – ESRS 2 GENERAL DISCLOSURES
BASIS FOR PREPARATION
Introduction
Our Sustainability Reporting
As part of Lundin Gold Inc.’s (Lundin Gold, the Company, our, we or us) commitment to transparency and responsible business
conduct, we have published our sustainability statement for the first time in accordance with the European Sustainability Reporting
Standards (ESRS) introduced under the EU Corporate Sustainability Reporting Directive (CSRD) of 14 December 2022. The CSRD
expands and strengthens the European Union’s sustainability disclosure requirements and requires entities in scope to report
detailed and standardized information on their environmental, social, and governance (ESG) impacts as well as related financial risks
and opportunities.
Because Lundin Gold is listed on the Nasdaq Stockholm Stock Exchange, we fall under the scope of CSRD. This sustainability statement
aligns with ESRS and the EU Taxonomy and presents our material sustainability-related impacts, risks, and opportunities (IROs), the
processes we use to identify and manage them, and our performance across all material topics. It includes the general disclosures
required under ESRS 2 as well as topic specific disclosures informed by our Double Materiality Assessment (DMA).
Our Approach to Sustainability
Sustainability is foundational to Lundin Gold’s corporate strategy and drives long-term value creation, operational resilience, and risk
management. Through operating a single, high-grade, long-life asset at Fruta del Norte (FDN) we focus on maintaining safe and reliable
operations, and building strong relationships with employees, contractors, local communities, Indigenous Peoples and government
authorities. We actively strengthen our performance in health and safety, biodiversity conservation, efficient water and tailings
management, climate-related risk management, ethical business conduct, and respect for human rights.
Operating in a Complex Environment
We acknowledge the sustainability-related challenges ahead, from navigating Ecuador’s dynamic economic, social and political
landscape to responding to evolving sustainability disclosure requirements. We continue to manage sustainability IROs while
advancing operational improvements that support future growth and reinforce our commitments to strong governance and
environmental and social performance.
Our approach emphasizes continuous improvement: strengthening management systems, implementing action plans that emerge
from risk and impact assessments, and maintaining open, meaningful engagement with affected communities and Indigenous
Peoples. These efforts help safeguard our social license to operate and explore while enabling sustainable value creation for all
stakeholders.
GENERAL BASIS FOR PREPARATION OF THE SUSTAINABILITY STATEMENT (ESRS 2, BP-1)
Consolidated Sustainability Statement
Lundin Gold prepares its sustainability statement on a consolidated basis, applying the same consolidation principles the Company
uses for its financial statements. This approach supports consistency, comparability, and alignment between financial and
sustainability disclosures and reflects the full scope of Lundin Gold’s operations, governance, and impacts.
The consolidated sustainability statement covers Lundin Gold Inc. and all entities over which the Company exercises control.
This includes material upstream and downstream activities across the value chain, as assessed through Lundin Gold’s materiality
processes.
This Report focuses on the FDN gold mine, Lundin Gold’s sole producing asset, and includes business activities undertaken through
the Company’s operating and exploration subsidiaries in Canada, Ecuador and Singapore
1
. Aurelian Ecuador S.A., our major operating
subsidiary, holds the concessions underlying FDN in Ecuador, which includes five metallic mineral concessions. The entity is wholly
owned by Lundin Gold through Aurelian Resources Inc. and Aurelian Resources Corporation Ltd., both of which are Canadian
subsidiaries. Our exploration subsidiaries, Aurelianmenor S.A. and Surnorte S.A., hold 24 of our metallic mineral concessions. They
are wholly owned by Lundin Gold through Aurelian Exploration Inc., also a Canadian subsidiary.
Coverage of Value Chain
Lundin Gold’s sustainability statement covers the Company’s own operations, consistent with the consolidation boundaries that
the Company applies in its financial reporting. We also include value chain information in connection with material IROs arising
from the Company’s direct and indirect business relationships in the upstream and downstream value chain.
2025 Annual Report
36
We develop our understanding of how upstream and downstream value chain relationships influence our material IROs through
ongoing procurement practices, contractor management, logistics processes and engagement with customers. We reflect the
qualitative aspects of these value chain interactions in our business model, operating context and risk management disclosures
within our Annual Information Form and Management’s Discussion and Analysis.
Lundin Gold continues to strengthen its understanding of value chain related sustainability risks and opportunities and will
consider the expansion of upstream and downstream disclosures over time, in line with evolving ESRS requirements, data
availability and stakeholder expectations.
Use of Exemption for Disclosure
When preparing our sustainability statement, we did not make use of the option to omit specific pieces of information corresponding
to intellectual property, know-how, or the results of innovation.
DISCLOSURES IN RELATION TO SPECIFIC CIRCUMSTANCES (ESRS 2, BP-2)
The following disclosures provide details on specific circumstances related to the preparation of our sustainability statement:}
Time Horizon
Lundin Gold has applied the short, medium and long-term time horizons defined by ESRS 1 without deviation. Our definition of
short and medium-term aligns with Lundin Gold’s business planning, risk management and sustainability governance processes.
For the purposes of sustainability reporting, Lundin Gold defines its time horizons as follows:
•
Short-term:
up to one year
•
Medium-term:
two to five years
•
Long-term:
beyond five years
VALUE CHAIN ESTIMATIONS
Although our sustainability statement focuses on operations under Lundin Gold’s control, certain metrics inherently require the
use of upstream or downstream value chain data. Where primary third-party data is incomplete or not fully verifiable, we apply
reasonable estimates based on indirect sources. The metrics that include estimated value chain data are:
•
Climate change – Scope 3 greenhouse gas (GHG) emissions: calculated using a combination of supplier information, activity
data and recognized emission factors to estimate emissions associated with upstream and downstream activities.
•
Own workforce – Contractors’ headcount and location: Indirect employment and local subcontracting, including employment
and procurement generated through contractors and service providers supporting FDN’s operations and exploration, based on
contractor-reported information and internal estimates where full data is unavailable.
Sources of Estimation and Outcome Uncertainty
When the Company requires estimates, it bases them on reasonable assumptions, established calculation methods and the best available
data at the time of reporting. We outline our assumptions, methodologies and data limitations, including the basis for preparation and
resulting levels of accuracy, for key metrics throughout our sustainability statement. This includes estimates within our calculation of
Scope 1, 2 and 3 GHG emissions (including emission factors that are subject to sensitivity due to potential future updates to emissions
reporting protocols), energy consumption, water withdrawal, and waste rock generated metrics.
Forward-Looking Information
This sustainability statement contains forward-looking information or forward-looking statements. Please refer to these detailed
statements in the Forward-Looking Statements section provided in the "Appendix".
2025 Annual Report
37
GOVERNANCE
ROLE OF THE EXECUTIVE BOARD AND SUPERVISORY BOARD IN SUSTAINABILITY MATTERS
(ESRS 2, GOV-1 AND GOV-2)
Lundin Gold’s Board of Directors (the Board) holds ultimate responsibility for the stewardship of the Company, including oversight
of material IROs. Five standing committees support the Board – the Audit Committee, Corporate Governance and Nominating
Committee, Compensation Committee, Health, Safety, Environment and Sustainability (HSES) Committee, and Technical Committee
– each operating under a written mandate reviewed annually and publicly available at Lundin Gold’s website, Corporate Governance.
Board Oversight
Board of Directors
Executive Team
Senior Management Team
Audit
Commiee
CEO,
CFO,
COO and Vice Presidents
Corporate Governance
and Nominang (CGN)
Commiee
Health, Safety,
Environment and
Sustainability (HSES)
Commiee
Technical
Commiee
Compensaon
Commiee
Operaons
FDN Site General
and Senior Managers
Exploraon Senior
Managers
Corporate
Department
Directors
Our Workforce
Board Oversight, Roles and Responsibilities
The Board holds overall responsibility for the stewardship of the Company. The Board maintains internal controls and
risk management procedures and oversees risks across strategic, operational, financial, legal, governance, reputational,
environmental, social, climate-related and technological areas. It approves and monitors long-term sustainability goals and
performance targets annually, and it incorporates sustainability-related metrics into executive compensation to reinforce
accountability.
The Board delegates primary responsibility for sustainability-related oversight to the HSES Committee.The HSES Committee oversees
sustainability strategy and policies, monitors environmental, social, health and safety performance and reviews related risks, including
climate-related considerations. The Committee reports regularly to the Board on sustainability performance, emerging issues
and the effectiveness of the Company’s sustainability-related controls and management systems.
Lundin Gold integrates material IROs identified through the DMA, stakeholder engagement, and risk management processes,
into strategic planning, capital allocation, oversight of major transactions and operational changes, and the Enterprise
Risk Management (ERM) framework. Where relevant, the Board and its committees weigh options between sustainability
objectives, operational performance and long-term value creation, to support informed and balanced decisions.
Management Responsibilities and Reporting Flow
Management implements Board-approved strategies, policies and controls. The Chief Executive Officer (CEO) leads sustainability
matters, supported by the Executive Team and the Senior Management Team, which oversees implementation across functions.
The Executive Team includes all the C-suite executives and Vice Presidents. The Senior Management Team includes the Executive
Team, the FDN General Manager and Ecuador-based Directors.
Dedicated processes – including ERM, sustainability performance monitoring, internal audits and compliance systems – support
the management of material IROs, and the Company integrates them with key internal functions.
2025 Annual Report
38
Reporting lines provide regular oversight:
•
Management reports to the Senior Management Team;
•
The Executive Team provides the Board and its committees quarterly reports covering material IROs, performance against
sustainability and climate objectives, key stakeholder engagement results, due diligence outcomes, and the effectiveness
of policies, actions and metrics;
•
Every four months, management and the Senior Management Team have sessions to review operational, strategic and
climate-related risks, their causes and impacts, and the effectiveness of mitigation measures, considering stakeholder
engagement initiatives when relevant. The Executive Committee escalates significant issues to the HSES Committee and
the Board;
•
The Audit Committee receives reporting on risk management, internal controls and compliance.
During the reporting period (January 1, 2025 to December 31, 2025), the Board, HSES Committee and Senior Management
Team addressed key material topics including occupational health and safety, environmental management, biodiversity,
climate risks and emissions, community and Indigenous engagement, ethical conduct and regulatory compliance, ethical
supply chains, local procurement, and associated reputational and operational risks. "Overview of Lundin Gold’s Impacts,
Risks and Opportunities" includes a full list of material IROs identified in the reporting period.
Board Composition, Expertise and Access to Skills
Relevant expertise, diverse skills and access to additional resources strengthen the Board’s oversight of sustainability matters.
While sustainability expertise is primarily concentrated within the HSES Committee, the full Board draws on this expertise through
regular reporting, committee updates and dedicated discussions at Board meetings. On average, members of the HSES Committee
each bring more than 20 years of experience as internal and external advisors to companies and organizations on sustainability
and ESG strategy, occupational health and safety, human rights, ethical supply chains and sustainable finance. Additionally, the
Board strengthens its sustainability-related expertise through structured orientation and ongoing education, including access to
management, site visits, regular briefings on operational and sustainability matters, and opportunities for directors to participate in
external seminars and training.
Board and Senior Management Team expertise aligns with Lundin Gold’s material IROs, including health and safety, environmental
management, climate change, community relations, Indigenous engagement, supply chain responsibility and ethical governance.
The governance data tables below present detailed quantitative information on Board composition, diversity and independence.
Board Composition, Diversity and Independence
1
Independence is reported in alignment with the standards of the Canadian Securities Administrators in National Instrument 52-110 – Audit Committees.
Not Independent 33%
Independent
1
67%
Board Independence
Female 44%
Male 56%
Gender Diversity
4
5
Part of visible minories, 11%
Not part of visible minories, 89%
Visible Minorities
Under 50, 33%
50 to 60, 56%
Over 60, 11%
Age
3
1
5
1
8
6
3
6
2025 Annual Report
39
Lundin Gold’s Board of Directors as at December 31, 2025
1
Director
Name
Independent
Member
(Y/N)2
Executive
Member
(Y/N)
Tenure
(Years)
Audit
Committee
Compensation
Committee
Corporate
Governance
& Nominating
Committee
Health, Safety,
Environment &
Sustainability
Committee
Technical
Committee
Carmel
Daniele
Y
N
10
Gillian
Davidson
Y
N
4
Ian Gibbs
Y
N
20
Melissa
Harmon
N
N
2
Ashley
Heppenstall
Y
N
10
Jamie Beck
N
Y
0
Scott Langley
N
N
2
Jack Lundin
Y
N
3
Angelina
Mehta
Y
N
2
Y: Yes; N:No
Committee Member
1
The Board comprises only shareholder representatives, with employee perspectives incorporated through engagement
channels rather than direct representation.
² Independence is reported in alignment with the standards of the Canadian Securities Administrators in National Instrument
52-110 – Audit Committees.
INTEGRATION OF SUSTAINABILITY-RELATED PERFORMANCE IN INCENTIVE SCHEMES (ESRS 2,
GOV3)
We apply a pay-for-performance approach in which executive remuneration consists of base salary, short-term incentives (STI)
and long-term incentives (LTI). Director’s compensation is fixed and not performance-based.
The Company integrates sustainability metrics into the STI program. Under the STI program, executive performance is assessed
against financial, operational and sustainability-related objectives that are modified each year depending on the Company’s
annual objectives. We determine STI as variable cash bonuses based on predetermined annual performance objectives, of which
20% relate directly to ESG and climate-related measures (2025: community wellbeing, human rights action plan and climate action
– GHG reductions).
Lundin Gold applies a modifier, the HSE Factor, to executives’ STI calculations, adjusting them up or down by 10% based on
performance with respect to health, safety and environmental performance measures agreed at the start of the financial year.
In the event of a fatality, the HSE Factor is automatically set to a maximum of 75% for all executives. While these metrics are
used to calculate performance, an executive’s ultimate STI payment is subject to the discretion of the Compensation Committee
and the Board. The Board and the HSES Committee review progress against these metrics quarterly, and this progress informs
annual incentive decisions.
In 2025, the HSE Factor was determined as follows:
Threshold Performance
HSE Factor = 0.9
Target Performance
HSE Factor = 1.0
Breakthrough Performance
HSE Factor = 1.1
Production delays imposed by regulators
Material fines imposed
TRIR > 0.50
Less than 2,000 Medium and High Risk
observations and less than 90% of the
observations closed
No shutdowns due to environmental
non-compliance
TRIR <= 0.49 and > 0.35
2,500 Medium and High Risk
observations and between 90% and 98%
of the observations closed
No lost time incidents
100% environmental compliance
TRIR <0.35
3,000 Medium and High Risk
observations and over 98% of the
observations closed
2025 Annual Report
40
•
Environmental Compliance is the degree to which operations meet applicable environmental laws and permits.
•
Health and safety observations rated medium or high on the 5 point risk card indicate a credible potential for serious injury
or fatality and require prioritized corrective action.
•
The incident rate (TRIR) is based on lost time and medical aid incidents and calculated on the basis of 200,000 hours
worked.
The Compensation Committee oversees the executive and director compensation framework, approves annual incentive plan
design and performance metrics, and evaluates corporate performance outcomes at year-end. The HSES Committee assesses
performance against the Company’s health, safety, environment and sustainability objectives and presents its findings to the
Compensation Committee for incorporation into the overall performance assessment. The full Board approves all elements of CEO
compensation. Day-to-day administration of the annual bonus program, including individual calculations and payments, is carried
out by the Executive Team within the parameters approved by the Board.
Climate-related Considerations in Compensation
In 2025, Lundin Gold included a climate-related element in the Executives’ STI program through the ESG component of annual
performance objectives, focusing on implementing a market-based Scope 2 GHG reduction strategy. Climate performance
metrics assess progress on implementing the Company’s climate strategy, which, in 2025, included initiatives to reduce Scope
2 emissions.
Lundin Gold’s 2026 Management Information Circular provides further details on the link between sustainability and climate
performance and executive compensation.
STATEMENT OF DUE DILIGENCE (ESRS 2, GOV-4)
Lundin Gold applies a structured, risk based due diligence process for sustainability matters that is integrated into its
governance, risk management and operational practices and aligned with international standards, including the UN Guiding
Principles (UNGPs) on Business and Human Rights.
At the governance level, the Board, through the HSES Committee, oversees sustainability and human rights due diligence,
and the Executive Team leads implementation. Due diligence expectations are embedded in corporate policies, including our
Human Rights Policy, Responsible Mining Policy and Code of Business Conduct and Ethics, which are referenced throughout
this sustainability statement. The table below provides an overview of where the core elements of Lundin Gold’s due diligence
process are described within our sustainability statement.
Mining Policy and Code of Business Conduct and Ethics, which are referenced throughout this sustainability statement. The
table below provides an overview of where the core elements of Lundin Gold’s due diligence process are described within our
sustainability statement.
To further strengthen our approach to responsible business practices, Lundin Gold is integrating human rights and supplier risk
considerations into key processes across our operations. As part of our supplier due diligence, prior to supplier selection we use
supplier questionnaires to assess human rights and ethical business conduct risks. In addition, supplier screening is conducted
through a dedicated due diligence platform that monitors third parties for allegations and convictions related to sanctions, bribery
and corruption, child and forced labour, human trafficking, human rights violations, fraud, money laundering, and adverse media.
This process supports supplier onboarding, ongoing monitoring, and risk escalation within procurement and contract management.
Core Elements of Due Diligence
Sections in the Sustainability Statement
Embedding due diligence in governance,
strategy and business model
General information - "Governance"
General information - "Interests and views of stakeholders"
General information - "Stakeholder Engagement"
"Own workforce"
"Affected communities"
General information - "Description of our process to identify and
assess material impacts, risks and opportunities"
Refer to the topical sections reflecting our range of actions through
which impacts are addressed
Refer to the topical sections reflecting our ambitions, goals and
targets to track the effectiveness of efforts
Engaging with affected stakeholders in all
key steps of the due diligence
Identifying and assessing adverse impacts
Taking actions to address those adverse
impacts
Tracking the effectiveness of these efforts
and communicating
A
B
C
D
E
2025 Annual Report
41
For human rights due diligence, Lundin Gold discloses its approach in its Modern Slavery Report, available on Lundin Gold’s website.
In 2024, the Company conducted a detailed Human Rights Risk Assessment (HRRA) with an independent human rights expert. Our
HRRA included a country context risk review for Ecuador and a corporate governance review, extensive rights-holder engagement,
and identification of priority human rights risks. Based on the results, Lundin Gold established a Human Rights Working Group and
a Human Rights Action Plan, and adopted a Human Rights Policy to guide prevention, mitigation, and remediation efforts.
RISK MANAGEMENT AND INTERNAL CONTROLS OVER SUSTAINABILITY REPORTING (ESRS 2,
GOV-5)
Risk Management and Internal Controls over Sustainability Reporting
Lundin Gold applies dedicated risk management and internal control processes specifically to the preparation, review and integrity
of its sustainability reporting. These processes operate within our broader governance framework and support the completeness,
accuracy, consistency, and reliability of sustainability disclosures.
The Company identifies and monitors sustainability reporting risks within its ERM framework and assesses them alongside other
operational and corporate risks. The scope of sustainability reporting risk management covers the identification, collection, estimation,
consolidation, review and public disclosure of sustainability information. Key components include defined roles and accountabilities for
sustainability data owners, documented methodologies and assumptions, internal validation procedures and multi-level management
review.
Lundin
Gold
identifies
risks
related
to
sustainability
reporting
by
assessing
potential
causes
of
misstatement,
omission
or
non-alignment
with
reporting
standards,
including
the
ESRS.
We
evaluate
these
risks
through
an
impact
probability
matrix
and
address
high-priority
risks
through
formal
mitigation
measures
and
action
plans.
Our impact probability matrix categorizes risks as low, medium, high or extreme depending on their potential effect on people,
business and regulatory compliance. High and extreme risks are subject to formal mitigation plans, reflecting our risk prioritization
methodology.
Principal sustainability reporting risks include data quality and availability, reliance on estimates and third-party information,
methodological consistency and completeness of disclosures. Mitigations include standardized reporting, documented assumptions,
management review and defined internal controls.
Integration, Reporting and Oversight of Control Findings
Management reviews sustainability reporting risks, key judgments, estimates and the effectiveness of related controls during the
reporting process. Management reports findings to the Executive Team and, where appropriate, to the Board of Directors through the
HSES Committee, supporting effective oversight and continuous improvement.
We integrate sustainability risk findings from our ERM process into sustainability, finance, operations and risk management processes.
Management risk owners are responsible for implementing controls and addressing identified risks within planning and reporting cycles.
Our Disclosure Committee oversees the quality and integrity of public disclosures, including sustainability-related information. The
Committee reviews material disclosures to support accuracy, completeness and alignment with reporting requirements prior to
publication.
Strategy
STRATEGY, BUSINESS MODEL AND VALUE CHAIN (ESRS 2, SBM-1)
Business Model
Significant Products and Services
Lundin Gold is a Canadian mining company headquartered in Vancouver, British Columbia, and part of the Lundin Group of
Companies. The Company’s core business is the exploration, development and operation of high-quality gold assets over the
life of the mine, with a strategic focus on long-life, low-cost and low-carbon operations.
The Company’s principal products are gold doré and gold concentrate produced from its 100% owned FDN mine, located in
southeast Ecuador. FDN has been in commercial production since late 2019 and is a high-grade, underground gold operation. It
is a major contributor to Ecuador’s gold output and an important producer within the region. These outputs generate revenues
and cash flows that support returns to shareholders, reinvestment in operations, and long-term financial sustainability. Outcomes
for other stakeholders include direct and indirect employment, local procurement and contracting opportunities and social
investment programs that support community development. The Company also delivers outcomes in the form of environmental
stewardship, safe operations, and transparent engagement with regulators, communities and other stakeholders. There were no
material changes to the Company’s principal product offerings during the reporting period.
In addition to gold production, Lundin Gold’s activities include mineral exploration and the management of mining concessions.
The Company holds 28 metallic mineral concessions and three construction material concessions in the Province of Zamora
Chinchipe, Ecuador, covering approximately 64,454 hectares. The FDN mine is located within the La Zarza concession, in the
2025 Annual Report
42
Parish of Los Encuentros, Canton of Yantzaza, Province of Zamora Chinchipe.
Near-Mine Exploration
The near-mine exploration program focuses on identifying and advancing new mineral discoveries in the geological
environment surrounding FDN, with particular emphasis on the emerging copper-gold porphyry corridor adjacent to the
operation. In 2025, the program represented the largest drilling campaign ever conducted on the land package hosting
FDN. The key porphyry discoveries within the corridor include:
•
Trancaloma:
An at-surface copper-gold porphyry system with confirmed lateral and vertical continuity and identified areas
for further expansion.
•
Sandia:
A copper-gold porphyry system located approximately four kilometres north of Trancaloma, with mineralization
beginning at surface.
•
Chontas:
Another confirmed porphyry system south of Trancaloma, extending the overall corridor from five to ten
kilometres.
The 2025 results collectively demonstrate the scale and continuity of the copper-gold porphyry corridor surrounding FDN.
For 2026, the program is expected to continue advancing drilling across the corridor, including at Castillo and new sectors
around FDN, with the goal of further delineating this emerging mineral district.
Regional Exploration
In 2025, Lundin Gold commenced the first year of a new three-year greenfield exploration strategy, guided by our Regional
Exploration Program. This program focuses on the systematic evaluation of Lundin Gold’s large, unexplored concession
package located within the same geological environment that hosts FDN. The current strategy prioritizes early-stage, surface-
based exploration across our concessions. Our three-year strategy follows a phased approach, beginning with geological and
geochemical data acquisition.
Important exploration activities during the year included:
•
Geological mapping
•
Geochemical sampling of rocks and soils
•
Geophysical surveys, including airborne
magnetic and radiometric surveys
, completed across most of the regional
concession package
Based on results generated from surface exploration programs, 2026 is planned to be the first year of drilling on the regional land
package.
Significant Markets and Customer Groups
The Company’s customer base primarily consists of established international precious metals traders, refineries and smelters with
expertise in sourcing, refining and marketing gold products. These customers operate in international markets. Lundin Gold selects
these customers based on their commercial competitiveness, technical capability, reliability, and alignment with the Company’s
ethical, compliance, and responsible sourcing expectations.
The Company generated 76% of its revenue from four major customers during the year ended December 31, 2025 (2024 – 69%
from four major customers). However, the Company is not economically dependent on these customers as gold and silver can be
sold to smelters and through numerous banks and commodity market traders worldwide. We reported no material changes to our
significant markets or customer groups during the reporting period.
Headcount
Headcount by geographical area is disclosed in "ESRS S1 – Own Workforce".
2025 Annual Report
43
Vancouver
CANADA
ECUADOR
Toronto
Toronto Stock
Exchange: LUG
Fruta del Norte
Concentric Rings
Nasdaq
Stockholm: LUG
Stockholm
SWEDEN
Ring 1
Ring 4
Ring 5
Ring 3
Ring 2
Fruta del Norte
Los Encuentros
ECUADOR
CONCENTRIC RINGS
PERU
3
The rest of the Province of
Zamora Chinchipe
2
4
The rest of Ecuador
The rest of the Canton of Yantzaza
1
The Parish of Los Encuentros and the
communies of Río Blanco and Playón
Internaonal
5
The Rings have been defined through our community engagement
process and are aligned with the administrave structure of Ecuador.
Note:
Shuar communies in the Province of Zamora Chinchipe are considered Ring 1.
Sustainability-Related Goals for Products, Markets, Geography and Stakeholders
Lundin Gold directly links its sustainability-related goals to its core products, its customer base, the geographical context of its
operations in Ecuador and its relationships with key stakeholders.
With respect to products and services, we aim to produce gold responsibly, safely and efficiently, minimizing environmental
impacts and maximizing socio-economic benefits. This includes maintaining FDN as a low-cost, energy-efficient, high-grade
operation, dedicated to implementing the Global Industry Standard on Tailings Management (GISTM), water stewardship, and
continuous improvement in health and safety performance, while aligning production practices with international mining and
sourcing expectations.
In terms of customer categories and markets, we focus our sustainability goals on maintaining access to reputable, well-
regulated international markets by meeting legal, regulatory, and responsible-conduct requirements. This includes adherence
to anti-corruption and anti-bribery standards, sanctions compliance, and responsible sourcing expectations, which underpin
long-term commercial relationships and reinforce our commitment to our Responsible Mining Policy.
Geographically, Lundin Gold prioritizes sustainable development in Ecuador, particularly in the Province of Zamora Chinchipe
and the areas of influence around FDN. Key goals include contributing to local employment, strengthening local procurement,
supporting community development and livelihoods, respecting human rights, and maintaining constructive engagement with
national, regional and local authorities.
The section "Stakeholder Engagement" provides further information on the importance of stakeholder relationships and the
Company’s stakeholder engagement strategy.
Our Definition of “Local”
Our definition of “local” allows us to maximize shared benefits of FDN, to mitigate or minimize risks and to measure our
impact accordingly through local employment, procurement and community investment. Our approach considers the country’s
Amazon Law, which requires companies operating in the Ecuadorian Amazon to prioritize the hiring of local and Indigenous
workers from the region. We identified four regions or “Rings” through our community engagement process as demonstrated
in the following diagram, we consider “local” to include Ring 1, Ring 2 and Ring 3.
2025 Annual Report
44
Use of
Products
End of
Life
Financial
Capital
Investors
and insurers
Approvals
& Permits
Local and naonal
government authories
Labour, tax,
environment and
mining regulators
Regulatory approvals,
licenses and permits
to operate
Key
Inputs
Suppliers
Customers
Logiscs providers
End-users
Refiners and smelters
Exploration
Activities
Tailings
Management
Mineral exploration
and the management
of mining concessions
Gold doré and concentrate extraction,
processing and production
Distributions
Gold doré and
concentrate
products
Refining
& Smelting
Concentrate products
Mining
Processing
• Fuel (diesel and gas)
• Mining equipment
• Chemicals
• Mechanical parts
and accessories
• Drilling equipment
• Explosives
• Cement to site
• Energy
• Water
Goods & Services
Administrative &
Corporate Functions
Local communies and Indigenous Peoples
Lundin Gold workforce
(employees and non-employees)
Local and naonal government authories
Labour, tax, environment and mining regulators
Mining chambers and trade associaons
Strategic partnerships (NGOs, Academia)
Upstream
Own Operations
Downstream
ECUADOR + CANADA
ECUADOR + CANADA*
WORLDWIDE
Biodiversity
Management
* Canada only for Administrative and Corporation Functions.
Affected Stakeholders
Material Sustainability Topics
Upstream
Operations
Downstream
E1
Climate Change
E1
Climate Change
E1
Climate Change
E2
Pollution
E3
Water and Marine Resources
E4
Biodiversity and Ecosystems
E5
Resource Use and Circular Economy
G1
Business Conduct
S1
Own Workforce
S3
Affected Communities
E4
Biodiversity and Ecosystems
S1
Own Workforce
S3
Affected Communities
Our Value Chain
Value Chain Position and Main Actors
Operating costs, sustaining capital, workforce expenses, energy and consumables drive the Company’s cost structure, while
gold sales generate almost all of its revenue. The gold mining sector presents governance, environmental and social risks.
These include land use, water, tailings, energy use, emissions, labour, political engagement and community relations risks. The
Company manages these risks through integrated systems and mitigation measures. Opportunities arise from the Company’s
high-grade, low-cost asset base, which enable lower impacts across key environmental topics such as energy use and emissions,
water management, and land disturbance, contributing to shared value creation for stakeholders.
2025 Annual Report
45
Responsible
Resource
Governance
Accountability
and
Management
Systems
External
Communicaon,
Sustainability
and Financial
Reporng
Strategic
Partnerships
Parcipatory
Dialogue
E
N
V
I
R
O
N
M
E
N
T
G
O
V
E
R
N
A
N
C
E
S
O
C
I
A
L
E
E
S
SG
G
E
N
A
B
L
E
R
S
Climate
Change
Environmental
Stewardship
Community
Infrastructure
Community
Wellbeing
Human
Rights
Health
and Safety
Lasng
Economic
Opportunies
S
T
R
A
T
E
G
I
C
P
I
L
L
A
R
S
Our Sustainability Strategy
Lundin Gold’s corporate strategy integrates sustainability as a core element of long-term value creation and risk management.
Our strategic focus on operating a single, high-grade, long-life asset at FDN underpins its approach to managing sustainability
impacts while maintaining financial resilience and operational excellence. Sustainability sits at the heart of Lundin Gold’s
operations today and our vision for tomorrow. As stewards of the land on which we operate, we are committed to delivering
our products in a manner that is safe, sustainable, and aligned with global efforts to address urgent challenges such as climate
change, biodiversity loss, and human rights.
Key strategic elements that relate to sustainability include maintaining safe and reliable operations, minimizing our
environmental impacts across areas such as energy use and emissions, water management, and land disturbance per ounce
produced, and fostering constructive relationships with employees, contractors, local communities and Indigenous Peoples
and government authorities. This includes a strong emphasis on health and safety performance, efficient tailings and water
management, biodiversity protection, climate-related risk management, ethical business conduct and respect for human rights
across the Company’s activities.
Building on these elements, one strategic action was the integration of climate-related risks and opportunities into ERM and
business planning. We will continue to implement energy efficiency initiatives, optimize fuel use and evaluate opportunities to
reduce GHG emissions, while also assessing physical and transition climate risks relevant to our operations in Ecuador.
Social performance is another critical matter, emphasizing long-term meaningful community engagement, local hiring and
procurement, and investment in social programs that contribute to sustainable development in the area of influence around
FDN. We also prioritize a secure workforce through strong Health and Safety practices. Operational practices embed human
rights due diligence, access to remedy and responsible supply chain management.
Governance-related elements include maintaining robust corporate governance, transparent disclosure, strong internal
controls and effective legal and regulatory compliance. We design anti-corruption, whistleblower protection, and third-party
due diligence processes to safeguard our reputation and social license to operate.
The main sustainability-related challenges ahead include operating in a complex social and political environment in Ecuador,
managing evolving regulatory and sustainability disclosure expectations, addressing climate-related risks and ensuring that
growth or optimization initiatives do not adversely affect environmental or social performance. Critical solutions include
strengthening management systems, implementing action plans arising from risk and impact assessments, and ongoing
engagement with stakeholders to support responsible mining and long-term value creation.
2025 Annual Report
46
Looking Ahead: Our New Five-year Sustainability Strategy
In 2020, we launched our 2021-2025 sustainability strategy, a framework and set of targets aiming to embed sustainability across
all levels of our business and create enduring, shared value in Los Encuentros, throughout Ecuador, and beyond. We are proud of
the progress we have made across all pillars, including surpassing several of our original targets.
With the 2021–2025 Sustainability Strategy concluding in 2025, Lundin Gold has developed a new forward-looking strategy to
guide our efforts from 2026-2030. The updated strategy reflects changes in the regulatory and reporting landscape, evolving
stakeholder expectations, and our development into a growth-oriented mining company.
Building on the foundation of our existing strategy, we developed the new framework through a structured process that
incorporated an updated DMA, peer benchmarking, and scenario planning. With this approach, our strategy reflects our material
IROs and aligns with emerging global sustainability expectations and CSRD requirements.
Our strategy is anchored in our vision of “Transforming lives through responsible mining” and is organized around five strategic
pillars: Valued Workforce, Shared Prosperity, Stakeholder Trust, Environmental Stewardship, and Responsible Governance. For each
material topic, we have defined long-term ambitions, measurable targets, and Key Performance Indicators (KPIs) that strengthen the
connection between sustainability and business performance. This revised framework positions Lundin Gold to secure its legacy as
a leading gold company, deepen its positive impact, enhance resilience, and maintain stakeholder trust toward 2030 and beyond.
We set our 2026–2030 targets using a structured review of our current performance, operational requirements, projected
growth, local capacity assessments, community expectation surveys, and a participatory design process with local authorities
and ministries. We also based our targets on inputs collected during our DMA and discussion between the Executive Team and
Senior Management Team that elevated and positioned diverse points of view from local communities, Indigenous Peoples, local
governments, Lundin Gold’s own workforce, local businesses, regulators and social and environmental partners. As part of our
engagement efforts around our new targets, we also informed investors.
The following key assumptions form the foundation for setting realistic and achievable targets as part of our 2026-2030 strategy.
Key assumptions include improvements in the local education and training pipeline, stable operational needs, unchanged ring
definitions, a sustained local labour market, continued leadership commitment, steady procurement volumes, and growing
local supplier capacity. Environmental assumptions include considerations related to future water availability, anticipated
developments in the national energy grid driven by renewable energy expansion, declining costs for batteries and alternative
fuels, and the availability of high integrity carbon credits.
Key 2026-2030 targets are highlighted within the relevant sections of our sustainability statement.
2025 Annual Report
47
STAKEHOLDER ENGAGEMENT (ESRS 2, SBM-2)
Key Stakeholders, Organization, Purpose & Outcomes
Stakeholder engagement is a core element of Lundin Gold’s sustainability approach and an essential input into the development
and ongoing refinement of the Company’s strategy and business model. It enables open, transparent dialogue with those
affected by or interested in the Company’s activities, helping build trust, long-term relationships and stronger decision-making.
Management coordinates engagement through structured processes, with oversight from Senior Leadership Team and the
Board’s HSES Committee. Mechanisms include formal meetings, workshops, community assemblies, bilateral discussions,
grievance mechanisms and regular disclosures.
The purpose of engagement is to understand stakeholder concerns and expectations, share information, identify and manage
impacts, risks and opportunities, and jointly develop solutions where appropriate. Lundin Gold uses insights gathered through
engagement to shape its strategy, set sustainability priorities, and manage risks. The Company incorporates these insights into
key processes such as the DMA, HRRA, and the design of sustainability initiatives.
Another element of Lundin Gold’s stakeholder engagement and outreach is our work with the Lundin Foundation, a Canadian
non-profit organization, supported by the Lundin Group that promotes sustainable development, strengthens local economies,
and improves community well-being in regions where Lundin Group companies operate. The Lundin Foundation partners with
Lundin Gold to design and implement impact investment initiatives focused on education and training, inclusive procurement,
economic diversification, and resource governance in Ecuador. It also receives financial contributions from Lundin Gold to fund
these programs, helping improve local employment, supplier development, and long-term community resilience.
Through ongoing and inclusive dialogue, Lundin Gold considers stakeholder perspectives in decision-making; our engagement
supports our commitment to responsible mining and strengthens long-term value creation and operational resilience.
Shared
Prosperity
Stronger
Communies,
Lasng Posive
Impact
We create shared
value, strengthen
communies, and
generate lasng
economic
opportunies.
Stakeholder
Trust
Meaningful
Engagement,
Strong
Relaonships
We culvate lasng
relaonships
through collaboraon,
transparency,
and respect.
Responsible
Governance
Leading with
Integrity,
Honouring our
Principles
We build trust through
principled leadership,
commied to integrity
and accountability.
Environmental
Stewardship
Respect the
Environment,
Develop
Sustainably
We protect and respect
the natural
environment through
responsible resource
development.
Valued
Workforce
Culture of
Respect,
Commitment
to Excellence
We foster a safe and
respecul
workplace culture
where employees are
valued and share our
commitment to
operaonal excellence.
Stakeholder and Rights Holder Interests and Views and Their Influence on Strategy and Business Model
Local Communities and
Indigenous
Peoples
Own
Workforce
Government Authorities,
Regulators and Industry
Associations
Investors and
Lenders
Customers
Suppliers
Local Businesses,
Non-Governmental
Organizations (NGOs)
Dialogue Channels
Community roundtables held
every six weeks, community
perception surveys,
newsletters, interviews, focus
groups, site visits, private
meetings and press releases,
among others.
Email, newsletters, intranet,
interviews, focus groups,
perception surveys, grievance,
anti-harassment and
whistleblower mechanisms,
monthly meetings (town halls).
Political engagement strategy,
newsletters, interviews, focus
groups, site visits, private
meetings, presentations at
industry conferences, press
releases, among others.
Investor relations, external
disclosure materials such as
management information
circular, annual and quarterly
reports, management’s
disclosure and analysis,
sustainability report,
presentations at industry and
investor conferences, one-on-
one meetings, press releases
and website.
Email, newsletters, perception
surveys
and site visits.
Emails, newsletters,
site visits, private meetings,
press releases,
among others.
Emails, newsletters,
site visits, private meetings,
press releases,
among others.
Stakeholder Interests
•
Employment and local
procurement opportunities
•
Environmental protection
•
Water stewardship
•
Health and safety
•
Respect for human rights
•
Cultural heritage
•
Long-term socioeconomic
development
•
Safe working conditions
•
Fair and respectful treatment
•
Skills development
•
Job security
•
Ethical workplace practices
•
Legal and regulatory
compliance
•
Fiscal contributions
•
Environmental performance
•
Transparency and alignment
with national development
objectives
•
Financial performance
•
Operational reliability
•
Risk management
•
Strong governance
•
Climate-related risks
•
Transparent sustainability
disclosure
•
Quality and safety
•
Human rights due diligence
•
Operational performance
•
Responsible sourcing
•
Fair business practices
•
Human rights
•
Environmental impacts
•
Responsible sourcing
•
Fair business practices
•
Human rights
•
Environmental impacts
•
Community outcomes
How Engagement is Taken into Account by Lundin Gold
These views directly influence
Lundin Gold’s operating model
at FDN, including its local hiring
and procurement strategies,
community investment
programs, environmental
management practices,
grievance mechanisms and
approach to
stakeholder participation.
These perspectives inform
the Company’s strategy for
workforce management, health
and safety systems, training
programs, contractor oversight
and corporate culture.
These interests shape Lundin
Gold’s compliance frameworks,
governance practices, reporting
processes and approach
to engagement with
public institutions.
Their expectations are reflected
in the Company’s emphasis on
disciplined capital allocation,
integration of
climate-related risks into ERM,
governance structures, and
alignment with international
reporting standards and best
practices.
These views inform
Lundin Gold’s supply chain
management, third-party due
diligence processes.
These views inform
Lundin Gold’s supply chain
management, third-party due
diligence processes, human
rights commitments and
collaborative initiatives.
These views inform
Lundin Gold’s supply chain
management, third-party due
diligence processes, human
rights commitments and
collaborative initiatives.
2025 Sustainability Statement
48
2025 Annual Report
49
IDENTIFICATION
ENGAGEMENT
Develop IRO Universe
Review Inial DMA results
Establish
assessment criteria
Working sessions with
topic owners
IRO refinement
and priorizaon
16 SME interviews
and 11 workshops
VALIDATION
Execuve Commiee
review
Formal EXCO
endorsement
Aligned with ESRS
& CSRD
1
2
3
By systematically considering these stakeholder and rights holder interests and perspectives, Lundin Gold works to ensure that its
strategy and business model respond to material sustainability matters, support its social license to operate and contribute to long-
term, sustainable value creation.
Lundin Gold continuously reviews and, where appropriate, amends its strategy and business model to consider the interests and
views expressed by stakeholders and rights holders through ongoing engagement and formal assessment processes. Lundin Gold’s
new Sustainability Strategy 2026–2030 reflects updated stakeholder expectations.
Double Materiality Assessment (DMA)
DESCRIPTION OF THE PROCESS TO IDENTIFY AND ASSESS MATERIAL IMPACTS, RISKS, AND
OPPORTUNITIES (ESRS 2, IRO-1)
Lundin Gold conducted its first DMA in 2023. This initial assessment established a baseline for identifying material sustainability
topics and their associated IROs. The Company refreshed its DMA in collaboration with the Lundin Foundation in August 2025.
This refresh refined Lundin Gold’s list of IROs and provided a deeper understanding of their relevance and implications within the
Company’s operational and strategic context for the current year, in alignment with CSRD.
The DMA evaluates two dimensions
Useful and transparent
informaon required to
understand the
Company’s performance
and posion and the
impact of its business
Lundin Gold’s actual or
potenal posive and
negave impacts on people
and the environment
over the short,
medium, and
long term
Impact
Materiality
Risks and opportunies
with the potenal to
generate financial
effects on Lundin Gold
Financial
Materiality
Impact Outwards
Impact Inwards
Our DMA process drew on a peer review of sustainability topics reported by mining companies in Canada, the United States and
within the Lundin Group, as well as selected mining industry standards such as the Toward Sustainable Mining framework from the
Mining Association of Canada and the Consolidated Mining Standard Initiative guidance from the International Council on Mining
and Metals. Subject matter experts and management jointly assessed the IROs, and then Senior Management Team validated the
results through multiple executive sessions.
DMA Process
2025 Annual Report
50
Identification
The identification stage began with a detailed review of prior 2023 DMA results which included prioritized topics and subtopics
as well as qualitative insights derived from stakeholder and rights holder interviews and validation sessions with Lundin Gold’s
Senior Leadership Team. To maintain alignment with the CSRD framework, the Company cross-referenced its existing topic structure
against the ESRS topical areas and related subtopics, confirming that it appropriately reflected all sustainability matters required
under ESRS 1 Application Requirement (AR) 16.
Based on these predefined topics, Lundin Gold identified relevant subtopics for analysis and developed an expanded IRO inventory
to capture potential IROs across environmental, social, and governance dimensions. This included consideration of risks and
opportunities that may arise from identified impacts and dependencies within Lundin Gold’s value chain. Internal departments,
subject matter specialists and the Lundin Foundation contributed expertise that strengthened the process and aligned it with
industry practices and broader stakeholder expectations. These perspectives guided the refinement of topics and helped the IRO
universe reflect the Company’s operational realities, regulatory developments and evolving stakeholder priorities.
To evaluate the potentially material IROs identified in the process, Lundin Gold applied a defined set of assessment criteria. For
the impact materiality assessment, we evaluated each impact based on scale (magnitude of the impact), scope (geographical
reach), irremediability (ability to reverse or compensate), and likelihood (probability that a potential impact will occur). For human
rights impacts, we did not consider likelihood. For the financial materiality assessment, we evaluated risks and opportunities using
our internal ERM scoring methodology, which considers both the magnitude of potential financial effects and the likelihood of
occurrence.
IMPACT MATERIALITY ASSESSMENT
Negligible
Minor
Moderate
Serious
Very serious
No discernible
effect
Slight inconvenience
that is easily
manageable
Noceable and
requires some
effort to migate
Substanal and
requires immediate
aenon
Severe and
potenally
catastrophic
Sub-local area
Single
municipality
Regional
Country-wide
Mulple
countries
Limited
spread
Limited
spread
Moderately
spread
Widespread
Very widely
spread
Zero impact
Minor
Posive
Moderate
Posive
Significantly
posive
Extremely
Posive
No discernible
posive effect
Small impact
and limited
scope
Noceable and
contributes
posively
Substanal with
significant
benefits
Transformave
and significantly
improving
Not Likely
Low
Moderate
Highly Likely
Near
Certain
Yes
No
Completely
remediable
Mostly
remediable
Somewhat
remediable
Mostly
irremediable
Completely
irremediable
10%
probability
25%
probability
50%
probability
75%
probability
90%
probability
-
+
1
5
4
2
3
1
5
4
2
3
1
5
4
2
3
1
5
4
2
3
1
5
4
2
3
1
0
Scope
How widespread
the impact is
geographically
Scale
Irremediability
Degree to which impact
can be reversed or
compensated
Likelihood
Probability that a
potenal impact will
materialize
Human Rights Impact
Fundamental rights
under the Internaonal
Bill of Human Rights
Gravity of harm or
benefit to people
or the environment
2025 Annual Report
51
Engagement & Prioritization
We used our in-house subject matter experts as a proxy for bringing the interests and views of our stakeholders into the DMA.
To do this we conducted a series of working sessions with internal stakeholders to assess the identified IROs using the defined
assessment criteria. During these working sessions, internal stakeholders provided insights based on their operational expertise
and their knowledge of external stakeholder perspectives, including those of local communities and Indigenous Peoples, regulators,
and industry associations. These insights were also used to refine IRO descriptions and rationales.
Validation & Results
The validation process included a series of Senior Management Team reviews to confirm the methodology, validate scoring
outcomes, and integrate leadership feedback into the final prioritization of IROs.
As a result of this iterative approach, Lundin Gold refined its materiality thresholds and streamlined its list of material topics
and IROs with the aim of achieving proportionality and alignment with best practices. The final outcome confirmed 11 material
topics and 32 material IROs for reporting in 2025, comprising 15 impacts, 14 risks, and 3 opportunities. The HSES Committee
reviewed and approved Lundin Gold’s DMA process and final outcome, including material IROs.
Lundin Gold discloses material information for all material sustainability matters related to our material IROs, as determined
by the DMA process outlined above. Information is material if it is significant to Lundin Gold or our value chain, or meets users’
decision-making needs.
Lundin Gold will review the relevance and accuracy of all identified IROs on an annual basis, with a full DMA refresh conducted
every two years. The Company also intends to conduct additional reviews whenever significant changes occur that could impact
its own operations or value chain. These actions keep the Company’s approach current and aligned with its evolving business
context, regulatory requirements, and its ERM framework.
Policies that Lundin Gold uses to address identified IROs are made available to all stakeholders on our website.
FINANCIAL MATERIALITY ASSESSMENT
Very Low
Low
Moderate
High
Very High
Up to $5M
$5M to
$10M
$10M to
$20M
$20M to
$30M
Over
$30M
Not Likely
Low
Moderate
Highly Likely
Near Certain
10%
probability
25%
probability
50%
probability
75%
probability
90%
probability
1
5
4
2
3
1
5
4
2
3
Likelihood
Probability that the
financial risk or
opportunity will
materialize
Magnitude
Potenal financial
effect on
LUG – quanfied
associated cost
2025 Annual Report
52
Our Material ESRS Topics
Material
Significant
Inmaterial
8
12
11
9
10
6
7
5
2
4
3
1
13
Material
Significant
Inmaterial
FINANCIAL MATERIALITY
IMPACT MATERIALITY
Double Material
Impact Material
Financial Material
Non- Material
S2
S4
Workers in the value chain
Consumers and end- users
E1
Climate Change
E2
Polluon
E3
Water and Marine Resources
E4
Biodiversity and Ecosystems
E5
Circular Economy
S1
Own Workforce
S3
Affected Communies
G1
Business Conduct
IMPACT MATERIALITY
FINANCIAL MATERIALITY
ENVIRONMENT
1
E1 -
Climate Change Adaptation
2
E1 -
Energy
3
E2 -
Pollution of Water
4
E3 -
Water Discharges to Water Bodies
5
E4 -
Impact on the Extent and Condition
of Ecosystems
6
E4 -
Land-Use Change
7
E5 -
Waste (Tailings Management)
SOCIAL
8
S1 -
Health & Safety
9
S1 -
Secure Employment
10
S1 -
Training and Skills Development
11
S3 -
Communities’ Economic, Social &
Cultural Rights
12
S3 -
Rights of Indigenous Peoples
GOVERNANCE
13
G1 -
Political Engagement
2025 Annual Report
53
Topic Specific Considerations in Identifying and Assessing IROs
E1 – Climate Change (ESRS 2 and E1, IRO-1, SBM-3)
As part of its DMA and expert interviews, Lundin Gold used climate scenario analysis to inform the identification and qualitative
assessment of physical and transition risks and opportunities. See section "E1 Why it Matters" for disclosure of our climate
scenario analysis and results.
E2 – Pollution and E3 – Water (ESRS 2, E2 and E3, IRO-1)
Through its Environmental and Social Impact Assessment (ESIA), and the creation of its Environmental Management Plan (EMP),
Lundin Gold has screened its sites and business activities to identify actual and potential impacts, risks, and opportunities
related to pollution and water resources in its own operations and value chain. These assessments cover the FDN site and
the Near Mine area, including the La Zarza and Emperador mining concessions. For certain Regional Exploration concessions,
located in the provinces of Zamora Chinchipe and Morona Santiago, Lundin Gold manages environmental permits and standard
EMPs mandated by the Ministry of Environment and Energy that outline the prevention, mitigation and control measures
applicable to exploration activities. These locations and activities represent the primary areas where pollution-related impacts
may occur and where the Company implements associated management measures.
Within Lundin Gold’s EMPs, the Company has established specific measures to address water use and water pollution, underscoring
the relevance of water as a key environmental aspect for the Company. Insights from these assessments were an important
component of Lundin Gold’s DMA and the process for identifying IROs. This process incorporates various stakeholder perspectives,
including those of affected communities. More details on how stakeholder engagement is conducted can be found in section
"Stakeholder Engagement".
E4 – Biodiversity (ESRS 2 and E4, IRO-1)
This process included a biodiversity screening focused primarily on operations, supported by ESIA that Lundin Gold conducted
prior to the construction and exploitation phases of FDN. These studies established socio-environmental baselines in line with
Ecuadorian regulations and with reference to International Finance Corporation (IFC) Performance Standard 6, incorporating local
and Indigenous knowledge, cultural practices, and ecosystem services. The findings informed the Company’s EMP and a dedicated
Biodiversity Management and Monitoring Plan (BMMP).
Lundin Gold also incorporated insights from affected communities, including local communities and Indigenous Peoples, into
its identification of material IROs, as outlined in our DMA process discussed above and in section “Stakeholder Engagement”.
Further, ongoing consultations take place with affected communities through various engagement channels, see section
"Processes for Engaging with Affected Communities and Channels to Raise Concerns" for additional details.
The Company’s concessions lie near biodiversity-sensitive areas. La Zarza borders the El Zarza Wildlife Refuge and includes part
of the Cordillera del Cóndor Protected Forest, while the Colibrí 5 concession borders the refuge to the west. The BMMP applies
the mitigation hierarchy – avoid, minimize, restore. Across FDN’s area of influence, Lundin Gold has addressed the ‘avoid’ and
‘minimize’ stages and is now focused on identifying restoration and compensation measures. This includes strategic alliances
for biodiversity research and conservation that support sustainable landscapes and restoration beyond the Company’s direct
influence.
E5 – Resource Use and Circular Economy (ESRS 2 and E5, IRO-1)
The screening of mining waste, especially tailings and waste rock, was based on the ESIA and the EMP, which Lundin Gold
developed in alignment with national regulations on waste management. In 2025, Lundin Gold also initiated a comprehensive
climate change assessment to evaluate how projected climate conditions may affect the operations over the long-term, with a
particular focus on our TSF. We established a dedicated non-hazardous and hazardous waste management plan (non-mining)
to address hazardous and non-hazardous waste generated during construction, operation, and closure phases. Through
this process, we conducted a more extensive screening of our activities and engaged with stakeholders, including affected
communities, to identify, minimize and mitigate our impacts. Additional details on our stakeholder engagement are outlined in
our DMA process above and in section "Stakeholder Engagement"
G1 – Business Conduct (ESRS 2 and G1, IRO-1)
The process considered the Company’s operating context in Ecuador, its listings in Canada and Sweden, and its value chain
structure. Criteria included location, activity type, sector characteristics and transaction structures. Lundin Gold applies
Canadian business conduct standards and Ecuadorian regulations, and monitors compliance through its governance framework
and ERM, updated quarterly. The assessment addressed risks related to political engagement, oversight of mining activities,
money laundering exposure and interactions with high-risk actors. Lundin Gold maintains strong screening methodologies, and
a compliance officer oversees their implementation, to verify that business conduct commitments and legal requirements are
met within the Company’s operations and value chain.
2025 Annual Report
54
OVERVIEW OF LUNDIN GOLD’S IMPACTS, RISKS AND OPPORTUNITIES (ESRS 2, SBM-3)
The tables below provide an overview of the material ESRS topical standards, the associated sustainability matters, and the related IROs
identified through Lundin Gold’s first-time DMA and stakeholder engagement processes.
Environment
Topic
Sustainability Matters and Related IROs
I/R/O
Actual (A)
and
Potential (P)
Time
Horizon
Area in the
Value Chain
E1
Climate Change
Climate
Change
Adaptation
Increased workforce vulnerability to extreme
weather (-)
I
P
LT
OP
Costly projects (-)
R
P
LT
OP
Energy
GHG Emissions (-)
I
A
ST
US - DS
Forced to implement costly projects due to
regulations (-)
R
P
ST
OP
E2
Pollution and
E3
Water and Marine
Resources
Pollution of
Water and
Discharges to
Water Bodies
Environmental degradation from spills on-site in
the operation (-)
I
P
ST
OP
Environmental degradation from spills in the
supply chain (-)
I
P
ST
OP
Non-compliance with discharge quality for
industrial water- with new permit discharge
criteria or expansion of Colibri 4 or Colibri 5 (-)
R
P
ST
OP
Non-compliance with discharge quality for
domestic wastewater (-)
R
P
ST
OP
E4
Biodiversity and
Ecosystems
Impact on the
Extent and
Condition of
Ecosystems
Biodiversity loss (-)
I
P
LT
US - OP
Regulatory risks and permitting (-)
R
P
ST
OP
Damage to brand value (-)
R
P
ST
OP
Lagging behind industry standards (-)
R
P
MT
OP
Land - Use
Change
Environmental Remediation (-)
R
P
LT
OP
Reputational Damage (-)
R
P
LT
OP
E5
Resources and
Circular Economy
Waste
(Tailings
Management)
Health and safety hazards on workers and
surrounding communities (-)
I
P
LT
OP
Loss of chemical stability - TSF (-)
R
P
MT
OP
I:
Impact
; R:
Risk
; O:
Opportunity
A:
Actual
; P:
Potential
LT:
Long
-
term
, MT:
Medium
term
; ST:
Short
Term
OP:
Operations
; US:
Upstream;
DS:
Downstream
2025 Annual Report
55
At present, there are no measurable financial effects resulting from material IROs on Lundin Gold’s financial position, results of
operations, or cash flows. However, we maintain internal estimations of potential financial impacts through our ERM and DMA
processes. Likewise, there is no significant risk of material adjustments to carrying amounts in the next reporting period.
Governace
Topic
Sustainability Matters and Related IROs
I/R/O
Actual (A)
and
Potential (P)
Time
Horizon
Area in the
Value Chain
G1
Business Conduct
Political
Engagement
and Lobbying
Activities
Industry advocacy (+)
I
A
ST
OP
Policy changes and contract breach (-)
R
P
ST
OP
Proactive regulation shaping (+)
O
P
ST
OP
Crisis management advantage (+)
O
P
ST
OP
I:
Impact
; R:
Risk
; O:
Opportunity
A:
Actual
; P:
Potential
LT:
Long
-
term
, MT:
Medium
term
; ST:
Short
Term
OP:
Operations
; US:
Upstream;
DS:
Downstream
Social
Topic
Sustainability Matters and Related IROs
I/R/O
Actual (A)
and
Potential (P)
Time
Horizon
Area in the
Value Chain
S1
Own Worforce
Health & Safety
Fatalities or long-term health issues (-)
I
P
ST
OP
Events associated with the transportation,
handling, and storage of chemicals (-)
I
P
ST
US - OP
Secure
Employment
Wellbeing challenges (-)
I
A
ST
OP
Financial stability (+)
I
A
ST
OP
Illegal work stoppages (-)
R
P
ST
OP
Training
and Skills
Development
Development of national talent (+)
I
P
MT
OP
S3
Affected Communities
Communities’
Economic,
Social & Cultural
Rights
Co-finance public services and infrastructure
development (+)
I
A
ST
OP
Sustainable linked loans (+)
O
P
LT
US
Rights of
Indigenous
Peoples
Undermining of Indigenous Peoples' self-
determination (-)
I
P
LT
OP
Contamination of ancestral lands - mine closure (-)
I
P
LT
OP
Legal disputes or protests (Prior Consultation) (-)
R
P
MT
OP
Negative publicity and brand damage (-)
R
P
ST
OP
2025 Annual Report
56
ENVIRONMENT
EU TAXONOMY
SCOPE
Lundin Gold assessed its economic activities against the EU Taxonomy Regulation (EU) 2020/852, a classification system
that identifies which business activities qualify as environmentally sustainable. The assessment covered the 2025 reporting
year and examined the Company’s capital expenditure, operating expenditure, and turnover in accordance with Article 8
disclosure requirements. Lundin Gold applied the original reporting requirements under the Taxonomy Regulation rather
than the simplified regime introduced through the revised Delegated Act incorporating the Omnibus simplifications.
The assessment considered direct operational activities and enabling/supporting activities relevant to the Company’s
mining operations. Given the nature of the extractive sector, particular attention was paid to environmental management,
biodiversity conservation, and infrastructure related activities.
No OpEx meets the EU Taxonomy eligibility criteria, as the definition requires these to be “direct, non-capitalized costs”. In our
case, operational expenses including maintenance costs are capitalized into inventory and subsequently expensed through
“Cost of Goods Sold”. Additionally, no turnover was associated with EU Taxonomy-eligible or aligned activities in 2025. This
reflects the current structure of revenues and operating costs in the mining sector, where revenue-generating activities and
operational expenses are not yet covered by EU Taxonomy-aligned definitions.
EU Taxonomy eligibility and alignment – 2025
KPI
Turnover
CapEx
OpEx
Taxonomy-eligible,
but not aligned (%)
0.0%
7.0%
0.0%
Taxonomy-aligned (%)
0.0%
6.5%
0.0%
Row
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and
deployment of innovative electricity generation facilities that produce energy from nuclear processes with
minimal waste from the fuel cycle.
No
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear
installations to produce electricity or process heat, including for the purposes of district heating or industrial
processes such as hydrogen production, as well as their safety upgrades, using best available technologies.
No
3
The undertaking carries out funds or has exposures to safe operation of existing nuclear installations that
produce electricity or process heat, including for the purposes of district heating or industrial processes such
as hydrogen production from nuclear energy, as well as their safety upgrades.
No
Row
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation
facilities that produce electricity using fossil gaseous fuels.
No
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of
combined heat/cool and power generation facilities using fossil gaseous fuels.
No
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat
generation facilities that produce heat/cool using fossil gaseous fuels.
No
2025 Sustainability Statement
57
1
Comparative data for 2025 is not presented as this is the Company’s first year of reporting under the EU Taxonomy
Y:
Fulfilled
N:
Not fulfilled
N/EL:
Not eligible
CCM
: Climate Change Mitigation
BIO:
Biodiversity
CEY
: Circular Economy
CCA:
Climate Change Adaptation
Financial year 2025
2025
Substantial contribution criteria
DNSH (Does not significantly harm)
Minimum
Safeguards
Proportion
of
Taxonomy
- aligned
(A.1) or
-eligible
(A.2)
CapEx year
20241
Category
enabling
activity
Category
transitional
activity
Economic Activities
Code
CapEx
Proportion
of CapEx
year 2025
Climate
Change
Mitigation
Climate
Change
Adaptation
Water
Pollution
Circular
Economy
Biodiversity
Climate
Change
Mitigation
Climate
Change
Adaptation
Water
Pollution
Circular
Economy
Biodiversity
m/
USD
%
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Construction, extension and
operation of waste water
collection and treatment
CCA
5.3
$5.19
6.4%
N
Y
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
-
Conservation, including
restoration, of habitats,
ecosystems and species
BIO
1.1
$0.077
0.1%
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
Y
-
CapEx of environmentally
sustainable activities (Taxonomy-
aligned) (A.1)
$
5.270
6.5%
0%
98%
0%
0%
0%
2%
Y
Y
Y
Y
Y
Y
Y
-
Of which enabling
$-
0%
0%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
-
E
Of which transitional
$-
0%
-
-
-
-
-
-
Y
Y
Y
Y
Y
Y
Y
-
T
A.2 Taxonomy - eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Use of concrete in civil engineering
CEY
3.5
$0.39
0.5%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
-
-
-
-
-
-
-
-
-
-
CapEx of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
$0.39
0.5%
0%
0%
0%
0%
100%
0%
-
-
-
A.CapEx of Taxonomy- eligible
activities (A.1+A.2)
$5.66
7.0%
0%
98%
0%
0%
100%
2%
-
-
-
B. Taxonomy non-eligible activities
CapEx of Taxonomy non-eligible
activities ($ million)
$75.50
93%
Total CapEx ($ million)
$81.16
100%
2025 Sustainability Statement
58
Financial year 2025
2025
Substantial contribution criteria
DNSH (Does not significantly harm)
Minimum
Safeguards
Proportion
of Taxonomy
(A.1) or (A.2)
Turnover
year 20241
Category
enabling
activity
Category
transitional
activity
Economic
Activities
Code
Turnover
Proportion
of Turnover
year 2025
Climate
Change
Mitigation
Climate
Change
Adaptation
Water
Pollution
Circular
Economy
Biodiversity
Climate
Change
Mitigation
Climate
Change
Adaptation
Water
Pollution
Circular
Economy
Biodiversity
m/USD
%
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Revenues of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
$-
-
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
Of which enabling
$-
-
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
E
Of which transitional
$-
-
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Turnover of Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2)
$-
-
0%
0%
0%
0%
0%
0%
A. Turnover of Taxonomy-eligible activities
(A.1+A.2)
$-
-
0%
0%
0%
0%
0%
0%
B. Taxonomy non-eligible activities
Turnover of Taxonomy non-eligible activities
($ million)
$1,193
100%
Total Turnover ($ million)
$1,193
100%
1
Comparative data for 2025 is not presented as this is the Company’s
first year of reporting under the EU Taxonomy.
Y:
Fulfilled
N:
Not fulfilled
N/EL:
Not eligible
CCM
: Climate Change Mitigation
BIO:
Biodiversity
CEY
: Circular Economy
CCA:
Climate Change Adaptation
Financial year 2025
2025
Substantial contribution criteria
DNSH (Does not significantly harm)
Minimum
Safeguards
Proportion
of
Taxonomy
(A.1) or (A.2)
OpEx year
20241
Category
enabling
activity
Category
transitional
activity
Economic
Activities
Code
OpEx
Proportion
of OpEx year
2025
Climate
Change
Mitigation
Climate
Change
Adaptation
Water
Pollution
Circular
Economy
Biodiversity
Climate
Change
Mitigation
Climate
Change
Adaptation
Water
Pollution
Circular
Economy
Biodiversity
m/USD
%
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. Taxonomy-eligible activities
A.1 Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
$-
-
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
Of which enabling
$-
-
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
E
Of which transitional
$-
-
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
T
A.2 Taxonomy - eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
OpEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
$-
-
0%
0%
0%
0%
0%
0%
-
A. OpEx of Taxonomy- eligible activities
(A.1+A.2)
$-
-
0%
0%
0%
0%
0%
0%
-
B. Taxonomy non-eligible activities
OpEx of Taxonomy non-eligible activities
($ million)
$-
-
Total OpEx ($ million)
$-
-
1
Comparative data for 2025 is not presented as this is the Company’s
first year of reporting under the EU Taxonomy
Y:
Fulfilled
N:
Not fulfilled
N/EL:
Not eligible
CCM
: Climate Change Mitigation
BIO:
Biodiversity
CEY
: Circular Economy
CCA:
Climate Change Adaptation
2025 Annual Report
59
METHODOLOGY FOR DETERMINING ELIGIBILITY AND ALIGNMENT
We have applied a structured, documented, and auditable assessment process, consistent with EU Taxonomy guidance.
Identification of Economic Activities
A total of
32 economic activities
were identified across Lundin Gold’s operations, including:
•
Exploration and development
•
Core operational, processing & metallurgical activities
•
Logistics and infrastructure related activities
•
Environmental management, conservation, and compliance activities
•
Enabling and supporting activities
This step provided comprehensive coverage of activities with potential relevance to the EU Taxonomy environmental objectives.
Mapping to EU Taxonomy Activities and Eligibility Screening
Each identified activity was mapped to the most relevant EU Taxonomy economic activity and screened for eligibility against
the Climate Delegated Act (Commission Delegated Regulation (EU) 2021/2139) and Environmental Delegated Act (Commission
Delegated Regulation (EU) 2023/2486). The eligibility assessment considered the coverage of all six EU Taxonomy environmental
objectives: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources,
transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems.
As a result
three activities
were identified as EU Taxonomy-eligible:
•
Lundin Gold Activity:
Mine ventilation, dewatering, ground support, Tailings management including TSF works
•
CEY 3.5 Use of concrete in civil engineering
•
Environmental Objectives: Circular Economy
•
Lundin Gold Activity
: Water management (collection, treatment, recycling and discharges)
•
CCM 5.3 & CCA 5.3 Construction, extension and operation of wastewater collection and treatment
•
Environmental Objective: Climate Mitigation and Climate Adaptation
•
Lundin Gold Activity
: Environmental compliance, permitting, and reporting
•
BIO 1.1 Conservation, including restoration, of habitats, ecosystems, and species
•
Environmental Objective: Biodiversity
Quantification of Financial Exposure
For eligible activities, Lundin Gold quantified financial exposure by:
•
Allocating actual 2025 Turnover, CapEx and OpEx to eligible activities
•
Applying activity-level attribution based on project documentation and cost centers
•
Confirming that no turnover and operational expenses were directly attributable to eligible activities
Alignment Assessment
Eligible activities were assessed for alignment in collaboration with the Finance team and relevant subject matter experts by
evaluating compliance with:
•
Technical Screening Criteria (TSC)
for substantial contribution to the relevant environmental objective
•
Do No Significant Harm (DNSH)
criteria across all other environmental objectives
•
Minimum Safeguards
, including human rights, labour standards, anti-corruption and business ethics, and Governance and
grievance mechanisms.
Only activities meeting all three pillars were considered EU Taxonomy-aligned.
Internal Validation and Documentation
The assessment process was supported by:
•
Cross-functional input from Sustainability, Environment, Operations, and Finance teams
•
Use of the EU Taxonomy Calculator as a reference tool
•
Maintenance of documented evidence to support eligibility and alignment conclusions
2025 Annual Report
60
ALIGNMENT RESULTS AND CONTRIBUTING ACTIVITY
Of the three EU Taxonomy-eligible activities,
two activities met all
applicable alignment requirements during the reporting period:
•
CCA 5.3 Construction, extension and operation of wastewater collection and treatment
•
Environmental Objective: Climate Adaptation
•
BIO 1.1 Conservation, including restoration, of habitats, ecosystems, and species
•
Environmental Objective: Biodiversity
The Taxonomy alignment assessment for the three Taxonomy eligible activities was performed in a sequential manner, assessing
Substantial Contribution (SC), Do No Significant Harm (DNSH) and Minimum Safeguards (MS) in line with the EU Taxonomy Regulation.
The Substantial Contribution criteria were assessed at activity level with the involvement of relevant internal departments and
topic owners at Lundin Gold, who provided activity-specific technical input and supporting evidence. Only activities meeting
the applicable SC criteria were assessed as aligned. For aligned activities, compliance with Do No Significant Harm criteria was
subsequently evaluated through a review of activity-specific operational practices and corporate-level policies. Lundin Gold adheres
to the principle of “do no significant harm” through its governance framework and its Responsible Mining Policy, which guides
environmental and social risk management across operations. As part of the assessment, only one environmental objective met the
substantial contribution criteria. For this reason, no duplication was applied to the CapEx. No economic activity in the Taxonomy
assessment met multiple environmental criteria.
Minimum Safeguards were assessed at Group level, as these requirements apply consistently across all activities. Lundin Gold
has implemented a Human Rights Policy aligned with the UN Guiding Principles on Business and Human Rights, supported by
related policies and procedures, and applicable to all Taxonomy-aligned activities. These activities met the relevant Technical
Screening Criteria and DNSH requirements and resulted in the following aligned expenditures in 2025:
•
Taxonomy-aligned CapEx:
$5,270,202 (6.5%)
All other eligible activities did not meet one or more alignment criteria, primarily due to:
•
Inability to demonstrate substantial contribution under the current TSC.
•
Activities contributing indirectly to environmental objectives but not meeting prescriptive thresholds.
•
Sector specific limitations within existing EU Taxonomy definitions for mining and extractives industry.
KEY ASSUMPTIONS AND DATA SOURCES
The assessment relied on the following assumptions and data sources:
•
Financial data from audited internal Finance systems, covering 2025 Turnover CapEx and OpEx.
•
Turnover: Corresponds to income arising from the Company’s ordinary activities, in accordance with IFRS. Total turnover is
disclosed in the Financial Statements, page 124.
•
Capital expenditure (CapEx) includes additions to tangible and intangible assets, as reported in the Consolidated Financial
Statements the sum of Sustaining capital expenditures and Non-sustaining capital expenditures. For EU Taxonomy
purposes, CapEx includes investments related to property, plant and equipment and intangible assets that are relevant for
Taxonomy-eligible and aligned activities, visible on page 20 of the Annual Report.
• Operating expenditure (OpEx) comprises direct non-capitalized costs related to day-to-day operations, including
maintenance, short-term leases, and other operating expenses relevant to Taxonomy-eligible activities, in line with Article
8 of the EU Taxonomy Regulation. OpEx is derived from internal management reporting and is not presented as a separate
line item in the consolidated financial statements.
•
Operational and environmental data provided by Business Sustainability, Environment, Finance, and Operations
Departments.
•
Internal policies, management systems, permits, and management plans used to assess DNSH and Minimum Safeguards.
•
Conservative interpretation applied where EU Taxonomy criteria required judgment, in line with extractive-sector reporting
norms.
2025 Annual Report
61
Where data granularity was limited, Lundin Gold applied a precautionary approach and excluded activities from alignment.
GAPS AND LIMITATIONS
Lundin Gold recognizes the following limitations in the current assessment:
•
The EU Taxonomy Technical Screening Criteria remain highly restrictive for extractive and mining activities, limiting
alignment outcomes despite strong environmental performance.
•
Several eligible activities support environmental objectives indirectly but do not yet meet quantitative or prescriptive
alignment thresholds.
•
The absence of eligible or aligned turnover reflects sector wide structural constraints, rather than operational gaps.
•
Lundin Gold operates its mining activities in Ecuador under Ecuadorian regulations and its corporate activities under
Canadian regulations.
The Company considers its current alignment levels to be representative of the maturity of EU Taxonomy guidance for the mining
sector.
FORWARD-LOOKING APPROACH AND CONTINUOUS IMPROVEMENT
Lundin Gold views the EU Taxonomy as a dynamic regulatory framework and will continue to refine its approach over time by
strengthening documentation and performance tracking for eligible activities, integrating EU Taxonomy considerations into capital
allocation and project design where feasible, closely monitoring regulatory developments and updates to the Technical Screening
Criteria relevant to the extractive sector, and enhancing internal data systems to enable more granular and accurate attribution of
CapEx and OpEx. Collectively, these actions are expected to support a progressive increase in EU Taxonomy alignment as regulatory
clarity improves, and sector specific guidance continues to evolve.
2025 Annual Report
62
ESRS E1 CLIMATE CHANGE
WHY IT MATTERS (ESRS 2 AND E1, SBM-3, IRO-1)
Climate change can affect our continuity, safety, and cost of our operations. Physical climate risks may impact critical infrastructure
and production, while transition risks can influence regulatory requirements, energy supply, and operational planning. Understanding
these impacts and risks supports Lundin Gold’s ability to maintain operational resilience and to plan effectively for future conditions.
Increased workforce vulnerability to extreme weather
Costly projects
IRO Summary
Climate Change Adaptation
IMPACT
PHYSICAL RISK
Our operations can cause soil erosion and land
degradation, reducing the land’s capacity to hold
water and supporting vegetation. This heightens
the risk of landslides, especially during heavy
rain, and poses greater threats to own workforce,
potentially causing death.
Lundin
Gold
implements
intensive
costly
projects related to climate change adaptation
(e.g. increased drainage, flood barriers, buffer
zones, etc.).
-
-
Forced to implement costly projects due to regulations
TRANSITION RISK
Lundin Gold is required to implement costly
projects
related
to
climate
change
due
to
regulations issued by the Ecuadorian authorities
GHG Emissions
Energy
IMPACT
The Company’s GHG emissions arise from its direct
energy use, including fossil fuel combustion (Scope
1), indirect emissions from purchased electricity
(Scope 2), and estimated emissions generated
across its value chain (Scope 3), all of which
contribute to global climate impacts.
Negative
Positive
1
The determination of emissions as ‘minor’ and ‘moderate’ is based on an internal peer review conducted during 2025.
Resilience Analysis
Our resilience analysis draws on work initiated through a Task Force on Climate-related Financial Disclosures (TCFD)-aligned Climate
Change Report (May 2022) which included an assessment of FDN operations and our value chain. In 2024 and 2025, we expanded
our FDN operations physical risk assessment through external climate modelling engagements to further assess the risk related
to probable maximum precipitation (PMP) and its impact on FDN’s Tailings Storage Facility (TSF). We are currently progressing our
work on updating the transition risk analysis and developing possible climate scenarios, and we plan to incorporate this work into
our ERM and future adaptation planning.
Lundin Gold’s 2022 assessment evaluated physical and transition risks against three scenarios: International Energy Agency (IEA) Net
Zero 2050 (aligned with the Paris Agreement 1.5°C target), the IEA Sustainable Development scenario and the Intergovernmental
Panel on Climate Change (IPCC) Shared Socioeconomic Pathways (SSP) high-emission scenario (SSP2-4.5 and SSP5-8.5). These climate
scenarios cover plausible risks and uncertainties that may be relevant for Lundin Gold as they align with the risk factor disclosures the
Company uses in its financial statements, as both draw on the same expectations regarding the energy transition, future regulation
and their potential impacts on costs, operations and financial performance.
The time horizons differ with ESRS 1 section 6.4 as
Climate Scenario Analysis used 20 years periods that are consistent and require longer term period for physical risk analysis.
Key constraints to our assessment include limited availability and quality of climate data, dependence on critical infrastructure,
low carbon energy alternatives and supply chains vulnerable to both transition and physical disruptions. We recognized that this
assessment includes uncertainties related to the pace and cost of low-carbon technology deployment, availability of critical minerals,
future carbon pricing and regulatory developments, and the resilience of energy and logistics systems. Further uncertainty arises
from the potential severity of physical climate hazards, supply chain disruptions, and evolving market and insurance conditions.
Our assessment identified carbon pricing, technology shifts in the context of the energy transition, market developments with
changes in energy supply, energy costs, investor expectations under low-carbon transition scenarios and energy mix assumptions
from Ecuador’s national grid as key transition risk drivers. We also considered Ecuadorian regulatory authorities as a driver of
mandatory climate-related compliance projects including a potential for stricter environmental permitting requirements. We are
currently progressing our work on updating our transition risk analysis.
Through this assessment we identified key physical risks from the high-emissions scenario including increased intensity of flooding
and drought events relevant to FDN. Risks to critical mine infrastructure, including the TSF, water management infrastructure, and
underground access. We also identified heightened exposure of Lundin Gold’s own workforce to extreme weather events (landslides
during heavy rain).
Findings from this assessment show that our business model remains resilient under the scenarios assessed. We are committed to
continuing to monitor and manage physical and transition risks.
2025 Sustainability Statement
63
The tables below present a detailed overview of these impacts and risks identified in the scenario analysis and our associated mitigation measures:
TRANSITION RISKS
Type of Risk
Possible Impacts
Time
Horizon
Current
Likelihood
Description
FDN Activities Impacted
Localization
Current
Expected
Magnitude
Our Mitigation Options/Mea-
sures
Technology
•
Availability of low-emission
mining equipment
•
Renewable energy technology
Medium-Term
(2-5 years)
Rare
•
Align emerging technology with the
requirements for equipment renewal
•
Underground mining fleet (diesel medium/heavy-duty
trucks, off-road mining equipment); stationary diesel
equipment
Operations (FDN)
Insignificant
•
Evaluate emerging technologies that
are relevant for FDN
•
Establish external partnerships
•
Train employees on emerging
technology to be implemented at
FDN
Policy & Legal
•
Emission reduction
requirements
•
Restrictions on heavy industry
•
Reporting and disclosure
•
Litigation
Medium-Term
(2-5 years)
Possible
•
Changes to land-use regulations; limited ability
to permit exploration or expansion
•
FDN mine permit continuity; potential expansion beyond
current mine life; regional exploration
Operations (FDN)
Moderate
•
Active monitoring of climate policy
in all relevant jurisdictions
•
Broad external engagement to
monitor disclosure requirements
and practice adoption of relevant
standards
•
Develop educational sessions for
the management team and board
Likely
•
Changes to disclosure standards
•
Corporate reporting (AIF, Sustainability Statement);
Value Chain
(National &
International)
Minor
Possible
•
Uncertainty in future Canadian and Ecuadorian
climate policies
•
Operational planning; emissions management; fuel
purchasing strategy
Value Chain
(National &
International)
Moderate
Rare
•
Change in access to capital or cost of capital
for gold mining
•
Project financing; growth strategy/M&A; sustaining
capital allocation
Value Chain
(National &
International)
Minor
Markets
•
Energy costs
•
Insurance impacts
•
Premium/penalty for climate
performance and commodity
exposure
•
Inefficiencies in the carbon
offset market
Medium-Term
(2-5 years)
Moderate
•
Increased cost of carbon intensive inputs such
as fuel, cement and steel
•
Diesel procurement for trucks and mining equipment;
TSF and underground infrastructure construction using
cement and steel
Value Chain
(National)
Insignificant
•
Embed climate risk in our
procurement processes
•
Include Scope 3 emissions in
supplier engagement
•
Work closely with insurance
providers to meet updated
requirements to maintain coverage
•
Establish emission reduction targets
•
Engage with investors to facilitate a
strong understanding of our climate
strategy
•
Develop a portfolio of internally
developed carbon offsets
Likely
•
Increased insurance premiums and/or
deductibles or exclusion of certain risks from
insurance coverage
•
FDN site insurance; business interruption coverage
Operations (FDN)
Value Chain
(National)
Minor
Possible
•
Use of carbon offsets to achieve reduction
targets despite known efficiencies in the market
•
GHG emissions management program; net emissions
reporting
Operations (FDN)
Value Chain
(National)
Minor
Reputation
•
Reduced demand for gold
•
Reduced investor appetite for
mining
•
Attractiveness of gold mining
for future employees
Medium-Term
(2-5 years)
Possible
•
Adverse reputational impact to the mining
sector regionally or globally if it is perceived
as being an impediment to addressing climate
change
•
Investor relations; social license in Zamora Chinchipe;
TSX/Nasdaq Stockholm listing positioning
Value Chain
(National &
International)
Minor
•
Develop strong external
communication regarding:
-
Our efforts to contribute
positively to reducing climate
change; and
-
The challenges that our
Company is facing
•
Engage with key industry bodies
to support a strong understanding
of the role that mining has in the
climate transition
Possible
•
Inability to meet decarbonization expectations
•
GHG reduction targets; Scope 1 ans 2 emissions from
FDN operations
Value Chain
(National &
International)
Minor
Unlikely
•
Increased pressure to reduce direct emissions,
adopt green power sources and offset
emissions
•
Energy mix at FDN (% of renewable electricity via grid
hydro); remaining diesel-dependent operations
Operations (FDN)
Minor
Rare
•
Difficulty in recruiting the next generation of
employees
•
Technical workforce recruitment for FDN underground
operations
Operations (FDN)
Insignificant
2025 Sustainability Statement
64
Current Likelihood:
<5%
20%
50%
80%
>95%
Rare
Unlikely
Possible
Likely
Certain
Current Magnitude:
Insignificant
Minor
Moderate
Major
Catastrophic
1
2
3
4
5
PHYSICAL RISKS
Type of Risk
Possible Impacts
Time
Horizon
Current
Likelihood
Description
FDN Activities Impacted
Localization
Current
Expected
Magnitude
Our Mitigation Options/Mea-
sures
Chronic
Erosion
Water
Stress
Drought
•
Changes to long-term weather
patterns
•
Damage to facilities
•
Increased operating costs
•
Lack of insurability of assets
•
Service and supply chain
interruptions
•
Suspension of operations
•
Loss of gold production
Medium-Term
(2-5 years)
Possible
•
Increased costs due to required changes to
infrastructure location, capacity, design, etc.
•
TSF design standards (rainfall storage capacity); road and
bridge infrastructure; electrical substation design
Operations (FDN)
Major
•
Review design criteria of critical
infrastructure including the
tailings storage facility
•
Identification of alternative routes
•
Incorporate climate considerations
into closure planning
Possible
•
Changes in the availability of water (scarcity
or excess) which could impact power
availability, among other impacts
•
Hydroelectric grid supply (FDN’s primary power source);
water management for processing and tailings
Operations (FDN)
Minor
Possible
•
Required changes to Environmental
management plans
•
Environmental monitoring programs; water management
plans; closure planning
Operations (FDN)
Major
Acute
Flooding
Wildfire
Heat Stress
Cold Stress
•
Service and supply chain
interruptions
•
Asset devaluation and write-
off
•
Lack of insurability of assets
•
Suspension of operations
•
Potential loss of gold
production
Medium-Term
(2-5 years)
Rare
•
Tailings storage facility overtopping
•
TSF integrity; downstream community safety; regulatory
compliance
Operations (FDN)
Moderate
•
Include climate scenarios into our
operational planning
•
Ongoing monitoring of seasonal
rain pattern changes and ground
water wells
•
Collection and analysis of
meteorological and hydrological
data
Possible
•
Landslides
•
Road access to FDN (supply chain); electrical
transmission lines; underground portal access
Operations (FDN)
and Value Chain
(National)
Minor
Possible
•
Loss of electricity supply
•
All processing operations; ventilation systems;
underground pumping; camp services
Operations (FDN)
Minor
Unlikely
•
Flooding of camp
•
Worker accommodation; operational continuity;
personnel safety
Operations (FDN)
Minor
Unlikely
•
Damage to key infrastructure
•
Port of Guayaquil (imports); road network across 6 grid
zones; airport access; electrical substations
Value Chain
(National)
Minor
Possible
•
Reduced site access or availability of
transport routes
•
Supply chain for diesel, reagents, explosives, food;
employee mobility; gold doré transport
Value Chain
(National)
Minor
Likley
•
Increased operating costs
•
All-in sustaining costs (AISC); business interruption
Operations (FDN)
Major
2025 Annual Report
65
TSF Focused Physical Risk Assessment
Our physical risk scenario analysis was conducted using IPCC SSP scenario, including a moderate-emission scenario (SSP2-4.5)
and a high-emission scenario (SSP5-8.5). This range of scenarios provides a span of plausible outcomes to inform our risk
identification. Key inputs to this assessment included site-specific climate, geomorphology, geology, geochemistry, hydrology,
and hydrogeology, representing a geospatial, site-level physical risk analysis. Our analysis considered risks over the following
time horizons: 2020-2040, 2041-2070, and 2071-2100. The results of this assessment will guide future decisions on our
TSF design basis and our broader water management infrastructure. We plan to conduct additional technical assessments
to validate climate-related implications and integrate the results into engineering designs across the site. See section
"E5 Resource Use" for additional disclosure.
Ability to Adapt
Our Climate Strategy guides our actions in four key areas: reducing GHGs, offsetting GHGs, climate leadership, and climate
adaptation. Our strategy enables us to identify key climate risks and mitigation actions, pursue decarbonization efforts, and
seek innovative offset opportunities that benefit local communities and Indigenous Peoples. We review progress annually and
report it to the HSES Committee, which helps keep climate considerations embedded in governance and decision-making.
Key Areas of Focus
Enablers
Offset GHGs
Risk Management
Opportunity Discovery
& Business Planning
Governance
& Incenves
Reporng
& Disclosure
Reduce carbon footprint
of our operaons through
decarbonizaon.
Reduce GHGs
Reduce the carbon footprint
of our operaons through
offseng.
Be a climate leader
in Ecuador.
Climate Leadership
Adapt to physical
impacts.
Climate Adaptaon
TRANSITION PLAN FOR CLIMATE CHANGE (E1-1)
Currently, Lundin Gold does not have a transition plan in place to align its strategy and business model with a 1.5°C pathway under
the Paris Agreement. This reflects the Company’s operational context: FDN operates with a comparatively low emissions intensity
relative to gold produced, which limits the scale of reductions achievable through structural decarbonization. The remote location
of the mine also constrains access to low-carbon energy alternatives and other decarbonization technologies that may be available
to operations in more accessible locations. In this context, the Company considers the cost of developing and implementing a
formal transition plan to be disproportionate to the quantum of emissions that would be reduced. Lundin Gold nonetheless remains
committed to managing its emissions responsibly and has established a carbon neutrality goal, against which it monitors and publicly
reports its performance.
POLICIES RELATED TO CLIMATE CHANGE (E1-2)
We manage our material climate-related impacts and risks through two key policies: our
Responsible Mining Policy
and our
Energy
Management Policy
. Together, these policies guide our approach to climate change adaptation and energy efficiency.
Our
Responsible Mining Policy
is a corporate commitment that applies to all operations and subsidiaries and defines our
commitment to environmental stewardship, efficient use of energy and resources, and continuous improvement in health,
safety, and environmental performance. The policy requires us to assess and address climate-related risks and impacts in our
planning and operational decisions. It also commits us to responsible facility design and operation, minimizing environmental
impacts through efficient water and energy use, responsible waste management, and adherence to legal requirements for
species and ecosystem protection.
This policy was approved by the Board of Directors. The CEO oversees its implementation, supported by regular external audits (e.g.
energy efficiency audits, health and safety audits, environmental license compliance reviews, environmental management plan
monitoring, and human rights risk assessments) and quarterly reporting to the Board. We also consider stakeholder perspectives
through ongoing engagement with key stakeholder groups including employees, local communities and Indigenous Peoples, and
partners. We make this policy available to all stakeholders on our corporate website. The implementation and effectiveness of the
policy are monitored and communicated through internal management processes that include internal and third-party audits,
performance tracking against annual objectives and KPIs, governance, and reporting cycles through the Executive Team and Board,
integration of certified management systems, and structured engagement with employees and communities. Public sustainability
disclosures complement these internal processes.
Our
Energy Management Policy
is part of our Integrated Management System and aligns with several ISO certifications. The
policy commits us to establishing and periodically reviewing energy-efficiency targets, maintaining the availability of data and
resources needed to achieve them, complying with energy-related legal requirements, and embedding energy-efficiency criteria
2025 Annual Report
66
in procurement and design processes. This site level policy applies to all employees at FDN and undergoes an annual review
by the FDN Mine General Manager, who is the most senior individual accountable for its implementation. We communicate
the policy to internal stakeholders through a structured, multichannel approach that includes corporate email notices, onsite
bulletin boards, digital screens, internal news programming, and employee engagement activities across all shifts to support
consistent awareness and understanding of our energy efficiency commitments.
ACTIONS AND RESOURCES RELATED TO CLIMATE CHANGE (E1-3)
In 2025, Lundin Gold undertook actions intended to strengthen its future climate adaptation and energy-efficiency performance.
As most of the Company’s Scope 1 and Scope 2 emissions originate from diesel and electricity consumption, mitigation actions
in 2025 emphasized energy-efficiency improvements under the ISO 50001 Energy Management System and preparatory work
for renewable electricity sourcing. These measures contribute to improving FDN’s energy mix and reducing its operational
emissions over time. There are no restrictions on the allocation of resources for climate-related actions where such allocation
is determined to enhance operational efficiency, support long-term operational objectives, or contribute to responsible mine
closure outcomes. Accordingly, Lundin Gold does not anticipate limitations, delays, or reduced effectiveness of the disclosed
climate-related actions due to resource availability or allocation constraints.
Energy Efficiency
: Implementation of an ISO 50001-Based Energy Management System
In 2025, Lundin Gold implemented an Energy Management System at FDN based on the ISO 50001 standard. As part of the
implementation, we conducted a detailed analysis of all energy-consuming processes, including electricity and fossil fuels. The
analysis identified significant energy uses in the processing plant and mine areas and statistically characterized their energy
performance. Based on the findings, Lundin Gold established energy-performance improvement objectives for three priority
areas: efficiency improvements in the grinding circuit, optimization of mine ventilation systems, and reductions in diesel
consumption in haul trucks.
The implementation of the energy management system identified diesel consumption in the mining fleet as one of the most
significant energy uses at FDN. The system enables detailed monitoring of haul truck energy performance, helps identify
efficiency improvement opportunities, and supports the optimization of fleet operations. As a result, the operation transports
the same or greater quantities of ore while consuming less diesel, thereby reducing inefficient fuel use per tonne.
Consequently, the Company strengthens operational control, which facilitates the implementation of initiatives to prevent
inefficient diesel consumption while simultaneously avoiding greenhouse gas emissions associated with operational
inefficiencies.
In alignment with these priority areas, Lundin Gold made the following investments during the year: optimization of mine
ventilation, improving our energy efficiency of the grinding circuit to process larger ore volumes with lower energy consumption,
and increasing our fuel efficiency of the haulage fleet through the use of a diesel additive that enhances fuel properties.
Clean Electricity Sourcing and Carbon Offsetting
: Renewable Energy and Offset Strategy
In 2025, Lundin Gold advanced our Renewable Energy and Offset Strategy following extensive due diligence, with CEO and CFO
approval. The Strategy advanced on two fronts: the assessment of renewable energy projects for a potential power purchase
agreement in Ecuador, and a feasibility study for an in-country offset project.
With respect to the power purchase agreement, Lundin Gold initiated discussions with a renewable energy provider and
assessed the technical, regulatory, and contractual feasibility of a long-term supply agreement for FDN. This analysis informed
the Company’s renewable energy availability scenario and the development of a contractual framework to transition FDN
from the national electrical grid to private hydropower, reducing its exposure to fossil fuel reliance on the national grid during
periods of drought or infrastructure constraints. In 2026, Lundin Gold will continue progressing our Renewable Energy and
Offset Strategy.
With respect to the in-country offset project, management completed a feasibility study and shortlisted potential projects
during 2025. As a next step, the Company will assess the results of that work in determining whether to advance.
Climate Adaptation and Nature-Related Physical Risk Management
In addition, Lundin Gold continues to implement actions to address physical climate-related risks including soil erosion and
landslides, soil erosion is addressed through rehabilitation and restoration activities as part of Lundin Gold’s biodiversity
management approach. Further details are disclosed in the section "Actions Related to Biodiversity". Lundin Gold addresses
landslide risks through slope stabilization measures along access roads to the FDN mine. These measures also contribute to
workforce safety and are further reflected in the section "Actions related to Own Workforce".
Regulatory Developments Related to Climate Change and Biodiversity
Lundin Gold continues to monitor emerging climate-related regulatory developments in Ecuador. At this stage, the potential cost
implications relate to transition risks rather than implemented requirements. Reforms to Ecuador’s environmental legislation
that would impose new climate-related obligations are currently advancing through the National Assembly.
2025 Annual Report
67
OUR PERFORMANCE – METRICS AND TARGETS
ENERGY CONSUMPTION AND MIX (E1-5)
We operate in a high climate impact sector (NACE Code 7.29 – Mining of other non-ferrous metal ores), which is characterized by
significant energy use. Our operations at FDN source electricity primarily from Ecuador’s national interconnected power transmission
system, which includes a renewable energy component. In the reporting year, we generated 480 MWh of energy from non-renewable
sources at the FDN mine due to supply constraints of the national grid.
The table presents detailed figures on total energy consumption, the energy mix, and energy intensity.
In 2025, our production intensity calculated as total energy consumption per ounce of gold produced is 0.50 MWh/oz. Au produced
(0.50 MWh/oz. Au produced in 2024). Lundin Gold’s energy intensity is 0.00014 MWh/USD Net Revenue
(0.00021 MWh/USD Net
Revenue in 2024) calculated as total energy consumption per Net Revenue, as required for activities in high climate-impact sectors.
Methodologies and Assumptions
Energy consumption is converted from gigajoules (GJ) to megawatt-hours (MWh) using standard energy unit conversions. Conversion
factors used are consistent with the 2014 reference values from the Energy and GHG Emissions Management Reference Guide of the
Mining Association of Canada and 2018 Gasnam Espain equivalence table for LPG. For additional information, please see the section
below on GHG emission methodologies and assumptions which are also relevant to Lundin Gold’s energy consumption calculations.
GROSS SCOPES 1, 2 AND 3 TOTAL GHG EMISSIONS (E1-6 AND E1-4)
Lundin Gold reports its GHG emissions in accordance with the GHG Protocol Corporate Standard and the requirements of ESRS E1.
We express all emissions in metric tonnes of CO₂-equivalent (tCO₂e) using the most recent IPCC 100-year Global Warming Potential
values. We report Scope 1, Scope 2, and Scope 3 emissions on a gross basis, without including offsets, removals, or purchased
carbon credits. Biogenic CO₂ emissions do not apply to Lundin Gold’s operations, as the FDN mine does not generate emissions from
biomass combustion or biodegradation. Furthermore, Lundin Gold does not operate under any regulated emission trading schemes.
The table below presents our total GHG emissions for the reporting period and 2024, broken down by Scope 1, Scope 2 (location-based
only as Lundin Gold does not purchase any market-based instruments), and material Scope 3 categories, as well as the overall total.
In 2025, our Scope 1 and Scope 2 carbon footprint was 52,111 tCO
2
e representing an intensity of 0.10 tCO
2
e per ounce of gold
produced same as 2024 intensity of 0.10 tCO
2
e /oz. Au produced.
During the reporting period, the implementation of the energy management system at Fruta del Norte (FDN) enabled detailed
monitoring of the mining haulage fleet’s performance. As a result, diesel consumption per tonne of material transported was
optimized, strengthening operational control and energy efficiency. This improvement helped limit a larger increase in Scope 1
emissions in a context where Scope 2 emissions were affected by the higher carbon intensity of the national electricity grid, driven
by Ecuador’s energy crisis.
Total Energy Consumption by Type (Mwh)
Includes FDN, Quito, Los Encuentros offices
2025
2024
Energy Source
Mwh
% of Total
Mwh
% of Total
Subtotal - Non-Renewable Fuel
108,376
100%
131,917
100%
Diesel
104,930
97%
128,829
98%
Gasoline
2,877
3%
2,411
2%
Jet A1 (Heavy fuels)
518
0%
570
0%
LPG
52
0%
107
0%
Nuclear/Coal/Natural gas/Other
-
-
-
-
Subtotal - Non-Renewable Fuel
-
-
-
-
Biomass/Biofuels/Biogas/Hydrogen/Other
-
-
-
-
Subtotal - Electricity
141,780
100%
117,091
100%
Total Energy
250,157
249,008
Fuel consumption from crude oil and petroleum products
108,376
43%
131,917
53%
Consumption of purchased or acquired electricity, heat,
steam and cooling from renewable sources
110,943
44%
98,871
40%
Consumption of purchased or acquired electricity, heat,
steam and cooling from fossil sources
30,837
13%
18,219
7%
Note:
Figures are rounded.
2025 Annual Report
68
The section below describes our methodology.
GHG Intensity
GHG Production Intensity (Scope 1 + Scope 2)
2025
2024
Kilotonnes of Ore Milled (Kt)
1,828
1,691
GHG Emissions Intensity
(tCO
2
e/ Kt ore milled)
28.50
29.14
Ounces of Gold Produced (oz)
498,315
502,029
GHG Emissions Intensity
(tCO
2
e/ oz. Au produced)
0.10
0.10
GHG Production Intensity (Scope 1 + Scope 2 + Scope 3)
2025
2024
Kilotonnes of Ore Milled (Kt)
1,828
1,691
GHG Emissions Intensity
(tCO
2
e/ Kt ore milled)
79.13
83.37
Ounces of Gold Produced (oz)
498,315
502,029
GHG Emissions Intensity
(tCO
2
e/ oz. Au produced)
0.29
0.28
GHG Emissions (Tonnes CO
2
Equivalent)
Includes CO
2
, CH
4
, and N
2
O, as Appropriate
GHG Scope(tCO
2
e)
2025
2024
Comparative
FDN
Exploration
Ecuador
Offices (Quito,
Los
Encuentros)
2
Total
FDN
Exploration
Ecuador
Offices (Quito,
Los
Encuentros)
2
Total
N
%N/N-1
Scope 1
Gross Scope 1 GHG emissions (tCO
2
eq)
25,642
3,548
9
29,199
32,846
2,369
12
35,226
(6,027)
-17%
Scope 2
1
Gross Scope 2 GHG emissions – location-
based (tCO
2
eq)
22,846
-
66
22,912
14,000
-
51
14,051
8,861
63%
Scope 3
Total Gross Indirect (Scope 3) GHG
emissions (tCO
2
eq)
92,555
91,688
867
1%
Category 1.
Purchased goods and services
44,044
38,290
5,754
15%
Category 2.
Capital Goods
8,034
10,587
-2,553
-24%
Category 3
. Fuel and energy related activities
6,579
7,649
-1,071
-14%
Category 4.
Upstream transportation and
distribution
29,667
30,844
-1,177
-4%
Category 5.
Waste generated in operations
791
661
131
20%
Category 6.
Business travel
215
250
-35
-14%
Category 7.
Employee commuting
3,117
3,379
-262
-8%
Category 10.
Processing of sold products
(dore)
109
28
80
282%
Total GHG emissions
144,666
140,965
3,700
3%
1 2024 data was recalculated in 2025 due to AR6 updated global warming potential.
2 Scope 3 categories 1 and
2 were recalculated for 2024 and 2025, updating the emission factors from Quantis 2016 to EPA NAICS 2022 and incorporating inflation adjustment.
Note:
Total exclusions meant 3.6% of Scope 1 and 2 emissions. As this remains below the 5% threshold defined in LUG’s methodology, the recalculation policy was not triggered.
•
Lubricant use: Lubricants are not directly combusted; waste is managed by an authorized third party outside LUG’s operational boundary and representing up to 800 tCO2
e.
•
Fire extinguisher replacement: CO₂ recharge volumes are immaterial, in 2025 emissions were 0.15 tCO
2
e.
•
Domestic wastewater treatment: Lack of granular data to ensure accurate estimation per methodology and means up to 200 tCO
2
e.
•
Vancouver office emissions are determined to be negligible and not material, and therefore not disclosed.
In 2025, Lundin Gold’s emissions intensity is 0.00008 tCO
2
e /USD Net Revenue (0.00012 tCO
2
e /USD Net Revenue in 2024)
calculated as the sum of its gross Scope 1 emissions, gross Scope 2 (location-based) emissions and estimated Scope 3 (value
chain), expressed in tCO₂e, by its Net Revenue for the reporting period. The Company reconciles the Net Revenue figure used
in the calculation with the corresponding line item in its financial statements.
2025 Annual Report
69
Methodologies and Assumptions
In 2025, there were no significant changes in the definition of the Company or in the composition of our upstream or
downstream value chain. We quantify emissions from stationary combustion, mobile combustion, process emissions, and
fugitive emissions using activity data. We prioritize primary information sources, particularly fuel consumption and electricity
use. This approach strengthens data quality, traceability, and consistency and reduces uncertainty in emission estimates.
We apply appropriate emission factors and follow a clear hierarchy: latest national factors when available, followed by
regional factors, and then internationally recognized factors. Key sources include the National Meteorological Institute of
Costa Rica (IMN CR), the United States Environmental Protection Agency (EPA), the Mining Association of Canada (MAC),
the Ministry of Environment and Energy of Ecuador, DEFRA (United Kingdom), the World Gold Council (WGC), and supplier
specific emission factors for cement, steel, and industrial services when they meet quality and traceability requirements.
We present all GHG emissions and energy data on a consolidated basis at Lundin Gold. Lundin Gold has no associates or
joint arrangements for the purposes of consolidating its financial statements. During the period between the reporting
dates of data received from value chain entities and the Company’s financial-statement closing date, we did not identify any
significant events requiring adjustments to our reported emissions.
Changes in Preparation or Presentation of Sustainability Information compared to 2025
: Scope 3 Category 1 and Category 2 figures
are prepared using the spend-based method. The 2024 comparative figures were restated to ensure comparability between
periods after an error was identified. This error related to the use of outdated emissions factors from a discontinued source and
the absence of an inflation adjustment. EPA NAICS 2022 emission factors were adopted, as they are more current and better
aligned with Lundin Gold’s supplier categorization, and they have been adjusted for inflation. This change in emission factor
source and methodology resulted in:
•
Category 1 emissions in 2024 decreased from 86,447 to 38,290 tCO₂e, representing a decrease of 48,157 tCO₂e (-56%).
•
Category 2 emissions in 2024 decreased from 44,847 to 10,587 tCO₂e, representing a reduction of 34,260 tCO₂e (-76%): %).
Scope 1 Emissions
Scope 1 emissions represent direct GHG emissions from sources owned or controlled by Lundin Gold at the FDN mine. These
include stationary combustion (primarily diesel generators), mobile combustion from the mining fleet and other air and ground
vehicles, fugitive emissions from refrigerant use, and emissions associated with the consumption of explosives. We calculate
Scope 1 emissions using actual fuel and input consumption data supported by operational records. We quantify emissions by
multiplying activity data by emission factors selected in accordance with the hierarchy previously described.
Scope 2 Emissions
Scope 2 emissions include indirect GHG emissions from purchased electricity consumed at the FDN mine and administrative
offices. Lundin Gold applies the location-based method, using national grid average emission factors published by recognized
authorities. We rely on the previous year’s emission factor since updated national grid emission factors become available only
midyear in the year following the reporting period. The market-based method does not apply, because we do not procure
electricity through contractual instruments with renewable energy certificates. We obtain electricity consumption data from
meter readings and invoices and verify it with operational data when needed. No biogenic CO₂ emissions occur in Scope 2, and
we do not include any offsets or credits in the reported figures.
Scope 3 Emissions
The Scope 3 emissions inventory boundaries are defined under the operational control approach and include all relevant value
chain activities associated with Aurelian Ecuador S.A. and Aurelianmenor S.A., considering acquired goods and services, capital
goods, and other applicable categories.
The identification of significant categories is carried out in accordance with the principles of relevance, completeness,
consistency, accuracy, and transparency of the GHG Protocol. All categories identified as significant (see table below) are
included in the quantification. No relevant sources are excluded in the current reporting period, and any exclusions are based
on materiality criteria or information limitations, and are duly documented and justified.
Lundin Gold measures its Scope 3 emissions using activity-specific data whenever possible. We assessed the 15 categories
defined by the GHG Protocol and identified eight categories as significant for our operations (as presented in the table below).
We did not identify any relevant Scope 3 activities in the remaining categories, given the nature of our mining industry-related
activities.
2025 Annual Report
70
GHG Emissions Summary
For the significant categories, we prioritize the use of primary data, particularly for key suppliers of goods such as cement
and steel, national grid transmission losses, upstream marine, land and air transportation, business travel, and employee
commuting. In these cases, suppliers provide primary information through established cooperation mechanisms. For cement
and steel consumption (Category 1 – Purchased Goods and Services), we apply supplier-specific emission factors when available.
In 2025, we calculated 28% of total Scope 3 emissions using primary data. We develop annual improvement plans to progressively
enhance the coverage, quality, and accuracy of Scope 3 information.
Scope 1
29,199 tCO
2
eq
22,912 tCO
2
eq
92,555 tCO
2
eq
Diesel (Mobile and staonary)
Jet Fuel A1
HFC Fugive emissions
Explosive + Gasoline + LPG
Scope 2
Purchased grid
electricity
20%
emissions
16%
emissions
Scope 3
Purchased goods and services
Capital Goods
Fuel and energy-related acvies
Upstream transportaon and
distribuon
Waste generated in operaons
Business travel
Employee commung
Processing of sold products (doré)
64%
emissions
2025 Sustainability Statement
71
Scope 3 GHG Emissions Category
Calculation Methodology
Approach (Activity Description / Emissions Factor / Significance)
1
Purchased goods and services
•
Supplier-specific method
•
Spend-based method
•
U.S. Environmental Protection Agency (EPA). (2022). Supply Chain Greenhouse Gas Emission
Factors for U.S. Industries and Commodities (NAICS-based).
2
Capital goods
•
Average spend-based method
•
Quantis GHG Scope 3 Tool and Vendor supplied data.
3
Fuel and energy related activities
•
Average-data method
•
United Kingdom (UK) Government GHG Conversion Factors for Company Reporting.
4
Upstream transportation and distribution
•
Fuel-based method
•
Distance-based method
•
EPA Emissions Factors for GHG Inventories.
•
UK Government GHG Conversion Factors for Company Reporting. MAC – Energy and GHG Emissions
Management Reference Guide – Land Transport.
5
Waste generated in operations
•
Waste-type-specific method
•
EPA Emissions Factors for GHG Inventories.
•
UK Government GHG Conversion Factors for Company Reporting.
6
Business travel
•
Distance-based method
Vendor supplied data using Sabre Travel Network’s carbon emissions tool.
7
Employee commuting
•
Distance-based method
•
Fuel-based method
•
Employee air travel to and from FDN, corporate offices and local land travel. EPA Emissions Factors for
GHG Inventories.
•
MAC – Energy and GHG Emissions Management.
•
Reference Guide – Fuel-based methodology for employee land transport
8
Upstream lease assets
N/A
The Company does not operate any material upstream leased assets.
9
Downstream transportation and distribution
N/A
The Company does not report downstream transportation separately. Although post-sale transport occurs,
Lundin Gold pays for and manages these activities. According to the GHG Protocol, we account for these
emissions within upstream transportation. This approach avoids double counting and maintains methodological
consistency.
10
Processing of sold products (doré)
•
Average-data method
•
Includes refining of doré and concentrate sold. Future Impacts Gold Mining and Scope 3 GHG Emissions
Accounting and Reporting – 2024.
•
Processing into final products was estimated but determined to be immaterial.
11
Use of sold products
N/A
Not significant due to the nature of gold (doré/concentrate), which does not generate material emissions during
use.
12
End-of-life treatment of sold goods
N/A
Not significant due to the nature of gold (doré/concentrate), which does not generate material emissions at
end-of-life.
13
Downstream leased assets
N/A
The Company does not operate any downstream leased assets.
14
Franchises
N/A
The Company does not have any franchises.
15
Investments
N/A
Not significant for our business model, not estimated.
Note:
N/A (Not Applicable in gray)
Calculation Methodologies by Scope 3 Category and Significance Analysis:
2025 Annual Report
72
Targets Related to Climate Change
Lundin Gold has not set quantitative, outcome-oriented GHG emissions reduction targets. Lundin Gold tracks the effectiveness
of its climate-related actions through bi-weekly meetings involving senior sustainability and environmental staff. We assess
progress toward the Company’s 2030 carbon neutral commitment by reviewing our annual Scope 1 and Scope 2 carbon-footprint
results and comparing them with historical performance.
Looking forward to our 2026–2030 Sustainability Strategy, we confirmed our quantitative, outcome-based target for climate action:
FDN will become a carbon-neutral operation by 2030 for Scope 1 and Scope 2 emissions
. This target is anchored in our Responsible Mining
Policy and Energy Efficiency Policy and applies to the FDN operational boundary in Ecuador, using the GHG Protocol Operational
Control approach. We measure progress in net tCO₂e relative to our 2021 base year and quantify emissions using IPCC factors and
GHG Protocol methods.
GHG REMOVALS AND GHG MITIGATION PROJECTS FINANCED THROUGH CARBON CREDITS
(E1-7)
Lundin Gold neither acquired nor used carbon credits in 2025 and did not finance GHG removal or mitigation projects through
offsetting mechanisms. As a result, the Company’s climate strategy during the reporting period focused exclusively on operational
measures to improve energy performance and reduce emissions, without relying on carbon credits.
INTERNAL CARBON PRICING (E1-8)
Lundin Gold did not leverage any internal carbon pricing mechanisms during 2025. During the reporting period, the Company did
not apply internal carbon prices in investment decisions, operational planning, or the evaluation of climate-related projects.
ESRS E2 POLLUTION
WHY IT MATTERS (ESRS 2, SBM-3)
Water pollution is a material environmental risk for Lundin Gold, as unmanaged discharges and chemical releases can harm
ecosystems and downstream communities. Effective water-protection and chemical-management practices help safeguard local
water resources and maintain compliance with strict national and international standards.
Environmental degradation from spills on-site in the
operation
Noncompliance with discharge quality for industrial water
with new permit discharge criteria or expansion of Colibri 4/5
Environmental degradation from spills in the supply chain
Noncompliance
with
discharge
quality
for
domestic
wastewater
IRO Summary
Pollution of water
IMPACT
RISK
Chemical spills and heavy metal contamination
caused by Lundin Gold’s own operations can
potentially harm surface water, groundwater, and
surrounding ecosystems.
Chemical spills and heavy metal contamination
caused by Lundin Gold’s suppliers can potentially
harm surface water, groundwater, and surrounding
ecosystems.
Negative
Positive
Industrial water balance and quality changes may
trigger infrastructure or equipment investments at
the water treatment plant to comply with Ecuador’s
discharge criteria throughout the life of the mine.
-
Wastewater balance and quality changes may
trigger infrastructure or equipment investments at
the water treatment plant to comply with Ecuador’s
discharge criteria throughout the life of the mine.
-
POLICIES RELATED TO POLLUTION OF WATER (E2-1)
Lundin Gold does not yet maintain a standalone policy dedicated solely to water-pollution prevention or the management of
substances of concern. However, we integrate these principles into our broader environmental framework, which is anchored in
our ESIA. In our ESIA, we evaluated operational activities, identified potential impacts, and established our EMP. Our EMP sets
mandatory measures that guide our operational practices to prevent and mitigate impacts on water quality and chemical use. It also
serves as our primary mechanism for managing pollution-related impacts, risks, and opportunities. The Responsible Mining Policy
and Human Rights Policy also outline Lundin Gold’s commitment to ensuring a clean, healthy, and sustainable environment for our
employees and community members, which includes measures to prevent spills and protect water quality.
2025 Annual Report
73
ACTIONS AND RESOURCES RELATED TO POLLUTION OF WATER (E2-2)
We are committed to conduct all activities in compliance with Ecuador’s environmental regulations. Our water-management
practices, discharge controls and chemical use follow the IFC Performance Standards and all applicable national requirements.
Since Lundin Gold produces doré and gold concentrate for further refining, water-pollution risks arise mainly from extraction and
processing activities. The Company also complies with the applicable national regulations for mercury and cyanide in Ecuador,
specifically Ministerial Agreement No. 099, which governs the registration, management, and traceability of hazardous chemical
substances. The chemical substances used in the Company’s operations were reviewed against the Candidate List of Substances
of Very High Concern (SVHC) under the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) Regulation.
This review determined that none of the substances currently used in operations—including , sodium cyanide, sodium carbonate,
nitric acid, sulfuric acid, hydrochloric acid, sodium hydroxide, sodium nitrate, and hydrogen peroxide—are classified as SVHCs, as
they do not exceed the regulatory thresholds for concentration (0.1% w/w) and total volume (greater than one tonne per year per
producer or importer). Consequently, the Company does not produce, use, or commercialize substances classified as SVHCs under
the REACH Regulation.
Additionally, no substances of concern or substances of very high concern are used during exploration activities. To address
operational risks, we maintain strict controls on all the chemicals used at site. The Ministry of the Environment, the Armed
Forces, and the Ministry of the Interior (National Police) regulate these substances under national frameworks due to their
potential use for the fabrication of explosives or controlled substances. Lundin Gold has a specialized team that oversees
sodium cyanide and other controlled substances (sodium carbonate, sodium bicarbonate, sodium hydroxide, hydrochloric acid,
nitric acid, sulfuric acid and sodium hydroxide), including mandatory annual permit renewals.
Operational controls include standard operating procedures (SOP) for chemical handling, water protection and process integrity;
ongoing training for employees and contractors; and an integrated emergency-response plan. A trained emergency brigade
responds to spills and pollution risks to protect workers, communities, and the environment.
The Company reports, for informational purposes, the consumption of
sodium cyanide
in the production process and the generation
of
mercury (Hg)
as a by-product, which is managed as hazardous waste. The reporting is limited to these substances as they are
classified as
hazardous chemical substances
and are subject to specific regulation, control, and oversight by the competent national
authority.
Sodium Cyanide
We use sodium cyanide as part of the gold recovery process. Our controls are aligned with the International Sodium Cyanide
Management Code, and our processes are periodically audited. At site, teams follow established procedures for receiving,
storing, and handling sodium cyanide. These controls cover the full value chain, from procurement and transport to onsite
management.
We use sodium cyanide in the mineral leaching process at FDN mine. Its import, transport, storage and operational use are
governed by a national regulatory framework, which provides for the registration and traceability of hazardous chemical
substances. Lundin Gold renews this registration annually.
We direct residual sodium cyanide to a dedicated destruction process (detox), following its use in ore leaching. Treated tailings
are subsequently deposited in our TSF or supplied to the paste plant for underground backfilling.
We carry out continuous monitoring at our TSF, infiltration pool and groundwater. To date, these monitoring programs have
not identified sodium cyanide contamination, demonstrating the effectiveness of our operational controls. We return empty
ISO tanks — the sealed intermodal containers used to transport sodium cyanide to site — to the supplier for refilling, thereby
supporting full lifecycle traceability. Sodium cyanide does not leave the facility as a product, emission or component of a
commercial output.
Mercury
We do not use mercury in the processing circuit. However, it is naturally part of the ore body as cinnabar (mercury sulfide) and
is recovered as a byproduct during refining using retort systems. We store all mercury in compliance with legal and technical
hazardous-waste requirements. In 2025, we worked with a qualified service provider that managed transportation and final
disposal of all mercury generated at FDN in full compliance with national regulations. This provider was certified by the national
environmental authority, ensuring adherence to Ecuador’s stringent requirements for handling, transport, and disposal of
hazardous substances.
Other Controlled Substances
We manage other regulated substances in line with national legislation and their respective safety data sheets. Authorities
including the environmental regulator, the Armed Forces and the Ministry of the Interior (National Police) oversee the control
and transportation of these substances. Their requirements apply to suppliers as well as to onsite operations.
2025 Annual Report
74
Community Health and Safety – APELL Program
Since 1988, UN Environment has led the APELL Program to improve local preparedness for chemical emergencies. At Lundin
Gold, we use APELL to strengthen the capacity of local governments and emergency responders, promote a safety culture
through community outreach, and increase awareness of hazards using both reactive and preventive measures. We first applied
the APELL Program to cyanide management to address spill risks during the transport of hazardous materials. Over time, its
application expanded to support our broader emergency response approach, including tailings management. Our measures
include auditing transporters and contractors, conducting mock spill drills, updating contingency and emergency response
plans, and training authorities, communities, and responders in spill prevention, containment, rapid response, and remediation.
These actions help build community resilience by clarifying stakeholder roles, supporting coordinated response planning, and
reducing the impacts of technological hazards and environmental emergencies.
In relation to FDN’s operations, the COE Yantzaza and the National Risks Management Authority now lead the APELL Program.
They coordinate with local authorities, government entities, and communities, while we support the program through external
monitoring, gap analysis, action plan follow-up, and continuous improvement.
Our Performance – Metrics and Targets
METRICS AND TARGETS RELATED TO POLLUTION OF WATER (E2-3 AND E2-4)
Lundin Gold monitors several metrics that support its Responsible Mining Policy and its broader commitment to reducing
environmental impacts. At the FDN mine, we monitor the following metrics:
▪
Industrial wastewater discharges
▪
Domestic (sewage) discharges
▪
Spills or leaks from/to the TSF pipelines.
In 2025, operations remained stable, as higher production levels than 2024 did not alter treatment systems or pollution-related
outputs. An accredited laboratory monitors wastewater discharges and assesses them against the limits established under
national regulations, following the frequency set out in our EMP. In 2025, we recorded no non-compliances for industrial
discharges. Additionally, there were no tailings spills that impacted water bodies, natural soils, or adjacent ecosystems.
For domestic effluent discharges (sewage) we recorded two non-compliances at a single monitoring point for the phosphorus
parameter, with exceedances of 11 mg/L and 5 mg/L above the Maximum Permissible Limit of 10 mg/L. However, throughout
the year, the average flow rate discharged (m3/second) represents only 0.0021% of the total flow rate of the Machinaza River, the
receiving water body. This percentage represents the ratio between the average monthly discharge rate recorded in 2025 and
the river’s average monthly flow rate during the same year. Based on this proportion, the non-compliance events did not result
in a significant impact on the river’s water quality or downstream conditions, as the discharged volume is negligible compared
to the natural flow of the water body. To enhance our compliance with applicable regulatory requirements and working towards
alignment with IFC standards, we are advancing the implementation of two new sewage treatment plants at FDN. The facilities are
expected to become operational in late 2026 or early 2027.
Lundin Gold monitors regulated parameters, including sodium cyanide, following our EMP and national discharge limits. An
ISO/IEC 17025:2017-accredited laboratory, recognized by the Ecuadorian Accreditation Service (SAE), conducts all sampling and
analysis. Sampling follows methodologies approved in the EMP.
Lundin Gold did not set targets specifically addressing pollution matters, including water pollution or other subtopics, such
as discharges of pollutants to water bodies for 2025, or within its 2026–2030 Sustainability Strategy. Current management
of water-related pollution, encompassing both industrial process effluents and domestic wastewater discharges from our
FDN operations, is fully aligned with and driven by compliance with Ecuadorian environmental regulations, national mining
authority requirements, applicable permits, and effluent quality standards. These regulatory obligations include continuous
monitoring according to our EMP, treatment processes, and reporting to prevent adverse impacts on local water quality, aquatic
ecosystems, and downstream communities.
SUBSTANCES OF CONCERN (E2-5)
In 2025, we used 802.8 tonnes of sodium cyanide. As discussed in the action section above, we apply comprehensive controls
aligned with the International Sodium Cyanide Management Code to support responsible management of sodium cyanide
across its entire lifecycle.
In 2025, we managed a total of 138.97 kg of mercury, including 27 kg generated in the same year. The remaining volume
originated from temporary storage accumulated between 2021 and 2024. Given low annual generation volumes and the need
to verify permits and technical requirements for transport and final disposal, accumulated waste has been stored, since the
start of operations, in a fully restricted area meeting all applicable technical storage standards. In 2025, we completed the
comprehensive management of all accumulated material, whereby transportation and final disposal of all mercury generated
at FDN was completed in compliance with national regulations
2025 Annual Report
75
Lundin Gold did not set targets specifically addressing ESRS E2 Pollution matters related to substances of concern for 2025
or within its 2026–2030 Sustainability Strategy. Similar to water pollution, we manage substances of concern fully through
compliance with Ecuadorian environmental regulations, national mining authority requirements, and applicable permits. These
regulatory obligations include continuous monitoring according to our EMP.
ESRS E3 WATER
WHY IT MATTERS (ESRS 2, SBM-3)
Water plays an important role in Lundin Gold’s operational performance and regulatory compliance. Variation in wastewater
quantity or quality may require adjustments to treatment systems, and chemical spills could affect surface water, groundwater or
nearby ecosystems. These risks occur primarily within our processing plant, water-management systems and chemical-storage
areas and may result in operational impacts if not managed appropriately. Effective water management is therefore important
to maintain compliance and support the continuity of operations.
Environmental degradation from spills on-site in the
operation
Noncompliance with discharge quality for industrial water
with new permit discharge criteria or expansion of Colibri 4/5
Environmental degradation from spills in the supply chain
Noncompliance
with
discharge
quality
for
domestic
wastewater
IRO Summary
Water
IMPACT
RISK
Chemical spills and heavy metal contamination
caused by Lundin Gold’s own operations can
potentially harm surface water, groundwater, and
surrounding ecosystems.
Industrial water balance and quality changes may
trigger infrastructure or equipment investments at
the water treatment plant to comply with Ecuador’s
discharge criteria throughout the life of the mine.
Chemical spills and heavy metal contamination
caused by Lundin Gold’s suppliers can potentially
harm surface water, groundwater, and surrounding
ecosystems.
Wastewater balance and quality changes may
trigger infrastructure or equipment investments at
the water treatment plant to comply with Ecuador’s
discharge criteria throughout the life of the mine.
-
-
POLICIES RELATED TO WATER MANAGEMENT (E3-1)
Lundin Gold guides the management of water-related impacts, risks and opportunities through its Responsible Mining
Policy. The policy emphasizes environmental stewardship and includes commitments to efficient resource use and
minimizing environmental impacts. Additional information on the broader policy framework appears in the section
"Policies Related to Climate Change".
Although our Responsible Mining Policy does not explicitly address all material water-related risks, we manage these aspects
through our EMP. We monitor performance, conduct compliance checks and apply mitigation measures to protect water quality.
Our approach follows IFC water management guidelines as well as all applicable national regulatory requirements. The CEO
holds ultimate accountability for the implementation of the IFC aligned water management approach. We have no policies on
sustainable oceans and seas, as our operations do not use seawater.
ACTIONS AND RESOURCES RELATED TO WATER MANAGEMENT (E3-2)
Our water-management actions address our three material sources of water consumption across our operations: industrial water use,
domestic water use, and water used in exploration activities.
Industrial Water
We implement various actions to manage water-related impacts, risks and opportunities, including those associated with
changes in wastewater balance and quality, and the potential for chemical spills to affect surface or groundwater.
Environmental Management Approach and Water Stewardship Priorities
Our EMP includes actions to prevent, minimize and mitigate potential impacts on surface and groundwater, particularly those
affecting nearby rivers. A key principle is maximizing recirculation and reuse of industrial water to reduce extraction from natural
sources. We manage the industrial water system to meet the majority of operational water demand through the recirculation
2025 Annual Report
76
of contact water and the recovery of process and tailings supernatant water, minimizing withdrawals from the environment.
Contact water moves through settling ponds across the site, from which we supply industrial demand points. When operational
processes do not require additional water, we route surplus contact water and affected water with changed physicochemical
properties to treatment plants to comply with all applicable discharge standards. We also maximize natural drainage to avoid
fresh water entering the industrial circuit. All contact water is directed to a treatment plant before discharge, in line with our
EMP. Site infrastructure supports the management of both contact and non-contact water streams.
Preventive Measures, Incident Management and Corrective Actions
Lundin Gold reduces the likelihood of water-related incidents by conducting regular inspections of critical areas and continuously
monitoring process and water systems. The Company identifies potential issues through its incident management system and
weekly incident reporting, which enable rapid follow up and corrective actions.
The Company also strengthens preparedness by carrying out emergency drills, including spill response simulations. If an incident
occurs, site teams act immediately to contain impacts, investigate root causes and implement corrective and preventive measures.
Lundin Gold consolidates environmental and safety incidents and reviews them regularly. At the corporate level, the Company
provides quarterly updates to the Board of Directors, including incident severity, trends and key actions.
Community Water Monitoring Program
Since 2022, we have had a Community Water Monitoring Program in place in partnership with the Lundin Foundation and Universidad
Técnica Particular de Loja (UTPL) to promote transparency and community participation in local water stewardship. In 2025, we
reinforced monitoring techniques, trained additional community monitors, and conducted quarterly water quality sampling with
community participation. Community members and the UTPL specialists met regularly to review monitoring results and discuss
water quality trends.
Domestic Water
We manage domestic water use by applying targeted measures that improve efficiency across our facilities. We identified and
corrected cases where potable water was used in industrial activities, installed water saving faucets in new housing blocks,
carried out preventive maintenance on laundry equipment, and inspected and repaired leaks as soon as they occurred.
Exploration Water
In our exploration activities, water management also plays a central role. Water recirculation is achieved through solids removal
units, which allow all drilling effluent to be reused, and through a self-supporting pond system that enables efficient use of both
captured water and water used in drilling. These systems eliminate the need to treat and discharge drilling effluent. Temporary
camps operate gray-water treatment plants, and we conduct monitoring prior to discharge to verify compliance with national
regulatory limits.
In December 2025, Lundin Gold received Punto Azul recognition from the national environmental authority for strong
water-management practices in its exploration activities. This recognition reflects ongoing efforts to maintain compliance with
Ecuador’s water-discharge criteria and to strengthen water-management performance across the site.
METRICS AND TARGETS RELATED TO WATER MANAGEMENT (E3-3 AND E3-4)
Metrics and Targets Related to Water Management
In 2025, Lundin Gold reported combined water-consumption data for all three material water-use categories: industrial operations,
domestic use, and exploration activities.
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77
Key Water Management Metrics
2025
2024
Volume
(m3)
Intensity
(m3 per Tonnes of
Ore Milled)
Intensity
(m3 per Oz. of
Gold produced)
Volume
(m3)
Intensity
(m3 per Tonnes of
Ore Milled)
Intensity
(m3 per Oz. of
Gold produced)
Water Withdrawal
5,760,944
3.15
11.56
3,058,863
1.81
6.09
Streams1
172,071
0.09
0.35
168,727
0.10
0.34
Contact Water/Precipitation2
5,393,156
2.95
10.82
2,668,068
1.58
5.31
Infiltrations to underground
mine
195,717
0.11
0.39
222,067
0.13
0.44
Seawater/Produced/Third
party
-
-
-
-
-
-
Water Discharge
5,717,390
3.13
11.47
2,967,746
1.76
5.91
Water Consumption3
43,554
0.02
0.09
91,117
0.05
0.18
Tonnes of Ore Milled (t)
1,828,225
1,690,865
Ounces of Gold Produced
(oz)
498,315
502,029
1 Streams include water catchment for camp use as well as for industrial use in both exploration and exploitation, at points approved by the environmental authority.
2 Contact water is excess water on-site that has been in contact with mineral-bearing and excavated rock or any operational facility, as well as water reclaimed from the TSF.
This water is collected, reused, and treated in the Main Water Treatment Plant (MWTP) before being discharged into the aquatic receiving environment.
3 The quantity of water that reaches the Company’s boundaries and is not discharged back into the aquatic environment in the reporting period.
The differences between 2024 and 2025 results are primarily explained by variations in precipitation levels recorded during
each period. In 2025, wetter conditions were observed compared to 2024, resulting in increased volumes of water managed
within operations, including its capture, reuse, and treatment. At the TSF station, total accumulated precipitation reached
2,784.02 mm in 2024 and 3,814.5 mm in 2025. The increase in precipitation directly contributed to the variations observed
across water management indicators during the period.
Lundin Gold’s water intensity (water consumption/Net Revenue) for 2025 was 0.00002 m3/USD (0.00008 m3/USD in 2024).
Contextual Information
FDN measures water used for human consumption with flow meters installed at authorized withdrawal points and does not
recycle this water. For industrial purposes, including mining operations, FDN sources water from operational and authorized
catchment systems as well as the TSF. Flow meters monitor and record all industrial water usage, and mechanical volumetric
(paddle-type) meters provide additional data for industrial water withdrawal. FDN estimates rainfall volumes entering the TSF
using topographic data collection.
FDN employs GOLDSIM software to model water balances, including inflows, outflows, forecasting, and scenario analysis.
For exploration drilling, we obtain water from approved collection points, each equipped with flow meters for accurate data
collection.
Our mining operations treat all operational effluent discharges before releasing them into the Machinaza River, ensuring
compliance with national maximum permissible limits.
Industrial Water
We have not yet established a quantitative target for industrial water use. As part of our 2026–2030 Sustainability Strategy, we have
set a goal to define our 2030 industrial water targets by 2026. This will include a water-intensity target. This target is embedded
within our Responsible Mining Policy, and Environmental Management Plan, which form part of the permitting conditions under
Ecuador’s Ministry of Environment and Energy.
Domestic Water
Aligned with our Responsible Mining Policy Environmental Impact Assessment, and Sustainability Strategy, Lundin Gold monitors
domestic water efficiency and compliance with regulatory requirements. The Environment and Permits Department leads
monitoring with support from all operational areas, using calibrated flow meter data, operational records and maintenance
activities to track progress.
Exploration Water
Lundin Gold also monitors water efficiency in drilling exploration activities, to track compliance with regulatory requirements and
foster water management best practices. The exploration technical team monitors performance through monthly tracking and
quarterly consolidation of water management records, implementing operational adjustments as needed to maintain efficiency.
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78
ESRS E4 BIODIVERSITY
WHY IT MATTERS (ESRS 2, SBM-3 AND E4, SBM-3)
Biodiversity-related impacts and risks are material to Lundin Gold’s strategy and business model. Operating in one of the world’s
most ecologically sensitive areas, we understand the critical need to protect biodiversity to sustain essential ecosystems. As a
company committed to responsible mining, we are dedicated to minimizing the environmental impact of our operations.
Biodiversity Loss
Regulatory Risks and Permitting
Damage to Brand Value
IRO Summary
Impacts on the Extent and Condition
of Ecosystems
IMPACT
RISK
Deforestation and pollution caused by operations
could result in destruction of biodiversity hotspots
such
as
the
Andes-Amazon
transition
zone
and in significant declines in plant and animal
populations, including endemic and endangered
species in Ecuador’s rich ecosystems.
Negative
Positive
Government could expand conservation areas and
reduce the size of future exploration sites (e.g.
inability to explore or mine in protected forests).
-
Perceived contribution to biodiversity destruction
could damage Lundin Gold’s reputation, reduce
-
Environmental Remediation
Reputational Damage
Direct Impact Drivers of Biodiversity Loss
RISK
Lundin Gold may be required to invest heavily in
restoring degraded ecosystems.
-
Misalignment
with
stakeholder
expectations
regarding mine closure could lead to legal
proceedings and a decline in stakeholder trust.
-
Lagging Behind Industry Standards
Failure to adopt best practices for biodiversity
management
can
put
the
Company
at
a
disadvantage compared to competitors that align
with global standards.
-
investor confidence, and strain relationships with
stakeholders including NGOs, governments, and
local communities.
Lundin Gold’s operations interact with biodiversity in two distinct contexts: the FDN Mine and regional exploration activities:
FRUTA DEL NORTE
Material Sites Located in Biodiversity-Sensitive Areas
FDN’s operations constitute a material site and comprise the La Zarza concession (4,628 ha) and the Colibrí 2, 4 and 5 concessions
(271 ha), all located within the Cordillera del Cóndor Key Biodiversity Area (KBA). Vegetation removal and terrain modification
required for operations may alter soil layers, increase erosion risk, and limit future land use. Operations also pose a risk of
deforestation and pollution that could lead to the destruction of biodiversity hotspots, such as the Andes-Amazon transition
zone, and to significant declines in plant and animal populations. Lundin Gold has implemented biotic rescue, environmental
monitoring, and progressive rehabilitation to manage these impacts.
The concession borders two biodiversity-sensitive areas: the El Zarza Wildlife Refuge (located within the National System of
Protected Areas) to the west and the Cordillera del Cóndor Protective Forest (included within the Vegetation and Protected
Forest System) to the east. Our mine is located approximately three kilometres from the nearest point of the refuge and
one kilometre from the protective forest. Both areas fall under the Ecuadorian Environmental Authority. These ecological
conditions guide impact management and inform baseline assessments.
Land Degradation, Desertification, or Soil Sealing
Our operations may cause soil erosion and land degradation, reducing water retention and vegetation capacity and increasing
landslide risks during heavy rainfall. Deforestation and pollution may also affect endemic and endangered species. Our
EMP approved by the Ecuadorian Ministry of Environment sets out related mitigation actions, including erosion control and
native-species conservation.
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79
Operations Affecting Threatened Species
Further details on operations affecting threatened species are provided in the metrics section below. The Company applies the
mitigation hierarchy with reference to IFC Performance Standard 6 to manage these risks: avoid, minimize, restore and offset
EXPLORATION ACTIVITIES
Material Sites Located in Biodiversity-Sensitive Areas
The Near Mine exploration area consists of the La Zarza and Emperador concessions, covering 9,491 hectares. Exploration
work takes place primarily in La Zarza, which lies inside the Cordillera del Cóndor KBA. Parts of this area intersect with the
Cordillera del Cóndor Protective Forest and border the El Zarza Wildlife Refuge. Environmental assessments did not identify
direct impacts on adjacent protected areas.
The Regional Exploration area includes 24 concessions in the provinces of Zamora Chinchipe and Morona Santiago, covering
around 54,000 hectares. Concessions where activities are undertaken are also located within the Cordillera del Cóndor KBA,
with some areas overlapping or bordering nationally protective forests.
Operations Affecting Threatened Species
Further details on operations affecting threatened species are provided in the metrics section.
RESILIENCE OF STRATEGY AND BUSINESS MODEL RELATED TO BIODIVERSITY (E4-1)
Lundin Gold incorporates biodiversity considerations into its strategy and business model based on its DMA, which identified
biodiversity-related IROs as material. These results inform short-, medium- and long-term operational and planning processes.
A dedicated resilience analysis of physical, transition and systemic risks is still pending, and the Company plans to further
assess these risks and integrate the results into strategic decision-making.
The current assessment indicates that vegetation removal and land modification at FDN can lead to long-term effects such as
erosion, reduced soil fertility and persistent landscape changes, which may influence future restoration requirements. Lundin
Gold manages biodiversity-related physical risks through environmental impact studies, identification of critical habitats with
reference to IFC Performance Standard 6, and application of the mitigation hierarchy. Our Construction Environmental Plan
allows us to manage identified physical risks through established project-specific environmental controls and flora and fauna
rescue programs.
The assessment currently covers the Company’s own operations and their direct areas of influence and does not include
the upstream or downstream value chain. Key assumptions include the ongoing effectiveness of our Environmental Impact
Assessment and BMMP, the efficacy of our biodiversity management measures in mitigating identified impacts, and the
expectation that regulatory requirements and stakeholder demands will continue to strengthen biodiversity protection.
Our DMA confirms that biodiversity-related risks are material, including those linked to land degradation and biodiversity-sensitive
areas. Our existing plans provide the current framework for biodiversity management, though a comprehensive resilience analysis
is needed to fully understand exposure to physical, transition, and systemic risks.
POLICIES RELATED TO BIODIVERSITY AND ECOSYSTEMS (E4-2)
Protecting biodiversity forms part of Lundin Gold’s environmental commitments. We base our approach on our
Responsible
Mining Policy
, which outlines principles for managing ecological impacts and supporting conservation-related efforts. The
policy includes commitments to comply with applicable legal requirements for species protection and to engage in research,
partnerships, and land-management practices. Additional information on the Company’s overarching policy framework is
provided in the section "Policies Related to Climate Change".
We have not developed a stand-alone biodiversity policy for sites located in or near biodiversity-sensitive areas, nor have we
established a separate policy to address deforestation. Biodiversity management is instead governed by a combination of local
regulatory requirements and the IFC Performance Standard 6 on biodiversity conservation and the sustainable management
of living natural resources. This framework guides the Company’s approach to habitat protection, species management, and
assessment of any potential offset requirements.
Material IROs related to biodiversity are also addressed through our environmental management system.
ACTIONS AND RESOURCES RELATED TO BIODIVERSITY AND ECOSYSTEMS (E4-3)
Lundin Gold implements actions to manage material biodiversity impacts and risks, with the primary focus on the FDN mine,
where activities affect both the extent and condition of ecosystems. Biodiversity management follows local regulations and
IFC Performance Standard 6. We allocate dedicated financial, human, and technical resources to biodiversity management,
including biodiversity budgets, specialized biodiversity team, and monitoring and assessment tools. We prioritize resource
allocation based on identified impacts, environmental regulatory, voluntary commitments and environmental risk assessments.
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80
Lundin Gold incorporates local and Indigenous knowledge into its biodiversity and ecosystems-related actions through
environmental and social baselines that were developed as part of the Environmental Impact Studies (EIS) for the FDN mine and
exploration activities. These baselines included information from Indigenous communities and other key stakeholders, which
served as a reference for biodiversity impact and risk assessments and the design of Environmental Management Plans. Local
knowledge continues to be applied in operational biodiversity management activities, such as plant production, seed and seedling
collection and rehabilitation processes. Biodiversity management prioritizes natural regeneration and strategic partnerships for
biodiversity research, conservation, and landscape-level restoration beyond the FDN area of influence.
FRUTA DEL NORTE
ACTIONS ADDRESSING THE CONDITION AND EXTENT OF ECOSYSTEMS
At FDN, we employ progressive rehabilitation practices throughout the life of the mine to minimize our physical impacts on
the local environment and biodiversity. These actions align with our 5-Year Sustainability Strategy, BMMP, EMP and Integrated
Land Management Strategy, emphasizing our commitment to environmental stewardship and supporting systematic planning,
monitoring, and continuous improvement of our biodiversity actions.
Before any land disturbance occurs, we conduct rescue and relocation activities, prioritizing species of conservation
importance. We minimize land disturbance through mine planning practices and implement progressive rehabilitation in areas
that are no longer required for operations. We incorporate infrastructure design measures and have three wildlife crossings
to help limit habitat fragmentation.
Rehabilitation measures include soil preparation, revegetation, and monitoring of vegetation recovery. Lundin Gold
conducts restoration using native species, applies erosion and soil control measures, and protects surrounding ecosystems
through water management practices.
Monitoring Activities
Lundin Gold uses an integrated monitoring and analysis approach to assess habitat status and ecological processes associated
with threatened species, according to the BMMP. This approach recognizes the complexity of biological systems and
acknowledges that local extinction risk cannot be evaluated solely by isolated population counts.
Our environmental team conducts biannual restoration monitoring, uses multispectral imagery to assess vegetation health,
and prepares quarterly deforestation reports to support oversight and decision-making. This biannual biotic monitoring is
carried out to identify changes in the structure, composition, and functioning of ecosystems, with an emphasis on detecting
alterations potentially associated with anthropogenic pressures. Lundin Gold uses the results to develop a dynamic baseline
for assessing trends in different biological groups and their relationship to habitat status over time.
In 2025, Lundin Gold conducted a structural connectivity assessment at local and regional scales to evaluate land use change
and habitat fragmentation in line with the BMMP. The assessment shows that local landscape connectivity remains because
we conserved key habitat patches, maintained forest configuration, and applied responsible land-use planning. Although
ecological risks remain, the results indicate that our landscape management helped prevent more severe fragmentation and
may reduce risks for species that depend on connected habitats. The assessment also identifies structurally fragile areas and
biological groups more sensitive to connectivity loss.
Vulnerability Studies
In 2024, we partnered with the UTPL to conduct a scientific investigation on three key species in the FDN area:
Magnolia yantzazana
,
Heliangelus regalis
, and
Tapirus terrestris
. This study aimed to define the vulnerability of each of these species and to better
understand their biological characteristics, habitat, behaviours and distribution to define conservation actions.
Our fieldwork and innovative monitoring techniques successfully identified the presence of 24 additional
Magnolia yantzazana
trees northeast of the FDN area. We detected populations of Heliangelus regalis by using camera traps and installed drinking
troughs. We also identified the presence of Tapirus terrestris and collected genetic material of Tapir hair for further analysis.
During 2025, based on the outcomes of these assessments, conservation actions have been defined and will be implemented in
the coming years. These actions focus on the management of priority species through in situ and ex situ conservation approaches,
monitoring, and adaptive management. The associated conservation plans establish species-specific targets, which will guide the
progressive implementation of these actions within the Company’s environmental planning processes.
As part of these efforts, our conservation program for
Magnolia yantzazana
underwent an independent assessment and obtained
certification from the Wildlife Habitat Council (WHC). The WHC Conservation Certification program evaluates conservation
projects based on objective criteria that consider the planning, implementation, monitoring, results, and sustainability over time
of the actions carried out. Certification is only granted to initiatives that demonstrate a tangible contribution to conservation, are
locally appropriate, exceed regulatory requirements, and have measurable and documented results. WHC certification reinforces
Lundin Gold’s commitment and excellence in responsible biodiversity management.
2025 Annual Report
81
Biodiversity Offsetting
Lundin Gold is developing a biodiversity offsetting strategy aimed at achieving no-net loss of natural habitat and a net gain of
critical habitat. Current work includes identifying a potential protected area, defining the offset approach, and developing a
financial sustainability model by 2026. We will determine cost estimates, compliance towards the IFC Performance Standard 6
and implementation path once we finalize the plan.
Mine Closure
Lundin Gold recognizes the future actions needed to close FDN in alignment with its Responsible Mining Policy. As disclosed
within our Financial Statements, the estimated total future liability for reclamation and remediation costs on an undiscounted
basis and adjusted for an estimate of future inflation is approximately $29.8 million as at 31 December 2025.
Regulatory Developments Related to Biodiversity
Further
information
on
regulatory
developments
and
engagement
activities
is
disclosed
in
the
sections
"Actions Related to Climate Change" and "Actions Related to Political Engagement".
EXPLORATION ACTIVITIES
Our exploration related actions aim to prevent temporary disturbances during platform construction. These include flora
and fauna rescue, lighting control, maintenance of ecological flow at authorized water withdrawal points and periodic biotic
monitoring. These measures mitigate impacts on ecosystem extent (vegetation clearing) and ecosystem conditions (species
disturbance) within the Cordillera del Cóndor region.
OUR PERFORMANCE – METRICS AND TARGETS
METRICS AND TARGETS RELATED TO BIODIVERSITY AND ECOSYSTEMS (E4-4 AND E4-5)
Lundin Gold reports biodiversity metrics and targets for FDN and our exploration activities using species level data from the
International Union for Conservation of Nature (IUCN) Red List and national conservation classifications, complemented by
ecosystem level indicators with reference to IFC Performance Standard 6.
Species-Level
The table below provides a detailed breakdown of species listed on the IUCN Red List and Ecuador’s national conservation lists:
IUCN Red List Species and National Conservation List Species with Habitats in Areas Affected by Exploration and Operations, by
Level of Extinction Risk
Level of Extinction Risk
20251
2024
Fruta del Norte
Exploration2
Fruta del Norte
Exploration2
Critically Endangered
1
0
3
3
Endangered
11
20
12
127
Vulnerable
21
28
20
147
Near Threatened
26
24
18
371
Least Concern
331
237
342
575
Total
390
309
395
1,223
Endangered and Critically Endangered (as %
Total Species)
3%
6%
4%
11%
1 La Zarza and Emperador Concessions
2 In
2025, exploration activities in the Emperador concession decreased by 83% compared to 2024. Although exploration activity increased in the La Zarza concession during
2025, operations were strategically prioritized in previously intervened areas, with an emphasis on optimizing existing footprints rather than expanding into new areas. As a
result of this overall reduction and optimization of intervened areas, the total number of species rescued and relocated in 2025 was lower than in 2024.
Methodologies and Assumptions
Lundin Gold considers aspects related to distribution within specific ecosystems and the risk of extinction of priority species through
critical habitat studies conducted every six months, with reference to IFC Performance Standard 6, and through the assessment
of changes in vulnerability categories. Under this framework, studies conducted in the FDN area allow for the identification of
areas of high biodiversity value associated with the presence of threatened, endemic, and/or restricted distribution species. For
each reporting period, primary data is collected through in-situ biotic rescue and monitoring activities conducted across La Zarza
and Emperador, where identified species are recorded and consolidated into a unified database. Each species was then assessed
against IUCN threat categories at both national and international levels, validated accordingly, and finally reported. Year-on-year
differences in biodiversity indicators are explained by variations in the extent and intensity of intervened areas, which directly
2025 Annual Report
82
influence species detection and rescue outcomes. In 2025, exploration activities in the Emperador concession decreased by 83%
compared to 2024.
Although we do not currently define a quantitative target related to species-level, we strengthen our biodiversity management
by applying a robust set of monitoring and conservation activities across the site. These include targeted fauna and flora
rescue measures for amphibians, reptiles, mammals, and native plants. We monitor the implementation of our biodiversity
management through established ecological indicators relevant to our material IROs. These indicators include changes in
species richness and abundance, species vulnerability categories, the identification of sensitive species, and the integrity and
connectivity of forest patches (studies in progress).
Looking forward to our 2026–2030 Sustainability Strategy,
we set a quantitative target to fully implement 100% of the biodiversity
offset plan for FDN by 2028
. By 2028, all planned offset actions (e.g., responsible land management practices, restoration activities,
conservation management, and monitoring systems) will be implemented exceeding legal requirements. The achievement of
ecological outcomes (e.g., no net loss of natural habitat and a net gain of critical habitat) will continue to be measured over
the longer term, as biodiversity responses materialize. This target is part of our Responsible Mining Policy and Biodiversity
Management. It covers the FDN mine and the designated offset areas in Zamora Chinchipe, building on partial implementation
achieved by 2025. We base this target on the scientific analysis underpinning the approved Biodiversity Offset Plan, including
quantitative biodiversity assessments within our Environmental Impact Assessment, habitat-quality metrics, and IUCN-aligned
methods designed to achieve no net loss of natural habitat or, where feasible, a net positive impact of critical habitat.
The second target focuses on participatory monitoring.
We will design and implement at least one biodiversity participatory monitoring
program with local communities by 2030
. This target is part of our Responsible Mining Policy and Biodiversity Management Plan. It
applies to the FDN operational area and adjacent biodiversity zones in Zamora Chinchipe. As of 2025, no formal program exists,
and this target builds from that baseline. The program will use measurable indicators such as the number of trained community
monitors, monitoring sites covered, data contributed, and annual feedback from participants. This approach reflects established
science showing that community-based biodiversity monitoring strengthens locally scaled conservation outcomes.
Land-Use Change
Land cover conversion within the FDN area is associated with the progressive development of the mining project, as well as
with the implementation of restoration and rehabilitation activities over time.
1 For FDN this is a cumulative figure comprising the following environmental permits: FDN-La Zarza, Las Peñas Camp-FDN Road, the North Access Road, the electric transmission
line, Quarry and Zamora bridge (Quarry is totally overlapped within FDN-La Zarza, therefore it is not double counted).
Land Management
Land (hectares)
FDN
Exploration Near Mine
(La Zarza and Emperador)
2025
2024
2025
2024
Total amount of ha licensed for FDN exploitation phase1
2,671
2,671
9,491
9,491
Total amount of ha newly disturbed within the reporting period
11.0
4.0
1.2
1.0
Total amount of ha newly rehabilitated to the agreed end use within the
reporting period
0
0
0
0
Cumulative total ha disturbed and not yet rehabilitated to the agreed
end use within the reporting period
423
412
NA
NA
Cumulative ha disturbed and not yet rehabilitated
(as % Total amount of ha licensed)
16%
15%
0%
0%
Total amount of land in active restoration within the reporting period
4.3
3.7
N/A
N/A
Repurposed land
1.8
-
-
-
Cumulative total land in active restoration (2021-2025 Sustainability
Strategy)
17.9
15.4
N/A
N/A
Methodologies and Assumptions
We monitor active restoration through a continuous monitoring program that covers weed control, replacement of non-surviving
vegetation, targeted fertilization, and growth monitoring, with the objective of achieving a minimum survival rate of 60%. We conduct
internal monitoring semi-annually to assess planting success in accordance with the EMP, and annually in areas where vegetation
has already developed suitable conditions for optimal growth. We monitor restoration progress by ecosystem type, including lower
montane evergreen forest, low montane sandstone forest, piedmont evergreen forest, and undetermined ecosystems. We use tools
such as geographic information systems (GIS), updated maps, and technical field records to support traceability and to evaluate
progress in active restoration efforts.
Our rehabilitation plans are integrated into our Sustainability Strategy. By 2024, we have exceeded our target by restoring 15.4 ha
of land in La Zarza concession by 2025 (baseline of 2021), achieving this one year ahead of schedule (14.5 ha planned). In 2025, we
2025 Annual Report
83
continued to exceed this target, restoring a total of 4.3 ha across different ecosystem types. This brought our cumulative restoration
total between 2021 and 2025 to 19.7 ha. Of this area, during 2025, approximately 1.8 hectares of restored land were derecognized
due to natural processes (mass movement events), and areas were repurposed for operational use due to project dynamics. As a
result, as of the end of 2025, the effective area under active restoration amounted to approximately 17.9 ha
As part of our 2026–2030 Sustainability Strategy,
we will develop a Progressive Closure Plan for FDN by 2027 and conduct annual
reviews and updates thereafter
. This target is part of our Responsible Mining Policy. It covers the entire FDN mine site, including
operational areas, tailings, infrastructure, and waste facilities, as well as areas of hydrological and community influence.
ESRS E5 RESOURCE USE
WHY IT MATTERS (ESRS 2, SBM-3)
Effective management of our TSF is crucial for protecting the environment and safeguarding public health. Tailings, a by-product of
mining operations, often contains hazardous substances that can lead to extensive environmental damage, water contamination,
loss of biodiversity and harm to the overall health and wellbeing of the local communities and Indigenous Peoples if not effectively
managed. We are committed to using best practices in waste management, including our tailings, to protect our workforce,
communities and the environment.
Health and Safety hazards on workers and surrounding
communities
IMPACT
A major breach of the Tailings Storage Facility
(TSF) can pose a danger to the health of workers
and nearby communities, increasing the risk of
exposure to toxic substances and heavy metals.
IRO Summary
Waste
Loss of chemical stability - TSF
RISK
Leaching from rockfill and quarry materials
on-site could cause environmental degradation,
pH fluctuations at water quality monitoring
points,
and
pose
a
risk
of
long-term
impacts to the chemical stability of the TSF.
Inadequate dam construction material could
limit tailings storage capacity and affect the
Company’s
ability
to
meet
its
operational
requirements over the life of mine.
-
Our material waste streams at the FDN mine include tailings and waste rock:
•
Tailings
are a common by-product of mineral processing. They consist of finely crushed rock, water and chemical additives
used to support mineral recovery.
•
Waste rock
consists of mined material with low gold content which makes it non economically viable to be processed.
We also consider sludge from mine sumps and paste waste as waste rock. This material contains sulphur and metals that,
when exposed to the environment, can generate acid drainage and the leaching of metals into surrounding soils and water.
POLICIES RELATED TO WASTE (E5-1)
Lundin Gold manages its material impacts and risks related to resource use through two key policies:
Our
Responsible Mining Policy
applies to all operations and commits Lundin Gold to reducing resource consumption, minimizing
waste and managing materials in ways that prevent environmental and community impacts. Further details on the overarching
policy framework, including governance and accountability, are available in "Policies related to Climate Change".
Given the materiality of mineral residues, our Tailings Management Policy provides more specific commitments for the safe
and responsible management of the TSF. The policy sets requirements for lifecycle management of the TSF, risk reduction,
transparent disclosure and engagement with project-affected communities. It also establishes a commitment to implement
the GISTM and comply with relevant host country laws and regulations. Key governance roles under the Policy include an
Engineer of Record, responsible for the design and third-party quality assurance during construction, and an Independent
Tailings Review Board, which reviews TSF design and operational performance. Our Chief Operating Officer (COO) serves as
the accountable executive and holds responsibility for implementing the policy and monitoring performance.
Additionally, Lundin Gold manages waste through our EMP for the FDN mine, approved by the National Environmental
Authority. This plan covers all activities related to mining, processing, and smelting and helps maintain compliance with
Ecuadorian regulations and international standards.
2025 Annual Report
84
ACTIONS AND RESOURCES RELATED TO WASTE (E5-2)
Our objective at FDN is to minimize all forms of waste generated and to divert it from final disposal. We continuously seek new
strategies to reduce waste generation and incorporate circular economy principles. Despite the efforts of the mining industry
to reuse tailings and waste rock, there are several limitations to the use of tailings in other activities such as construction.
Waste Diverted from Final Disposal (Paste and Waste Rock)
At FDN, we maximize the use of tailings as backfill for the underground mine by mixing it with binders like cement to create a paste
for filling mined-out voids. This reduces the volume of tailings stored in our TSF and enhances underground stability, maximizing ore
extraction and ensuring workers’ safety.
We also use waste rock to backfill mine voids in two ways. Most often, we use waste rock as plugs for the stopes that we will backfill
with paste. We also use waste rock directly to backfill stopes.
Waste Directed to Final Disposal (TSF)
Tailings not used for paste backfill are managed in the TSF, which was designed as a zero-discharge dam and is raised using a
downstream construction method. Our water management system reclaims and treats water for reuse in our process plant within
a closed circuit.
Construction of the fifth tailings dam raise reached 85% completion, with $24.5 million spent in 2025. This amount forms part
of our sustaining capital expenditure recognized during the year and presented in the statement of financial position as at 31
December 2025. The fifth tailings dam raise is on track for completion during the first quarter of 2026. This investment supports
our strategy to increase the capacity of tailings storage at FDN. According to our current Life of Mine Plan at FDN, we project that
the TSF will reach an elevation of 1,515 metres above sea level (masl), with an approximate dam height of 60 metres by the year
2030. As of the end of 2025, the dam crest is at 1,478.2 masl.
Lundin Gold monitors its TSF’s structural integrity using an advanced system that employs both real-time and manual instruments,
providing continuous data on the dam’s stability and integrity. This enables proactive management and timely interventions.
We construct, maintain and manage our TSF in collaboration with relevant government bodies, independent engineering firms, and
tailings experts. We follow leading international tailings management standards, including the Mining Association of Canada’s Guide
to the Management of Tailings Facilities, the Canadian Dam Association’s Guidelines and Technical Bulletins, and the GISTM, which we
have committed to fully implementing no later than 2030.
Measures Implemented in 2025
As a first milestone in our GISTM implementation, Lundin Gold completed a third party gap assessment in early 2025, conducted by
recognized GISTM experts. The assessment established a baseline and informed a detailed implementation plan.
We advanced several technical assessments to evaluate potential failure modes, site conditions, and the properties of the FDN tailings
to support risk-based decision-making. These assessments strengthened our knowledge base, improved technical documentation
and enhanced governance processes. Lundin Gold also advanced baseline assessments for the inundation zone downstream the
TSF, improving overall scenario planning and risk assessments. Given the potential loss of life (PLL), the consequence level for the
TSF has been defined as Extreme, leading to a more conservative design criterion.
To support more efficient water management and reduce stored volumes within the TSF, we implemented several operational
upgrades in 2025. These included improvements to the reclaim pipeline and pumping capacity, allowing more water to be returned
from the TSF to the processing plant. The Company also improved the corridor housing the tailings and reclaim pipelines, reducing
spill risk and improving system stability. In addition, a fibre-optic leak detection system is being installed to enhance monitoring and
early detection capabilities, with completion expected in 2026.
Significant progress was achieved on site characterization of the TSF, to reflect material changes in conditions and new knowledge.
This study includes site-specific climate, geomorphology, geology, geochemistry, hydrology, and hydrogeology (surface and
groundwater flow and quality), geotechnical, and seismicity. This will be updated throughout the lifecycle of the FDN to account for
variability in ore properties, processing, and tailings deposition.
Climate Change Assessment and Implications for Tailings and Water Management
In 2025, Lundin Gold initiated a climate change assessment to evaluate how projected climate conditions may affect the mine
over the long-term, with particular focus on our TSF. The assessment includes hydrological modelling, updated design rainfall
values and scenario analysis covering extreme precipitation and drought conditions. Lundin Gold has engaged a qualified third
party to review the underlying data and methodologies. See ESRS E1, section "Why it Matters"
for additional details on this
assessment. The results will guide future decisions on our TSF design basis and our broader water management infrastructure.
We plan to conduct additional technical assessments to validate climate-related implications and integrate the results into
engineering designs across the site.
2025 Sustainability Statement
85
OUR PERFORMANCE – METRICS AND TARGETS
METRICS AND TARGETS RELATED TO WASTE (E5-4 AND E5-5)
The following table presents all material waste generated at the FDN mine:
81%
19%
92%
8%
Tailings
1,737,685
Waste
(Barren)
Rock
257,998
Waste Directed to Disposal
1,053,803
96,650
Waste Diverted from Disposal
683,882
161,348
Note:
Figures are rounded.
1 Underground stockpile change calculation method and its characteristics are detailed in the section below under Methodologies and Assumptions.
Tailings and Waste Rock Management
2025
2024
Waste (tonnes)
Waste
Generated
(tonnes)
Intensity (tonnes
generated per
Tonnes of Ore
Milled)
Intensity
(tonnes
generated per
Oz. of Gold
produced)
Underground
Stockpile
Change
1
Waste
Diverted
from
Disposal
(tonnes)
Waste
Directed
to Disposal
(tonnes)
Waste
Generated
(tonnes)
Intensity (tonnes
generated per
Tonnes of Ore
Milled)
Intensity
(tonnes
generated per
Oz. of Gold
produced)
Underground
Stockpile
Change
1
Waste
Diverted
from
Disposal
(tonnes)
Waste
Directed
to Disposal
(tonnes)
Total Tailings and Waste Rock
1,965,429
1.08
3.94
30,254
845,230
1,150,453
1,914,992
1.13
3.81
117,927
737,299
1,295,619
Tailings
1,737,685
0.95
3.49
-
683,882
1,053,803
1,612,011
0.95
3.21
-
653,028
958,983
Waste (Barren) Rock
227,744
0.12
0.46
30,254
161,348
96,650
302,981
0.18
0.60
117,927
84,271
336,636
Tailings and Waste Rock - Recycled
waste
(as % Total Waste Generated)
43%
39%
Tailings - Recycled waste (as % Total
Tailings)
39%
41%
Tailings and Waste Rock - Non-Recycled
waste (as % Total Waste Generated)
59%
68%
Tailings - Non-Recycled waste
(as % Total Tailings)
61%
59%
Tonnes of Ore Milled (t)
1,828,225
1,690,865
Ounces of Gold Produced (oz)
498,315
502,029
2025 Annual Report
86
Methodologies and Assumptions
We classify waste in accordance with Ecuadorian environmental regulations and sector standards:
•
Tailings:
We obtain tailings volume data through flow meters and density meters. The system feeds into a modelling tool
that calculates our total tailings generated and deposited or redirected for paste backfill. Quantities are finally reconciled
based on bathymetric and topographic surveys at the TSF and backfilled voids surveyed by drones and LIDAR (Light
Detection and Ranging) technology.
•
Waste rock and sludge:
The total waste rock generated includes all material produced underground, including stockpile
waste rock and sludge from mining sumps. However, not all of this material is brought to surface. A portion remains
underground and is stockpiled for reuse (e.g., backfill or road maintenance). As a result, material generated in one reporting
period may be used in a subsequent period.
We record waste rock and sludge volumes and tonnage based on a truck factor that is updated monthly by the geological
mine team. This factor has an expected variance of approximately ±3%, which is considered an acceptable range for waste
rock reporting. A new system implemented at the mine outlet allows us to track the volume effectively loaded into the
mining trucks. Our database is updated daily and provides direct measurements of production and movement. In 2025 the
mine team implemented new technologies to provide better assessment of the relationship between tonnage and volume
of waste.
•
Underground stockpile change
: This is a new metric in this reporting period. Prior to 2025, quantities were estimated
based on direct observation of volumes, based on a truck factor. From 2025 onwards, stockpile volumes were determined
through topographic surveys conducted via drone-based LiDAR technology, enabling precise calculation of stored volume.
This volume is subsequently converted into tonnes using the specific density of the waste rock, which is derived from truck
factors calculated on the basis of measured weight and volume of transported material.
Changes in Preparation or Presentation of Sustainability Information compared to 2025
: In 2025, waste reporting was updated
to incorporate sludge and paste waste from mine sumps, stockpile movements, and a standardized approach to quantifying all
categories of diverted waste material, none of which were reported in the prior year. To address this error and ensure comparability
between periods, 2024 comparative figures have been restated to reflect the updated scope and measurement approach:
•
Waste Generated has been restated from 336,041 tonnes to 302,980 tonnes, representing a decrease of 33,061 tonnes
(-9.8%). The prior figure included waste extracted from underground stockpiles produced in 2023 and brought to surface
in 2024. The restated figure reflects only waste generated within the respective reporting year, consistent with the
methodology applied for 2025.
•
Waste Diverted from Disposal has been restated from 28,300 tonnes to 84,271 tonnes, representing an increase of 55,971
tonnes (+197.8%). The prior figure was based predominantly on backfill quantities and did not capture all categories of
reused material. The restated figure reflects a standardized quantification approach that accounts for all uses of diverted
waste material by the mining operations team.
•
Waste Directed to Disposal has been restated from 307,741 tonnes to 336,636 tonnes, representing an increase of 28,895
tonnes (+9.4%). The restatement reflects the inclusion of sludge and paste waste from mine sumps disposed at the PAG
PAD, previously excluded, and a change in calculation basis from the derived difference between generated waste and
backfill use to a direct truck-factor measurement.
Looking forward to our 2026–2030 Sustainability Strategy, we set a voluntary, quantitative target related to our tailings
management:
to fully implement GISTM for the FDN TSF by 2030 at the latest, which means to have all 77 requirements in the “Meets” or
“Non-Applicable” categories
. Progress will be measured against a baseline established through the 2025 gap assessment of all 77
GISTM requirements. Baseline results showed that from the 77 requirements assessed, 29% were in the “Meets” or “Meets
with Observations” category, 49% were either in the “In Progress” or “Partially Meet”, 19% in the “Doesn’t Meet” category,
and 3% “Not Applicable”. The focus for 2026 will be to improve performance and turn the 19% in the doesn´t meet category
into the IP-PM-M categories. Annual internal assessments and biannual third-party GISTM audits will be used to track gaps
closure.
This target is relevant to the disposal phase of the waste hierarchy and is grounded in established engineering science,
geotechnical best practices, and failure-mode analysis and represents the global consensus of technical and safety experts
in tailings management. All design and monitoring methodologies are based on established geotechnical science. This target
is supported by our Tailings Management Policy, Responsible Mining Policy, and Safety Management System, as well as our
permitting obligations and legal requirements under the Ministry of Environment and Energy.
2025 Annual Report
87
SOCIAL
ESRS S1 OWN WORKFORCE
WHY IT MATTERS (ESRS 2, SBM-3 AND S1, SBM-3)
Lundin Gold’s strategy and business model depend on a safe, skilled and engaged workforce across its Ecuadorian operations.
Through competitive wages, robust health and safety, wellbeing programs, and career development opportunities, we help
build a loyal, valued and skilled team while supporting sustainable livelihoods in our Ecuadorian communities. The health and
safety of our people, and the integrity of our operations remain core priorities, reinforced by ongoing efforts to attract, develop,
and retain talent.
Fatalities or long-term health issues
Events associated with the transportation, handling,
and storage of chemicals
Wellbeing challenges
Financial stability
Illegal work stoppages
Development of national talent
IRO Summary
Health and Safety
Secure Employment
Training and skills development
IMPACT
IMPACT
IMPACT
RISK
Operations pose serious health and safety risks,
including
rockfalls,
explosive
handling,
and
exposure to harmful chemicals. These dangers
can lead to fatal accidents or long-term health
issues if safety measures are not strictly followed,
highlighting the need for proper safety protocols
and training.
Injuries from accidents in the transportation, storage
and handling of chemicals (cyanide or sulfuric acid)
pose risks to workers and communities, including
burns, poisoning, and respiratory issues. Depending
on the extent of exposure, these incidents can
range from minor to life-threatening.
Irregular
shifts
and
long
hours
away
from
families
can
negatively
impact
workers’
physical, mental and psychological wellbeing.
Competitive wages and benefits enable employees
to meet their needs and improve quality of life.
Illegal work stoppages and strikes can disrupt
production, causing revenue losses, legal expenses,
and higher security costs. Prolonged disruptions
may strain supply chains and undermine investor
confidence.
Training programs help cultivate national expertise,
reducing the company’s dependency on foreign
labour and fostering community growth and
economic independence.
Negative
Positive
-
DEFINING OWN WORKFORCE
Lundin Gold’s workforce comprises:
•
Employees:
including permanent and temporary personnel. They work in mining, processing, maintenance, geology,
exploration, environment, health and safety, surface operations, administrative, and management roles at FDN and in
corporate offices.
•
Non-employees:
including contractors, vendors and consultants that provide services to the Company through contractual
arrangements with its Ecuadorian subsidiaries, Aurelian Ecuador S.A., Aurelianmenor S.A. and Surnorte S.A. These non-
employees perform work within the Company’s concessions, at the FDN operation, within the broader area of social
influence, or in connection with transportation and logistics activities associated with these areas.
Both groups may experience material impacts related to occupational health and safety, working conditions, wellbeing, labour rights
and access to remedy.
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POLICIES RELATED TO OWN WORKFORCE (S1-1)
We manage workforce-related IROs through a set of corporate policies. These policies align with our Responsible Mining strategy,
Ecuadorian labour legal frameworks and international standards. They are also integrated into operational management systems at
the FDN mine and across corporate functions.
These policies apply to all of Lundin Gold’s workforce, including permanent and temporary employees, service-agreement personnel
and non-employees working within the Company’s concessions and areas of influence. Where specific risks are higher, such as
for operational staff, shift workers or those handling hazardous materials, we address these risks through targeted procedures,
training and controls. Senior management and the Board, including our HSES Committee, provide governance and oversight. The
CEO is accountable for the implementation of these corporate policies and delegates responsibility to the relevant members of the
Executive Leadership Team, depending on the topic. The Company monitors implementation and effectiveness through internal
processes and public sustainability reporting.
Health and Safety
Protecting the health and safety of our workforce is a core principle of responsible mining. Four policies govern this area:
•
Responsible Mining Policy
•
Code of Business Conduct and Ethics Policy
•
Human Rights Policy
•
Workplace Discrimination, Harassment and Violence Policy
Lundin Gold’s Responsible Mining Policy commits the Company to achieving zero harm, identifying and reducing the potential
for accidents and implementing emergency response plans to protect workers, contractors and communities. The Company
embeds workplace accident prevention in this policy through systematic risk management, hazard identification, emergency
preparedness and regular internal and external audits. External audits are typically performed by independent third parties
in the context of certification processes or compliance verification (e.g., ISO certifications, Cyanide Code, FDN Environmental
Management Plan). Although the policy does not list all operational hazards – such as rockfalls, explosives handling or chemical
exposure – we address these risks through our Internal Regulations for Occupational Health and Safety in Mining, which sets
out the mandatory procedures and responsibilities for preventing workplace risks and protecting workers’ health and safety,
our Emergency and Contingency Response Plan, which outlines the protocols and roles to be followed in the event of critical
incidents, and comprehensive training programs.
The Code of Business Conduct and Ethics Policy
reinforce the Company’s commitment to achieving zero harm by requiring all
employees to comply with applicable health, safety and environmental laws and internal standards. The policy sets clear
expectations for promoting a positive work environment, following safety protocols and immediately reporting hazardous
conditions, injuries, accidents or any activity that compromises security. It also prohibits working under the influence of
substances that could impair safety.
Lundin Gold’s
Human Rights Polic
y sets out the Company’s commitment to respecting and observing all human rights, including
labour rights, for employees, non-employees and supply chain workers. The policy recognizes the right of employees and
community members to a clean, healthy and sustainable environment.
Lundin Gold’s
Workplace Discrimination, Harassment and Violence Policy
sets out the Company’s commitment to providing and
maintaining a safe and healthy workplace for its employees, including a workplace that is free from discrimination, harassment
and workplace violence. The policy outlines Lundin Gold’s expectations regarding acceptable workplace conduct, provides a
confidential complaint procedure for reporting incidents and protects reporters from retaliation.
In addition to these policies, we use our Health and Safety Management System (HSMS) to effectively manage our three core focus
areas, Operational Safety, Occupational Health and Community Safety. We designed this system to monitor, manage, and enhance
employee health and wellbeing through health monitoring, wellbeing initiatives, incident management, compliance reporting and
training programs. The section "Actions Related to Health and Safety" provides additional information on our actions supported
by our HSMS.
Training and Skills Development
Our
Training Policy
is dedicated exclusively to defining a set of guidelines for the participation of personnel in training courses and
activities to provide the opportunity for education and development of skills. Training activities are classified into two categories:
Legal or Operational Compliance training that is legally required and compulsory for an employee to complete their job safely and
efficiently. It may have come from government guidelines or legislation, or it may be training that an organization deems essential
for its employees or specific job roles. On the other hand, Development training activities are focused on improving the skills or
abilities of the workforce. This development also includes upskilling, so employees maintain currency with advances in industry
and equipment changes or upgrades.
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Secure Employment
Our
Human Rights Policy
prohibits forced labour, child labour and human trafficking, and promotes fair employment practices
and respects freedom of association and collective bargaining. The Company does not tolerate discrimination or harassment
and aims to pay employees fairly while enforcing working hours aligned with International Labour Organization (ILO) standards.
Accountability for implementing this policy rests with the Vice President, Legal and Sustainability, who reviews the policy
annually, or as required, and recommends any necessary modifications to the Board of Directors.
The Company bases its approach on internationally recognized instruments such as the UNGP on Business and Human Rights, the
ILO Declaration on Fundamental Principles and Rights at Work and the Organization for Economic Cooperation and Development
(OECD) Guidelines for Multinational Enterprises. Lundin Gold implements this approach through ongoing human rights due
diligence, risk assessments and grievance mechanisms, including an anonymous whistleblower hotline accessible to all at secure
reporting website hosted by IntegrityCounts. Our implementation approach allows us to monitor compliance with internationally
recognized instruments. We provide additional details on our human rights due diligence approach in the ESRS 2 section
"Statement of Due Diligence".
Elimination of Discrimination, Harassment and Violence
To further strengthen its commitment to a safe and respectful workplace, Lundin Gold established its
Workplace Discrimination,
Harassment and Violence Policy
. This policy prohibits discrimination, harassment and violence in all work-related settings and
applies to employees, non-employees, suppliers and agents. It explicitly covers a wide range of protected grounds including
race, color, gender or gender identification, pregnancy or child-birth, sex, sexual orientation, marital or family status, age,
religious, ideological or political conviction, language, ethnic or national origin, aesthetic stereotypes, having HIV/AIDS or
another disease or physical or mental disability or other protected grounds under regulations relevant to Lundin Gold.
This policy sets clear expectations for respectful conduct and provides a formal complaint process, including access to
a whistleblower platform. It prohibits retaliation and facilitates prompt and impartial investigation of concerns. Policy
commitments are implemented through defined procedures and management systems to prevent, mitigate and address
discrimination, if identified. Requirements are embedded in internal processes, including the Internal Occupational Health
and Safety Regulations for mining activities, recruitment and employment practices, training programs, and grievance, anti-
harassment and whistleblower mechanisms. We provide this policy to all employees upon hire and annually thereafter,
supported by mandatory training. We report quarterly on complaints to the Board’s HSES Committee.
Lundin Gold’s commitment to inclusion and positive action for groups at greater risk of vulnerability within its workforce is embedded
in its Workplace Discrimination, Harassment and Violence Policy and Human Rights Policy. These commitments apply to employees
and contractors and are implemented across the FDN operation and supporting offices. Particular focus is placed on women and
Indigenous Peoples, reflecting both the context of the mining sector and the Company’s operating environment in Ecuador.
PROCESS FOR ENGAGING WITH OWN WORKERS AND CHANNELS TO RAISE CONCERNS (S1-2
AND S1-3)
Lundin Gold engages directly with its workforce so that employee perspectives inform decisions related to health and safety,
wellbeing, working conditions and operational practices. The Company embeds engagement in daily operations at FDN and supports
it with formal communication and feedback mechanisms guided by the above policies to identify and address workforce impacts.
Types, Frequency and Levels of Engagement
We engage with employees through a range of formal and informal mechanisms. These include regular email communications, internal
newsletters, the Company intranet, structured interviews and focus groups, employee perception surveys, and established grievance,
anti-harassment and whistleblower mechanisms. In addition, townhall meetings provide a direct forum for dialogue between
employees, operational leaders and senior management, enabling two-way communication and timely escalation of concerns.
Engagement takes place primarily at site level, where operational leaders, HR and the Communications team facilitate discussions
and collect feedback. We consolidate information from site-level engagement and communicate it to senior management.
Stages of Engagement in Decision-Making
Employees participate throughout the full decision-making cycle:
•
Identification and assessment: insights from surveys, interviews, focus groups and grievance mechanisms help identify
risks and concerns.
•
Design and decision-making: HR, operational leaders and management review feedback to shape action plans and
workforce programs.
•
Implementation: we communicate expectations and changes through routine meetings and internal channels, allowing
clarification and further input.
•
Monitoring and improvement: continuous feedback informs adjustments to policies, procedures and operational controls.
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90
Insights from surveys, interviews,
focus groups and grievance
mechanisms help idenfy risks and
concerns.
Connuous feedback informs
adjustments to
policies, procedures and
operaonal controls.
We communicate expectaons and
changes through roune meengs and
internal channels, allowing clarificaon
and further input.
HR, operaonal leaders and
management review feedback to shape
acon plans and workforce programs.
Idenficaon
and
Assessment
Monitoring
and
Impro�ement
Design and
Decision -
Making
Implementaon
Stages of engagement in decision-making related to Lundin Gold’s process for engaging workers
Channels to Raise Concerns
We provide multiple confidential channels for employees and non-employees to raise concerns. These channels include direct
engagement with supervisors, HR Business Partners, Health and Safety staff or operational leaders, as well as formal mechanisms
such as the Company’s community grievance mechanism, anti-harassment system and whistleblower systems, which also allow
anonymous reporting where legally permitted.
The Company provides grievance channels in Spanish, Shuar and English and communicates their availability and accessibility
through onboarding, mandatory training, internal communications, the intranet, notice boards, and routine workforce engagement.
Employees and non-employees can submit reports in person, electronically or in writing. We log, assess, investigate and address
all cases in line with internal procedures. The Company provides protections against retaliation through its Whistleblower Policy,
which safeguards employees and third parties who raise concern in good faith. Additional information is available in the Business
Conduct chapter.
Remedy for Negative Impacts
If the Company identifies that it has caused or contributed to a material negative impact on people in its own workforce, it takes
a structured and rights-based approach to providing or contributing to remedy. The Company identifies potential impacts through
ongoing due diligence, risk assessments, workplace inspections and formal reporting channels. Once it confirms an issue, it
assesses the severity and scope and escalates the matter to the relevant functions, such as HR, Health and Safety, Legal or Business
Sustainability. The Company implements remedial actions that may include corrective operational measures, changes to work
practices or conditions, disciplinary actions, targeted training or, where appropriate, medical, psychological or financial support.
Roles and Responsibilities
HR, together with operational leaders and our Communications team, manages engagement activities and escalates key insights.
Lundin Gold’s CEO holds the most senior accountability for these processes. He is supported by our HR Director and FDN General
Manager, part of the Senior Management Team, who review consolidated workforce feedback to inform decisions related to working
conditions, health and safety and employee programs.
Effectiveness of Engagement
The Company assesses engagement and remedies effectiveness through perception and engagement surveys, analysis of grievance
and whistleblower trends, and monitoring indicators such as health and safety performance, turnover, absenteeism, and training.
Grievance resolution times and feedback from town halls also inform corrective actions. A key indicator of effectiveness is the
absence of work stoppages during the reporting period, which demonstrates trust in engagement mechanisms and the integration
of workforce perspectives into decision-making.
HR and operational management review the insights gathered through all engagement channels with particular attention to
patterns affecting vulnerable or marginalized groups. Town halls and regular face-to-face meetings with operational teams, HR and
leadership further provide continuous opportunities for dialogue, especially for frontline and operational workers who may have
limited access to digital platforms. Based on the insights obtained, we develop and implement targeted interventions to strengthen
workplace health, safety, wellbeing, inclusion and equal access to opportunities.
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ACTIONS AND RESOURCES RELATED TO OWN WORKFORCE (S1-4)
Lundin Gold identifies and addresses actual or potential negative and positive impacts and mitigates material risks on its workforce
through a structured process integrated into governance, risk management and daily operations.
Health and Safety
Lundin Gold recognizes that strong health and safety practices are essential for a successful mining operation. The Company uses
its HSMS to guide the application of a hierarchy of controls to reduce hazards, supported by organizational processes, personal
protective equipment and behavior-based safety programs. All actions described below are designed to manage these impacts and
deliver positive outcomes for our workforce.
Risk-Based Training and Competence Development
In 2025, Lundin Gold reinforced its risk-based approach to health and safety training by prioritizing competence development for
critical tasks (golden rules) such as confined space entry, hot works and working at heights. All new hires receive comprehensive
safety induction, and all employees complete mandatory annual refresher training. On an ongoing basis, the Company integrates
training into safety management tools, with operative procedures embedded to reinforce safe work practices.
Behavior-Based Safety and Leadership Engagement
Lundin Gold’s Field Safety Leadership Activities (ASCL) program, launched in 2023 and enhanced in 2025, strengthens behavior-based
safety and visible leadership in the field. This is an ongoing program that sets clear expectations for supervisory engagement and is
supported by planned ASCL activities, weekly inspections and monthly observations carried out across all management levels. During
the year, Lundin Gold enhanced leadership interactions with operational personnel to verify compliance with safety standards and
identify opportunities for improvement, as well as positive recognition. This approach fosters strong leadership presence, proactive risk
identification, and continuous improvement in daily operations.
Occupational Health and Industrial Hygiene Program
In 2025, Lundin Gold strengthened its industrial hygiene program by appointing a dedicated hygiene specialist, enabling continuous
monitoring of workplace hygiene and exposure risks. The Company completed the first round of exposure assessments in June 2025
to comply with chemical exposure limits and support early detection of occupational illnesses. With an internal hygiene team now
in place, Lundin Gold advanced its occupational hygiene plan and psycho-safety program and plans to adopt Occupational Tolerance
Limit (LOT) standards in 2026 to further improve detection and follow-up for conditions such as silicosis.
Health and Safety Oversight and Assurance
Lundin Gold maintains an oversight process including continuous monitoring and improvement of health and safety performance. In
2025, the Company strengthened this process through weekly, bi-weekly and monthly meetings where management reviewed KPIs,
including incident trends, to enable timely corrective actions.
We capture all health and safety data – including walkthroughs, audits and observations – in our ISOTools platform, which centralizes
monitoring and reporting and provides management with the insights needed for informed decision-making. Our HSMS further
supports oversight by integrating health monitoring, incident management, compliance reporting and training programs, and
continued to align with ISO 45001 and the Ecuadorian Agencia de Regulación y Control de Energía y Recursos Naturales no Renovables
(ARCERNNR)-013/2020 regulation in 2025. Independent third-party audits regularly verify compliance with legal requirements and
ISO standards, reinforcing the robustness of the Company’s management system.
Training and Skills Development
In 2025, Lundin Gold advanced workforce development through targeted programs, including leadership training, in-person
non-discrimination training and a train-the-trainer initiative on harassment and violence prevention. These actions strengthened
skills, supported inclusion and prepared the workforce for future needs.
Leadership and Non-Discrimination Training
In 2025, Lundin Gold launched a leadership training program aimed at fostering strong leadership practices across all levels of the
organization. The program emphasizes accountability, communication and team engagement, and aims to promote a positive and
productive work environment. Additionally, the Company implemented in-person training on non-discrimination, reinforcing its
commitment to respect and inclusion in the workplace.
Train the Trainer and Harassment Prevention
To strengthen awareness and prevention of workplace harassment and violence, we introduced a train-the-trainer program at the
end of 2024. We initiated the internal roll out during 2025, and it is scheduled to continue during 2026. This initiative prepares
internal trainers to deliver harassment and violence prevention training to the broader workforce, driving consistent messaging and
effective implementation.
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92
Developing National Talent at FDN
FDN operates in a remote region of Zamora Chinchipe province where access to formal employment and professional
development has historically been limited. Expanding local participation in our workforce — and building the skills required
to sustain it — is both a material positive impact we seek to generate and a core operational objective. Achieving our local
employment targets requires that we recruit, develop, and retain workers from across the full available local talent pool,
including women, Indigenous community members, and people with disabilities. Our talent programs are designed with this in
mind.
Structured Training and Career Development
The Company maintains training as a core priority through structured processes and systems, including:
•
Training needs identification:
Our Human Resources (HR) team conducts annual meetings with department heads to
assess training requirements for technical roles and soft skills. Based on these discussions, HR develops an annual training
plan and monitors its implementation.
•
Department-specific programs:
Core operational areas – mining, process plant, and maintenance – have dedicated training
experts who design and deliver programs tailored to their specific needs. Within the mine, experienced expatriate trainers
help onboard and upskill local employees to meet operational standards.
•
Training delivery and tracking:
We track all training activities through our third-party training platform, which maintains an
inventory of training needs and records completed sessions.
•
Language training:
Officially posted programs include language training to support workforce integration and broaden
participation in technical and supervisory roles.
•
Talent management function:
Lundin Gold has established a talent management function to consolidate training,
organizational development, and career growth initiatives across the business.
•
Young Talent Program:
We attract and develop future industry professionals by providing opportunities for interns and
graduates. This is scheduled for launch in 2026.
Expanding the Local Talent Pipeline
Reaching the full local talent pool requires ongoing, deliberate effort to address structural barriers that would otherwise limit
participation. In 2025, Lundin Gold undertook the following measures to broaden access and remove barriers to entry, development,
and advancement:
•
Female workforce survey:
This survey was conducted across the organization to identify challenges and inform targeted
actions, with input from the Lundin Foundation. Findings are informing targeted actions to reduce attrition, support career
advancement, and strengthen recruitment from female candidates in the region.
•
Internal Mentorship Program:
We provide structured guidance and development opportunities for employees across all
functions, supporting their progression into technical and leadership roles where local representation has historically been
low.
•
Equitable hiring practices:
Our hiring practices are designed to recruit from the broadest possible local base. This includes
sustaining a workforce in which approximately 9% of employees identify as Indigenous and approximately 2% are persons
with disabilities — groups that represent an important part of the regional talent pool and that have historically faced
barriers to formal employment in the extractive sector.
•
Respectful workplace training:
Annual training on discrimination, harassment, and violence — delivered through in-person
sessions and workshops — is a prerequisite for maintaining the conditions under which a diverse local workforce can be
retained and developed over time.
Human Rights Integration
Building on the HRRA conducted in 2024, Lundin Gold established a Human Rights Working Group comprising senior leaders and
operational representatives. This group developed an action plan that includes workforce-specific measures — including those
described above — and reports progress to the Board as part of the Company’s corporate goals and sustainability strategy. Ensuring
that workforce development is conducted without discrimination, and that all employees have access to grievance mechanisms and
fair treatment, underpins our local employment commitments.
Secure Employment
Lundin Gold is committed to fair employment practices, equitable compensation and the respect of human rights across its workforce.
In 2025, the Company focused on strengthening wage fairness, advancing diversity and inclusion, and expanding programs that
support equal opportunities and career development.
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93
Fair Compensation and Market Alignment
In 2025, Lundin Gold conducted a salary and benefits survey to benchmark its compensation structure against local and regional
markets. This work included an independent job evaluation, a comparison of pay grades and a review of medical insurance plans.
Where discrepancies were identified, the Company adjusted compensation to maintain fairness and competitiveness. Lundin Gold
also confirmed that all employees, including interns, earn above the national and mining sectorial minimum wage. These efforts
complement the Company’s annual pay gap certification and its pay up audit, which monitors gender pay equity and informs
corrective actions, reinforcing its commitment to equitable compensation.
Assessment of Forced Labour and Child Labour Risk
Lundin Gold assessed the risk of forced or compulsory labour and child labour across its own workforce and operations, with a
particular focus on its FDN mine. Based on the nature of its operations, the regulatory environment and its employment practices,
the Company assesses its own operations as low risk for both forced or compulsory labour and child labour. We have not identified
any instances or allegations of forced or child labour within our value chain. Should we determine that we have caused or contributed
to any cases of modern slavery, we are committed to cooperating with affected parties to develop remediation measures tailored to
their needs. With no instances requiring remediation, our focus has been to prevent and mitigate potential adverse impacts.
OUR PERFORMANCE – METRICS AND TARGETS
This section presents key metrics and targets, including characteristics of employees and non-employees, adequate wage, coverage
of social protection, health and safety and incidents of discrimination. These metrics complement our actions outlined in the
previous section.
CHARACTERISTICS OF OUR EMPLOYEES AND NON-EMPLOYEES (S1-6 AND S1-7)
Characteristics of our Employees
Employee data is self-reported by employees and managed through the Company’s Human Resources information systems. These
systems capture personal and demographic information for all employees, with all data reviewed and approved by HR functions
prior to reporting. The table below presents the distribution of the Company’s employees by gender and region, as well as the type
of employment contract, based on headcount as of December 31, 2025.
Employee Headcount by Gender
Gender
Number of employees (headcount)
Male
1,633
Female
380
Total Employees
2,013
Employee Headcount by Contract Type, Broken Down by Gender
Female
Male
Total
Number of permanent employees1
358
1,516
1,874
Number of temporary employees2
22
117
139
1 Permanent employees hold indefinite employment contracts, as set out in Article
14 of the
Ecuadorian Labour Code.
2
Temporary employees, while engaged under a formal employment contract, hold arrangements
of a fixed or defined nature.
Employee Headcount Additional Characteristics
Gender
Number of employees (headcount)
% of total headcount
People with disabilities1
50
2%
Indigenous Peoples2
175
9%
1 Does not include employees who are qualified substitutes of people with disabilities by the Ecuadorian Ministry of Labor and who count for the percentage of people with
disabilities according to Ecuadorian legislation.
2 Employees who self-identified as members of ancestrally rooted nationalities, including those in the Amazon, Coastal and Andean Region.
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94
During the period, 173 employees left the Company (159 in 2024) resulting in a 9% employee turnover rate (8% in 2024).
Methodologies and Assumptions
Turnover rate is defined as the total number of employee departures during the reporting period divided by the average total
number of employees, expressed as a percentage. The average number of employees is calculated as the arithmetic mean of
total headcount comprising permanent and temporary employees at the beginning and end of the reporting year.
Changes in Preparation or Presentation of Sustainability Information compared to 2025
: In n 2024, the turnover rate included only permanent
employees. In 2025, the methodology has been revised to include both permanent and temporary employees. Consequently, 2024
comparative figures have been restated to update for this error. The number of employee departures was adjusted from
146
to
159
,
representing an increase of 13 employees (+9%) while the turnover rate remained the same with 8%.
Characteristics of our Non-Employees
Contractors compile non-employee data through monthly workforce reports that include all individuals providing services under
contractual agreements with Lundin Gold’s Ecuadorian subsidiaries. These reports must cover all personnel who meet the
required criteria – namely individuals performing work within the Company’s mining concessions, at the FDN operation, within
the broader area of social influence or in connection with transportation and logistics activities related to these areas. Supply
Chain Management and HR consolidate the reports and review them for consistency with contractual scopes and site access
records. The methodology assumes accurate and complete reporting from contractors actively engaged during the period.
We report non-employees on a headcount basis, reflecting the number of individuals providing services regardless of hours
worked. For this disclosure, the reported figure corresponds to December 31, 2025, and provides a clear snapshot of the
non-employee workforce working in FDN and associated operational areas.
Non-employee numbers increased in 2025 compared to the prior reporting period. This increase reflects higher levels of
regional exploration activity, the Company’s TSF expansion and several construction and infrastructure projects undertaken at
the site during the year. These activities required additional specialized and short-term contractor support and do not represent
a structural change to Lundin Gold’s core employment model at FDN.
Methodologies and Assumptions
All data has been provided by contractors. Data relates solely to contractors who provide services at FDN and its area of influence.
Data on non-employees is compiled using a standardized methodology based on monthly workforce reports submitted by
contractors that meet the above criteria. These reports are consolidated by Lundin Gold’s contract management and Business
Sustainability functions and are subject to internal review to validate consistency with contractual scopes.
ADEQUATE WAGES (S1-10)
We believe that fair and competitive compensation is essential to our success and the wellbeing of our workforce. All employees
are paid an adequate wage aligned with applicable benchmarks, national and mining entry-level requirements. Lundin Gold
designs its compensation practices not only to exceed minimum standards but also to promote long-term workforce stability.
By maintaining these principles, we reinforce our commitment to responsible business practices and sustainable employment.
Training and Skills Development (S1-5 and S1-13)
Looking forward to our 2026–2030 Sustainability Strategy,
we set a target to champion a Technical Training Initiative in Zamora
Chinchipe by 2030
. To achieve this target, we will co-design, co-fund, and facilitate a Technical Training Initiative in Zamora
Chinchipe Province that delivers technical education aligned with regional employment opportunities in the mining and mining
services sectors. This target is grounded in our Responsible Mining Policy and Training Policy.
Lundin Gold Employment by Area of Origin
Employment by
Area of Origin
Operations and Exploration
2025
2024
#
%
#
%
Ring 1
560
28%
495
25%
Ring 2
260
13%
248
12%
Ring 3
241
12%
230
12%
Ring 4
810
40%
772
41%
Total Ecuador
1,871
93%
1745
90%
Ring 5 (foreign)
130
6%
150
10%
Canadian Entities
12
1%
11
0%
Total Lundin Gold
2,013
100%
1906
100%
Non-Employees by Area of Origin
Employment by
Area of Origin
Operations and Exploration
2025
2024
#
%
#
%
Ring 1
315
16%
259
15%
Ring 2
185
9%
144
8%
Ring 3
170
8%
140
8%
Ring 4
1,182
59%
1,050
61%
Total Ecuador
1,852
93%
1,593
93%
Ring 5 (foreign)
149
7%
124
7%
Total Lundin Gold
2,001
100%
1,717
100%
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95
SOCIAL PROTECTION (S1-11)
All our employees receive social protection benefits that provide income protection in the event of sickness, employment injury and
acquired disability. The Company formally employs its workforce in accordance with Ecuadorian and Canadian labour legislation, as
applicable, and enrolls all employees in the national social security systems, which provides mandatory coverage for occupational
accidents, work-related illnesses, temporary and permanent disability, invalidity and retirement, ensuring income continuity during
periods of incapacity.
In addition to public social protection, Lundin Gold supplements statutory coverage with Company-provided benefits for both
permanent and temporary employees. These benefits include private health insurance, life insurance, sickness and disability
coverage, paid medical leave, maternity and paternity leave and other employment benefits. Together, these measures provide
comprehensive protection against income loss resulting from employment injury or acquired disability across the entire workforce.
HEALTH AND SAFETY (S1-5 AND S1-14)
Maintaining the health and safety of its workforce is a top priority for Lundin Gold, particularly given the inherent risks associated
with mining operations. At year-end 2025, Lundin Gold covered 100% of employees and non-employees working on its sites through
the Company’s HSMS, which is built on 15 core elements aligned with the local Mining Occupational Health and Safety Regulation.
This system aims to prevent incidents, mitigate risks and foster a culture of safety across all operational areas.
Lundin Gold’s 2021–2025 Sustainability Strategy established clear, measurable and time-bound health and safety targets aligned
with the Company’s commitment to zero harm and our Code of Conduct and Responsible Mining Policy. We integrated these targets
into the Health and Safety Pillar and monitor progress through our HSMS, with performance monitored regularly and reported to
senior management and the Board. Health and safety targets have been developed as a commitment to continuous improvement
in safety practices and site management; health and safety leaders are involved in the target setting process. Our health and safety
targets include zero onsite and offsite fatalities (2021 baseline of zero fatalities) and an annual reduction in Total Recordable Incident
Rate (TRIR) of 0.40 (2021 baseline TRIR of 0.46). Lundin Gold achieved both targets in 2025.
The table below presents all key health and safety metrics, including fatalities, recordable work-related accidents, and days lost.
These indicators enable the Company to monitor performance and drive ongoing enhancements to safeguard our workforce.
Methodologies and Assumptions
Employee health and safety data is collected through the Company’s HSMS, which governs occupational health and safety across
our operations. This data is centrally managed within Lundin Gold’s HSE Tool, an online system which included health and safety
data for both employees and contractors. Our TRIR methodology multiplying by 200,000 hours aligns with the Occupational Safety
and Health Administration (OSHA).
Looking forward to our 2026–2030 Sustainability Strategy,
we set a target to achieve an interdependent safety culture by 2030 through
visible leadership, behavior-based safety, and human-factors management
. This target is grounded in our Responsible Mining Policy and
supports our commitment to zero harm. It applies to all Lundin Gold operations in Ecuador and Canada. Our baseline comes from
our 2024 Safety Culture Maturity Assessment, which positioned FDN in the “dependent/independent” transition zone.
INCIDENTS, COMPLAINTS, AND SEVERE HUMAN RIGHTS IMPACTS (S1-17)
Respecting human rights and fostering a workplace free from discrimination are fundamental principles for Lundin Gold. Lundin
Gold fulfills this responsibility through its Human Rights Policy and addresses any concerns promptly through formal grievance
mechanisms that maintain confidentiality and fair resolution. In 2025, we received 25 grievances from our own workforce grievances
and 8 potential incidents of discrimination, including harassment; all eight incidents were investigated and addressed using the
Company’s mechanism to provide response or remedy.
Health and Safety Management
1
Employees and Contractors at site
Operations & Exploration
Gender
2025
2024
Hours Worked
8,185,372
7,015,771
Fatalities
0
0
Medical Incidents
2
9
13
Lost Time Incidents
3
0
10
Total Recordable Incident Rate (TRIR) / 200,000
Hours (weighted average)
0.22
0.66
1 Lundin Gold has applied transitional relief to exclude ill health metrics in the current year
2 An occupational injury qualifies as an MI if it results in the injured employee needing professional medical treatment
3 An occupational injury qualifies as an LTI if it results in the injured employee needing at least one full day off from work
2025 Annual Report
96
1
Includes 10 whistleblower complaints and 15 HR related grievances received under the community mechanism. Excludes incidents of discrimination.
2 Includes 5 incidents reported through the Harassment Mechanism and 3 incidents initially received through the Community Grievance Mechanism and subsequently
reclassified.
Own Workforce Grievances Summary Table
Operations & Exploration
Gender
2025
2024
Own workforce grievances1
25
26
Incidents of discrimination, including harassment2
8
8
Severe human rights incidents
0
0
The Company did not incur any fines, penalties or compensation payments related to grievance complaints. In 2025, Lundin Gold
also identified no severe human rights incidents involving its workforce; as a result, no fines, penalties or compensation payments
were issued in connection with such incidents.
Looking forward to our 2026–2030 Sustainability Strategy, we set a target to strengthen access to remedy across our workforce.
We
will develop and operationalize a monitoring framework by 2026 that tracks the effectiveness and trust of our workforce grievance mechanism
using a defined indicator set
. This target is anchored in our Human Rights Policy and Responsible Mining Policy, both aligned with the
UN Guiding Principles on Business and Human Rights. It applies to all Lundin Gold operations in Ecuador and Canada.
We have also set a target that focuses on embedding human rights across our systems and processes.
We aim to integrate human
rights into 100% of all relevant Lundin Gold systems and processes by 2030
. This target reflects our Human Rights Policy, which aligns with
the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. It applies to all
Lundin Gold locations and to our upstream supply chain in Ecuador and Canada. As of 2025, partial embedding exists in areas such as
security management and community consultation, and we are conducting a full scope assessment in 2026 to define the complete
set of relevant systems and create a baseline for this 2026-2030 target.
ESRS S3 AFFECTED COMMUNITIES
WHY IT MATTERS (ESRS 2, SBM-3 AND S3, SBM-3)
Lundin Gold recognizes that rapid growth can bring significant change to a region, which is why we take a proactive and
collaborative approach with local communities and Indigenous Peoples including the Shuar People. Our focus on economic
development and community wellbeing has led to initiatives that strengthen community wellbeing, expand employment
opportunities and support the growth of local businesses around FDN. We work closely with local communities and the Shuar
People so that they can meaningfully participate in the benefits of resource development.
Lundin Gold identifies material IROs related to affected communities mainly from the FDN operation and value chain activities.
We gather these insights through ongoing due diligence, community engagement, grievance monitoring, and risk assessments.
These insights inform our strategic planning, mitigation measures, and community investment priorities.
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97
Co-Finance Public Services and Infrastructure Development
Sustainable Linked Loans
Contamination of Ancestral Lands – Mine Closure
Legal Disputes or Protests (Prior Consultation)
Negative Publicity and Brand Damage
Undermining of Indigenous Peoples’ Self-Determination
IRO Summary
Communities’ Economic, Social and Cultural
Rights
Rights of Indigenous Peoples
IMPACT
OPPORTUNITY
IMPACT
IMPACT
RISK
Lundin Gold collaborates with national and
local authorities and communities to co-finance
priority
public
services
and
infrastructure
projects. These partnerships help align public
investment with local needs, improving access
to essential services and supporting socio-
economic development in its areas of influence.
Leading in social performance and maintaining high
ESG
standards
attract
ESG-focused
investors,
reduce the cost of capital, and secure long-term
funding.
Mining operations pose a risk of contaminating
ancestral lands during closure or in the event of a
catastrophic incident. Contaminating lands is a
form of dispossession in terms of future use – TSF
area of influence.
Poor engagement with Indigenous Peoples can
disrupt cultural practices, restrict access to or
maintenance of spiritual sites, and hinder the use
of traditional territories, threatening their right to
self-determination.
Negative
Positive
Failing to meaningfully engage with Indigenous
Peoples during exploration and development
can violate their rights to self-determination and
cultural integrity, causing direct harm to affected
communities. It also exposes the Company to legal
challenges, operational disruptions, and significant
reputational and financial consequences, including
loss of investor confidence.
-
Failure to respect Indigenous Peoples’ rights can
generate significant reputational harm, attract
international media attention, fuel public backlash,
reduce investor confidence, and negatively affect
the Company’s market value.
-
The primary affected communities include:
•
Local rural communities
living around our operations, including those in the parish of Los Encuentros (Yantzaza canton),
El Playon and Rio Blanco. These communities are directly influenced by our mining activities – such as infrastructure
development, workforce influx and environmental management – and benefit from our job creation, procurement and
community investment programs.
•
Communities along our value chain,
particularly those affected by our suppliers and logistics providers in Ecuador.
Increased economic activity and transportation along our supply routes to ports like Guayaquil or Posorja can bring both
opportunities and risks.
•
Communities of Indigenous Peoples,
notably the Shuar Indigenous People, who reside near our operations in the FDN area
of influence, including organizations like the Shuar Federation of Zamora Chinchipe (SFZC). The Shuar Federation is a social
organization, which integrates seven cantonal associations (Zamora, Yantzaza, El Pangui, Yacuambi, Nangaritza, Paquisha
and Centinela del Condor) and 53 subsidiary Shuar communities, with a population of approximately 7,000 Shuar. Their
interests encompass cultural preservation, land rights, and economic inclusion. Through initiatives including partnerships
with the Lundin Foundation focused on cultural promotion, capacity building, and economic diversification, Lundin Gold
works to support long-term, community-driven benefits for Shuar communities.
POLICIES RELATED TO AFFECTED COMMUNITIES (S3-1)
The Company’s strategy for managing material impacts, risks, and opportunities affecting communities is anchored in the
following principles:
•
Responsible Mining Policy
•
Human Rights Policy
•
Environmental Management Plan – Community Relations Plan
•
The General Framework Agreement with the Shuar People
(renewed in 2025 and valid until December 31, 2028) provides
the formal foundation that guides Lundin Gold’s actions and engagement with Shuar Indigenous Communities and
Indigenous Rights.
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98
Rights of Indigenous Peoples
Lundin Gold’s approach to Indigenous rights is primarily governed by its Sustainability Strategy, which sets clear guidelines and
targets for Indigenous Peoples and Indigenous Rights. The Company operationalizes this strategy through its General Framework
Agreement with the Shuar People. The agreement establishes a collaborative approach based on dialogue, cultural respect and
shared decision-making with Indigenous authorities.
Lundin Gold’s
Responsible Mining Policy
commits the Company to respect the collective and customary rights, interests, culture,
and connection to land of directly affected Indigenous Peoples within its area of influence. These commitments are embedded
in and reinforced by Lundin Gold’s Human Rights Policy. During the reporting period, the Company did not identify material
incidents of noncompliance with these commitments. Further details on scope, governance, accountability, and compliance
with UN Guiding Principles for the Human Rights Policy appear in the section "Policies Related to Own Workforce".
These strategic commitments are implemented at the operational level through the
EMP and Community Relations Plan (CRP)
for FDN and the General Framework Agreement with the Shuar People. The CEO is accountable for their implementation and
delegates this responsibility to the VP Legal and Sustainability.
These frameworks establish structured engagement protocols, consultation mechanisms, and participatory processes that
enable Indigenous Peoples to be meaningfully involved in decisions affecting their territories.
Communities’ Economic, Social, and Cultural Rights
Through our
Responsible Mining Policy
and Sustainability Strategy, Lundin Gold aims to create lasting benefits for host communities
via partnerships and sustainable programs. By contributing to local and national government revenues through taxes and
royalties, the Company helps enable public services and infrastructure development. Further details on scope, governance and
accountability for the Responsible Mining Policy appear in the section "Policies Related to Climate Change".
Our
Procurement Policy
promotes transparent, ethical and competitive purchasing, taking into account environmental and social
considerations and objectives at Lundin Gold. Lundin Gold’s Supply Chain Senior Manager is accountable for the implementation
of this policy under the oversight of the CFO and VP Legal and Sustainability.
The
CRP
for FDN establishes comprehensive programs to support the economic, social, and cultural rights of local communities
and Indigenous Peoples. The CRP outlines specific initiatives including:
•
Economic Development:
Local employment programs, skills training and capacity building, preferential hiring from host
communities, support for local entrepreneurship, and local procurement initiatives that prioritize community suppliers.
•
Social Investment:
Education support through scholarships and infrastructure improvements, healthcare initiatives and
medical assistance programs, sports and recreational facilities, and infrastructure development including roads, water
systems, and community centers.
PROCESSES FOR ENGAGING WITH AFFECTED COMMUNITIES AND CHANNELS TO RAISE
CONCERNS (S3-2 AND S3-3)
How Engagement Takes Place
Engagement occurs directly with affected communities, their legitimate representatives, and, where useful, credible
intermediaries. Lundin Gold maintains multiple engagement channels, including structured community roundtables,
consultations, focus groups, surveys, interviews, site visits and ongoing face-to-face meetings at the Los Encuentros community
relations office. Engagement is both ongoing and event-driven and takes place during planning stages, ongoing operations, and
exploration activities.
The Company holds community dialogue roundtables approximately every eight weeks and supplements them with additional
engagement activities depending on operational needs, community interest and the significance of potential impacts. In
2025, Lundin Gold held six rounds of community roundtables, each consisting of scheduled sessions. Each day focused on
a specific topic, and the Company invited participants based on the relevance of the topic to their interests and expertise.
Tracking, Monitoring and Ensuring Effectiveness
Lundin Gold assesses the effectiveness of its engagement processes by following up on its commitments to communities, tracking
issues raised during consultations and monitoring the delivery of community investment and development programs. The Company
verifies progress through follow-up meetings, perception surveys, grievance mechanism data, and feedback from local authorities
and civil society organizations. Lundin Gold also uses the absence of unresolved social conflict indicators – such as road blockades,
protests or severe grievances – as an outcome measure of effective engagement.
Inclusive Engagement and Vulnerable Groups
We take steps to understand the perspectives of groups that may be more vulnerable to impacts or marginalized. We structure
engagement activities to include women, elderly, Indigenous Peoples, youth, farmers and communities located in areas exposed
2025 Annual Report
99
to potential high-consequence events, such as those within the hypothetical tailings facility flooding zone or along transport
routes for hazardous materials.
Special Rights for Indigenous Peoples
Lundin Gold recognizes the specific rights of Indigenous Peoples and, therefore, works to ensure that its engagement processes
respect their cultural, territorial and spiritual heritage. Although no Indigenous Peoples reside within the area of direct
influence of FDN operation, the Company engages directly with Indigenous communities in areas connected to current or
potential exploration, including the Shuar People. We conduct engagement through culturally appropriate consultation and
information processes that enable Indigenous leaders to shape the mode, agenda and timing of discussions. Insights from these
consultations inform cooperation agreements, mitigation measures and community investment projects.
Channels for Raising Concerns
We provide multiple, accessible and culturally appropriate channels for affected communities to raise concerns or submit
complaints. The Company has established an IFC Performance Standards aligned grievance mechanism for community
complaints, which is also accessible to employees. The grievance mechanism provides local communities and employees with
a process to express concerns or submit complaints in Spanish, English, and Shuaar. Users can submit grievances in person at
our offices in Los Encuentros or Quito, via email, a toll-free number, or through designated mailboxes at FDN, Los Encuentros
and Quito. Further information on these channels and on protection against retaliation appears in the Business Conduct and
Own Workforce chapters.
Governance and Internal Responsibilities
The CEO holds overall accountability for engagement with affected communities. The Company delegates operational
responsibility to relevant members of the Executive Team, including leaders responsible for Sustainability, CSR, Health and
Safety, Environment and Permitting, HR and the Lundin Foundation. These teams work to ensure that engagement activities
are conducted appropriately and that community perspectives are incorporated into mitigation measures, operational controls
and community investment programs. Lundin Gold escalates material issues and outcomes from engagement to the Senior
Leadership Team and, where relevant, to the Board’s HSES Committee.
Thematic Roundtables
Tourism and
Environment
Local Enterprises and
Procurement
Diversity and
Inclusion
Producve
Innovaon
Roads and
Public Works
Local
Transportaon
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100
ACTIONS AND RESOURCES RELATED TO AFFECTED COMMUNITIES (S3-4)
In 2025, we implemented targeted actions to prevent, mitigate and remediate potential negative impacts on affected
communities, while also creating positive outcomes and addressing material risks and opportunities. These actions were
particularly relevant as the Company expanded exploration activities into new jurisdictions, which required enhanced
engagement and social management processes.
Lundin Gold allocates dedicated financial, human and operational resources to manage impacts on affected communities,
including annual budgets for community investment, Indigenous engagement, local hiring and procurement, environmental
management, emergency preparedness and grievance mechanisms. Throughout the reporting period, Lundin Gold identified
no human rights issues or incidents connected to affected communities.
Rights of Indigenous Peoples
In 2025, the Company dedicated action plans for Indigenous Peoples aligned with United Nations Declaration on the Rights of
Indigenous Peoples (UNDRIP) and ILO 169, including culturally appropriate engagement and cooperation agreements:
Framework Agreement with the Shuar Federation of Zamora Chinchipe
In 2025, Lundin Gold and the Shuar Federation renewed the General Framework Agreement, which serves as the foundation for
our long-term collaboration. We work closely with the Federation’s leadership to reinforce dialogue and collaboration, support
cultural preservation and advance community development initiatives that reflect the aspirations of Indigenous communities.
We expect to define and start implementing an Indigenous Peoples plan for 2026-2028 in 2026.
Shuar Investment Initiatives
In 2025, Lundin Gold strengthened economic opportunities for the Shuar Indigenous People in Zamora Chinchipe through targeted
community development initiatives. In partnership with the Lundin Foundation, the supplier development program enabled
Shuar-owned enterprises to provide products and services to FDN operations, while complementary support advanced organic
agriculture projects.
Key highlights include the ShuarNum initiative (meaning “the place of the human being” in Shuar), an ongoing Shuar-led project
promoting cultural preservation, community-based tourism, ancestral medicine, and sustainable economic development. Since its
inception in 2019, ShuarNum has grown steadily, expanding in 2025 with a new business line in tire distribution under the Shuar
name Tsentsak, supported by dedicated investment to strengthen community economic resilience and self-determination. Likewise,
the Organic Cocoa Production in Shuar Territory – Phase IV and Sugar Cane initiatives strengthened sustainable livelihoods through
agroecological cocoa and sugar cane production. Key achievements included establishing a new cocoa nursery and generating
meaningful community income through the sale of cocoa products. The project also supported local producers with targeted
technical training, helping to strengthen sustainable farming practices, organizational capacity, and market-access opportunities.
During the year, we also continued to support cultural preservation, including the Shuar Cultural Interpretive Centre, developed in
collaboration with Indigenous leaders.
Regional Exploration and Community Engagement Measures
As part of our Regional Exploration Program, we created and executed a comprehensive social management approach to engage with
local communities and Indigenous Peoples. Before any technical exploration work begins, our Corporate Social Responsibility and
Exploration teams led a structured socialization process that informed community leaders, Indigenous authorities and landowners
about our planned activities, obtained permissions and secured agreements. This process involved our Legal, Land, Environment and
Permitting teams to support communities to fully understand the nature, duration and potential impacts of planned exploration.
Lundin Gold formally documents all interactions and agreements with landowners and Indigenous territories, including land-access
permits, socialization records and community commitments. Current exploration activities focus on soil and rock sampling.
As exploration progresses to drilling in 2026, our CSR team will restart the engagement cycle by returning to each territory to
communicate planned drilling activities, potential impacts, proposed mitigation measures and associated community benefits.
Throughout the Regional Exploration Program, our CSR team will maintain ongoing engagement with impacted groups through
community development support plans, identification of new local projects, and transparent communication of progress and
results.
Communities’ Economic, Social and Cultural Rights
Beyond avoiding, reducing and mitigating risks, Lundin Gold continues to invest in initiatives that deliver positive impacts for
affected communities and support long-term socioeconomic development. Our actions to support communities’ economic,
social, and cultural rights are an integral and ongoing component of our Sustainability Strategy. We seek to create diverse
economic opportunities in the region surrounding FDN that extend beyond the duration of its operations.
Community Wellbeing and Education Initiatives
Lundin Gold’s community investment initiatives continued to advance throughout 2025. The second phase of the Company’s
Los Encuentros Recreational, Educational, and Mental Health Program
in partnership with
Educación para Compartir
and Newmont
2025 Annual Report
101
Corporation initiated and progressed as planned, providing counselling support to local residents. The program’s sports
academy also continued to offer youth-focused extracurricular activities, including basketball, soccer, dance, music, and boxing.
In addition, the English-language learning component supported students through regular classes with strong attendance,
while the university preparation program concluded successfully, helping local graduates gain admission to higher-education
institutions across the country.
Our Educational Support Program, developed in partnership with Junior Achievement Ecuador (JAE), continued to expand
access to higher education for young people aged 15 to 18 from the communities of Los Encuentros and Chicaña. The program
focuses on helping participants pass their graduation exams, reducing dropout rates, and providing sustained academic
accompaniment until each student reaches their educational goals. Since its inception, the program has grown into a
meaningful pathway for local youth seeking to pursue post-secondary education, whether at universities, technical institutes,
or through careers in public service such as the Police and Army. A robust follow-up mechanism tracks the long-term progress
of former participants, ensuring that support does not end at graduation but continues as students transition into higher
education and professional life.
Local Government Collaboration and Community Infrastructure
Lundin Gold maintains active and ongoing engagement with the local governments of El Pangui, Paquisha, Zamora Chinchipe,
Yantzaza, and Los Encuentros to support rural road maintenance, community wellbeing, and critical infrastructure development.
Throughout the year, the Company demonstrated its commitment to the regions it operates in by investing in a range of community-
focused initiatives. These included improvements to local non-hazardous waste management systems, the development of a
livestock trade fair complex, and support for a childcare facility designed to be accessible to all community members. Additionally,
the Company funded upgrades to street lighting and electrical systems in nearby towns, contributing to safer and more sustainable
living conditions. In Los Encuentros, the Company also advanced the Estamos Conectados (“We Are Connected”) project, an initiative
aimed at strengthening community bonds and improving access to connectivity and essential services for local residents. Further
highlights included the launch of Urban Renewal – Phase II in Los Encuentros, comprehensive infrastructure maintenance for Los
Encuentros local school, and the renewal of the Los Encuentros sewage treatment plants — all reflecting the Company’s broader
commitment to fostering long-term, positive relationships with the communities surrounding its operations.
Lundin Gold also announced El Zarza–Jardín del Cóndor, an upcoming road-paving initiative which is expected to begin in early
2026. This project will be financed by Lundin Gold and will strengthen a key section of the former public access route between
Los Encuentros and the FDN site.
Local Procurement
Lundin Gold advanced the NEXO Local Supplier Development Program with the Lundin Foundation. The program integrates local
businesses into the FDN supply chain, supports diversification of their customer bases, and builds a sustainable legacy for surrounding
communities. It prioritizes gender equity, with most positions filled by women and formal recognition from external stakeholders.
The Somos Semilla program provided technical assistance, revolving credit, and marketing support to local fruit and vegetable
producers. The program created a broad network of support across numerous community agricultural groups and associations in
the region.
Further information on our process for identifying actions, determining measures to address potential impacts and tracking
effectiveness appears in the section "Processes for Engaging with Affected Communities and Channels to Raise Concerns".
METRICS & TARGETS RELATED TO AFFECTED COMMUNITIES (S3-5)
Lundin Gold established its targets related to affected communities through its 2021–2025 Sustainability Strategy, drawing on
operational experience at FDN, feedback from local communities and Indigenous Peoples, outcomes of community roundtables,
grievance trends and internal risk assessments. Senior management reviews and endorses proposed targets, and the Board of
Directors provides oversight through regular sustainability and risk reporting.
We track performance against these targets on an ongoing and bi-annual basis. The sustainability and site management teams
consolidate the results, and senior leadership reviews them to support informed decision-making and continuous improvement.
Grievances Recorded by Affected Communities
Lundin Gold tracks community grievances as a core metric for evaluating its social performance and its responsiveness to affected
communities. These metrics form an important part of the Company’s sustainability performance indicators, enabling Lundin Gold
to assess and prioritize community concerns and implement corrective measures where required.
The following table outlines grievances received from affected communities from our channels to raise concerns:
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102
Affected Communities Grievances Summary Table – Entity Specific
2025
2024
#
#
Total Grievances
73
44
Transferred out of Grievance Mechanism (related to own
workforce or not applicable to the Mechanism)
23
16
Total community grievances recorded by FDN and exploration
activities
50
28
2025 Grievance by Topic – Entity Specific
Department involved in
Grievance Mechanism
Common Topics
Number
Total community grievances recorded by FDN and exploration activities
50
Supply Chain
Breach of contract and payments obligations; employment contract
termination, road infrastructure damage, heavy transport speeding and
disputes with contractors
40
Business Sustainability
Lundin Foundation lack of payment
1
CSR
Improvements to community support; crop damage; safety observations
6
CSR, Exploration and
Procurement
Unsafe transportation in a pickup truck and dissatisfaction with food service
2
Security and CSR
Unprofessional behavior at Los Encuentros checkpoint
1
Transferred out of Grievance Mechanism (internal)
23
Legal1
Workplace harassment
3
Human Resources &
Administration2
Disrespectful behavior by a Lundin Gold employee; dissatisfaction with medical
care at FDN; accommodation and catering discontent.
15
Social Responsibility
Community investment and information request
5
Total
73
1 Transfered and reported under “Incidents of discrimination, including harassment” above.
2 Transfered and reported under “Own workforce grievances” above.
Methodologies and Assumptions
The tables above provide an overview of all grievances recorded during the reporting period, including the common topics and
departments involved. This includes grievances from Lundin Gold’s own workforce, workers in the value chain and affected
communities reported through our community grievance mechanisms.
Local Workforce and Economic Performance
We aim to maintain a predominantly national and local workforce, with more than 50% of employees hired from nearby
communities and strong representation from Zamora Chinchipe. Lundin Gold has developed this target to support our Amazonia
Law compliance that requires the majority of our employees to be born, inhabitants and currently living in provinces comprising the
Ecuadorian Amazon region. This target also demonstrates our commitment to economic inclusion and local capacity development.
The Company assesses progress annually through its workforce metrics. As shown in the "S1 Employee Headcount by Area of
Origin table", the geographic distribution confirms that Lundin Gold maintains a highly Ecuadorian workforce and achieved 53%
local employment target during the reporting period (compared to a 2021 baseline of 49%). As shown in the "S1 Non-Employees
by Area of Origin table", 33% of non-employees were considered local. Lundin Gold has a limited ability to influence hiring
decisions for indirect employment; while we did not achieve our target for non-employees, we continue to engage with our
business partners to support local hiring wherever possible.
Looking forward to our 2026–2030 Sustainability Strategy,
we set a quantitative target to increase direct employment from Rings 1–3 to
60% by 2030
. This target is directly linked to our Responsible Mining Policy and Social Performance Management System and applies
to all Lundin Gold operations in Ecuador. It defines a 2026–2030 trajectory to grow local participation while sustaining benefits for
host communities near the FDN operation.
Beyond direct employment, we contribute to broader socio-economic development in Zamora Chinchipe and across Ecuador.
The table below presents the Company’s economic performance over the past two years aligned with the Global Reporting
Initiative (GRI) 201-1 Direct Economic Value Generated and Distributed, highlighting the additional regional and national economic
contributions generated through wages, payments to government, community investment and operational expenditure.
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103
Lundin Gold Economic Performance
1
($ millions) – Entity Specific
GRI 201-1 Direct Economic Value Generated and
Distributed
Operations and Exploration
2025
2024
Var % (YoY)
Net Revenues ($’000)
1,783
1,193
49%
Total Lundin Gold Economic Value Generated
1,783
1,193
49%
Operating Costs2
205
179
14%
Employee Wages and Benefits2
123
101
22%
Payments to Providers of Capital2
0
265
-100%
Payments to Government2
519
289
80%
Community Investment2
6
5
13%
Total Lundin Gold Economic Value Distributed2
853
840
2%
Total Lundin Gold Economic Value Retained2
930
353
163%
1 Includes only Aurelian Ecuador S.A. financial information as it is the only Lundin Gold subsidiary in Ecuador that generates significant revenue.
2 Non-IFRS measures, see definitions below.
Methodologies and Assumptions
This metric refers to certain financial measures, such as operating costs, employees wages and benefits, payments to providers
of capital, payments to government and community investment, which are not recognized under IFRS Accounting Standards and
do not have a standardized meaning prescribed by IFRS Accounting Standards.
These measures may differ from those made by
other companies and accordingly may not be comparable to such measures as reported by other companies.
These measures
have been derived from the Company’s financial statements because the Company believes that they are of assistance in the
understanding of the results of operations and its financial position.
The above metrics are calculated using the following definitions, which are prepared on an accrual basis in accordance with GRI
201-1: a. Direct economic value generated and distributed (non-IFRS measures):
•
Operating Costs (non-IFRS measures):
Operating costs are expenditures incurred in the normal course of business operations,
representing the direct costs of producing goods and delivering services. These typically include payments to suppliers for raw
materials, consumables, energy, logistics, and contracted services.
•
Employee Wages and Benefits (non-IFRS measures):
Total remuneration provided to employees in exchange for their work, including
salaries and wages, social security contributions, and other employment related benefits.
•
Payments to Providers of Capital (Non-IFRS measure):
Financial returns distributed to the organization’s capital providers, including
interest paid to lenders.
•
Payments to Government (Non-IFRS measure):
Mandatory financial contributions made by the organization to public entities,
including corporate income taxes, royalties, and other levies required by law.
•
Community Investment (Non-IFRS measure):
Community investments are voluntary contributions and expenditures made by
the organization to support the development and well-being of local communities and broader society. These may include
donations, sponsorships, co-financed infrastructure support, education and health programs, and other social or public
services initiatives.
Changes in Preparation or Presentation of Sustainability Information compared to 2025
: The 2024 comparative figures have been
restated representing an increase of $11 million (+1%) as a result of the following adjustments:
•
Community Investment has been restated from $4 million to $5 million, representing a $1 million increase (+25%), this reflects
the reclassification of contractor expenditures related to community road maintenance into Community Investments.
•
Employee Wages and Benefits has been restated from $107 million to $101 million, representing a $6 million decrease (-6%), to
exclude G&A payroll outside of Ecuador.
•
Payments to Government has been restated from $273 million to $289 million, representing a $16 million increase (+6%), to
include withholding tax paid on dividends and financing charges.
Looking forward to our 2026–2030 Sustainability Strategy, we have set the following targets to further our engagement and support
of local communities and Indigenous Peoples:
•
We set a target to scale at least one high-impact health or education program from Los Encuentros to the regional level by 2030
.
This
target is anchored in our Responsible Mining Policy and Social Performance Management System. It applies to our operations
in Los Encuentros with planned expansion into Zamora Chinchipe. As of 2025, multiple health and education programs are
already active in FDN-adjacent communities, and we will use 2025 program reach and outcome data as the baseline. We will
track progress through indicators such as programs assessed for scale-up, beneficiaries reached, geographic expansion, partner
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104
co-funding, and outcome measurement results.
•
To strengthen inclusion for priority groups,
we aim to design and fully implement a flagship community investment program focused on
the empowerment of women and youth by 2030.
This target is embedded in our Responsible Mining Policy and Social Performance
Management System and applies to our operations in Los Encuentros, with potential expansion into additional cantons in Zamora
Chinchipe. As of 2025, existing programs include some gender and youth components, but no dedicated flagship program is
in place. We will measure progress through indicators such as program launch and funding, the number of women and youth
beneficiaries, partner co-funding, outcome indicators, and annual beneficiary satisfaction scores.
•
To support long-term economic resilience in our host communities,
we commit to support that 100% of our economic diversification
initiatives create sustainable business opportunities independent of FDN by 2030
. This target is embedded in our Responsible Mining
Policy and Social Performance Management System and applies to all diversification initiatives we support in Rings 1 and 2. As
of 2025, we are compiling the inventory that will form the baseline, and preliminary assessments show partial independence
in several agri-business and services initiatives. We will measure progress by assessing each initiative against defined
sustainability-independence criteria.
•
We also aim to expand the impact of our social investments by ensuring that 100% of these investments are co-funded through strategic
partnerships by 2030 and that all off-site infrastructure projects include a capacity-building and management component
. This target
is embedded in our Procurement Policy, Responsible Mining Policy, and Social Performance Management System and applies
to all Lundin Gold–managed social investment in Rings 1–3. As of 2025, some investments already involve local governments
co-funding, but strategic partnership co-funding is not yet universal. Progress will be measured by assessing the share of the
portfolio meeting both criteria.
•
To strengthen trust and transparency, we will establish a formal Social Licence Monitoring System (SLMS) and integrate it into operational
and management decision-making
. This target is embedded in our Responsible Mining Policy and Social Performance Management
System and applies to the FDN operation across Rings 1–3. As of 2025, we conduct community perception surveys, but no
integrated SLMS exists. Using 2024 as the base year, we will build a system that generates social-risk and community-trust
metrics. Progress will be tracked through indicators such as SLMS implementation, data-collection frequency, the number of SLO
indicators monitored, community trust scores, and the percentage of findings that lead to documented operational responses.
•
Finally, we will strengthen our partnerships with Indigenous Peoples by implementing a plan that enables Indigenous communities to
participate in the benefits of mining through capacity-building and training
. This target is embedded in our Human Rights Policy
and Responsible Mining Policy and applies to all Indigenous communities with a documented relationship to FDN. We aim
to demonstrate measurable improvements in trust relationships with Shuar communities and other impacted Indigenous
groups through progress on the Indigenous Engagement Plan. As of 2025, existing training and scholarship programs form the
baseline. We will track progress through indicators such as agreement on the plan with Indigenous communities, participation
in training, the number of Indigenous-owned enterprises benefiting from local procurement, participation in STEM roles, and
the annual benefit distribution report reviewed by community governance structures.
Local Procurement
Lundin Gold maintains a strong local-procurement base and as part of our 2021 – 2025 Sustainability Strategy we set a target to
source at least $29 million annually from local suppliers in Ecuador, prioritizing businesses in the mine’s area of influence. In 2025, we
surpassed this commitment with $36 million in local procurement.
GRI 204-1. Lundin Gold Goods and Services Procurement
1,2,3
– Entity Specific ($ millions)
2025
2024
Procurement by Area of Origin
USD
%
USD
%
Ring 1
29.4
10%
21.9
8%
Ring 2
3.9
1%
3.7
1%
Ring 3
2.4
1%
2.2
1%
Ring 4
214.3
71%
189.8
68%
Total Ecuador
250.1
83%
217.6
78%
Total International
52.3
17%
61.6
22%
Total Lundin Gold
302.4
100%
279.2
100%
Local Procurement (Ring 1 to 3)
35.7
12%
27.8
10%
Local Subcontracting
7.9
5.0
1 Includes procurement from Aurelian Ecuador S.A., Aurelianmenor S.A. and Surnorte S.A.
2 All data has been provided by contractors. This includes the subcontracting of local exploration, construction, security, transportation and environmental services from Ring
1, 2, and 3 suppliers.
3 Non-IFRS measures, see definitions below.
2025 Annual Report
105
Methodologies and Assumptions
We use the following definitions aligned with GRI 204-1 Proportion of Spending on Local Suppliers (non-IFRS measures) when
calculating goods and services procurement:
•
Procurement
(non-IFRS measures):
Procurement refers to the purchase of goods and services from suppliers that are
registered, operate, and deliver within Ecuador, in support of Lundin Gold’s operational activities. It includes expenditures
on materials, consumables, diesel/fuel, logistics, and contracted services. It excludes payments to local governments and
government entities that hold a monopoly on utilities, taxes and contributions, monetary transfers to local governments as
part of community investment and expenditures related to legal and land.
Supplier Classification (Ring Structure)
: To better reflect the geographic distribution of economic value, suppliers are classified into
five “rings” based on their proximity to the Company’s operations. More detail on "Our definition of Local" section in ESRS 2.
•
Local Procurement
(non-IFRS measures):
Refers to the purchase of goods and services from suppliers from Ring 1 to 3, based
on the supplier’s principal tax address.
•
Local Subcontracting
(non-IFRS measures):
Refers to the engagement of third-party providers by companies holding active
contracts with Lundin Gold for the delivery of services or supply of goods. The indicator captures the total value invoiced
on a semi-annual basis by local suppliers, based on the supplier’s principal tax address.
Looking forward to our 2026-2030 Sustainability Strategy, we set a target to
increase local procurement from suppliers in Rings
1–3 by 30% ($11 million) by 2030
. Building on our existing baseline, this new target aims to raise spending with locally based
suppliers to approximately $47 million by 2030. This target is embedded in our Procurement Policy, Responsible Mining Policy,
Social Performance Management System and applies to all FDN-controlled procurement activities. We will track progress using
absolute spending and percentage growth in procurement from suppliers registered and operating in Rings 1–3.
GOVERNANCE
ESRS G1 BUSINESS CONDUCT
BUSINESS CONDUCT, POLICIES AND CORPORATE CULTURE (G1-1)
Lundin Gold is committed to ethical business conduct, a strong corporate culture and responsible stakeholder engagement. The
Company guides this commitment through a suite of governance policies that shape how it identifies, assesses and manages its
material business conduct risks and opportunities. The section "Role of the Executive Board and Supervisory Board in Sustainability
Matters" provides further details on governance oversight.
Business Conduct Policies
At the centre of Lundin Gold’s governance framework is the Company’s
Code of Business Conduct and Ethics
, which outlines expectations
for lawful and ethical behaviour, including compliance, conflicts of interest, reporting integrity, workplace conduct and accountability.
The Code emphasizes adherence to anti-corruption and anti-bribery laws and applies to directors, officers, employees, contractors,
suppliers and agents.
Lundin Gold has core policies that support its Code of Business Conduct and Ethics, including an
Anti-Bribery and Anti-Corruption
(ABC) Policy
,
Sanctions and Anti-Money Laundering Compliance Policy
, the
Workplace Discrimination
,
Harassment and Violence Policy
and
the
Responsible Mining Policy
. The ABC Policy applies across all operations and to all employees and third parties and aligns with the
relevant laws of Ecuador, Canada and the United States. The Policy sets out core requirements, including a prohibition of all forms of
bribery, rules for interactions with public officials, third-party due diligence, and reporting and disciplinary procedures, addressing
legal and reputational risks related to corruption. The Board reviews these policies at least annually, and directors and officers certify
their compliance with them each year, upholding effective oversight and continued relevance.
Establishment of Corporate Culture
Board leadership, executive oversight and the Company’s governance policies shape Lundin Gold’s corporate culture. The Board
promotes accountability, transparency and ethical conduct, and it regularly reviews governance practices to reflect evolving
regulatory expectations and best practice.
Lundin Gold reinforces its culture through mandatory training delivered via the Company’s learning platform and supported by
the HR Training Department. All employees complete an annual Code of Conduct refresher each June, and the Company tracks
completion to support oversight.
Management plays a central role in modelling expected behaviours and integrating ethical expectations into daily operations.
This includes all members of the senior management team, who serve as the operational leaders of Lundin Gold. We evaluate
the effectiveness of our corporate culture through training completion, internal controls, oversight processes, reporting
mechanisms, and audits, including the whistleblower program reviewed by the Audit Committee.
2025 Annual Report
106
Reporting Violations and Whistleblowing
Lundin Gold’s Whistleblower Policy, overseen by the Audit Committee, provides confidential and accessible channels for employees
and external stakeholders to report concerns about Code breaches, legal violations, or other misconduct. Stakeholders may submit
reports in Spanish or English via web, email, toll-free telephone line or by visiting the Company’s offices. This mechanism offers
accessible, confidential and safe pathways for internal and external stakeholders to raise concerns without fear of retaliation.
The Policy prohibits retaliation against anyone who reports a concern in good faith and commits to taking measures to protect
whistleblowers. If an individual believes they experienced reprisals, they can appeal directly to the Chair of the Audit Committee,
who must demonstrate that any action taken was unrelated to the report.
Further information on the Company’s whistleblower mechanism appears in the section "Process for Engaging with Own Workers
about Impacts and Existence of Channels to Raise Concerns" and in the section "Prevention and Detection of Corruption and
Bribery".
High-Risk Functions
We use a risk-based approach to identify functions with elevated exposure to corruption, bribery and money-laundering risks, including
functions susceptible to abuse of position for personal gain, improper payments and illicit financial flows, reflecting operational
realities and regulatory requirements. To strengthen prevention and mitigation efforts, the Company formalized a bribery, corruption
and money-laundering risk matrix by department and function in December 2025. We use this matrix to inform our anti-corruption
and compliance training program so that high-risk functions receive targeted and proportionate training. In 2025, 100% of high-risk
functions – defined as our supply chain, HR and CSR departments – received annual training at Lundin Gold. The training covers
conflict of interest situations and provides practical examples tailored to HR, CSR, and supply chain roles, while also explaining how
employees should respond and report concerns.
PREVENTION AND DETECTION OF CORRUPTION AND BRIBERY (G1-3 AND G1-4)
Lundin Gold is committed to conducting business ethically and in compliance with anti-corruption and anti-bribery laws.
The Company embeds this commitment in its Code of Business Conduct and Ethics and its ABC Policy, with ongoing actions
outlined below.
Compliance Structure and Procedures
In 2025, Lundin Gold appointed a National Compliance Officer in Ecuador to strengthen its on-the-ground compliance function.
The role encompasses employee training, conflict of interest management, investigations, anti-money laundering compliance,
and oversight of internal screening and payment practices and supplier monitoring, embedding a culture of ethical conduct and
accountability across the Company’s Ecuadorian operations.
We maintain a comprehensive system to prevent, detect and address potential incidents of corruption or bribery. Preventive controls
include clearly defined policies, mandatory training and risk-based oversight of higher-risk functions. Our IFC-compliant social
grievance mechanism and the independent Integrity Counts whistleblower platform support detection and enable both identified
and anonymous reporting.
Whistleblower reports are received concurrently by the Vice President, Legal and Sustainability and the Chair of the Audit Committee.
Complaints involving fraud, bribery, corruption or senior personnel trigger Audit Committee handling or oversight, depending on
severity. For all other matters, the Vice President, Legal and Sustainability oversees the investigation independently of the operational
management chain implicated in the concern. The Audit Committee may also direct investigations, request additional review, or
engage external specialists to maintain objectivity and alignment with regulatory expectations.
Management reports quarterly to the Audit Committee, detailing the nature of reports, investigation progress, outcomes and any
corrective actions. Matters involving Audit Committee handling or oversight are reported by the Audit Chair to the Board of Directors.
Communication and Training
Lundin Gold communicates its anti-corruption and anti-bribery standards through established policies, training and tailored
engagement with functions that operate in higher-risk environments. The Company provides the Code of Conduct and the ABC Policy
to all employees at onboarding and whenever updates occur. Lundin Gold maintains a structured training program that includes:
•
Mandatory annual training on the Code of Conduct and the ABC Policy for all employees, contractors and relevant third
parties.
•
Curriculum covering bribery risks, reporting obligations, conflicts of interest, political exposure risks and real-world
scenarios relevant to the mining sector.
•
Targeted sessions for senior management focused on decision-making risks, oversight responsibilities and regulatory
expectations.
•
Development of dedicated anti-corruption training for the Board to further strengthen governance oversight
2025 Annual Report
107
We track training completion through our learning management system and update program content periodically to reflect evolving
regulations, best practices and internal risk assessments.
Looking forward to our 2026-2030 Sustainability Strategy,
we set a process-based target to develop and deliver at least one customized
anti-corruption and anti-bribery training program each year with key internal and external stakeholders
. This target is part of our
Code of Business Conduct and Ethics, Anti-Corruption and Anti-Bribery Policy, and Compliance Management Programme. It
applies to both our corporate office and the FDN operation in Ecuador and Canada. As of 2025, annual anti-corruption training
programs have been delivered on a general basis. In 2026, the Company will introduce customized, stakeholder-specific training
programs, establishing that year as the baseline for measuring progress.
Incidents of Corruption and Bribery
During the 2025 reporting period, Lundin Gold did not incur any convictions or fines related to violations of anti-corruption or anti-
bribery laws.
POLITICAL ENGAGEMENT (G1-5)
WHY IT MATTERS
By adhering to transparent and ethical business practices and engaging in regular dialogue with regulators and government entities,
we help maintain clarity around regulatory expectations. These relationships facilitate constructive engagement on matters relevant
to our operations, including policies that support responsible investment and operational continuity in Ecuador. Clear and predictable
rules, supported by a strong rule of law, remain essential for Lundin Gold’s continued growth in the country and form an important
basis for future investment decisions.
Industry Advocacy
IRO Summary
Political Engagement and Lobbying Activities
IMPACT
Engagement with policymakers allows Lundin Gold
to contribute industry perspectives to regulatory
processes, supporting frameworks that promote
sustainable investment, operational stability, and
long-term economic development.
Proactive Regulation Shaping
Crisis Management Advantage
OPPORTUNITY
As
one
of
the
few
established
mining
operators in Ecuador, Lundin Gold positively
influences the development of clear and stable
regulatory
frameworks,
reducing
compliance
risk, minimizing legal costs, and supporting long-
term operational certainty for the Company and
the broader sector.
Constructive
relationships
with
government
authorities facilitate swift dispute resolution,
regulatory negotiations, and crisis management,
mitigating financial losses and delays.
Policy Changes and Contract Breach
RISK
Negative
Positive
Significant changes in government policies that are
inconsistent with the fiscal, regulatory, or contractual
framework established under the Company’s
existing agreements can necessitate adjustments
to those arrangements, introducing the risk of
disputes, legal uncertainty, and impacts to Lundin
Gold’s financial stability.
-
Policies Related to Political Engagement
Our political engagement is guided by our
Code of Business Conduct and Ethics
and
Anti-Bribery
and
Anti-Corruption (ABC) Policy
.
Further, we maintain a
Standard Operating Procedure (SOP)
for Interactions with Government Officials and Public Institutions
, overseen
by the Vice President Legal and Sustainability and formalized in late 2025 to guide transparent, consistent and compliant
interactions with authorities. We will roll out training to operationalize this SOP in 2026 for relevant functions, including CSR,
Business Sustainability, Finance, Environment and Permitting, and the Senior Leadership Team.
Actions Related to Political Engagement
Lundin Gold engages with government and public authorities openly, responsibly and only for legitimate business and regulatory
purposes. Our approach supports stable operations, protects our reputation and contributes to the rule of law in the jurisdictions in
which we operate. To operationalize this approach, we implemented the following action plans and measures on a permanent basis:
2025 Annual Report
108
•
National and local stakeholder engagement strategy to guide structured and transparent interactions with government
authorities and key stakeholders.
•
Regular political risk assessments and continuous monitoring of political, regulatory and institutional developments.
•
Transparent engagement with public institutions and stakeholders, aligned with the Code of Conduct and ABC Policy.
•
Ethical, non-lobbying advocacy on mining, sustainability and regulatory matters.
•
Alignment with the Chamber of Mines Ecuador (CME) and other industrial chambers in Ecuador political engagement strategy
to create consistent governance and risk management practices.
•
Strict compliance with legal and regulatory requirements, supported by internal controls, legal oversight and monitoring.
•
Robust contractual protections in agreements to mitigate political, regulatory and corruption-related risks.
•
Positioning and communication of Lundin Gold as a responsible mining company, emphasizing governance, sustainability and
ethical conduct.
•
Proactive reputation management to anticipate, manage and respond to political and governance-related risks.
•
Strategic partnerships with local, national and international organizations to enhance impact and create mutual benefits.
Through our ongoing engagement with local governments in the province of Zamora Chinchipe, we seek to contribute to discussions
on local development priorities and to support initiatives related to infrastructure, social investment, and training programs that
align with community needs. By encouraging the local reinvestment of revenues within the framework of existing legal and fiscal
mechanisms, we aim to help direct resources toward projects that support long-term community wellbeing.
Lundin Gold continues to be an active member of the CME, an association that represents formal large-and medium-scale mining
in the country and is committed to the development of responsible mining through industry standards and best practices, where
we hold a Director position within its Board of Directors. From our office in Quito, Ecuador, our Business Sustainability Department
engages with national stakeholders through an ongoing political engagement strategy aligned with the CME’s strategy. This strategy
aims to enable two-way dialogue about responsible mining and the benefits stemming from the development and operation of FDN,
monitor risks and develop appropriate mitigation measures. We engage regularly with national government officials to facilitate our
compliance with social, economic and environmental laws and regulations and with National Assembly members.
It is important to note that Lundin Gold does not engage in lobbying activities related to its material IROs or otherwise. Consequently,
no topics, positions or transparency-register information require disclosure.
Lundin Gold maintains a strict policy of not providing financial or in-kind political contributions – whether directly or indirectly – to
political parties, candidates, political organizations or lobbying associations. The Company anchors this commitment in its Code of
Conduct and its ABC Policy, which prohibits improper political influence and mandates compliance with applicable laws.
The Board oversees compliance and anti-bribery controls, primarily through our Audit Committee. Management, supported by
our Legal and Compliance functions, implements and monitors adherence to these controls in daily operations.
Political Contributions
During the 2025 reporting period, Lundin Gold did not make any financial or in-kind political contributions, either directly or
indirectly, in Canada or Ecuador. Our definition of political contributions aligns with ESRS definition under G1-5 application
requirements.
Appointments of Former Public Officials
We apply a precautionary and ethics-driven approach to appointments to avoid conflicts of interest and corruption risks.
During the reporting period, no member of our management or Board of Directors held a comparable public-sector role
within the two years preceding their appointment.
APPENDIX
FORWARD-LOOKING STATEMENT
Certain information and statements in this sustainability statement are considered “forward-looking information” or “forward-
looking statements” as those terms are defined under Canadian securities laws (collectively referred to as “forward-looking
statements”). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases
such as “believes”, “anticipates”, “expects”, “is expected”, “scheduled”, “estimates”, “pending”, “intends”, “plans”, “forecasts”,
“targets”, or “hopes”, or variations of such words and phrases or statements that certain actions, events or results “may”,
“could”, “would”, “will”, “should”, “might”, “will be taken” or “occur” and similar expressions) are not statements of historical
fact and may be forward-looking statements.
2025 Annual Report
109
By their nature, forward-looking statements and information involve assumptions, inherent risks, and uncertainties, many
of which are difficult to predict, and are usually beyond the control of management, that could cause actual results to be
materially different from those expressed by these forward-looking statements and information. Lundin Gold believes that the
expectations reflected in this forward looking information are reasonable, but no assurance can be given that these expectations
will prove to be correct. Forward-looking information should not be unduly relied upon. This information speaks only as of the
date of this Sustainability Statement, and the Company will not necessarily update this information, unless required to do
so by securities laws. This sustainability statement contains forward-looking information in a number of places, such as in
statements relating to our Sustainability Strategy; our short-term and long-term sustainability goals, including the timing and
anticipated achievement of our goals and targets; the benefits to be derived from our plans and actions, including initiatives
to protect the health and safety of our employees, to reduce water usage by our operations, to protect the biodiversity of our
local ecosystem and to improve local employment and procurement; the economic and social benefits to be derived from our
operations and our community programs; and our goals related to climate change action and estimates of gold production
and the future performance of our operations. Key assumptions related to our Sustainability Strategy include improvements
in the local education and training pipeline, stable operational needs, unchanged ring definitions, a sustained local labour
market, continued leadership commitment, steady procurement volumes, and growing local supplier capacity. Environmental
assumptions include considerations related to future water availability, anticipated developments in the national energy grid
driven by renewable energy expansion, declining costs for batteries and alternative fuels, and the availability of high integrity
carbon credits. There can be no assurance that such statements will prove to be accurate, as Lundin Gold’s actual results
and future events could differ materially from those anticipated in this forward-looking information as a result of the factors
discussed in the “Risk Factors” section in Lundin Gold’s Annual Information Form dated March 20, 2026, which is available at
our website or Sedarplus website. Lundin Gold’s actual results could differ materially from those anticipated.
Factors that could cause actual results to differ materially from any forward looking statement or that could have a material impact
on the Company or the trading price of its shares include: fiscal risk; community relations; mining operations; security situation;
waste disposal and tailings; environmental compliance; illegal mining; infrastructure; forecasts relating to production and costs; land
acquisition and surface rights; indigenous consultation requirements; Mineral Reserve and Mineral Resource estimates; regulatory
compliance and government approvals; dependence on a single mine; climate change and extreme weather events; shortages of
critical resources; exploration and development; control of Lundin Gold; information systems and cyber security; health and safety;
human rights; measures to protect biodiversity, endangered species and critical habitats; global economic conditions; competition
for new projects; availability of workforce and labour relations; key talent recruitment and retention; gold price; market price
of the Company’s shares; social media and reputation; insurance and uninsured risks; dividends; internal controls; conflicts of
interest; violation of anti-bribery and corruption laws; claims and legal proceedings; reclamation obligations; expropriation and
nationalization; and pandemics, epidemics or infectious disease outbreak; disease outbreak; conflicts of interest; violation of anti-
bribery and corruption laws; internal controls; claims and legal proceedings; and reclamation obligations.
NON-IFRS MEASURES
This Sustainability Statement uses certain supplementary economic and procurement-related metrics to support sustainability
reporting under the CSRD and ESRS. These metrics are not defined or required by IFRS Accounting Standards and therefore
constitute Non-IFRS measures. They are derived from the Company’s IFRS financial records, procurement systems, and underlying
accounting data but involve aggregation, classification, or presentation choices made by management for sustainability
reporting purposes. Management believes these supplementary metrics enhance transparency regarding the Company’s:
•
Economic value creation and distribution;
•
Contribution to local and national economies; and
•
Integration of sustainability considerations into business strategy and purchasing decisions.
These measures may not be comparable with similarly named measures presented by other companies.
2025 Annual Report
110
Operating Costs
2025
2024
Cost of Goods Sold
319
284
Royalties
103
69
Adjusted for:
Items included under Employee Wages and Benefits
(106)
(87)
Items included under Payments to Government
(110)
(87)
Operating Costs ($ million)
205
179
Employee Wages and Benefits
2025
2024
Direct production costs
250
244
Direct sales costs, including employee portion of profit sharing
40
19
Exploration salaries and benefits
8
6
Adjusted for:
Employee Wages and Benefits Capitalized to PPE
3
2
Non-Labour direct production costs
(175)
(169)
Non-Labour direct sales costs
(3)
(2)
Employee Wages and Benefits ($ million)
123
101
Payments to Providers of Capital
2025
2024
Finance expense
-
267
Adjusted for:
Accretion of transaction costs
-
(2)
Payments to Providers of Capital ($ million)
-
265
Community Investment
2025
2024
Direct production costs
250
244
Adjusted for:
Employee Wages and Benefits
(75)
(75)
Production Costs
(169)
(164)
Community Investment ($ million)
6.1
5.4
Total Procurement
2025
Accounts Payable - 2025
15
Adjusted for:
Accounts Payable - 2024
(18)
Payments
305
Total Procurement ($ million)
302.4
Payments to Government
2025
2024
Current income tax expense
426
192
Adjusted for:
Items reclassed from Operating Costs
110
87
Other government fees
5
2
Change in VAT receivable
(13)
10
Taxes in other jurisdictions and included in Operating Costs
reclassification
(9)
(2)
Payments to Government ($ million)
519
289
2025 Annual Report
111
ESRS INDEX
ESRS Disclosure
Requirement
Disclosure Requirement
Sustainability Statement
ESRS 2: General Disclosures
BP-1
General basis for the preparation of
sustainability statements
"General Basis for Preparation of the Sustainability
Statements"
BP-2
Disclosures in relation to specific
circumstances
"Disclosures in Relation to Specific Circumstances"
GOV-1
The role of the administrative,
management and supervisory bodies
"Role of the Executive Board and Supervisory Board in
Sustainability Matters"
GOV-2
Information provided to and
sustainability matters addressed by
the undertaking’s administrative,
management and supervisory bodies
"Role of the Executive Board and Supervisory Board in
Sustainability Matters"
GOV-3
Integration of sustainability-related
performance in incentive schemes
"Integration of Sustainability-related Performance in
Incentive Schemes"
GOV-4
Statement on due diligence
"Statement of Due Diligence"
GOV-5
Risk management and internal controls
over sustainability reporting
"Risk Management and Internal Controls over
Sustainability Reporting"
SBM-1
Strategy, business model and value chain
“Business Model”
“Our Value Chain”
“Our Sustainability Strategy”
SBM-2
Interests and views of stakeholders
“Stakeholder Engagement”
SBM-3
Material impacts, risks and opportunities
and their interaction with strategy and
business model
“Our Sustainability Strategy”
“Stakeholder Engagement”
“Double Materiality Assessment”
“Overview of Lundin Gold’s Impacts, Risks and
Opportunities”
IRO-1
Description of processes to identify
and assess material impacts, risks and
opportunities
“Identification”
“Engagement & Prioritization”
“Validation & Results”
“Topic Specific Consideration in Identifying and Assessing
IROs”
IRO-2
Disclosure requirements in ESRS covered
by the undertaking’s sustainability
statement
“ESRS Index”
“ESRS Data Points from other EU Legislation”
MDR-P
Policies adopted to manage material
sustainability matters
"Under Environmental, Social and Governance
sustainability matters"
MDR-A
Actions and resources in relation to
material sustainability matters
"Actions and Resources Related to..." under
Environmental, Social and Governance sustainability
matters.
MDR-M
Metrics in relation to material
sustainability matters
"Metrics and Targets Related to…" under Environmental,
Social and Governance sustainability matters.
MDR-T
Tracking effectiveness of policies and
actions through targets
"Metrics and Targets Related to…" under Environmental,
Social and Governance sustainability matters.
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112
ESRS Disclosure
Requirement
Disclosure Requirement
Sustainability Statement
ESRS E1: Climate Change
E1-1
Transition plan for climate change
mitigation
"Transition Plan for Climate Change"
E1-2
Policies related to climate change
mitigation and adaptation
"Policies Related to Climate Change"
E1-3
Actions and resources in relation to
climate change policies
"Actions and Resources Related to Climate Change"
E1-4
Targets related to climate change
mitigation and adaptation
"Gross Scopes 1,2,3 and Total GHG Emissions"
E1-5
Energy consumption and mix
"Energy Consumption and Mix"
E1-6
Gross Scopes 1, 2, 3 and Total GHG
emissions
"Gross Scopes 1,2,3 and Total GHG Emissions"
E1-7
GHG removals and GHG mitigation
projects financed through carbon credits
Not material
E1-8
Internal carbon pricing
Not material
ESRS E2: Pollution
E2-1
Policies related to pollution
"Policies Related to Pollution of Water"
E2-2
Actions and resources related to pollution
"
Actions and Resources Related to Pollution of Water"
E2-3
Targets related to pollution
"Metrics and Targets Related to Pollution of Water"
E2-4
Pollution of air, water and soil
"Metrics and Targets Related to Pollution of Water"
E2-5
Substances of concern and substances of
very high concern
"Substances of Concern"
ESRS E3: Water and Marine Resources
E3-1
Policies related to water and marine
resources
"Policies Related to Water Management"
E3-2
Actions and resources related to water
and marine resources
"Actions and Resources Related to Water Management"
E3-3
Targets related to water and marine
resources
"Metrics and Targets Related to Water Management"
E3-4
Water consumption
"Metrics and Targets Related to Water Management"
E3-5
Potential financial effects from water and
marine
Phase-In
ESRS E4: Biodiversity
E4-1
Transition plan and consideration of
biodiversity and ecosystems in strategy
and business model
"Resilience of Strategy and Business Model Related to
Biodiversity"
E4-2
Policies related to biodiversity and
ecosystems
"Policies Related to Biodiversity"
E4-3
Actions and resources related to
biodiversity and ecosystems
"Actions and Resources Related to Biodiversity"
E4-4
Targets related to biodiversity and
ecosystems
"Metrics and Targets Related to Biodiversity"
E4-5
Impact metrics related to biodiversity and
ecosystems change
"Metrics and Targets Related to Biodiversity"
ESRS E5: Resource Use and Circular Economy
E5-1
Policies related to resource use and
circular economy
"Policies Related to Waste"
E5-2
Actions and resources related to resource
use and circular economy
"Actions and Resources Related to Waste"
E5-3
Targets related to resource use and
circular economy
"Metrics and Targets Related to Waste"
E5-4
Resource inflows
Not material
E5-5
Resource outflows
"Metrics and Targets Related to Waste"
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113
ESRS Disclosure
Requirement
Disclosure Requirement
Sustainability Statement
ESRS S1: Own Workforce
S1-1
Policies related to own workforce
"Policies Related to Own Workforce"
S1-2
Processes for engaging with own workers
and workers’ representatives about
impacts
"Process for Engaging with Own Workers and Channels
to Raise Concerns"
S1-3
Processes to remediate negative impacts
and channels for affected communities to
raise concerns
"Process for Engaging with Own Workers and Channels
to Raise Concerns"
S1-4
Taking action on material impacts on own
workforce, and approaches to mitigating
material risks and pursuing material
opportunities related to own workforce,
and effectiveness of those actions
"Actions and Resources Related to Own Workforce"
S1-5
Targets related to managing material
negative impacts, advancing positive
impacts, and managing material risks and
opportunities
“Training and Skills Development”
“Health and Safety”
S1-6
Characteristics of the undertaking’s
employees
"Characteristics of our Employees"
S1-7
Characteristics of the undertaking’s
non-employees
"Characteristics of our Non-Employees"
S1-8
Collective bargaining coverage and social
dialogue
Not material
S1-9
Diversity metrics
Not material
S1-10
Adequate wages
"Adequate Wages"
S1-11
Social protection
"Social Protection"
S1-12
Persons with disabilities
Not material
S1-13
Training and skills development
Phase-In for training and skills development related
metrics
S1-14
Health and safety metrics
“Health and Safety”
Phase-In for ill health related metrics
S1-15
Work-life balance metrics
Not material
S1-16
Pay gap between women and men
Not material
S1-17
Incidents, complaints and severe human
rights impacts
"Incidents, Complaints and Severe Human Rights
Impacts"
ESRS S3: Affected Communities
S3-1
Policies related to affected communities
"Policies Related to Affected Communities"
S3-2
Processes for engaging with affected
communities about impacts
"Process for Engaging with Affected Communities and
Channels to Raise Concerns"
S3-3
Processes to remediate negative impacts
and channels for affected communities to
raise concerns
"Process for Engaging with Affected Communities and
Channels to Raise Concerns"
S3-4
Taking action on material impacts on
affected communities, and approaches
to managing material risks and pursuing
material opportunities related to affected
communities, and effectiveness of those
actions
"Actions and Resources Related to Affected
Communities"
S3-5
Targets related to managing material
negative impacts, advancing positive
impacts, and managing material risks and
opportunities
"Metrics and Targets Related to Affected Communities"
2025 Annual Report
114
ESRS Disclosure
Requirement
Disclosure Requirement
Sustainability Statement
ESRS G1: Business Conduct
G1-1
Business conduct policies and corporate
culture
"Business Conduct, Policies and Corporate Culture"
G1-2
Management of relationships with
suppliers
Not material
G1-3
Prevention and detection of corruption
and bribery
"Prevention and Detection of Corruption and Bribery"
G1-4
Confirmed incidents of corruption or
bribery
"Prevention and Detection of Corruption and Bribery"
G1-5
Political influence and lobbying activities
"Political Engagement"
G1-6
Payment practices
Not material
2025 Sustainability Statement
115
ESRS DATA POINTS FROM OTHER EU LEGISLATION
The following tables include all of the data points that derive from other EU legislation as listed in ESRS 2, appendix B,
indicating where the data points can be found in the sustainability statement.
Disclosure
Requirement
Data-point
Name
SFDR reference
Pillar 3 reference
Benchmark
Regulation reference
EU Climate Law
reference
Section
ESRS 2 GOV-1
21 d
Board’s gender diversity
Indicator number 13 of Table #1 of
Annex 1
Commission Delegated
Regulation (EU)
2020/1816, Annex II
Role of the Executive
Board and Supervisory
Board in Sustainability
Matters
ESRS 2 GOV-1
21 e
Percentage of Board members
who are independent
Delegated Regulation
(EU) 2020/1816,
Annex II
Role of the Executive
Board and Supervisory
Board in Sustainability
Matters
ESRS 2 GOV-4
30
Statement on due diligence
Indicator number 10 Table #3 of
Annex 1
Statement of Due
Diligence
ESRS 2 SBM-1
40 d i.
Involvement in activities related
to fossil fuel activities
Indicators number 4 Table #1 of
Annex 1
Article 449a Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453 Table 1:
Qualitative information on Environmental risk and Table 2:
Qualitative information on Social risk
Delegated Regulation
(EU) 2020/1816,
Annex II
not material
ESRS 2 SBM-1
40 d ii.
Involvement in activities related
to chemical production
Indicator number 9 Table #2 of Annex
1
Delegated Regulation
(EU) 2020/1816,
Annex II
not material
ESRS 2 SBM-1
40 d iii.
Involvement in activities related
to controversial weapons
Indicator number 14 Table #1 of
Annex 1
Delegated Regulation
(EU) 2020/1818,
Article 12(1) Delegated
Regulation (EU)
2020/1816, Annex II
not material
ESRS 2 SBM-1
40 d iv.
Involvement in activities related
to cultivation and production of
tobacco
Delegated Regulation
(EU) 2020/1818,
Article 12(1) Delegated
Regulation (EU)
2020/1816, Annex II
not material
ESRS E1-1
14
Transition plan to reach climate
neutrality by 2050
Regulation (EU)
2021/1119, Article
2(1)
Transition Plan for
Climate Change
ESRS E1-1
16 g
Undertakings excluded from
Paris-aligned benchmarks
Article 449a Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453 Template 1:
Banking book – climate change transition risk: Credit
quality of exposures by sector, emissions and residual
maturity
Delegated Regulation
(EU) 2020/1818,
Article12.1 (d) to (g),
and Article 12.2
Transition Plan for
Climate Change
ESRS E1-4
34
GHG emission reduction targets
Indicator number 4 Table #2 of Annex
1
Article 449a Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453 Template 3:
Banking book – climate change transition risk: alignment
metrics
Delegated Regulation
(EU) 2020/1818,
Article 6
Gross Scopes 1,2,3 and
Total GHG Emissions
2025 Sustainability Statement
116
Disclosure
Requirement
Data-point
Name
SFDR reference
Pillar 3 reference
Benchmark
Regulation reference
EU Climate Law
reference
Section
ESRS E1–5
38
Energy consumption from
fossil sources disaggregated
by sources (only high climate
impact sectors)
Indicator number 5 Table #1 and
Indicator number 5 Table #2 of Annex
1
Energy Consumption
and Mix
ESRS E1–5
37
Energy consumption and mix
Indicator number 5 Table #1 of Annex
1
Energy Consumption
and Mix
ESRS E1–5
40 – 43
Energy intensity associated with
activities in high climate impact
sectors
Indicator number 6 Table #1 of Annex
1
Energy Consumption
and Mix
ESRS E1–6
44
Gross Scope 1, 2, 3 and Total
GHG emissions
Indicators number 1 and 2 Table #1
of Annex 1
Article 449a; Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453 Template 1:
Banking book – climate change transition risk: Credit
quality of exposures by sector, emissions and residual
maturity
Delegated Regulation
(EU) 2020/1818, Article
5(1), 6 and 8(1)
Gross Scopes 1,2,3 and
Total GHG Emissions
ESRS E1–6
53 – 55
Gross GHG emissions intensity
Indicators number 3 Table #1 of
Annex 1
Article 449a Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453 Template 3:
Banking book – climate change transition risk: alignment
metrics
Delegated Regulation
(EU) 2020/1818, Article
8(1)
Gross Scopes 1,2,3 and
Total GHG Emissions
ESRS E1–7
56
GHG removals and carbon
credits
Regulation (EU)
2021/1119, Article
2(1)
Not Reported
ESRS E1–9
66
Exposure of the benchmark
portfolio to climate-related
physical risks
Delegated Regulation
(EU) 2020/1818, Annex
II Delegated Regulation
(EU) 2020/1816,
Annex II
Phase-in
ESRS E1–9
66 a & c
Disaggregation of monetary
amounts by acute and chronic
physical risk paragraph 66 (a) &
Location of significant assets at
material physical risk paragraph
66 ©
Article 449a Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453 paragraphs
46 and 47; Template 5: Banking book – climate change
physical risk: Exposures subject to physical risk.
Phase-in
ESRS E1–9
67 c.
Breakdown of the carrying
value of its real estate assets by
energy efficiency classes
Article 449a Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453 paragraph
34;Template 2: Banking book – climate change transition
risk: Loans collateralized by immovable property – Energy
efficiency of the collateral
Phase-in
ESRS E1–9
69
Degree of exposure of the
portfolio to climate-related
opportunities
Delegated Regulation
(EU) 2020/1818,
Annex II
Phase-in
ESRS E1–9
69
Degree of exposure of the
portfolio to climate-related
opportunities
Delegated Regulation
(EU) 2020/1818,
Annex II
Phase-in
2025 Sustainability Statement
117
Disclosure
Requirement
Data-point
Name
SFDR reference
Pillar 3 reference
Benchmark
Regulation reference
EU Climate Law
reference
Section
ESRS E2-4
28
Amount of each pollutant
listed in Annex II of the E-PRTR
Regulation (European Pollutant
Release and Transfer Register)
emitted to air, water and soil
Indicator number 8 Table #1 of Annex
1 Indicator number 2 Table #2 of
Annex 1 Indicator number 1 Table #2
of Annex 1 Indicator number 3 Table
#2 of Annex 1
Substances of Concern
ESRS E3-1
9
Water and marine resources
Indicator number 7 Table #2 of Annex
1
Policies Related to
Water
ESRS E3-1
13
Dedicated policy paragraph
Indicator number 8 Table 2 of Annex 1
Policies Related to
Water
ESRS E3-1
14
Sustainable oceans and seas
Indicator number 12 Table #2 of
Annex 1
Not Material
ESRS E3-4
28 c
Total water recycled and reused
Indicator number 6.2 Table #2 of
Annex 1
Metrics and Targets
Related to Water
Management
ESRS E3-4
29
Total water consumption in
m3 per Net Revenue
on own
operations
Indicator number 6.1 Table #2 of
Annex 1
Metrics and Targets
Related to Water
Management
ESRS 2 - SBM-3
-E4
16 a i.
Indicator number 7 Table #1 of Annex
1
E4: Why it Matters
ESRS 2 - SMB-
3 - E4
16 b
Indicator number 10 Table #2 of
Annex 1
E4: Why it Matters
ESRS 2 - SBM-
3 - E4
16 c
Indicator number 14 Table #2 of
Annex 1
E4: Why it Matters
ESRS E4-2
24 b
Sustainable land/agriculture
practices or policies
Indicator number 11 Table #2 of
Annex 1
Policies Related to
Biodiversity
ESRS E4-2
24 c
Sustainable oceans/seas
practices or policies
Indicator number 12 Table #2 of
Annex 1
Not Material
ESRS E4-2
24 d
Policies to address deforestation
Indicator number 15 Table #2 of
Annex 1
Policies Related to
Biodiversity
ESRS E5-5
37 d
Non-recycled waste
Indicator number 13 Table #2 of
Annex 1
Metrics and Targets
Related to Waste
ESRS E5-5
39
Hazardous waste and
radioactive waste
Indicator number 9 Table #1 of Annex
1
Metrics and Targets
Related to Waste
ESRS 2 SBM3
- S1
14 f
Risk of incidents of forced
labour
Indicator number 13 Table #3 of
Annex I
S1: Why it Matters
ESRS 2 SBM3
- S1
14 g
Risk of incidents of child labour
Indicator number 12 Table #3 of
Annex I
S1: Why it Matters
ESRS S1–1
20
Human rights policy
commitments
Indicator number 9 Table #3 and
Indicator number 11 Table #1 of
Annex I
Policies Related to Own
Workforce
2025 Sustainability Statement
118
Disclosure
Requirement
Data-point
Name
SFDR reference
Pillar 3 reference
Benchmark
Regulation reference
EU Climate Law
reference
Section
ESRS S1–1
21
Due diligence policies on issues
addressed by the fundamental
International Labor Organization
Conventions 1 to 8
Delegated Regulation
(EU) 2020/1816,
Annex II
Policies Related to Own
Workforce
ESRS S1–1
22
processes and measures for
preventing trafficking in human
beings
Indicator number 11 Table #3 of
Annex I
Policies Related to Own
Workforce
ESRS S1–1
23
workplace accident prevention
policy or management system
Indicator number 1 Table #3 of Annex
I
Policies Related to Own
Workforce
ESRS S1–3
32 c
grievance/complaints handling
mechanisms
Indicator number 5 Table #3 of Annex
I
Process for Engaging
with Own Workers
and Channels to Raise
Concerns
ESRS S1–14
88 b & c
Number of fatalities and
number and rate of work
related accidents
Indicator number 2 Table #3 of Annex
I
Delegated Regulation
(EU) 2020/1816,
Annex II
Health and Safety
ESRS S1–16
88 e
Number of days lost to injuries,
accidents, fatalities or illness
Indicator number 3 Table #3 of Annex
I
Not Material
ESRS S1–16
97 a
Unadjusted gender pay gap
Indicator number 12 Table #1 of
Annex I
Delegated Regulation
(EU) 2020/1816,
Annex II
Not Material
ESRS S1–16
97 b
Excessive CEO pay ratio
Indicator number 8 Table #3 of Annex
I
Not Material
ESRS S1–17
103 a
Incidents of discrimination
Indicator number 7 Table #3 of Annex
I
Incidents, Complaints
and Severe Human
Rights Impacts
ESRS S1–17
104 a
Non-respect of UNGPs on
Business and Human Rights and
OECD Guidelines
Indicator number 10 Table #1 and
Indicator n. 14 Table #3 of Annex I
Delegated Regulation
(EU) 2020/1816, Annex
II Delegated Regulation
(EU) 2020/1818 Art
12 (1)
Not Material
ESRS 2 SBM3
– S2
11 b
Significant risk of child labour or
forced labour in the value chain
Indicators number 12 and n. 13 Table
#3 of Annex I
Not Material
ESRS S2–1
17
Human rights policy
commitments
Indicator number 9 Table #3 and
Indicator n. 11 Table #1 of Annex 1
Not Material
ESRS S2–1
18
Policies related to value chain
workers
Indicator number 11 and n. 4 Table #3
of Annex 1
Not Material
ESRS S2–1
19
Non-respect of UNGPs on
Business and Human Rights
principles and OECD guidelines
Indicator number 10 Table #1 of
Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II Delegated Regulation
(EU) 2020/1818, Art
12 (1)
Not Material
2025 Sustainability Statement
119
Disclosure
Requirement
Data-point
Name
SFDR reference
Pillar 3 reference
Benchmark
Regulation reference
EU Climate Law
reference
Section
ESRS S2–1
19
Due diligence policies on issues
addressed by the fundamental
International Labor Organization
Conventions 1 to 8
Delegated Regulation
(EU) 2020/1816,
Annex II
Not Material
ESRS S2–4
36
Human rights issues and
incidents connected to its
upstream and downstream
value chain
Indicator number 14 Table #3 of
Annex 1
Not Material
ESRS S3–1
16
Human rights policy
commitments
Indicator number 9 Table #3 of Annex
1 and Indicator number 11 Table #1 of
Annex 1
Policies Related to
Affected Communities
ESRS S3–1
17
Non-respect of UNGPs on
Business and Human Rights, ILO
principles or OECD guidelines
Indicator number 10 Table #1 Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II Delegated Regulation
(EU) 2020/1818, Art
12 (1)
Policies Related to
Affected Communities
ESRS S3–4
36
Human rights issues and
incidents
Indicator number 14 Table #3 of
Annex 1
Actions Related to
Affected Communities
ESRS S4–1
16
Policies related to consumers
and end-users
Indicator number 9 Table #3 and
Indicator number 11 Table #1 of
Annex 1
Not Material
ESRS S4–1
17
Non-respect of UNGPs on
Business and Human Rights and
OECD guidelines
Indicator number 10 Table #1 of
Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II Delegated Regulation
(EU) 2020/1818, Art
12 (1)
Not Material
ESRS S4–4
35
Human rights issues and
incidents
Indicator number 14 Table #3 of
Annex 1
Not Material
ESRS G1–1
10 b
United Nations Convention
against corruption
Indicator number 15 Table #3 of
Annex 1
Business Conduct,
Policies and Corporate
Culture
ESRS G1–1
10 d
Protection of whistleblowers
Indicator number 6 Table #3 of Annex
1
Business Conduct,
Policies and Corporate
Culture
ESRS G1–4
24 a
Fines for violation of anti-
corruption and anti-bribery laws
Indicator number 17 Table #3 of
Annex 1
Delegated Regulation
(EU) 2020/1816, Annex
II)
Prevention and
Detection of Corruption
and Bribery
ESRS G1–4
24 b
Standards of anticorruption and
antibribery
Indicator number 16 Table #3 of
Annex 1
Prevention and
Detection of Corruption
and Bribery
2025 Annual Report
120
Anti-Bribery and Anti-Corruption
The Los Encuentros Cultural, Educational and Sports Academy
Awareness and Preparedness for Emergencies at the Local Level
Agencia de Regulación y Control de Energía y Recursos
Naturales no Renovables
ABC
ACCEDELE
APELL
ARCERNNR
International Union for Conservation of Nature
Junior Achievement Ecuador
Key Biodiversity Areas
kilometres
Key Performance Indicators
Kilo tonnes of Ore Milled
Light Detection and Ranging
Occupational Tolerance Limit
Liquefied Petroleum Gas
Long-Term Incentive
Mining Association of Canada
Metres Above Sea Level
Million ounces
Main Water Treatment Plant
Non-Governmental Organization
Nitrous Oxide
Organization for Economic Cooperation and Development
Operating Expenditures
Ounces of Gold Produced
Potential Loss of Life
Probable Maximum Participation
Representative Concentration Pathway
Registration, Evaluation, Authorization and Restriction of Chemicals
Ecuadorian Accreditation Service
Standard Operating Procedure
Short-Term Incentives
metric tonnes of CO₂-equivalent
Task Force on Climate-related Financial Disclosure
Training for Operations
Technical Screening Criteria
Total Recordable Incident Rate
Tailings Storage Facility
United Kingdom
United Nations
United Nations Declaration on the Rights of Indigenous Peoples
UN Global Compact
UN Guiding Principles
US Dollars
Universidad Técnica Particular de Loja
Value Added Tax
World Gold Council
Wildlife Habitat Council
Year-over-year
IUCN
JAE
KBA
km
KPIs
Kt
LIDAR
LOT
LPG
LTI
MAC
MASL
Moz
MWTP
NGO
N
2
O
OECD
OpEx
Oz
PLL
PMP
RCP
REACH
SAE
SOP
STI
tCO
2
e
TCFD
TFO
TSC
TRIR
TSF
UK
UN
UNDRIP
UNGC
UNGP
USD
UTPL
VAT
WGC
WHC
YOY
Field Safety Leadership Activities
Biodiversity Management and Monitoring Plan
Capital expenditures
Chief Executive Officer
Chief Financial Officer
Methane
Chamber of Mines of Ecuador
Carbon Dioxide
Community Relations Plan
Corporate Social Responsibility
Corporate Sustainability Reporting Directive
Diversity, Equity and Inclusion
Double Materiality Assessment
Do No Significant Harm
Environmental Management Plan
United States Environmental Protection Agency
Educación para Compartir
Enterprise Risk Management
Environmental and Social Impact Assessment
Environment, Social and Governance
European Sustainability Reporting Standards
Fruta del Norte
grams per tonne
Green House Gas
Global Industry Standards for Tailing Management
Gigajoule
Global Reporting Initiative
hectares
Hydrofluorocarbon
Health and Safety Management System
Health, Safety, Environment and Sustainability
Human Resources
Human Rights Risk Assessment
International Energy Agency
International Finance Corporation
International Labour Organization
National Meteorological Institute of Costa Rica
International Panel on Climate Change
Impacts, Risks and Opportunities
ASCL
BMMP
CapEx
CEO
CFO
CH
4
CME
CO
2
CRP
CSR
CSRD
DEI
DMA
DNSH
EMP
EPA
EpC
ERM
ESIA
ESG
ESRS
FDN
G/T
GHG
GISTM
Gj
GRI
ha
HFC
HSMS
HSES
HR
HRRA
IEA
IFC
ILO
IMN CR
IPCC
IRO
2025 Annual Report
121
AUDITOR’S LIMITED ASSURANCE REPORT OF LUNDIN GOLD INC.’S
STATUTORY SUSTAINABILITY STATEMENT
To the Board of Directors of Lundin Gold Inc., corporate identity number 971300-0165
Conclusion
We have conducted a limited assurance engagement of the sustainability statement for Lundin Gold Inc. for the
financial year 2025. The sustainability statement is included on pages 35-120 in this document.
Based on our limited assurance engagement as described in the section Auditor's responsibility, nothing has come
to our attention that causes us to believe that the sustainability statement does not, in all material respects, meet
the requirements of the Swedish Annual Accounts Act which includes,
•
whether the sustainability statement meets the requirements of ESRS,
•
whether the process the company has carried out to identify reported sustainability information has been
conducted as described on in ESRS 2, IRO-1 (on pages 49-53) of the sustainability statement,
•
compliance with the reporting requirements of the EU's Green Taxonomy Regulation Article 8.
Basis for conclusion
We have conducted the limited assurance engagement in accordance with FAR's recommendation RevR 19
Revisorns översiktliga granskning av den lagstadgade hållbarhetsrapporten
. Our responsibility according to this
recommendation is further described in the section Auditor's responsibility.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Other matter
The sustainability statement for the previous financial year has not been subject to a limited assurance engagement
and no review of the comparative figures in the sustainability statement for the year 2025 has therefore been
performed.
Other information than the sustainability statement
This document also contains other information than the sustainability statement and consists of the following
documents; Initial information pages 1-4. In the official annual report other information consists of the following
documents; CEO letter pages 5-6, Management’s Discussion and Analysis pages 7-34, Financial Statements pages
124-148 and final page 152.
The Board of Directors and the President, CEO & Director are responsible for this other information.
Our conclusion on the sustainability statement does not cover this other information and we do not express any
form of assurance conclusion regarding this other information.
In connection with our limited assurance engagement on the sustainability statement, our responsibility is to
read the information identified above and consider whether the information is materially inconsistent with the
sustainability statement. In this procedure we also take into account our knowledge otherwise obtained in the
limited assurance engagement and assess whether the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this information, conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this regard.
2025 Annual Report
122
Responsibilities of the Board of Directors and the President, CEO
& Director
The Board of Directors and the President, CEO & Director, are responsible for the preparation of sustainability
statement in accordance with Chapter 6, Sections 12–12f of the Swedish Annual Accounts Act, and for such internal
control as the Board of Directors and the President, CEO & Director determines necessary to enable the preparation
of the sustainability statement that is free from material misstatements, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express a conclusion on whether the sustainability report has been prepared in accordance
with Chapter 6, Sections 12–12f of the Swedish Annual Accounts Act based on our review. The limited assurance
engagement has been conducted in accordance with FAR's recommendation RevR 19 Revisorns översiktliga
granskning av den lagstadgade hållbarhetsrapporten. This recommendation requires that we plan and perform
our procedures to obtain limited assurance that the sustainability statement is prepared in accordance with these
requirements.
The procedures in a limited assurance engagement vary in nature and timing from, and are less in extent than
for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance
engagement been performed. This means that it is not possible for us to obtain such assurance that we become
aware of all significant matters that could have been identified if a reasonable assurance engagement had been
performed.
Our firm applies ISQM 1 (International Standard on Quality Management), which requires the firm to design,
implement and operate a system of quality management, including policies and procedures regarding compliance
with ethical requirements, professional standards, and applicable legal and regulatory requirements.
We are independent of Lundin Gold Inc. in accordance with professional ethics for accountants in Sweden and have
otherwise fulfilled our ethical responsibilities in accordance with these requirements.
A limited assurance engagement involves performing procedures to obtain evidence about the sustainability
statement. The auditor selects the procedures to be performed, including assessing the risks of material misstatements
in the sustainability statement, whether due to fraud or error. In this risk assessment, the auditor considers the parts
of the internal control that are relevant to how the Board of Directors and the President, CEO & Director prepares
the sustainability statement, in order to design procedures that are appropriate under the circumstances, but not
for the purpose of providing a conclusion on the effectiveness of the company’s internal control. The review consists
of making inquiries, primarily of persons responsible for the preparation of the sustainability statement, performing
analytical review, and conducting other limited review procedures.
The review procedures primarily include:
Our procedures regarding the process that the company has implemented to identify sustainability information to
be reported included, but were not limited to, the following:
•
Obtaining an understanding of the process by:
–
Making inquiries to understand the sources of information used by management (e.g., stakeholder dialogues,
business plans, and strategy documents); and
–
Reviewing the company’s internal documentation of its process; and
•
Evaluating whether the information obtained from our actions regarding the process implemented by the
company is consistent with the description of the process in ESRS 2, IRO-1 (on pages 49-53) of the sustainability
statement.
Our procedures regarding the sustainability report included, but were not limited to, the following:
•
Through inquiries, obtaining a general understanding of the internal control environment, reporting processes,
and information systems relevant to the preparation of the information in the sustainability statement.
•
Evaluating whether the information identified by the process to identify sustainability information is included
in the Sustainability Statement;
2025 Annual Report
123
•
Evaluating whether the structure and the presentation of the sustainability statement is in accordance with the
ESRS;
•
Performing inquires of relevant personnel and analytical procedures on selected information in the sustainability
statement;
•
Performing substantive assurance procedures on selected information in the sustainability statement;
•
Performing a site visit to the company’s Fruta Del Norte gold mine (FDN) and Los Encuentros Community Office
in Zamora-Chinchipe, Ecuador, and regional head office in Quito, Ecuador, which included, but were not limited
to, the following:
–
tour of FDN and community operations;
–
inquiry with key site and corporate personal; and
–
observation and inspection of the implementation of policies and actions.;
•
Through inquiries and substantive procedures, evaluating supporting evidence to the methods, assumptions
and data for developing significant estimates and forward-looking information;
•
Obtaining an understanding of the process to identify taxonomy-eligible and taxonomy-aligned economic
activities and the corresponding disclosures in the sustainability statement
•
The review of taxonomy disclosures included, but was not limited to, the following review procedures:
-
Evaluating whether the presentation of the taxonomy tables is consistent with the requirements of the EU
Green Taxonomy and the corresponding disclosures;
-
Performing inquiries to company management and other relevant personnel to obtain an understanding of
the process and sources of information used in the taxonomy disclosures;
-
Performing analytical review procedures regarding selected taxonomy disclosures.
Inherent limitations in preparing the sustainability statement
In reporting forward-looking information in accordance with ESRS, the Board of Directors and the President, CEO
& Director of Lundin Gold Inc. are required to prepare the forward-looking information on the basis of disclosed
assumptions about events that may occur in the future and possible future actions by Lundin Gold Inc. actual
outcomes are likely to be different since anticipated events frequently do not occur as expected.
Stockholm, 23 April 2026
Öhrlings PricewaterhouseCoopers AB
Martin Johansson
Authorized Public Accountant
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
124
Note
December 31,
2025
December 31,
2024
ASSETS
Current assets
Cash and cash equivalents
19
$
$
Trade receivables and other current assets
4
Inventories
5
Advance royalty
Non-current assets
VAT recoverable
4
Property, plant and equipment
6
Mineral properties
7
Deferred income tax assets
18
$
$
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities
8
$
$
Income taxes payable
18
Other current liabilities
12
Non-current liabilities
Other non-current liabilities
12
Reclamation provisions
10
Deferred income tax liabilities
18
EQUITY
Share capital
11
Equity-settled share-based payment reserve
12
Accumulated other comprehensive loss
(40,658 )
(40,747 )
Retained earnings
$
$
Commitments (Note 24)
Approved by the Board of Directors
/s/ James A. Beck
/s/ Ian W. Gibbs
James A. Beck
Ian W. Gibbs
The accompanying notes are an integral part of these consolidated financial statements.
FINANCIAL STATEMENTS
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
125
Note
Years Ended
December 31,
2025
Years Ended
December 31,
2024
Revenues
13
$
$
Cost of goods sold
Operating expenses
14
Royalty expenses
Depletion and depreciation
Income from mining operations
Other expenses (income)
Exploration
15
Corporate administration
16
Finance expense
17
Finance income
(22,863 )
(16,289 )
Other expense (income)
(12,946 )
Derivative gain
9
(243,737 )
Net income before tax
Income tax expense
Current income tax expense
18
Deferred income tax (recovery) expense
18
(94,981 )
Net income for the year
$
$
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified to net income
Currency translation adjustment
(11,984 )
Derivative loss related to the Company’s own credit risk
9
(37,332 )
Deferred income tax on accumulated other comprehensive
income
18
Other
Comprehensive income for the year
$
$
Income per common share
Basic
11
$
$
Diluted
11
Weighted-average number of common shares outstanding
Basic
Diluted
The accompanying notes are an integral part of these consolidated financial statements.
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
126
Equity-settled
Note
Number of
common
shares
Share
capital
Share-based
payment reserve
Other
reserves
Retained
earnings
(deficit)
Total
Balance, January 1, 2024
$
$
$
$
(69,616 )
$
Exercise of stock options
(3,425 )
Vesting of share units
(3,025 )
(2,124 )
Exercise of anti-dilution
rights
11
Stock-based compensation
12
-
Reclassification of share
units
12
-
(3,306 )
(3,306 )
Other comprehensive loss
-
(42,702 )
(42,702 )
Net income for the year
-
Dividends paid
-
(143,846 )
(143,846 )
Balance, December 31, 2024
$
$
$
(40,747 )
$
$
Exercise of stock options
(2,576 )
Vesting of share units
(315 )
Exercise of anti-dilution
rights
11
Stock-based compensation
12
-
Reclassification of share
units
12
-
(641 )
(641 )
Other comprehensive
income
-
Net income for the year
-
Dividends paid
-
(663,798 )
(663,798 )
Balance, December 31, 2025
$
$
$
(40,658 )
$
$
The accompanying notes are an integral part of these consolidated financial statements.
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
127
`
Note
Years Ended
December 31,
2025
Years Ended
December 31,
2024
OPERATING ACTIVITIES
Net income for the year
$
$
Items not affecting cash:
Depletion and depreciation
Stock-based compensation
12
Derivative gain
(243,737 )
Other expense (income)
(10,917 )
Finance (income) expense
(22,863 )
Deferred income tax (recovery) expense
(94,981 )
Changes in non-cash working capital items:
Trade receivables and other current assets
(9,597 )
(32,059 )
Inventories
(4,278 )
Advance royalty
Accounts payable and accrued liabilities
Income taxes payable
Interest received
Share units settled in cash
12
(10,941 )
(3,959 )
Net cash provided by operating activities
FINANCING ACTIVITIES
Repayments of long-term debt
9
(101,106 )
Interest paid
9
(3,688 )
Finance charge paid
9
(260,990 )
Proceeds from exercise of stock options
Proceeds from exercise of anti-dilution rights
11
Dividends paid
(663,798 )
(143,846 )
Net cash used for financing activities
(644,863 )
(487,489 )
INVESTING ACTIVITIES
Acquisition and development of property, plant and equipment
(85,977 )
(82,398 )
VAT paid on investing activities
(11,253 )
(11,106 )
Net cash used for investing activities
(97,230 )
(93,504 )
Effect of foreign exchange rate differences on cash
(222 )
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
$
$
Supplemental cash information (Note 20)
The accompanying notes are an integral part of these consolidated financial statements.
Notes to the consolidated financial statements as at December 31, 2025
128
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
The common shares of the Company are listed for trading on the Toronto Stock Exchange (the “TSX”) and Nasdaq Stockholm
under the symbol “LUG” and the OTCQX Best Market under the symbol “LUGDF”. The Company was originally incorporated
in British Columbia and continued under the Canada
The Company’s head office is located at Suite 2800, 1055 Dunsmuir Street, Vancouver, BC , and it has an office in Quito,
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below
and have been consistently applied to all the periods presented.
These consolidated financial statements were approved for issue by the Board of Directors on February 19, 2026.
The following entities are included in these consolidated financial statements:
Ordinary shares held | |||
Country of | December 31, | December 31, | |
incorporation | 2025 | 2024 | |
Aurelian Resources Inc. | Canada | 100% | 100% |
Aurelian Resources Corporation Ltd. | Canada | 100% | 100% |
Aurelian Exploration Inc. | Canada | 100% | 100% |
Condor Finance Corp. | Canada | 100% | 100% |
Aurelian Ecuador S.A. | Ecuador | 100% | 100% |
AurelianEcuador Holding S.A. | Ecuador | 100% | 100% |
Ecoaurelian Agricola S.A. | Ecuador | 100% | 100% |
Aurelianmenor S.A. | Ecuador | 100% | 100% |
Surnorte S.A. | Ecuador | 100% | 100% |
SurNorte Ventures Pte. Ltd. | Singapore | 100% | 100% |
SurNorte Holdings I Pte. Ltd. | Singapore | 100% | 100% |
The proportion of the voting rights held directly by the parent company does not differ from the proportion of ordinary
The Company’s material accounting policies are outlined below:
Basis of consolidation
These consolidated financial statements incorporate the financial statements of the Company and the entities
controlled by the Company. Control exists when the Company is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee. The
financial information of subsidiaries is included in the consolidated financial statements from the date that control
commences until the date that control ceases. All significant intercompany transactions and balances have been
eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
Foreign currency translation
Company’s significant subsidiary, Aurelian Ecuador S.A., and certain entities is U.S. dollars. Effective January 1, 2025,
the functional currency of other entities with a functional currency different from the presentation currency was
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
129
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
Transactions and balances
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions.
At each statement of financial position date, monetary assets and liabilities are translated using the period end foreign
exchange rate. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction.
Critical accounting estimates and judgments
The preparation of consolidated financial statements requires management to make judgments, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, and expenses. The
estimates and associated assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the
revision and further periods if the review affects both current and future periods.
Significant assumptions about the future and other sources of estimation uncertainty that management has made
at the end of the reporting period that have a significant risk of resulting in a material adjustment to the carrying
amounts of assets and liabilities in the event that the actual results differ from assumptions made, relate to, but are
not limited to, the following:
– The Company estimates its mineral reserves and resources based on information
compiled and reviewed by qualified persons as defined in accordance with NI 43-101 requirements. The estimation
of mineral reserves and resources requires judgment to interpret geological data and metallurgical testing, design
of appropriate mining methods, recovery methods and establishment of a life of mine production schedule. The
estimation of recoverable reserves is also based on assumptions such as capital costs, operating costs and metal
pricing. New geological data or changes in the above assumptions may change the economic viability of reserves and
may, ultimately, result in the reserves being revised. Changes in the reserve or resource estimates may impact the
valuation of property, plant and equipment and mineral properties, the depletion and depreciation of property, plant
– Management applies significant judgement in assessing whether indicators of
impairment exist for a cash generating unit which would necessitate impairment testing. Internal and external factors
such as significant changes in the use of the asset, commodity prices, foreign exchange rates, capital and production
forecasts, mineral reserve and resource quantities, and discount rates are used by management in determining
whether there are any indicators. As at December 31, 2025, management did not identify any impairment indicators
Deferred taxes
– Deferred tax provisions are calculated by the Company while the actual amounts of income tax expense
are not final until tax returns are filed and accepted by the relevant authorities. Judgment is required in assessing whether
deferred tax assets and certain deferred tax liabilities are recognized on the balance sheet, in interpreting applicable tax
laws, and what tax rate is expected to be applied in the year when the related temporary differences reverse. Deferred tax
liabilities arising from temporary differences are recognized unless the reversal of the temporary differences is not expected
to occur in the foreseeable future and can be controlled. Assumptions about the generation of future taxable profits and
repatriation of retained earnings depend on management’s estimates of future production and sales volumes, gold prices,
reserves and resources, operating costs, decommissioning and restoration costs, capital expenditures, dividends and other
capital management transactions. These estimates and judgments are subject to risk and uncertainty and could result in an
adjustment to the deferred tax provision and a corresponding credit or charge to profit.
The Company has obligations for site restoration and
decommissioning related to Fruta del Norte. The future obligations for decommissioning and site restoration activities
are estimated by the Company using mine closure plans or other similar studies which outline the requirements that
will be carried out to meet the obligations. The provision for decommissioning and site restoration is remeasured at the
end of each reporting period for changes in estimates or circumstances. Changes in estimates or circumstances include
changes in legal or regulatory requirements, increased obligations arising from additional mining and exploration
Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the
instrument.
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
130
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
the acquisition or issue of financial assets and liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities measured at fair value through profit or loss are recognized immediately in the statement of income.
The Company classifies its financial assets according to the following measurement categories:
i.
Amortized cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments
of principal and interest are measured at amortized cost.
ii.
Fair value through other comprehensive loss (“FVOCI”)
Assets that are held for both collection of contractual cash flows and future potential sale, where the assets’
cash flows represent solely payments of principal and interest, are measured at fair value through other
comprehensive loss.
Fair value through profit or loss (“FVPL”)
The Company assesses the expected credit losses associated with its financial assets carried at amortized cost and
The Company classifies its financial liabilities according to the following measurement categories:
FVPL
Liabilities that are (i) held for trading or (ii) designated as FVPL, are measured at FVPL.
A financial liability is classified as held for trading if:
•
It has been incurred principally for the purpose of repurchasing it in the near term; or
•
On initial recognition it is part of a portfolio of identified financial instruments that the Company may
manage together and has a recent actual pattern of short-term profit-taking; or
•
It is a derivative, except for a derivative that is a financial guarantee contract or a designated and
effective hedging instrument.
A financial liability that is not a financial liability held for trading may be designated as FVPL upon initial
recognition if:
•
Such designation eliminates or significantly reduces a measurement or recognition inconsistency
that would otherwise arise; or
•
The financial liability forms part of a group of financial assets or liabilities or both, which is managed
and its performance is evaluated on a fair value basis; or
•
It forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the
entire combined contract to be designated as FVPL.
The amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of
that liability is recognised in other comprehensive income. The remaining amount of change in the fair value of
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
131
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
liability is recognised in the statement of income. Changes in fair value attributable to a financial liability’s credit
risk that are recognised in other comprehensive income are not subsequently reclassified to the statement of
ii.
Amortized cost
Liabilities not measured at FVPL are measured subsequently at amortized cost using the effective interest
method.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits held with banks, which are readily convertible into
known amounts of cash or mature within 90 days from the original dates of acquisition. Cash is classified as a financial
Inventories
Ore stockpiles, in-circuit and finished metal inventory are valued at the lower of weighted average production cost and
net realizable value. Production costs include the cost of raw materials, direct labour, mine-site overhead expenses and
applicable depreciation and depletion of mineral properties, plant and equipment. Net realizable value is calculated as
the estimated price at the time of sale based on prevailing and long-term metal prices less estimated future production
costs to convert the inventories into saleable form and estimated costs to sell.
Ore stockpile inventory represents ore on the surface that has been extracted from the mine and is available for further
processing. In-circuit inventory represents material in the mill circuit that is in the process of being converted into a
saleable form. Finished metal inventory represents doré and concentrate located at the mine, in transit to and at port,
and doré at refineries.
Materials and supplies inventories are valued at the lower of weighted average cost and net realizable value with a provision
recorded for obsolete or slow-moving inventory. Replacement costs of materials and spare parts are generally used as
the best estimate of net realizable value.
Any write-downs of inventory to net realizable value are recorded within cost of sales in the statement of income. If
there is a subsequent increase in the value of inventory, the previous write-downs to net realizable value are reversed
Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses. The cost of an
asset consists of its purchase price, any directly attributable costs of bringing the asset to its present working condition
and location for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring
the site on which it is located.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost of
the item can be measured reliably.
residual value over its estimated useful life. Mine and plant facilities are depleted using a unit of production method
over the total recoverable reserves. The estimated useful lives of property, plant and equipment are as follows:
Buildings |
20 years |
Machinery and equipment |
5 to 10 years |
Vehicles |
5 years |
Furniture and office equipment |
3 to 10 years |
Mine and plant facilities |
based on total recoverable reserves on a unit of production basis |
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
132
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
Depreciation methods and estimated useful lives and residual values are reviewed annually and when facts and
The Company reviews the estimated total recoverable reserves annually and when events and circumstances indicate
that such a review should be made. Changes to estimated total recoverable reserves are accounted for prospectively.
Expenditures on major maintenance or repairs, including the cost of the replacement of parts of assets and overhaul
costs or where an asset or part of an asset is replaced, is capitalized and the remaining carrying amount of the item
repaired, overhauled or replaced is derecognized when it is probable that future economic benefits associated with
the item will be available to the Company. All other costs are expensed as incurred.
An item of plant and equipment is derecognized upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Any related gain or loss is determined as the difference between the
net disposal proceeds or residual value, as applicable, and the carrying amount of the asset, and is recognized in the
Exploration and evaluation (“E&E”) expenditures and mineral properties
Exploration and evaluation expenditures are those costs required to find a mineral property and determine commercial
viability. E&E costs include costs to establish an initial mineral resource and determine whether Inferred mineral
resources can be upgraded to Measured and Indicated mineral resources and whether Measured and Indicated
mineral resources can be converted to Proven and Probable reserves.
E&E costs consist of, but are not limited to:
•
gathering exploration data through topographical and geological studies;
•
exploratory drilling, trenching and sampling;
•
determining the volume and grade of the resource;
•
test work on geology, metallurgy, mining, geotechnical and environmental; and
•
conducting engineering, marketing and financial studies.
Project costs in relation to these activities are expensed as incurred until such time that the project demonstrates
technical feasibility and commercial viability. Technical feasibility an commercial viability generally coincides with the
establishment of Proven and Probable mineral reserves. Upon demonstrating technical feasibility and commercial
viability, and subject to an impairment analysis, any such future costs, including costs incurred to increase Proven and
Probable reserves, are capitalized as development costs within mineral properties.
After initial recognition, mineral properties are valued at cost less accumulated depletion and any impairment losses. Costs
associated with acquiring a mineral property are capitalized as incurred. Upon commencement of commercial
production, mineral properties are depleted based on total recoverable reserves on a unit of production basis.
The Company reviews the estimated total recoverable reserves annually and when events and circumstances indicate
Impairment of non-financial assets
Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recorded immediately if the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash-generating units).
Fair value is the price that would be received from selling an asset or cash generating unit in an orderly transaction
between market participants at the measurement date. Costs to sell are incremental costs directly attributable to the
disposal of an asset or cash generating unit. Fair value less costs to sell is measured by estimating future after tax cash
flows using estimated future prices, mineral reserves and resources and operating and capital costs. All inputs used are
those that an independent market participant would consider appropriate.
Valueinuseisdeterminedasthepresentvalueofthefuturecashflowsexpectedtobederivedfromcontinuinguseofanassetor
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
133
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
cash generating unit in its present form. These estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash
generating unit for which estimates of future cash flows have not been adjusted.
Non-financial assets that have been impaired in prior periods are reviewed for possible reversal of the impairment
at each reporting date. When identified, a reversal of an impairment loss is recognized in the statement of income
Provisions
Asset retirement obligations
The Company recognizes a liability for an asset retirement obligation on long-lived assets when a present legal or constructive
obligation exists, as a result of past events, and the amount of the liability is reasonably determinable. Asset retirement
obligations are initially recognized and recorded as a liability based on estimated future cash flows discounted at a
risk-free rate. This is adjusted at each reporting period for changes to factors including the expected amount of cash
flows required to discharge the liability, the timing of such cash flows and the risk-free discount rate. Corresponding
amounts and adjustments are added to the carrying value of the related long-lived asset and depleted to operations
Current and deferred income tax
Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive
income or directly in equity. In this case the tax is also recognized in other comprehensive income or directly in equity,
respectively.
i.
Current tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted on the
statement of financial position date in the countries where the Company’s subsidiaries operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on
the basis of amounts expected to be paid to the tax authorities.
Deferred tax
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted
by the statement of financial position date and are expected to apply when the related deferred income tax
asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be utilized.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except
where the timing of the reversal of the temporary difference is controlled by the Company and it is probable
that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to
income taxes levied by the same taxation authority on either the taxable entity or different taxable entities
Share capital
Common shares are classified as equity.
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
134
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
Stock-based compensation
The Company has a stock-based compensation plan, under which the entity receives services from employees and
non-employees as consideration for equity instruments (options and share units) of the Company.
Stock options and share units granted to employees and non-employees are measured on the grant date. The fair value of the
employee and non-employee services received in exchange for the grant of the options and share units are recognized as an
expense. The total amount to be expensed is determined by reference to the fair value of the stock options and share
units granted and the vesting periods. The total expense is recognized over the vesting period, which is the period over
which all of the specified vesting conditions are to be satisfied.
As share units are expected to be settled in cash, the liability is remeasured at fair value at each reporting period and at
the date of settlement, with changes in fair value recognized as stock-based compensation expense in the consolidated
statements of income and comprehensive income in the period incurred.
The cash subscribed for the shares issued when the options are exercised is credited to share capital, net of any directly
Earnings per share
Basic earnings per share is computed by dividing the net income available to common shareholders by the weighted average
number of shares outstanding during the reporting period. Diluted earnings per share is computed similar to basic
earnings per share except that the weighted average shares outstanding are increased to include additional shares for the
assumed exercise of stock options, if dilutive. The number of additional shares is calculated by assuming that outstanding
stock options were exercised and that the proceeds from such exercises were used to acquire common stock at the
(o)
Comprehensive income
Comprehensive income is the change in the Company’s net assets that results from transactions, events and
circumstances from sources other than the Company’s shareholders and includes items that would not normally be
included in net profit such as derivative gains (losses) related to the Company’s own credit risk on designated financial
liabilities measured at fair value through profit or loss. The Company’s comprehensive income, components of other
comprehensive income (loss) and cumulative translation adjustments are presented in the consolidated statements of
income and comprehensive income and the statements of changes in equity.
Revenue recognition
Revenues are presented based on the location where the sale originated and recognized when all of the following
criteria are met:
•
Control has been transferred to the customer;
•
Neither continuing managerial involvement to the degree usually associated with ownership, nor
effective control over the goods sold, has been retained;
•
The amount of revenue can be reliably measured;
•
It is probable that the economic benefits associated with the sale will flow to the Company; and
•
The costs incurred or to be incurred in respect of the sale can be reliably measured.
These conditions are generally satisfied when title passes to the customer.
Doré sales
Revenues are recorded at the time of physical delivery, which is also the date that title of the gold and silver passes to
the customer. The sales price is fixed on the date of sale based on the spot price.
Concentrate sales
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
135
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
Based on the terms of concentrate sales contracts with independent smelting companies, revenues are recorded when
the concentrate is loaded on vessels for shipment to the customers, which is also the date that title passes to the
customer. Sales prices are provisionally set at that time based on the then market prices. Subsequent determination
of final gold prices can range from one to four months after shipment depending on the customer. For sales that are
provisionally priced at year end, an estimate of the adjustment to revenues and trade receivables is calculated based
on the expected month when the final gold price is forecast to be determined and the related forward price of gold at
(q)
New IFRS accounting standards and amendments
The following standards and interpretations, which may be applicable to the Company, have been issued but are not
yet effective as of December 31, 2025:
Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments
In May 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in
practice, and to include new requirements not only for financial institutions but also for corporate entities. These
amendments:
•
clarify the date of recognition and derecognition of some financial assets and liabilities, with a new
exception for some financial liabilities settled through an electronic cash transfer system;
•
clarify and add further guidance for assessing whether a financial asset meets the solely payments of
principal and interest (SPPI) criterion;
•
add new disclosures for certain instruments with contractual terms that can change cash flows (such
as some financial instruments with features linked to the achievement of environment, social and
governance targets); and
•
update the disclosures for equity instruments designated at FVOCI.
The amendments are effective for annual periods beginning on or after January 1, 2026 with early application
permitted, and are not expected to have a material impact on our financial statements.
IFRS 18 – Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements (IFRS 18), which replaces
IAS 1, Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by
requiring income and expenses to be presented into the three defined categories of operating, investing and financing,
and by specifying certain defined totals and subtotals. Where company-specific measures related to the income
statement are provided, IFRS 18 requires companies to disclose explanations around these measures, which are
referred to as management-defined performance measures. IFRS 18 also provides additional guidance on principles of
aggregation and disaggregation which apply to the primary financial statements and the notes. IFRS 18 will not affect
the recognition and measurement of items in the financial statements, nor will it affect which items are classified in
other comprehensive income and how these items are classified.
The standard is effective for reporting periods beginning on or after January 1, 2027, including for interim financial
statements. Retrospective application is required and early application is permitted. The Company is currently assessing
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
136
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
December 31, |
December 31, |
|
2025 |
2024 |
|
Trade receivables (a) |
$ 199,227 |
$ 155,948 |
VAT recoverable (b) |
42,534 |
58,028 |
Prepaid expenses and others |
18,340 |
19,579 |
$ 260,101 |
$ 233,555 |
(a)
Trade receivables represent the value of concentrate and doré sold as at period end for which the funds are not yet
received. Consistent with industry standards, concentrate sales generally have relatively long payment terms and
are not settled in full until two to five months after export.
Concentrate sales are first recorded based on provisional prices. For sales that are provisionally priced as at December
31, 2025, an adjustment is estimated and recorded using the forward gold price at year end for the future month
when the final gold price for each individual sale is expected to be determined. This adjustment resulted in an
increase of $33.8 million in trade receivables as of December 31, 2025 (December 31, 2024 - $5.1 million increase)
reflecting rising gold prices during the period.
Subject to submission of VAT claims and their acceptance by the applicable tax authorities, VAT paid in Ecuador by
the Company is being refunded or applied as a credit against taxes payable, based on the level of export sales in
any given month. Therefore, a portion of the VAT recoverable has been reclassified as current assets based on the
December 31, |
December 31, |
|
2025 |
2024 |
|
Ore stockpile |
$ 4,529 |
$ 8,254 |
Gold in circuit |
9,724 |
8,546 |
Doré and concentrate |
20,416 |
18,687 |
Materials and supplies |
58,213 |
52,723 |
$ 92,882 |
$ 88,210 |
As at December 31, 2025, the Company maintained a provision of $4.0 million (December 31, 2024 - $4.0 million) associated
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
137
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
| Furniture | ||||||
Cost | Construction | Mine and | Machinery and | Vehicles | and office | Total |
| in-progress | plant facilities | equipment | equipment | |||
Balance, January 1, | ||||||
| 2024 | $ 7,009 | $ 986,741 | $ 49,591 | $ 24,440 | $ 2,543 | $ 1,070,324 |
Additions | 38,363 | 47,629 | 1,086 | 423 | 2,730 | 90,231 |
Disposals and other | - | - | (1,465) | (1,561) | - | (3,026) |
Reclassifications | (6,128) | 6,128 | - | - | - | - |
Cumulative translation | ||||||
| adjustment | - | (1,057) | - | - | (12) | (1,069) |
Balance, December 31, | ||||||
| 2024 | 39,244 | 1,039,441 | 49,212 | 23,302 | 5,261 | 1,156,460 |
Additions | 49,238 | 23,338 | 4,261 | 2,706 | 1,614 | 81,157 |
Disposals and other | - | (290) | (271) | (2,165) | - | (2,726) |
Reclassifications | (49,376) | 49,376 | - | - | - | - |
Balance, December 31, | ||||||
| 2025 | $ 39,106 | $ 1,111,865 | $ 53,202 | $ 23,843 | $ 6,875 | $ 1,234,891 |
| Furniture | ||||||
| Accumulated depletion | Construction | Mine and | Machinery and | Vehicles | and office | Total |
| and depreciation | in-progress | plant facilities | equipment | equipment | ||
Balance, January 1, | ||||||
| 2024 | $ - | $ 306,896 | $ 24,669 | $ 19,583 | $ 280 | $ 351,428 |
Depletion and | ||||||
| depreciation | - | 102,883 | 6,530 | 1,884 | 831 | 112,128 |
Disposals and other | - | (866) | (1,561) | - | (2,427) | |
Cumulative translation | ||||||
| adjustment | - | (371) | - | - | (1) | (372) |
Balance, December 31, | ||||||
| 2024 | - | 409,408 | 30,333 | 19,906 | 1,110 | 460,757 |
Depletion and | ||||||
| depreciation | - | 101,835 | 6,588 | 1,678 | 1,775 | 111,876 |
Disposals and other | - | (22) | (177) | (2,165) | - | (2,364) |
Balance, December 31, | ||||||
| 2025 | $ - | $ 511,221 | $ 36,744 | $ 19,419 | $ 2,885 | $ 570,269 |
Net book value | ||||||
As at December 31, | ||||||
| 2024 | $ 39,244 | $ 630,033 | $ 18,879 | $ 3,396 | $ 4,151 | $ 695,703 |
As a December 31, 2025 | $ 39,106 | $ 600,644 | $ 16,458 | $ 4,424 | $ 3,990 | $ 664,622 |
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
138
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
Cost |
Fruta del Norte |
Balance, January 1, 2024 |
$ 160,028 |
Adjustments to restoration asset |
(1,677) |
Depletion |
(25,319) |
Balance, December 31, 2024 |
133,032 |
Adjustments to restoration asset |
- |
Depletion |
(22,888) |
Balance, December 31, 2025 |
$ 110,144 |
December 31, |
December 31, |
|
2025 |
2024 |
|
Accounts payable |
$ 15,201 |
$ 18,261 |
Accrued liabilities |
55,907 |
52,051 |
Accrued profit sharing to employees and royalties |
88,559 |
39,635 |
$ 159,667 |
$ 109,947 |
The stream loan credit facility (the “Stream Facility”) and the offtake derivative liability (the “Offtake”) were accounted
for as financial liabilities at fair value through profit or loss until the closing of their buy out from Newmont Corporation
(“Newmont”) on June 27, 2024 (the “Closing Date”) following payment of the first tranche of the purchase price of $180
million. The second and final tranche of $150 million was paid on September 30, 2024. The total buy out price of $330
million was comprised of the remaining unamortized principal balance of $94.4 million and finance expense of $235.6
million. The derivative adjustments during the year ended December 31, 2024 reflect the reversal of accumulated derivative
adjustments recorded on the Stream Facility since its inception in 2017.
Until the Closing Date, the Company made scheduled monthly payments under the Stream Facility totaling $35.8 million of
which $6.7 million was paid on account of principal; $3.7 million for accrued interest; and the remaining $25.4 million as
a finance expense. Following the buy out of the Stream Facility, the remaining balance of deferred transaction costs were
The Company’s reclamation provision relates to the rehabilitation of Fruta del Norte. The reclamation provision has been
calculated based on total estimated rehabilitation costs and discounted back to its present value. The pre-tax discount rate
and inflation rate are adjusted annually and reflect current market assessments.
At December 31, 2025, the Company applied a pre-tax discount rate of 9.4% (2024 – 9.7%) and an inflation rate of 1.0%
(2024 – 1.3%). The estimated total future liability for reclamation and remediation costs on an undiscounted basis and
adjusted for an estimate of future inflation is approximately $29.8 million (2024 – $30.7 million).
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
139
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
December 31, |
December 31, |
|
2025 |
2024 |
|
Balance, beginning of year |
$ 7,866 |
$ 8,722 |
Change in discount rate, amount, and timing of cash flows |
- |
(1,677) |
Accretion of liability component of obligations |
760 |
821 |
Balance, end of year |
$ 8,626 |
$ 7,866 |
Authorized:
•
Unlimited number of common shares without par value
•
Unlimited number of preference shares without par value
During the year ended December 31, 2025, the Company issued 252,592 common shares to Newmont Corporation
(“Newmont”), indirectly through its subsidiary Newcrest Canada Inc. (“Newcrest”), at a weighted average price of CAD$44.18
per share for total proceeds of $11.2 million. During the year ended December 31, 2024, 804,340 common shares were
issued to Newcrest at a weighted average price of CAD$22.40 per share for total proceeds of $13.1 million. These issuances
were completed in accordance with anti-dilution rights granted from an initial investment into the Company by Newcrest,
which was subsequently acquired by Newmont.
December 31, |
December 31, |
|
2025 |
2024 |
|
Net income |
$ 792,151 |
$ 426,050 |
Basic weighted average number of common shares outstanding |
241,033,793 |
239,312,029 |
Dilutive stock options |
1,476,592 |
1,414,639 |
Dilutive share units |
- |
699,657 |
Diluted weighted average number of common shares outstanding |
242,510,385 |
241,426,325 |
Income per common share: |
||
Basic |
$ 3.29 |
$ 1.78 |
Diluted |
3.27 |
1.76 |
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
140
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
Under an omnibus incentive plan (the “Omnibus Plan”) that allows for the reservation of a maximum 6% of the common
shares issued and outstanding for issuance at any given time, the Company may grant stock options, restricted share units
and deferred share units (collectively, the “Awards”). Subject to specific provisions under the Omnibus Plan, the eligibility,
vesting period, term, and number of Awards are granted at the discretion of the Company’s board of directors.
Recipients of share units granted and outstanding on a dividend record date are entitled to receive an award of additional
share units equal to the cash dividends declared and paid on the Company’s common shares (“Dividend Equivalent”).
Dividend Equivalents are calculated in accordance with the Omnibus Plan based on the number of share units held, the
dividend per share and the weighted average trading price of the Company’s shares on the TSX for the five days preceding
the date the dividend was paid. These additional share units are subject to the same terms and conditions as the underlying
share units.
(a)
Stock options
Stock options granted and outstanding under the Omnibus Plan have an expiry date of five years and vest over a period
of three or four years from date of grant. Stock options are exercisable into one common share of the Company at the
price specified in the terms of the option agreement.
During the year ended December 31, 2025, 148,200 stock options were granted to employees under the Omnibus
Plan. The fair value based method of accounting was applied to stock options on the date of grant using the Black-
Scholes option pricing model with the following weighted-average assumptions:
December 31, |
December 31, |
|
2025 |
2024 |
|
Risk-free interest rate |
2.65% |
3.16% |
Expected stock price volatility |
35.26% |
33.29% |
Expected life |
4.0 years |
3.7 years |
Expected dividends (CAD) |
$1.23 |
$0.55 |
Weighted-average fair value per option granted (CAD) |
$9.65 |
$3.77 |
A continuity summary of the stock options granted and outstanding under the Omnibus Plan is presented below:
| Year ended | Year ended |
|||
December 31, | December 31, |
|||
2025 | 2024 |
|||
Number of |
Weighted |
Number of |
Weighted |
|
stock options |
average |
stock options |
average |
|
exercise price |
exercise price |
|||
(CAD) |
(CAD) |
|||
Balance, beginning of period |
2,378,949 |
$ 11.87 |
3,594,969 |
$ 10.18 |
Granted |
148,200 |
40.49 |
350,900 |
16.07 |
Forfeited |
- |
- |
(112,167) |
16.02 |
Exercised 1 |
(963,425) |
11.41 |
(1,454,753) |
8.40 |
Balance outstanding, end of period |
1,563,724 |
$ 14.87 |
2,378,949 |
$ 11.87 |
Balance exercisable, end of period |
1,032,230 |
$ 11.14 |
1,523,442 |
$ 10.99 |
1
The weighted average share price on the exercise date for the stock options exercised during the year ended December 31, 2025 was CAD$55.08 (2024 - CAD$19.65).
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
141
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
The following table summarizes outstanding options at December 31, 2025:
| Outstanding options | ||||
Weighted average | ||||
| Range of | Number of | remaining | Weighted average | |
| exercise prices | options | contractual life | exercise price (CAD) | |
| (CAD) | outstanding | (years) | ||
$ | 9.79 to 10.72 | 723,762 | 0.73 | $ 10.05 |
$ | 10.73 to 29.53 | 689,149 | 2.44 | 14.36 |
$ | 29.54 to 98.65 | 150,813 | 4.17 | 40.30 |
1,563,724 | 1.82 | $ 14.87 | ||
The equity-settled share-based payment reserve includes the fair value of employee options as measured at grant date
and amortized over the period during which the employees become unconditionally entitled to the options. During
the year ended December 31, 2025, the Company recorded stock-based compensation expense of $1.0 million (2024
– $1.2 million) related to options.
(b)
Share units
Under the Omnibus Plan, the Company has granted restricted share units and deferred share units (collectively, “Share
Units”) to eligible employees and non-employee directors as presented below:
Restricted share units | Restricted | Deferred | |
with performance | |||
criteria | share units | share units | |
Balance at January 1, 2024 | 562,852 | 175,201 | 13,467 |
Granted | 240,871 | 132,180 | 30,934 |
Granted – Dividend Equivalent | 16,564 | 6,126 | 1,194 |
Forfeited | (56,876) | (15,823) | - |
Settled | (266,949) | (122,704) | - |
Balance at December 31, 2024 | 496,462 | 174,980 | 45,595 |
Granted | 235,632 | 51,260 | 15,031 |
Granted – Dividend Equivalent | 17,782 | 8,491 | 2,746 |
Forfeited | - | (793) | - |
Settled | (371,097) | (54,328) | - |
Balance at December 31, 2025 | 378,779 | 179,610 | 63,372 |
Share Units can be settled in common share or cash at the discretion of the Company’s board of directors and were
initially expected to be settled in shares. Starting December 31, 2024, to the extent permitted by the Company’s
omnibus incentive plan, Share Units are expected to generally settle in cash in future period and reclassified as
financial liabilities measured at fair value. As at December 31, 2025, all Share Units are accounted for as cash-settled
stock-based payments.
Restricted share units with performance criteria (“PSUs”)
PSUs are granted to eligible employees and vest three years from date of grant subject to continued employment and
certain performance conditions being met. The number of PSUs that vest are adjusted using a multiplier that is based
on total shareholder return by the Company’s shares over the three-year period relative to a peer group as defined by
the Company’s board of directors. Each vested PSU entitles the recipient to a payment of one common share or cash
at the discretion of the Company’s board of directors.
The fair value of PSUs was measured at each reporting date using Monte Carlo simulation and resulted in a weighted-
average fair value per unit of CAD$182.50 as at December 31, 2025 (2024 – CAD$32.09).
During the year ended December 31, 2025, the Company recorded stock-based compensation expense of $34.8 million
(2024 – $10.1 million) relating to PSUs and a liability of $36.1 million as at December 31, 2025 (2024 – $10.7 million).
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
142
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
Restricted share units without performance criteria (“RSUs”)
RSUs are granted to eligible employees and vest one to three years from date of grant subject to continued employment.
Each vested RSU entitles the recipient to a payment of one common share or cash at the discretion of the Company’s
board of directors.
The fair value of RSUs was measured at each reporting period using the 5-day volume weighted average share price
and resulted in a weighted-average fair value per unit of CAD$116.45 as at December 31, 2025 (2024 – CAD$31.09).
During the year ended December 31, 2025, the Company recorded stock-based compensation expense of $8.0 million
(2024 – $2.3 million) relating to RSUs and a liability of $8.7 million as at December 31, 2025 (2024 – $1.5 million)
Deferred share units (“DSUs”)
DSUs are granted to non-employee directors and do not vest until the end of service as a director of the Company. Each
vested DSU entitles the recipient to a payment of one common share or cash at the discretion of the Company’s board
of directors. Given DSUs are expected to generally settle in cash in future periods, outstanding DSUs were reclassified
as financial liabilities measured at fair value starting June 30, 2025.
Using the 5-day volume weighted average share price, fair value of DSUs was measured as at the December 31, 2025
with a weighted-average fair value per unit of CAD$116.45. For the year ended December 31, 2024, the fair value of
DSUs was measured on the date of grant with a weighted-average fair value per unit of CAD$18.86.
During the year ended December 31, 2025, the Company recorded stock-based compensation expense of $4.7 million
December 31,
December 31, |
December 31, December 31, |
|
2025 2025 |
2024 2024 |
|
Doré sales 1 |
$ 597,836 |
$ 423,550 |
Concentrate sales |
1,100,448 |
772,200 |
Gain (loss) on provisionally priced trade receivables |
84,656 |
(2,700) |
$ 1,782,940 |
$ 1,193,050 |
1
During the year ended December 31, 2024, $177.9 million of doré sales were sold under the Offtake to Newmont until the Closing Date of the Stream Facility
December 31,
December 31, |
December 31, December 31, |
|
2025 2025 |
2024 2024 |
|
Direct production costs |
$ 250,254 |
$ 244,373 |
Transportation |
27,762 |
21,372 |
Direct sales costs, including employee portion of profit sharing |
39,514 |
19,408 |
Change in inventories |
1,213 |
(1,626) |
$ 318,743 |
$ 283,527 |
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
143
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
December 31, |
December 31, |
|
2025 |
2024 |
|
Catering and camp expenses |
$ 3,720 |
$ 2,891 |
Concessions and land |
1,103 |
699 |
Mining supervision & control fees (1) |
3,231 |
- |
Development |
871 |
1,954 |
Drilling |
24,659 |
17,667 |
Environmental |
1,798 |
1,477 |
Geophysics |
1,775 |
2,006 |
Salaries and benefits |
8,031 |
6,204 |
Sampling and supplies |
11,450 |
7,027 |
Study and evaluation |
1,290 |
- |
Others |
1,595 |
1,243 |
$ 59,523 |
$ 41,168 |
1
Effective June 2025, the Government of Ecuador introduced the new mining supervision and control fee which is intended to fund oversight activities carried out by the
December 31, |
December 31, |
|
2025 |
2024 |
|
Corporate social responsibility |
$ 2,063 |
$ 2,119 |
Investor relations |
456 |
285 |
Office and general |
4,162 |
3,896 |
Professional fees |
2,370 |
2,284 |
Regulatory and transfer agent |
740 |
469 |
Salaries and benefits |
5,163 |
6,739 |
Special government levy (1) |
- |
1,913 |
Stock-based compensation |
48,460 |
15,734 |
Travel |
1,003 |
1,092 |
$ 64,417 |
$ 34,531 |
1
Key management compensation
Key management includes executive officers and directors of the Company. The compensation paid or payable to key
management for employee services, including amounts paid to certain executive officers following the end of their
employment, during the year ended December 31 is shown below.
December 31, |
December 31, |
|
2025 |
2024 |
|
Salaries, bonuses and benefits |
$ 5,240 |
$ 5,226 |
Stock-based compensation |
33,971 |
4,076 |
$ 39,211 |
$ 9,302 |
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
144
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
(b)
Other related party transactions
During the year ended December 31, 2025, the Company incurred $0.9 million (2024 – $1.3 million), primarily relating
to office rental and related services provided by a company associated with a director of the Company. In addition, the
Company entered into transactions with its largest shareholder, Newmont, during the years ended December 31, 2025
(a)
Income tax expense
Current income tax expense is generated from net income for tax purposes in Ecuador relating to operations at Fruta
del Norte. In addition to corporate income taxes in Ecuador which are levied at a rate of 22% and dividend withholding
taxes levied at a rate of 5% related to the anticipated portion of net income distributed from Ecuador, included in
current income tax expense is the portion of profit sharing payable to the Government of Ecuador which is calculated
at a rate of 12% of net income for tax purposes. The employee portion of profit sharing, calculated at a rate of 3% of
net income for tax purposes, is considered an employment benefit and included in operating costs.
The rates used in Ecuador differ from the amount that would result from applying the Canadian federal and provincial
income tax rates to net income before tax. These differences result from the following items:
December 31, |
December 31, |
|
2025 |
2024 |
|
Net income before tax |
$ 1,123,542 |
$ 634,117 |
Canadian federal and provincial income tax rates |
27.00% |
27.00% |
Expected income tax expense based on the above rates |
303,356 |
171,212 |
Increase (decrease) due to: |
||
Differences in foreign tax rates |
(49,339) |
(4,731) |
Non-deductible costs |
19,286 |
7,130 |
Withholding taxes (current and deferred) |
38,930 |
31,681 |
Losses and temporary differences for which an income tax asset has not |
||
been recognized |
14,945 |
3,951 |
Non-taxable portion of capital gains |
- |
(1,176) |
Global minimum top-up tax |
4,213 |
- |
Income tax expense |
$ 331,391 |
$ 208,067 |
(b)
Deferred income taxes
Deferred tax assets (liabilities) have been recognized on the statement of financial position as follows:
December 31, |
December 31, |
|
2025 |
2024 |
|
Inventories |
$ (5,646) |
$ (3,697) |
Mineral properties and property, plant and equipment |
(99,789) |
(137,070) |
Long-term debt |
105,444 |
65,018 |
Trade receivables and other current assets |
18,211 |
10,475 |
Accounts payable and accrued liabilities |
3,017 |
2,430 |
Other |
(10,600) |
(21,500) |
$ 10,637 |
$ (84,344) |
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
145
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
Deductible temporary differences for which no deferred taxes assets have been recognized are as follows:
December 31, |
December 31, |
|
2025 |
2024 |
|
Non-capital losses - Canada |
$ 27,760 |
$ 24,205 |
Net-capital losses - Canada |
- |
5,192 |
Mineral properties and property, plant and equipment |
66,860 |
66,866 |
Other |
61,008 |
13,045 |
$ 155,628 |
$ 109,308 |
As at December 31, 2025, the Company has the following tax losses which may be used to reduce future taxable
income:
Year of expiry |
Canada |
2026 |
$ - |
2027 |
- |
2028 |
- |
2029 |
- |
2030 and onwards |
27,760 |
Total |
$ 27,760 |
(c)
OECD Pillar Two
Effective January 1, 2025, the Company became subject to the OECD Pillar Two model rules as two out of the last four year’s
revenues exceeded €750 million. Pillar Two legislation was enacted in Canada effective January 1, 2024 and Singapore
effective January 1, 2025. Under the legislation, the Company is liable to pay a top-up tax for the difference between the
GloBE effective tax rate for each jurisdiction and the 15% minimum rate. The Company has effective tax rates that exceed
15% in all jurisdictions in which it operates, except for one jurisdiction. The Company has performed an analysis of the
Cash and cash equivalents are comprised of the following:
December 31, |
December 31, |
|
2025 |
2024 |
|
Cash |
$ 410,068 |
$ 224,783 |
Short-term investments |
220,113 |
124,417 |
$ 630,181 |
$ 349,200 |
Other supplemental cash information:
December 31, |
December 31, |
|
2025 |
2024 |
|
Income taxes paid (1) |
$ 312,637 |
$ 136,913 |
Change in accounts payable and accrued liabilities |
||
related to: |
||
Acquisition of property, plant and equipment |
(4,820) |
7,833 |
1
Effective January 1, 2024, the Company is subject to monthly income tax instalment payments in Ecuador using a rate published by the tax authorities in Ecuador based
on the previous year’s tax return. During the year ended December 31, 2025, in addition to monthly corporate income tax instalment payments, the Company remitted
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
146
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
whose operating results are regularly reviewed by a chief operating decision maker to make resource allocation decisions
and to assess performance. The Chief Executive Officer is responsible for allocating resources and reviewing operating
The Company’s primary business activity is the Fruta del Norte operating mine in Ecuador where all revenues originate.
Materially all of the Company’s non-current assets and non-current liabilities relate to Fruta del Norte. In addition, the
Company conducts exploration activities and maintains a number of concessions in Ecuador outside of Fruta del Norte.
The following are summaries of the Company’s current and non-current assets, current and non-current liabilities, and
income from mining operations:
Exploration |
Corporate and |
|||
Fruta del Norte |
activities |
other |
Total |
|
As at December 31, 2025 |
||||
Current assets |
$ 640,673 |
$ 585 |
$ 341,906 |
$ 983,164 |
Non-current assets |
803,373 |
90 |
531 |
803,994 |
Total assets |
1,444,046 |
675 |
342,437 |
1,787,158 |
Current liabilities |
354,265 |
4,798 |
29,447 |
388,510 |
Non-current liabilities |
8,626 |
- |
25,893 |
34,519 |
Total liabilities |
362,891 |
4,798 |
55,340 |
423,029 |
For the year ended December 31, 2025 |
||||
Revenues |
1,782,940 |
- |
- |
1,782,940 |
Operating expenses |
(318,743) |
- |
- |
(318,743) |
Royalty expenses |
(102,819) |
- |
- |
(102,819) |
Depletion and depreciation |
(135,041) |
- |
- |
(135,041) |
Income from mining operations |
1,226,337 |
- |
- |
1,226,337 |
As at December 31, 2024 |
||||
Current assets |
$ 446,585 |
$ 166 |
$ 227,708 |
$ 674,459 |
Non-current assets |
852,348 |
78 |
596 |
853,022 |
Total assets |
1,298,933 |
244 |
228,304 |
1,527,481 |
Current liabilities |
204,667 |
1,478 |
9,370 |
215,515 |
Non-current liabilities |
70,710 |
- |
24,957 |
95,667 |
Total liabilities |
275,377 |
1,478 |
34,327 |
311,182 |
For the year ended December 31, 2024 |
||||
Revenues |
1,193,050 |
- |
- |
1,193,050 |
Operating expenses |
(283,527) |
- |
- |
(283,527) |
Royalty expenses |
(69,158) |
- |
- |
(69,158) |
Depletion and depreciation |
(136,979) |
- |
- |
(136,979) |
Income from mining operations |
703,386 |
- |
- |
703,386 |
The Company generated 76% of its revenue from four major customers during the year ended December 31, 2025 (2024
– 69% from four major customers). However, the Company is not economically dependent on these customers as gold and
Fair value of financial instruments
The Company’s financial instruments include cash, cash equivalents and certain receivables, which are
categorized as financial assets at amortized cost, and accounts payable and accrued liabilities, which are
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
147
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
categorized as financial liabilities at amortized cost. The fair value of these financial instruments approximates their
carrying values due to the short-term nature of these instruments. Further, provisionally priced trade receivables of
$199.2 million (December 31, 2024 - $156.0 million) are measured at fair value using quoted forward market prices
(Fair value hierarchy level 2).
Fair value measurements and hierarchy
IFRS Accounting Standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities and the lower priority to unobservable inputs. The three levels of the fair value hierarchy are as follows:
Level 1:
Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability
to access at the measurement date.
Level 2:
Inputs that are observable, either directly or indirectly, for substantially the full term of the asset or
liability.
Level 3:
Financial risk management
The Company’s financial instruments are exposed to a variety of financial risks by virtue of its activities or by their
nature.
Lundin Gold is a Canadian company, with foreign operations in Ecuador. Revenues generated and expenditures incurred
in Ecuador are primarily denominated in U.S. dollars. However, equity capital, if needed, is typically raised in Canadian
dollars. As such, the Company is subject to risk due to fluctuations in the exchange rates of foreign currencies. Although
the Company does not enter into derivative financial instruments to manage its exposure, the Company tries to manage
this risk by maintaining most of its cash in U.S. dollars. Based on this exposure, a 2% change in the U.S. dollar exchange
Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its
contractual obligations. The majority of the Company’s cash is held in large financial institutions with a high investment
grade rating. The Company is also subject to credit risk associated with its trade receivables. The Company manages
this risk by only selling to reputable customers with strong financial statements.
Concentration of credit risk
Cash and cash equivalents are held with high quality financial institutions. Substantially all of the Company’s cash and
cash equivalents held with financial institutions exceed government-insured limits. The Company has established a
treasury policy that seeks to minimize its credit risk by entering into transactions with investment grade creditworthy
and reputable financial institutions and by monitoring the credit standing of those financial institutions. The Company
Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. Cash flow
forecasting is performed regularly to monitor the Company’s liquidity requirements to ensure it has sufficient cash to
always meet its operational needs. In addition, management is actively involved in the review, planning and approval
of significant expenditures and commitments.
The maturities of the Company’s current liabilities are due to be settled within one year, and other non-current
liabilities are due to be settled within two to three years. As at December 31, 2025, the Company’s cash and cash
equivalent
LUNDIN GOLD INC.
Notes to the consolidated financial statements as at December 31, 2025
148
(All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Tables are expressed in thousands of U.S. dollars, except share and per share amounts)
The Company is subject to commodity price risk from fluctuations in the market prices of gold and silver. Commodity
price risks are affected by many factors that are outside the Company’s control including global or regional consumption
patterns, the supply of and demand for metals, speculative activities, the availability and costs of substitutes, inflation, and
political and economic conditions. The Company has not hedged the price of any commodity at this time.
The fair value of a portion of the Company’s trade receivables are impacted by fluctuations of commodity prices. Based
on this exposure, an increase or decrease of 5% in gold and silver prices would increase or decrease the fair value of the
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern
and operate Fruta del Norte and to maintain a flexible capital structure which optimizes the cost of capital at an acceptable
risk while continuing to provide a return to shareholders through dividends.
In the management of capital, the Company considers items included in shareholders’ equity. The Company manages the
capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the
Company’s assets. In order to maintain or adjust the capital structure, the Company may choose to attempt to issue new
shares or debt instruments, acquire or dispose of assets, or to bring in joint venture partners.
In order to facilitate the management of its capital requirements, the Company prepares annual budgets that are updated
as necessary depending on various factors, including successful capital deployment and general industry conditions. The
Significant capital and other expenditures contracted as at December 31, 2025 but not recognized as liabilities are as
follows:
Capital |
||
| expenditures |
Other |
|
2026 |
$ 25,785 |
$ 476 |
2027 |
- |
476 |
2028 onward |
- |
5,319 |
Total |
$ 25,785 |
$ 6,271 |
The Company’s sales are subject to a 5% net smelter royalty payable to the Government of Ecuador and a 1% net revenue
2025 Annual Report
149
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Lundin Gold Inc.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial
position of Lundin Gold Inc. and its subsidiaries (together, the Company) as at December 31, 2025 and 2024, and its
financial performance and its cash flows for the years then ended in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).
What we have audited
The Company’s consolidated financial statements comprise:
•
the consolidated statements of financial position as at December 31, 2025 and 2024;
•
the consolidated statements of income and comprehensive income for the years then ended;
•
the consolidated statements of changes in equity for the years then ended;
•
the consolidated statements of cash flows for the years then ended; and
•
the notes to the consolidated financial statements, comprising material accounting policy information and
other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities
under those standards are further described in the
Auditor’s responsibilities for the audit of the consolidated financial
statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the
consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these
requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements for the year ended December 31, 2025. These matters were addressed in the context
of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
PricewaterhouseCoopers LLP
PwC Place, 250 Howe Street, Suite 1400
Vancouver, British Columbia, Canada V6C 3S7
T.: +1 604 806 7000, F.: +1 604 806 7806
Fax to mail: [email protected]
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
2025 Annual Report
150
Key audit matter
How our audit addressed the key audit matter
Revenue recognition
Refer to note 3 – Summary of material accounting policies
to the consolidated financial statements.
The Company recorded $1.8 billion of revenue for doré
and concentrate sales during the year ended December
31, 2025. Doré revenues are recorded at the time of
physical delivery, which is also the date that title of the
gold and silver passes to the customer. The sales price
is fixed on the date of sale based on the spot price.
Concentrate revenues are recorded when the concentrate
is loaded on vessels for shipment to the customers,
which is also the date that title passes to the customer.
Sales prices are provisionally set at that time based on
the then market prices. Subsequent determination of
final gold prices can range from one to four months after
shipment, depending on the customer.
We considered this a key audit matter due to (i) the
significance of the revenue balance and (ii) the high degree
of audit effort in performing procedures related to the
Company’s revenue recognition.
Our approach to addressing the matter included the
following procedures, among others:
•
Tested the revenue recognized for a sample of
revenue transactions, which included the following:
•
Agreed shipping and pricing terms to the sales
contracts.
• Inspected
third
party
delivery
or
loading
evidence.
•
Agreed doré sales price to third party evidence.
• Recalculated concentrate sales price using
market reference prices.
• Confirmed a sample of outstanding customer
invoice balances as of December 31, 2025 and,
for confirmations not returned, obtained and
inspected source documents such as invoices,
delivery or loading evidence, and subsequent
cash receipts.
Other information
Management is responsible for the other information. The other information comprises the Management’s Discussion
and Analysis, which we obtained prior to the date of this auditor’s report and the information, other than the consolidated
financial statements and our auditor’s report thereon, included in the 2025 Annual Report, which is expected to be
made available to us after that date.
Our opinion on the consolidated financial statements does not cover the other information and we do not and will not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard. When we read the information, other than the consolidated financial
statements and our auditor’s report thereon, included in the 2025 Annual Report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of management and those charged with
governance for the consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated
financial statements
2025 Annual Report
151
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
•
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
•
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Company as a basis for forming an opinion on the
consolidated financial statements. We are responsible for the direction, supervision and review of the audit
work performed for purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Eric Talbot.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants
Vancouver, British Columbia
February 19, 2026
www.lundingold.com
www.frutadelnorte.com
L
undin Gold Inc.
1055 Dunsmuir Street, Suite 2800
Vancouver, Brish Columbia V7X 1L2
Telephone: +1 604 689 7842
Toll-free: +1 888 689 7842
Aurelian Ecuador S. A., a subsidiary of Lundin Gold Inc.
Av. Amazonas N37-29 y UNP, Edif. Eurocenter Piso 5
Quito, Pichincha, Ecuador
Telephone: +593 2 299 6400
Calle 1ro de Mayo and 12 de Febrero
Los Encuentros, Zamora Chinchipe, Ecuador
CORPORATE HEAD OFFICE
REGIONAL HEAD OFFICE
COMMUNITY OFFICE
CORPORATE DEVELOPMENT &
INVESTOR RELATIONS
i
COMMUNICATION