Paul Harris sat down with Jamie Beck at the 2026 Mining Forum Americas in Colorado Springs and read him two holes. One was 108 grams of gold per tonne over 11.75 metres. The other was 236 grams over 3.95 metres. Beck, a geologist and the chief executive of Lundin Gold, did not flinch. He said Fruta del Norte, the company's mine in Ecuador, was built on something else. The original ore came in thicknesses of 30, 40, and 50 metres. What they are cutting to the south is higher grade and narrower. It will change the mining method. Then he said the sentence that matters. At some point the mine has to go back to reserve grade.
Here is the only idea. The gram in a headline is not the gram that pays the dividend. The reserve, as the company stated it on February 17, 2026, for December 31, 2025, is 5.85 million ounces in 25.66 million tonnes at 7.09 grams per tonne. The mill is being studied at a larger size because that 7 is where the ore is headed, not because a short core got richer. Part of the latest reserve add was a lower cutoff, not a richer vein. The cash thrown off while the mine still sits above 7 grams is the surplus. Ecuador has assessed one year of the state's share. Beck calls the bill a dispute over a date. The date is when a top-up is owed. It is not a second cut of the dividend.
Nothing here is a recommendation to buy or sell the share, the metal, or the mine. A downhole interval is not a reserve. You can lose money on a real mine.
Do the subtraction on the holes he was handed
The 236-gram hole is real, and it is not what it sounds like. In a July 27, 2026 release, hole UGE-E-26-487 at Fruta del Norte East cut 3.95 metres grading 236.62 grams, including 1.00 metre at 933 grams. The company said these lengths are not true widths. Gold along the 3.95 metres is about 935 gram-metres. The one-metre slice is 933 of them. The other 2.95 metres average about 0.6 gram. Almost the entire headline is a slice the length of a long step. The rock on either side of that slice, inside the same reported interval, is not a bonanza. It is low grade. The east deposit already has a published resource, and it does not look like this hole. In the February 17, 2026 reserve update the company put an inaugural inferred resource on Fruta del Norte East of 0.42 million ounces in 2.17 million tonnes at 6.01 grams. Inferred is not a reserve. Six grams is not 237.
A September hole at Bonza Sur does the same trick. Hole BLP-2026-553 cut 3.05 metres at 204.26 grams, including 0.60 metre at 1,035.60 grams. The company called it the highest-grade interval yet at that target, and it said the length is not a true width. Gold in the 3.05 metres is about 623 gram-metres. The 60-centimetre core is about 621 of them. The other 2.45 metres average about 0.7 gram. Take out a core shorter than a stride and the "204 grams" leaves with it.
The 108-gram hole does not collapse, and that is why you do the math one hole at a time. Hole UGE-S-26-478, also in the July release, cut 11.75 metres at 108.61 grams at Fruta del Norte South, including 0.40 metre at 2,030 grams. The spike is about 812 gram-metres. The other 11.35 metres still average about 41 grams. That is a real high-grade run, not a speck wearing a long interval as a coat. It is also not a true width. And 41 grams over 11 metres is not the 30-to-50-metre thicknesses Beck used to describe the original mine. Narrower and richer is still narrower. He said the mining method will have to change when they get there. A method is a cost. A cost is not in the headline.
The new discovery is quieter still. The speech-to-text of the interview turned the name into noise. The release calls it Quebrada Dorada. Hole CHT-2026-495 cut 13.05 metres at 6.53 grams, including 3.00 metres at 22.81 grams. The long interval is below the reserve grade of 7.09. Strip the 3 metres and the other 10 metres average about 1.7 grams. Lundin said this vein system extends the known epithermal trend to more than eight kilometres. Beck, on stage, said about eight kilometres on strike from Fruta del Norte. Use the release for the distance. A trend of eight kilometres is not eight kilometres of 200-gram rock. The hole that stretched the map grades like ordinary ore, and only in a length the company has not called a true width.
Beck also said they have cut 500- and 600-gram intervals over minable widths at Fruta del Norte South. That is his description, not a table in front of me. Minable width is a mining word. It is not a published true width. If a later report shows those intervals with a width, a tonnage, and a category, use that report. Until then they are his memory of the core shack, which is allowed, and not an ounce.
The reserve already did the hard job
Beck's reserve story is the one that survives the subtraction. He said they started with about a five-million-ounce reserve. They have since mined more than three million ounces. He said they now sit with about a six-million-ounce reserve. First gold was November 2019. Commercial production was February 2020. His "started mining in 2019" fits the first pour. It does not mean a full commercial year. The February 17, 2026 statement is the audited line, and the estimate date on it is December 31, 2025. Proven and probable reserves were 5.85 million ounces at 7.09 grams, from 25.66 million tonnes. That was up 6 percent from 5.54 million ounces the year before, after 0.53 million ounces of mining depletion in 2025. Inside that, Fruta del Norte South has an inaugural reserve of 0.54 million ounces in 2.50 million tonnes at 6.66 grams. Measured and indicated resources were stated at 7.48 million ounces at 7.13 grams. Resources are not reserves. The 0.54 million ounces at 6.66 grams are the south zone after it has been through a mine plan. The 204-gram core has not been.
Do not give the drill all the credit for the latest year. The same February release says Fruta del Norte itself added 0.30 million ounces to reserves before 2025 depletion. The company said that addition was driven primarily by a lower cutoff, from 3.7 grams to 3.2 grams, because it used a higher gold price. Exploration and flat unit costs were in the mix. The cutoff was the lead reason the company named. A lower cutoff pulls in rock that failed the old test. That rock is real. It is also leaner. It is one reason the reserve grade is 7.09 grams and not the grade of the early years. South's 0.54 million ounces are a conversion. The year's net rise, from 5.54 to 5.85, is both things. His longer claim, about five million at the start and about six million now after mining more than three million, is his account of the whole mine life. The table for the latest year is the cutoff plus the south.
That replacement is only partly the achievement. Over the life of the mine, by his telling, they mined a large piece of the original reserve and the reserve is larger than when they started. The grade of the thing on the books now is 7.09 grams, and the new south reserve is 6.66. Nobody replaced three million ounces with 200-gram rock. Part of the latest addition is ore that used to sit below the cutoff. A higher gold price changed the test. It did not change the rock into the headline holes. Harris asked how the new results compare with a mine aiming at about 500,000 ounces this year. Beck's answer was that they are a little different. Consistent thickness was the original gift. Higher grade in a narrower shape is a new problem, not a free upgrade.
The plant grade tells you which era you are in. In 2026 the company guided the mill at 5,500 tonnes a day and 8.3 grams, on the way to 475,000 to 525,000 ounces, with recovery guided at 91 percent. In the third quarter the mill averaged 5,823 tonnes a day. The grade was 10.1 grams. Recovery was 88.3 percent. Output was a record 153,736 ounces. Through nine months the mine had produced 392,472 ounces at an average grade of 9.0 grams and 5,614 tonnes a day. Beck said they are no longer in the 12- and 13-gram rock of the first years. He also said that at some point they go back to reserve grade. The recent quarters are still above the 8.3-gram plan, and well above 7.09. The fat is thinner than it was. It is not gone.
A bigger mill is a bet that the fat ends
Beck told Harris the expansion is on the order of 6,500 to 7,000 tonnes a day, against about 5,500 now. He hopes the work is largely done through 2027 and running at full speed in 2028. The capital cost is not out. He said they will bring a number later this year, with the scope and the scale. A September company slide said the study of life above 5,500 tonnes a day had a decision expected in the fourth quarter of 2026. Do not treat a hoped-for 2028 start as a sanctioned project. Treat it as the plan he is willing to describe before the cheque is published.
His reason is the grade. More tonnes through the plant, plus development into the south and the east, are how he intends to keep the mill full and hold something like half a million ounces for longer than the reserve life now on paper. The company's September slide put that life at about 12 years on reserves. Half a million ounces a year into 5.85 million ounces is about twelve years. That is the paper. "Much longer" is the hope, and the hope needs ounces that are not reserves yet.
Here is the check he did not put on the whiteboard. A mill that grows from 5,500 tonnes a day to 7,000 is about 27 percent more tonnes. A grade that falls from the 10.1 grams just mined to the 7.09 in the reserve is about a 30 percent drop. Put those two moves together, and leave recovery alone, and you get about 11 percent fewer ounces, not the same ounces. This is arithmetic. It is not his model. He has not published the grade he assumes in the bigger plant. If the fall is only from the 8.3-gram plan down toward something the extra tonnes can carry, the ounces can hold. If the fall is all the way from a 10-gram quarter to the reserve, the extra tonnes do not fully pay for it. The expansion is a cushion against a decline. It is not a machine that turns 200-gram headlines into a permanent half million.
Costs are the other reason the shape of the ore matters. Beck said operating costs are up about 2 to 3 percent. He said all-in sustaining costs are still inside guidance. That guidance, set for 2026, is $1,110 to $1,170 an ounce sold. Cash operating cost was guided at $900 to $960. He argued that a small, high-grade underground mine does not move the mountains of rock an open pit moves, so diesel inflation hurts less. Ecuador uses the U.S. dollar. He said labour inflation there has not been huge. Narrower ore can spend that insulation. More development metres per ounce, more selective mining, a method that changes: each one is a way for the cost to creep while the headline grade still looks kind. He has not put a new cost on the south. Until he does, the insulation is a description of the mine they have, not of the mine the narrow veins would be.
The surplus has a claimant
The sovereign adjustment is Ecuador's way of saying the state gets half the benefit of the resource. It sits in the exploitation agreement. It applies to oil and gas as well as to this mine. Beck's picture is two buckets. While Lundin was spending capital, its bucket drained and the state's bucket filled with taxes and royalties. Once the mine produced, the company's bucket started to catch up. The payment starts when the two meet. He said Fruta del Norte is likely the first time in Ecuador the adjustment is actually triggered. He told Harris that from then on it is an annual payment. Harris asked. Beck said yes.
The fight is the meeting date. The math is on a present-value basis. Old investment has to be brought forward into 2026 dollars. Beck said small changes in that sum move the answer by a lot. He said he is not surprised there are discrepancies. He called it a disagreement over a calculation, not a break with the country. He said the relationship remains good, and that the company will keep investing. His "yearly from then on" is the stage version. The contract version, in the company's own September release, is an annual adjustment only to the extent the state's cumulative share is below half.
The number on the table is not a metaphor. In September 2026, Ecuador's tax service assessed the 2023 year at $73 million, plus possible fines of $81 million, for $154 million before interest. Beck's statement at the time said the assessment misreads the method in the exploitation agreement, and that the company would escalate it to protect its rights. Mining.com described the rule this way: the state's cumulative benefits are not to fall below 50 percent. The company's side is the present value of cumulative free cash flow. The state's side counts taxes, royalties, profit sharing, value-added tax it cannot recover, and any adjustment already paid. None of that $154 million is a loss the company has booked as final in the interview. It is a claim. A claim of that size, on one year, is what "small changes have bigger impacts" means in cash.
Tie this back to the grade. The years above reserve grade are the years the company's bucket fills fastest. Those are the years a meeting date arrives sooner. A 10-gram quarter throws off cash a 7-gram year would not. The reported average realized price in the third quarter was $4,299 an ounce. The company said $46 of that was a provisional-pricing adjustment. Sales before the adjustment were $4,253. Either figure is a fat-year price. Beck's dividend policy is built on the cash. The published policy is a fixed quarterly dividend of $0.30 a share, plus a variable dividend of at least half of normalized free cash flow after the fixed dividend is paid. He told Harris about half of free cash flow goes to capital returns, and that this still leaves room to fund exploration. That "about half" is his stage line. The policy is the fixed cheque plus at least half of what remains. Both can be paid in full only while the surplus is large.
The state's half is not the next cut of that same pot. The dividend is a board choice about free cash flow. The sovereign adjustment is a cumulative test. The state is paid in a year only to the extent its share of cumulative benefits is below 50 percent. If the grade goes back to 7 grams, the pot that funds dividends and drills gets smaller. That does not mean the state then takes half of whatever is left after the dividend. The two tests use different math. They can both bite in a leaner year. They are not one knife used twice. He did not say the adjustment has started for good. He said the argument is when. The company has also said the 2023 assessment does not, by itself, change guidance, the expansion, or the dividend plan. A claim can be both large and unpaid.
Power is a cost, until it is a stoppage
Harris raised two Ecuador problems that are not about grade. He said new mines have been told to secure their own power. Shipping and diesel are up. Beck's answer on cost was the underground mine's small footprint. His answer on power was a contract. Lundin signed a purchase deal with a private hydro company, Barka Capital, for power from the Hidroquest plant. The power goes into the national grid. Fruta del Norte draws power out and gets credit. Beck told Harris the price is fixed and the contract is long. A June account of the same deal says something narrower. The plant is about 45 megawatts. Lundin's share is about 20 megawatts, against demand of about 20, with room to go to about 27 if the expansion needs it. The rate in that account is variable, not a single fixed number. The first term is five years, with an option to renew for five more. Use Beck's word as his word. Do not write "fixed price" as a fact the contract has published in the interview. And do not treat a plant that was still being finished in June as power that is already on the bus.
Then Harris asked about El Niño, the dry pattern that starves rivers and the dams on them. Beck said yes, they do anticipate trouble. The government will not want dark houses. In past dry spells the mine has been asked to cut what it takes from the grid. The backup is diesel generators. He was plain. It is a higher cost. It is not, in his view, a risk that the mine stops. An investor can hold both lines. Diesel backup is a real plan. It is also the expensive plan, and it is the plan you are on if the hydro credit and the weather fail together. A contract does not make rain. A variable rate does not cap the diesel bill.
What is not in the reserve
Beck split exploration into three jobs. One is conversion. He said about 25,000 metres aimed at the east and the south, to replace depletion and put ounces into next year's mine plan. He said that work has been the habit of the mine. The south's 0.54 million ounces, at 6.66 grams, are the part of that habit already in a reserve. The cutoff change at the original mine is a different kind of addition. Do not count both as the same drill success. The second job is near the mine: more epithermal gold and silver, and an emerging copper-gold porphyry district. He said they have spent real money looking for copper, and found some. The third is regional. About 8,000 metres on a land package of about 65,000 hectares. He said they have really only explored the La Zarza concession, about 6,500 hectares. The published 2026 program is larger than the pieces he named on stage. Guidance was $85 million and 133,000 metres. The 25,000 and the 8,000 are slices of a budget, not the budget. A September slide puts about 100,000 metres and $56 million on the near-mine work between them.
The copper he is willing to date is Sandia, about two kilometres northeast of the mine. He hopes for a first resource in the first quarter of 2027, and maybe late this year if they are lucky. He would not say whether Lundin Gold builds it, or shares it with another Lundin company, or does something else. He said it sits close to the plant they already have, so they can take their time and learn the size. He also said copper will be part of the pipeline. A resource that does not exist yet is not part of the 5.85 million ounces. A porphyry is not a vein. The mining method, the capital, and the state's 50 percent would all have to be built again. Patience is the right word. It is not an ounce, and it is not a reason to ignore the grade already in the gold reserve.
On buying other mines, he was just as plain. Organic growth comes first. Anything outside has to beat what they can still drill on their own ground. There is no production cliff forcing a deal. That is an advantage only if the reserve replacement continues. A cliff is what you get if the south and the east stay as headlines and never become the next 0.54 million ounces at a stated grade. The absence of pressure is not the presence of a second mine.
What to write on the card
Write the holes as included intervals, or do not write them. Fruta del Norte East, July 27: 3.95 metres at 236.62 grams, of which 1.00 metre at 933 grams does almost all the work, and the rest averages about 0.6 gram. Bonza Sur, September: 3.05 metres at 204.26 grams, of which 0.60 metre at 1,035.60 grams does almost all the work, and the rest averages about 0.7 gram. Fruta del Norte South, July 27: 11.75 metres at 108.61 grams, and after a 0.40-metre spike at 2,030 grams the rest still averages about 41 grams. Quebrada Dorada: 13.05 metres at 6.53 grams, and after 3 metres at 22.81 the rest averages about 1.7 grams. None of these lengths was reported as a true width.
Write the reserve on the next line. As at December 31, 2025, published February 17, 2026: 5.85 million ounces, 25.66 million tonnes, 7.09 grams, up from 5.54 million. South zone inside that: 0.54 million ounces at 6.66 grams. Fruta del Norte's own 0.30 million ounces, added before 2025 depletion, came primarily from a cutoff cut from 3.7 grams to 3.2 grams. East inferred resource: 0.42 million ounces at 6.01 grams. Not a reserve. Beck's round numbers, about five million at the start and about six million now, after more than three million mined, are his life-of-mine story. The table is the grade. The cutoff is part of the table.
Write the mill on the third line. Plan: 5,500 tonnes a day at 8.3 grams, 475,000 to 525,000 ounces, all-in cost $1,110 to $1,170. Third quarter: 5,823 tonnes a day, 10.1 grams, 153,736 ounces, recovery 88.3 percent. Realized price $4,299, of which $46 was provisional pricing. Expansion he described: a study of 6,500 to 7,000 tonnes a day, work through 2027, running in 2028, capital not published, decision expected in the fourth quarter of 2026. The mill is not at 7,000 tonnes now. A 27 percent increase in tonnes does not, by itself, replace a fall from 10 grams to 7.
Write the state on the fourth line. The state's cumulative share of benefits is not to fall below half. An annual payment is due only to the extent it does. The 2023 assessment is $154 million before interest, made of $73 million plus possible fines of $81 million. The company says the method was misread, and that the bill does not change the dividend plan. The meeting date is the dispute. The dividend half is a separate choice. It is not the pot the state then cuts in half.
What an investor can do with a mine like this
You can refuse the coat. If a hole is famous because of a metre, or sixty centimetres, say so in the first sentence. If a hole still grades about 41 grams after the spike comes out, say that too. The discipline is the same either way. The included interval is the fact. The average is the advertisement.
You can watch the gap between the grade they mill and the grade in the reserve. That gap is the surplus. It was 12 and 13 grams at the start, Beck said. It was 10.1 in the last quarter. The reserve is 7.09. The plan for this year was 8.3. The direction is down. The bigger mill is the company's answer to that direction. Ask, when the capital number arrives, what grade they used. If the study needs 10 grams to keep half a million ounces, it is a study of the fat years. If it works at 7, it is a study of the reserve.
You can watch conversion, not discovery. The south already has 0.54 million ounces in the reserve at 6.66 grams. The next honest addition looks like that: tonnes, a grade near the reserve, a category, a cost to reach it. Twenty-five thousand metres of conversion drilling is the program aimed at that page. Eight thousand regional metres, and 65,000 hectares barely touched, are a different bet. Price them as land, not as Fruta del Norte.
You can read the dividend against the bucket. The fixed $0.30, plus at least half of normalized free cash flow after that cheque, is the published policy. Half of free cash flow, in his words on stage, was the shorter version. The contract gives the state a top-up only when its cumulative share is under half. Those are not the same half, and they are not taken in order. A leaner grade shrinks the cash. It does not hand the state half of the dividend that remains. The fixed $0.30 a quarter is a board habit. It is not a geology.
You should not do the thing the eye-watering number invites. Do not add 200 grams to a 7-gram reserve and call the mine richer. Do not treat Quebrada Dorada's 6.5 grams over 13 metres as a second Fruta del Norte. Do not treat Sandia's missing resource as copper tonnes. Do not treat diesel generators as a free substitute for rain. Do not treat $154 million as either nothing or a final loss. It is a claim under a rule the chief executive says will become a yearly payment. The only open question he offered is when.
What would make this reading wrong
The reading is wrong if the included intervals are not inside the longer ones. The July and September releases present them as included, and they say the lengths are not true widths. If a true width comes out close to the downhole length, the sample matters more. It still is not the reserve. If the 1.00 metre at 933 grams is not inside the 3.95 metres, the subtraction fails. Redo it. Do not keep mine.
The reading is wrong if Beck's "500- and 600-gram intersections over minable widths" are later shown as thick, continuous ore with a true width and a tonnage. Then the south is closer to the original mine than the short spikes suggest. The 11.75 metres that still average about 41 grams are a hint that not every hole is a speck. One hint is not a reserve. The south reserve that exists today grades 6.66, not 41.
The reading is wrong if the February reserve is not 5.85 million ounces at 7.09 grams, or if the south reserve is not 0.54 million ounces at 6.66, or if the prior year was not 5.54 million. Those are the company's figures used here. It is also wrong if the 0.30 million ounces added at Fruta del Norte before 2025 depletion were not driven primarily by the cutoff falling from 3.7 grams to 3.2 grams. That clause is the company's, not a guess. Beck's "about six million" is a round number sitting on top of 5.85. The reading is wrong if "more than three million mined" and "about five million at the start" are treated as audited totals rather than his account. First gold in November 2019 and commercial production in February 2020 are the dates. The audited line to use is the reserve table.
The reading is wrong if the expansion study, when it arrives, shows that a grade near 7 grams at 6,500 to 7,000 tonnes a day holds the ounces under the costs he will then disclose. The 11 percent gap is arithmetic on two public numbers, the recent quarter and the reserve. It is not his flow sheet. A higher recovery, or a grade that only eases from 8.3 to something the extra tonnes can carry, would close it. He said recovery in the third quarter was 88.3 percent, against guidance of 91. That gap is the other direction.
The reading is wrong if the sovereign adjustment is not a cumulative 50 percent benefit test, or if the payment is due even when the state's share is already at or above half. The contract, in the company's September 8, 2026 release, requires an annual adjustment to the extent the state's cumulative benefit falls below 50 percent. The $154 million figure is the 2023 assessment of $73 million plus possible fines of $81 million, before interest. The company disputes the method and says the assessment does not change guidance or the capital-return plan. A court, or a settlement, could make the number smaller, or larger with interest, or due on a different year. Beck said he expects a yearly payment once the buckets meet. He did not say the meeting has been agreed. The reading is also wrong if a win in the dispute is treated as the repeal of the rule. He described the rule as the deal. It is wrong, in the other direction, if the dividend policy and the state's test are added as if the state takes half of the cash left after the dividend.
The reading is wrong if the hydro contract is in fact a fixed price for the life of the mine. Beck called the cost fixed. A June account says the rate is variable, the first term is five years with a five-year option, and the mine's share is about 20 megawatts of a 45-megawatt plant, with room to rise toward 27. It is also wrong if El Niño forces a long run on diesel that blows through the $1,110 to $1,170 guidance. He said the backup keeps the mine running. He also said it costs more. A quarter of generators is a test of the "2 to 3 percent" cost line. It has not been run in this interview.
The idea, once
Fruta del Norte's famous new holes and Fruta del Norte's reserve are different rocks. On two of the holes Harris called eye-watering, a slice of a metre or less carries almost all the gold, and the rest of the interval averages under 1 gram. One hole, 11.75 metres, still holds about 41 grams after its spike is removed, and even that is narrower than the mine Beck described, and it is not a true width. The east deposit those headlines sit beside has an inferred resource at 6.01 grams, not at 237. The reserve that he says replaced more than three million mined ounces grades 7.09 grams, and the south's own first reserve grades 6.66. Part of the latest reserve add at the original mine was a cutoff cut from 3.7 grams to 3.2 grams, not a new 200-gram vein. The study he described, at 6,500 to 7,000 tonnes a day, is a tool for staying near half a million ounces when the grade goes back toward that reserve. The mill is not there yet. It is running near 5,800 tonnes a day. A bigger mill does not, on a simple proportion, replace a fall from the 10 grams just mined to the 7 grams on the books. While the grade has been high, the cash has been high. Ecuador's rule gives the state a top-up when its cumulative share falls below half, and the state has assessed one year at $154 million before interest, a figure the company disputes and says does not change the dividend. Beck says the fight is the date. The dividend half is a different rule. Seven grams is what pays when the headline is gone. Two hundred grams is a slice. It is not the mine, and the surplus above seven grams is not all yours.