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(Sharecast News) - Metals Exploration said on Thursday that first-quarter pre-tax free cash flow fell to $29.4m from $40.0m in the prior quarter, as lower production at its Runruno mine in the Philippines offset a sharp rise in realised gold prices, while construction at its La India project in Nicaragua continued ahead of schedule.
The AIM-traded gold producer reported first-quarter revenue of $52.9m, down from $63.9m in the fourth quarter of 2025, after gold sales fell to 10,821 ounces from 16,009 ounces.
It said the average realised gold price rose to $4,885 an ounce from $3,995.
Cash at bank stood at $36.5m as at 31 March.
At Runruno, total ore and waste mined increased to 2.94m tonnes from 2.79m tonnes, although ore mined fell to 396,000 tonnes from 710,000 tonnes.
Gold production dropped to 10,505 ounces from 15,156 ounces, with processing based on 461,000 tonnes at a head grade of 0.92 grams per tonne, compared with 538,000 tonnes at 1.04 grams per tonne in the previous quarter.
Gold recovery declined to 77.1% from 84.1%, while all-in sustaining costs rose to $2,067 an ounce from $1,584, reflecting lower production as the mine approaches the end of its life.
The company cut its full-year 2026 production guidance for Runruno to 40,000 to 48,000 ounces and raised its AISC forecast to $1,700 to $2,000 an ounce.
It said the downgrade reflected disruption to the BIOX circuit caused by artisanal cyanide contamination in stages 5 and 6, a downgrade to the geological model following grade control drilling, and the impact of historical illegal small-scale mining activity on recoverable ounces.
Metals Exploration said a remediation programme had been completed and the BIOX circuit had since returned to normal production levels.
At La India, construction was 40% complete at the end of the quarter and remained within the revised budget and ahead of schedule, with process plant foundations, general infrastructure and bulk earthworks all progressing well.
The company said first gold production remained on track for December this year, and noted that a 25-year renewal of the main mining concession, effective from January 2027, was received on 27 March.
Exploration results from La India highlighted strong underground and open-pit intercepts, including 31.18 metres at 4.37 grams per tonne gold from 181.6 metres at La India South Underground, with higher-grade intervals of 0.48 metres at 138.4 grams per tonne and 1.93 metres at 21.3 grams per tonne.
At La India North Open Pit, drilling extended the mineralised zone by at least 30 metres on strike, while at Cacao two drillholes intersected significant mineralisation at depth, including 12.7 metres at 3.52 grams per tonne gold from 270.8 metres.
The company said drilling at Dupax in the Philippines did not identify a near-term production opportunity that could support repurposing of the Runruno processing plant, and no further short-term work was planned there.
"The quarter was a period of mixed success for Metals Exploration, with significant progress made in the construction, development and exploration of La India, coupled with some challenging developments from Runruno," said chief executive Darren Bowden.
He added that "development of the La India Project continued with momentum, with construction now 40% complete and running ahead of schedule," while the revised Runruno guidance reflected BIOX disruption, downgraded ore tonnage and grades, and illegal small-scale mining in high-grade areas.
At 1508 BST, shares in Metals Exploration were down 6.04% at 13.91p.
Reporting by Josh White for Sharecast.com.
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