Q2 2026 - Management’s Discussion and Analysis Download

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# Q2 2026 - Management’s Discussion and Analysis Download

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# Q2 2026 - Management’s Discussion and Analysis Download
LUNR ROYALTIES CORP.
(formerly 17156138 Canada Inc.)
Management’s Discussion and Analysis
For the three and six months ended June 30, 2026
LunR Royalties Corp.
Management's Discussion & Analysis
For the three and six months ended June 30, 2026
INTRODUCTION
The following management’s discussion and analysis (“MD&A”) is an overview of the activities of LunR Royalties
Corp. (“LunR” or the “Company”). LunR was incorporated on July 14, 2025, under the laws of the Canada Business
Corporations Act (the “CBCA”) as a wholly-owned subsidiary of NGEx Minerals Ltd. (“NGEx”), under the name
“17156138 Canada Inc.”. LunR was incorporated for the purpose of undertaking a share capital reorganization with
NGEx by way of a statutory plan of arrangement under the CBCA (the “Arrangement”) pursuant to an arrangement
agreement between LunR and NGEx dated July 21, 2025, as amended (the “Arrangement Agreement”), which, upon
its completion on October 23, 2025, resulted in 80.1% of the common shares of LunR (“LunR Shares”) being
distributed to shareholders of NGEx (“NGEx Shareholders”), with NGEx retaining a then 19.9% interest in LunR. Upon
completion of the Arrangement, LunR became a reporting issuer in the provinces of British Columbia, Alberta, Ontario
and Québec.
Additional details with respect to the Arrangement, NGEx or LunR can be found on SEDAR+ at www.sedarplus.ca.
This MD&A is intended to help the reader understand LunR’s operation and financial performance, along with its
present and future business environment. This MD&A should be read in conjunction with the Company’s unaudited
condensed interim financial statements for the three and six months ended June 30, 2026, and related notes therein,
which have been prepared in accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board (“IFRS Accounting Standards” or “IFRS”).
All currency amounts are stated in United States dollars ($), unless otherwise stated. References to C$ are to
Canadian dollars.
The first, second, third and fourth quarters of the Company’s fiscal years are referred to as “Q1”, “Q2”, “Q3” and
“Q4”, respectively.
The date of this MD&A is August 6, 2026.
DESCRIPTION OF BUSINESS AND OVERVIEW
LunR is a royalty and streaming company which focuses on growing and diversifying a portfolio of royalties and
metals purchase agreements (“Streams”) in the mining and mineral resource industry through acquisitions and
strategic investments, leveraging deep industry knowledge and expertise of its board of directors (the “LunR Board”)
and management. LunR intends to accumulate and manage a portfolio of diversified royalty and Stream interests
that may be acquired directly from mineral exploration companies or mine operators, as well as third-party holders
of existing royalties and Streams, across the spectrum of project stages, from grassroots exploration to production.
As at the date of this MD&A, LunR holds a silver Stream (the “FDN Stream”) on Lundin Gold Inc.’s (“Lundin Gold”)
Fruta del Norte gold mine in Ecuador (“FDN”), a 1.38% net smelter return (“NSR”) royalty on the mineral concessions
underlying NGEx’s Los Helados Project in Chile, and a 1.00% NSR royalty on the concession underlying NGEx’s
Lunahuasi Project.
LunR’s registered office is located at Suite 2200, 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8,
Canada and its head office is located at Suite 2800, 1055 Dunsmuir Street, Vancouver, British Columbia V7X 1L2.
The Company is listed on the Toronto Stock Exchange (the “TSX”) under the symbol “LUNR”.
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LunR Royalties Corp.
Management's Discussion & Analysis
For the three and six months ended June 30, 2026
QUARTERLY HIGHLIGHTS
Operating Results for the three months ended June 30, 2026
• The Company recorded inaugural revenue of $4.6 million during the three months ended June 30, 2026
(2025: nil).
• The Company received its first silver delivery under the FDN Stream and recorded sales of 69,959 ounces
of silver.
• Cash flows from operating activities of $2.9 million during the three months ended June 30, 2026 (2025:
nil).
• Net loss for the three months ended June 30, 2026 of $0.1 million (2025: nil) was lower than the previous
quarter due to inaugural revenue generated by the FDN Stream.
Acquisition of the FDN Stream
On May 28, 2026, the Company completed the acquisition of the FDN Stream (the “FDN Transaction”). The FDN
Stream is effective as of March 1, 2026, and will initially encompass 100% of FDN's payable silver production
with staged reductions once certain delivery thresholds have been met. The Company makes ongoing payments
equal to 10% of the spot price of silver at the time of each delivery, and the payment percentage will increase
once certain delivery thresholds have been met.
Key terms of the FDN Transaction are as follows:
• Upfront Consideration: LunR paid upfront consideration of $670.2 million by issuing 50,505,051
common shares of the Company to Lundin Gold on closing (the “Consideration Shares”).
• Effective Date: The FDN Stream is effective as of March 1, 2026, with the first delivery of silver having
been received by the Company in Q2 2026.
• Streamed Metal: LunR will purchase 100% of the payable silver production of FDN until 12,200,000
ounces have been delivered (the “First Dropdown Threshold”); LunR will then purchase 50% of FDN’s
payable silver until an additional 7,800,000 ounces have been delivered (the “Second Dropdown
Threshold”); and thereafter, LunR will purchase 7.5% of the payable silver for the remaining life-of-mine.
• Ongoing Payments: LunR will make payments equal to 10% of the spot price of silver at the time of
each delivery for ounces delivered up to the First Dropdown Threshold; payments will then increase to
20% of the spot price for deliveries up to the Second Dropdown Threshold; and thereafter, payments
will increase to 30% of the spot price for the remaining life-of-mine.
• Stream Area: All mining concessions related to FDN’s operations, totaling approximately 5,566 ha, are
subject to the FDN Stream. The FDN Stream area contains all Mineral Reserves and Mineral Resources
defined to date as well as the five copper-gold-silver porphyry discoveries that are in early stages of
exploration.
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LunR Royalties Corp.
Management's Discussion & Analysis
For the three and six months ended June 30, 2026
• Distribution of the Share Consideration: Lundin Gold distributed all of the Consideration Shares to
its shareholders as a dividend-in-kind upon closing of the FDN Transaction. Lundin Gold does not hold
any common shares of the Company following completion of the Distribution.
Other Corporate Updates
• On June 8, 2026, the Company’s common shares commenced trading on the TSX.
• On May 22, 2026, the Company announced the appointments of Ms. Tara Hassan and Mr. Armando
Picciotto as independent directors to its Board of Directors. On August 6, 2026, the Company announced
the appointment of Scott Langley as an independent director to its Board of Directors.
o Ms. Hassan brings more than 20 years of mining industry and capital markets experience in
corporate and operational leadership and equity research. She is currently Executive Vice
President, Corporate Development of Silverco Mining and prior to that, she served as Senior Vice
President, Corporate Development for SilverCrest Metals. She is currently a board member of two
TSX-listed precious metals companies and was formerly on the board of Maverix Metals until its
acquisition by Triple Flag Precious Metals in January 2023.
o Mr. Picciotto has over 16 years of experience in commodity trading and commercial leadership,
with expertise spanning physical crude oil and derivatives trading, risk management, and
international business development. He currently serves as Regional Team Leader for Latin
America and West Africa at Shell Western Supply and Trading, a subsidiary of Shell plc, where
he oversees two crude oil trading desks with combined trading activity of approximately 1 million
barrels per day.
o Mr. Langley currently serves as Group Head, Corporate Development, at Newmont Corporation.
Prior to joining Newmont in 2022, Scott spent over 15 years working in investment banking in
the metals and mining sector, at both National Bank Financial and Bank of America, and was
most recently Managing Director, Head of North American Metals & Mining for Bank of America.
During his career, Mr. Langley has worked on many capital markets and M&A transactions. Mr.
Langley holds a Masters of Business Administration from The Richard Ivey School of Business,
and a Bachelor of Commerce from Queens University.
KEY ASSET UPDATES
Fruta del Norte, Ecuador (100% Silver Stream), Producing
On February 22, 2026, Lundin Gold announced silver production guidance of 500,000 to 600,000 for 2026 (see Lundin
Gold’s press release of the same date). During the three months ended June 30, 2026, the Company purchased
69,959 ounces of silver under the FDN Stream, which represents 100% of the payable silver production of FDN for
the period from March 1 to May 31, 2026. Due to the timing of concentrate shipments, additional production from
this period was delivered in Q3 2026, and total production from this period is expected to be split between Q2 and
Q3 2026, respectively. Based on year-to-date production, the Company expects payable silver of 225,000 to 275,000
ounces to be deliverable under the FDN Stream for the second half of 2026, with production from Q4 2026 to be
delivered in Q1 2027.
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LunR Royalties Corp.
Management's Discussion & Analysis
For the three and six months ended June 30, 2026
Lunahuasi, Argentina (1.00% NSR Royalty), Exploration/Development
During the three months ended June 30, 2026, NGEx continued to publish drillhole assay results from its Phase 4
exploration program at Lunahuasi. A total of 27,318 metres were drilled during the Phase 4 exploration program,
which ran during the Austral summer from October 2025 to May 2026. As of July 30, 2026, assays for all 32 holes
have been released. Drill results continue to expand the known extent of mineralization to the north, south, and at
depth, while also confirming high grades and continuity within the named and new high-grade zones. See NGEx’s
press releases from March 23, April 30, May 13, June 23, July 8, and July 30, 2026 for additional detail.
Los Helados, Chile (1.38% NSR Royalty), Exploration/Development
No exploration activities were reported by NGEx during the three months ended June 30, 2026, as all efforts were
focused on the Phase 4 drill program at Lunahuasi. On April 7, 2026, Lundin Mining Corp. (“Lundin Mining”)
announced that it acquired the 30.9% interest in Los Helados not owned by NGEx from JX Advanced Metals
Corporation, with the accompanying press release noting potential synergies between Los Helados and Lundin
Mining’s Caserones operation to the north. See Lundin Mining’s April 7, 2026 press release for additional detail.
SUMMARY OF QUARTERLY RESULTS
The following table summarizes selected financial data reported by the Company for the three months ended June
30, 2026, and the previous quarters since incorporation. The Company's interim financial statements are reported
under IFRS Accounting Standards applicable to interim financial reporting.
July 14, 2025 to
In 000s September 30,
Except per share amounts Q2 2026 Q1 2026 Q4 2025 2025
Revenue $ 4,607 $ - $ - $ -
Net loss (147) (1,841) (475) (4)
Cash flows from operating
activities 2,858 (933) (252) (8)
Basic loss per share (0.00) (0.03) (0.01) (3,628)(1)
Diluted loss per share (0.00) (0.03) (0.01) (3,628)(1)
Total assets 673,36

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