REG - Metals Exploration - Quarterly Update to 31 March 2026

Metals ExplorationAnnouncement

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RNS Number : 5617B  Metals Exploration PLC  23 April 2026

Metals Exploration Plc

 3(rd) Floor,

22a St James Square, London, SW1Y 4JH

Email: info@metalsexploration.com (mailto:info@metalsexploration.com)

 

 

METALS EXPLORATION PLC

 

Quarterly Update to 31 March 2026

 

Metals Exploration plc (AIM: MTL) ("Metals Exploration", the "Company" or the
"Group"), a gold production, development and exploration company with assets
in the Philippines and Nicaragua, is pleased to announce its unaudited
quarterly results for Q1 2026 (the "Quarter").

 

Finance

·      Q1 2026 positive pre-tax free cash flow of US$29.4 million (Q4
2025: US$40.0 million).

·      Q1 2026 gold revenue of US$52.9 million (Q4 2025: US$63.9
million).

·      Q1 2026 gold sales of 10,821 ounces ("oz") sold at an average
realised gold price of US$4,885 per ounce ("/oz") (Q4 2025: 16,009 oz sold at
an average US$3,995 /oz).

·      Cash in bank of US$36.5 million at 31 March 2026.

 

Runruno - Mining Operations

·      Q1 2026 mining production of ore and waste was 2.94 million
tonnes ("Mt") (Q4 2025: 2.79 Mt), with a total of 396 thousand tonnes ("Kt")
of ore mined in Q1 2026 (Q4 2025: 710 Kt).

 

Runruno - Processing Operations

·      Q1 2026 gold production of 10,505 oz recovered from 461 Kt at a
head grade of 0.92 grammes per tonne ("g/t") (Q4 2025: 15,156 oz recovered
from 538 Kt at a head grade of 1.04 g/t).

·      Q1 2026 all-in-sustaining-cost ("AISC") of US$2,067 /oz (Q4 2025:
US$1,584 /oz) driven by lower production levels as the mine moves towards end
of life.

·      Q1 2026 gold recovery of 77.1% (Q4 2025: 84.1%).

 

FY2026 Revised Runruno Production Guidance

·      Revised FY2026 gold production guidance of 40,000 - 48,000 oz,
reflecting BIOX circuit disruption from artisanal cyanide contamination in
Stages 5 and 6, a geological model downgrade following grade control drilling,
and the impact of historical illegal small scale mining activity on
recoverable ounces, as detailed below.

·      Revised FY2026 AISC forecast for Runruno gold production:
US$1,700 - US$2,000 /oz due to lower production levels.

·      A structured remediation programme has been completed, as further
explained below, and the BIOX circuit has since recovered and is currently
operating at normal production levels.

·      No formal guidance is provided for the La India gold project
which remains on track to commence gold production in December 2026. Guidance
will be provided for FY2027.

Development - La India, Nicaragua

·      Overall construction continues to be within the revised budget
and ahead of schedule at 40% complete. Refer to the Company's announcement
dated 30 March 2026
(https://irtools.co.uk/42/story/a15341ca-8375-47c4-8d08-13b1bab84b34) .

·      Process plant foundations, general infrastructure and bulk
earthworks are all progressing ahead of schedule.

·      A 25-year renewal, effective from January 2027, of the main La
India mining concession was received on 27 March 2026.

Exploration - La India Nicaragua

·      Geotech drilling at La India South Underground returned the
strongest intercept of the programme, with drillhole LIGT612 intersecting
31.18 metres at 4.37 g/t gold ("Au") from 181.6 metres, including a high-grade
interval of 0.48 metres at 138.4 g/t Au and 1.93 metres at 21.3 g/t Au -
confirming high-grade mineralisation at depth.

·      Step-out drilling at the La India Phase 1 North Open Pit extended
the known mineralised zone by at least 30 metres on strike, with three
drillholes returning consistent near-surface intercepts:

o  LIDC620: 9.58 metres at 1.68 g/t Au from surface

o  LIDC621: 10.55 metres at 1.11 g/t Au from surface

o  LIDC626: 6.70 metres at 1.65 g/t Au, including 1.50 metres at 5.33 g/t Au

·      Exploration drilling at Cacao successfully defined a high-grade
ore shoot, with two drillholes intersecting significant mineralisation at
depth:

o  CCRD043: 12.7 metres at 3.52 g/t Au from 270.8 metres, including 2.0
metres at 19.7 g/t Au

o  CCRD044: 10.7 metres at 1.92 g/t Au from 233.6 metres, including 0.52
metres at 21.3 g/t Au

·      Across many targets, the drilling campaign has identified several
new zones of gold mineralisation, with Cacao and La India North extension
demonstrating the potential to host additional high-grade resources.

Exploration - Dupax, Philippines

·      Drill programme did not outline a near term production
opportunity to enable re-purposing of the Runruno processing plant. No further
work is planned at Dupax in the short-term and other options to repurpose the
processing plant are being considered.

Darren Bowden, CEO of Metals Exploration, commented:

 

"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. Despite the
issues faced in terms of lower production, gold revenue generated during the
Quarter was US$52.9 million, resulting in free cash flow of US$29.4 million.

 

"Development of the La India Project continued with momentum, with
construction now 40% complete and running ahead of schedule. Key activities,
including process plant foundations, bulk earthworks and site infrastructure,
are progressing well. Construction milestones achieved include the award of
major installation contracts, commencement of tailings storage facility works,
progress on the 138 kV substation in collaboration with ENATREL, and the
stockpiling of commissioning ore ahead of schedule. In addition, we were
pleased to have secured a 25‑year renewal of the main mining concession
effective from January 2027.

 

"While the La India project budget increased modestly by 4% to US$171 million
due to higher power infrastructure costs, first gold production remains on
track for December 2026. The project remains fully funded through Runruno cash
flow, supported by our undrawn gold pre‑pay facility. Additionally, during
the Quarter, over 1.2 million work hours were completed with no lost time
injuries, reflecting our strong safety culture.

 

"The exploration results at La India continue to demonstrate meaningful upside
potential beyond our current 12.5-year mine life. The identification of a
high-grade ore shoot at Cacao, alongside continued step-out success at the
North Open Pit, confirms our view that this district remains significantly
underexplored. The recent granting of four new concessions - including the La
Grecia project - further reinforces this view and materially expands our
exploration pipeline. We will continue to invest in exploration with the
objective of extending mine life and delivering long-term value for
shareholders.

 

"The revision to our FY2026 Runruno production guidance reflects three
factors: BIOX circuit disruption from contaminated ore linked to historical
illegal mining; downgraded ore tonnage and grades following detailed
grade-control drilling, which revealed greater structural complexity in the
Balcony lodes than modelled; and selective illegal small-scale mining in
high-grade areas, which has disproportionately impacted gold ounces. I am
pleased to report the BIOX circuit is now operating normally which will assist
recoveries.

 

"We continue to extract maximum value from Runruno to fund the development of
La India, which once in production, will deliver approximately double
Runruno's current production rate, strengthening our status as a highly
profitable gold producer delivering value for its shareholders.

 

"As we approach first production in December 2026, the Company's focus is on
developing La India, and I look forward to keeping shareholders up to date
with our progress as we reach the necessary operational milestones to achieve
this. Thank you for your continued support."

 

 

Runruno Production and Finance Summary

 

 Runruno Project Report                         Quarter    Quarter        FY 2026    FY 2025
 FY 2026                                        Actual     Actual         Actual     Actual
 PHYSICALS                      Units           Q1 2026    Q1 2025        3 Months   3 Months
 Mining
 Ore Mined                      Tonnes          396,064    503,463        396,064    503,463
 Waste Mined                    Tonnes          2,547,538  2,432,347      2,547,538  2,432,347
 Total Mined                    Tonnes          2,943,602  2,935,810      2,943,602  2,935,810
 Au Grade Mined                 g/tonne         1.07       1.69           1.07       1.69
 Strip Ratio                                    6.06       4.79           6.06       4.79
 Processing
 Ore Milled                     Tonnes          461,049    537,233        461,049    537,233
 Au Grade                       g/tonne         0.92       1.34           0.92       1.34
 S(2) Grade                     %               1.05       1.16           1.05       1.16
 Au Milled (contained)          Ounces          13,621     23,139         13,621     23,139
 Recovery                       %               77.1       90.7           77.1       90.7
 Au Recovered/Poured            Ounces          10,505     20,992         10,505     20,992
 Sales
 Au Sold                        Ounces          10,821     18,219         10,821     18,219
 Au Price                       US$/oz          4,885      2,661          4,885      2,661
 FINANCIALS (Unaudited)
 Revenue
 Gold Sales                     (US$000's)      52,856     48,476         52,856     48,476
 Operating Costs - Summary
 Mining                         (US$000's)      5,198      4,790          5,198      4,790
 Processing                     (US$000's)      7,065      8,463          7,065      8,463
 G&A                            (US$000's)      2,174      3,882          2,174      3,882
 Total Operating Costs          (US$000's)      14,437     17,134         14,437     17,134
 Excise Duty                    (US$000's)      3,717      1,952          3,717      1,952
 UK/Philippine G&A              (US$000's)      3,850      3,972          3,850      3,972
 Total Direct Production Costs  (US$000's)      22,004     23,058         22,004     23,058
 Net Cash Income                (US$000's)      30,852     25,418         30,852     25,418
 Total Capital Costs            (US$000's)      1,423      1,881          1,423      1,881
 Total non-cash costs           (US$000's)      9,688      16,233         9,688      16,233
 Pre-tax Free Cashflow          (US$000's)      29,429     23,536         29,429     23,536
 Cash Cost / oz Sold - C1       US$/oz          1,236      875            1,236      875
 Cash Cost / oz Sold - AISC(1)  US$/oz          2,067      1,303          2,067      1,303

 

Note 1: AISC includes all UK Corporate costs. It excludes costs directly
related to the Nicaraguan assets.

 

 

Runruno Operations

 

Revised FY2026 Production guidance

 

Gold production at Runruno during Q1 2026 has been adversely affected by three
operational and geological factors, each of which is described below. The
combined effect of these factors has resulted in a revision to the Company's
FY2026 production guidance to 40,000 - 48,000 oz, as set out in the table at
the end of this section.

1.    Process Plant Performance - BIOX Circuit Disruption

Metallurgical recovery and overall plant performance has been materially
impacted by repeated interruptions to the BIOX circuit. The BIOX process uses
bacteria to oxidise the iron and sulphur in pyrite, thereby liberating
refractory gold that would not otherwise be recoverable through conventional
processing.

Following the commencement of mining in Stages 5 and 6 of the open pit, ore
processed through the BIOX circuit was found to contain toxic elements that
inhibit bacterial activity and therefore reducing sulphide oxidation. Toxicity
has been attributed to cyanide contamination, most likely originating from
legacy small-scale mining activity conducted in the extensive network of
illegal tunnels within the Stage 5 and Stage 6 ore body. This contamination
caused several temporary suspensions of the BIOX circuit and significantly
reduced gold output during the Quarter.

The Company has implemented a structured remediation programme, comprising:
(i) systematic toxicity testing of ore samples prior to processing; (ii)
blending protocols to ensure contaminated ore is diluted with sufficient clean
ore; and (iii) laboratory trials using hydrogen peroxide as a detoxification
agent, in collaboration with global processing expert Metso Corporation, with
whom production data from the affected period has been shared for independent
evaluation and advice.

The BIOX circuit has since recovered and is currently operating at normal
production levels, processing ore on a 50:50 blend of clean and affected
material.

 

2.    Geological Model Downgrade - Ore Tonnage and Grade Reduction

The most recent JORC compliant ore reserve statement was published in 2021 and
was based on widely spaced exploration drill holes. Reserve estimates for the
first four stages of the mine proved reasonably reliable, reflecting the thick
and laterally continuous nature of the M lodes mined in those stages.

Stages 5 and 6 target a fundamentally different geological domain: the thin,
flat-lying Balcony lodes. The 2021 resource model predicted these lodes to be
continuous with no major structural faulting. Resource definition drilling
conducted in 2023 and 2024 was limited in density due to restricted land
access and steep mountainous topography and therefore did not yield sufficient
data to revise the model at that time.

With pre-strip mining of Stages 5 and 6 now complete, grade control drilling
has been able to define the ore body in detail for the first time. This work
has revealed a structural setting significantly more complex than previously
modelled: the Balcony lodes have been displaced by numerous faults that were
not identified in prior drilling campaigns, resulting in a reduction in both
ore tonnage and grade relative to the 2021 reserves estimate.

 

3.    Impact of Illegal Small-Scale Mining Activity

Small-scale miners have been active in and around the Runruno area for
decades. Illegal mining activity in the Stage 5 and Stage 6 zones continued
after FCF Minerals commenced production at Runruno, resulting in an extensive
network of subsurface tunnels, concentrated particularly within the Balcony
lodes of Stage 5.

These illegal operators demonstrated a systematic focus on the highest-grade
portions of the ore body. The full extent of mined voids can only be
determined as tunnels are exposed during open pit operations and confirmed
through grade control and blast hole drill interceptions. Void models are
constructed as this information becomes available, and estimated gold losses
are incorporated into short term mine plans.

Whilst the volumetric ore loss attributable to illegal mining typically
represents between 1% and 5% of total ore, the ounce loss is
disproportionately higher given that tunnelling was concentrated in the
highest-grade zones.

 

Revised FY2026 Forecast

The combined effect of the three factors described above underpins the
revision to the Company's FY2026 production guidance. The table below
summarises the key physical parameters against the original FY2026 budget:

 

                  Budgeted  Revised Forecast  Variance
 Total Mined      8.36 Mt   10.04 Mt          1.67 Mt
 Ore Milled       2.27 Mt   2.13 Mt           (136.5 Kt)
 Au Grade Milled  1.07 g/t  0.90 g/t          (0.17 g/t)
 Recovery         81.5%     75.9%             (5.65%)

 

 

Finance

 

Q1 2026 recorded gold sales of US$52.9 million (Q4 2025: US$63.5 million), at
an average realised gold price of US$4,885 /oz (Q4 2025: average gold price of
US$3,995 /oz); producing positive pre-tax free cash flow of US$29.4 million
(Q4 2025: US$40.0 million).

 

The Company's cash holdings at 31 March 2026 were US$36.5 million (31 December
2025: US$41.6 million). The Group has no drawn debt.

 

Mining Operations

 

Mining production of ore and waste for Q1 2026 was slightly above management's
forecast at 2.94 Mt (Q4 2025: 2.79 Mt). During Q1 2026, a total of 396 Kt of
ore was mined (Q4 2025: 710 Kt).

 

Process Plant

 

Gold produced during Q1 2026 was 10,505 oz (Q4 2025: 15,156 oz) from ore
milled in Q1 2026 of 461 Kt (Q4 2025: 538 Kt), at an AISC of US$2,067 /oz (Q4
2025: US$1,584 /oz). Head grade was lower than forecast at 0.92 g/t (Q4 2025:
1.04 g/t).

 

Average gold recovery rate for Q1 2026 was 77.1% (Q4 2025: 84.1%).

 

Residual Storage Impoundment ("RSI")

 

The RSI dam water freeboard remains well above design minimum levels.
Construction of the RSI final in-rock spillway continues.

 

Development

 

La India Gold Project

 

Construction activities at the La India Project progressed well during the
Quarter with overall construction remaining ahead of schedule at 40% complete
against a planned 35% at mid-March 2026. The total Project budget was
increased by 4% to US$171 million owing to increased power infrastructure
costs. The Project continues to be funded by the Company's Runruno gold mine
in the Philippines, supported by an undrawn US$30 million gold pre-pay
facility. First gold production at La India remains on track for December
2026. Highlights for the Quarter include:

 

·      1.2 million hours worked with no lost time injuries.

·      Processing plant construction tracking at 13% as planned; key
concrete footing pours across the site are near completion.

·      Local contractor, Duroblock S.A ("Duroblock"), has been awarded
the structural, mechanical, piping and electrical installation contract
alongside Degbed Company Limited as the specialist mill installation
contractor.

·      The Company agreed a collaborative arrangement with ENATREL,
Nicaragua's national electricity transmission company, to construct the 138 kV
substation at a total cost of US$6.2 million, representing a saving of US$6.2
million against ENATREL's original turnkey proposal of US$12.4 million.

·      The construction of the Tailings Storage Facility has commenced
following contract award to Duroblock, with access road and earthworks
activities ongoing.

·      Approximately 100,000 tonnes of commissioning ore is stockpiled
on the run-of-mine pad in-line with targeted 500,000 tonnes by the processing
plant commissioning date.

 

Exploration - Nicaragua

 

La India Project

 

Since acquiring the La India Project, the Company has completed a total of
15,638 metres of drilling. To date, the Company's focus has been on step-out
out drilling from planned mining areas and exploration drilling at Cacao. Two
drill rigs continue to operate at the La Inda Project, with one rig dedicated
to extensional drilling adjacent to the planned mining areas and the other
dedicated to exploration at high priority targets.

 

·      Drilling at La India South Underground intersected wide
high-grade mineralisation:

o  Drillhole LIGT612 intersected 31.18 metres at 4.37 g/t Au from 181.6
metres to 212.8 metres including 0.48 metres at 138.4 g/t Au (from 187.6 to
188.1 metres) and 1.93 metres at 21.3 g/t Au (from 240.3 to 240.8 metres).

·      Step-out drilling at La India Phase 1 - North Open Pit has
returned significant interceptions confirming and extension of the mineralised
zone of at least 30 metres:

o  Drillhole LIDC620 intersected 9.58 metres at 1.68 g/t Au and 13.15 g/t
silver ("Ag") from surface to 9.58 metres.

o  Drillhole LIDC621 intersected 10.55 metres at 1.11 g/t Au and 6.77 g/t Ag
from surface to 10.55 metres.

o  Drillhole LIDC626 intersected 6.70 metres at 1.65 g/t Au and 1.64 g/t Ag,
including 1.50 metres at 5.33 g/t Au and 3.71 g/t Ag.

·      Exploration drilling at Cacao has successfully defined a
high-grade ore shoot:

o  Drillhole CCRD043 intersected 12.7 metres at 3.52 g/t Au from 270.8 metres
to 283.5 metres, including 2.0 metres at 19.7 g/t Au (from 276.5 to 278.5
metres).

o  Drillhole CCRD044 intersected 10.7 metres at 1.92 g/t Au from 233.6 metres
to 244.3 metres, including 0.52 metres at 21.3 g/t Au (from 240.3 to 240.8
metres).

Other

 

Post-Quarter end, the Company was granted four new highly prospective
exploration concessions adjacent to the La India Project, covering a combined
area of 64,400 hectares, granted for a term of 25 years. Within these
concessions, four high priority targets have been identified. Refer to the
Company's announcement dated 10 April 2026
(https://irtools.co.uk/42/story/6401da38-5c13-4c23-8458-c9c362e8e561) .

 

 

Exploration - Philippines

 

Dupax Project

 

An initial drill programme at Dupax indicated that the target ore zone is
significantly deeper than predicted, leading the Company to conclude that an
economic resource at Dupax will not be able to be defined within a time period
such that the Runruno process plant can be converted to process Dupax ore.
Other options to re-purpose the Runruno plant are being considered.

 

 

Abra Project

 

Drill programmes on the Abra tenement remain on hold while the National
Commission for Indigenous Peoples further advances its consultation activities
with the potentially impacted local communities. The Company's expectation
remains that drilling in the Abra project area will commence later in H2 2026.

 

ESG

 

Occupational Health & Safety

 

The Company completed the Quarter without a lost time injury in either the
Philippines or Nicaragua.

 

Environment & Compliance

 

Compliance matters continue to be successfully monitored, and all operations
in both the Philippines and Nicaragua are compliant with no outstanding
material issues.

 

Community & Government Relations

 

The Company continues to receive strong support for Runruno and La India from
local communities and government agencies in both the Philippines and
Nicaragua.

 

 

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014, which forms part of United Kingdom domestic law by
virtue of the European Union (Withdrawal) Act 2018 (as amended). Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.

 

END

 

 

 

For further information, please contact or visit:

 

 Metals Exploration PLC
 Via BlytheRay                                +44 (0) 207 138 3204

 Nominated & Financial Adviser:               STRAND HANSON LIMITED
 James Spinney, James Dance, Rob Patrick      +44 (0) 207 409 3494
 Joint Broker:                                HANNAM & PARTNERS
 Matt Hasson, Franck Nganou                   +44 (0) 207 907 8500

 Joint Broker:                                PANMURE LIBERUM
 Amrit Mahbubani, Scott Mathieson, Zak Wadud  +44 (0) 203 100 2112

 Public Relations:                            BLYTHERAY
 Megan Ray, Said Izagaren                     +44 (0) 207 138 3204

metalsexploration@blytheray.com

 

Web:                      www.metalsexploration.com
(http://www.metalsexploration.com)

X:                            @MTLexploration
(https://twitter.com/MTLexploration)

LinkedIn:               Metals Exploration
(https://www.linkedin.com/company/metals-exploration-plc)

 

Competent Person's Statement

Mr Maxwell Donald Tuesley, BSc (Hons) Economic Geology, a member of the
Australasian Institute of Mining and Metallurgy (No 111470 and employee of the
Company, has compiled, read and approved the technical disclosure in relation
to the projects in this regulatory announcement in accordance with the AIM
Rules - Note for Mining and Oil & Gas Companies.

 

Forward Looking Statements

Certain statements relating to the estimated or expected future production,
operating results, cash flows and costs and financial condition of Metals
Explorations, planned work at the Company's projects and the expected results
of such work contained herein are forward-looking statementswhich are based on
current expectations, estimates and projections about the potential returns of
the Group, industry and markets in which the Group operates in, the Directors'
beliefs and assumptions made by the Directors. Forward-looking statements are
statements that are not historical facts and are generally, but not always,
identified by words such as the following: "expects", "plans", "anticipates",
"forecasts", "believes", "intends", "estimates", "projects", "assumes",
"potential" or variations of such words and similar expressions.
Forward-looking statements also include reference to events or conditions that
will, would, may, could or should occur. Information concerning exploration
results and mineral reserve and resource estimates may also be deemed to be
forward-looking statements, as it constitutes a prediction of what might be
found to be present when and if a project is actually developed.

 

These statements are not guarantees of future performance or the ability to
identify and consummate investments and involve certain risks, uncertainties
and assumptions that are difficult to predict, qualify or quantify. Among the
factors that could cause actual results or projections to differ materially
include, without limitation: uncertainties related to raising sufficient
financing to fund the planned work in a timely manner and on acceptable terms;
changes in planned work resulting from logistical, technical or other factors;
the possibility that results of work will not fulfil projections/expectations
and realize the perceived potential of the Company's projects; uncertainties
involved in the interpretation of drilling results and other tests and the
estimation of gold reserves and resources; risk of accidents, equipment
breakdowns and labour disputes or other unanticipated difficulties or
interruptions; the possibility of environmental issues at the Company's
projects; the possibility of cost overruns or unanticipated expenses in work
programs; the need to obtain permits and comply with environmental laws and
regulations and other government requirements; fluctuations in the price of
gold and other risks and uncertainties.

 

The Company expressly disclaims any obligation or undertaking to disseminate
any updates or revisions to any forward looking statements contained herein to
reflect any change in the Group's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based unless required to do so by applicable law or the AIM Rules.

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