Lundin Gold’s Dividend Twist: A New Star is Born from a Gold Mine

VANCOUVER, BC – June 11, 2026 – In a move that sharpens its focus and delivers a unique reward to its investors, Lundin Gold Inc. today completed the distribution of its entire stake in the newly independent LunR Royalties Corp. The transaction, structured as a special dividend-in-kind, saw over 50.5 million shares of LunR land in the accounts of Lundin Gold shareholders, marking the formal separation of the two entities.

This isn't just a routine corporate shuffle. It's the final step in a clever financial maneuver that began earlier this year, designed to monetize a non-core asset and create a new, publicly traded entity in the burgeoning royalty and streaming sector. By divesting its roughly 41.78% stake, Lundin Gold sheds its status as a “control person” of LunR, allowing it to concentrate exclusively on its crown jewel: the Fruta del Norte gold mine in Ecuador. For shareholders, it’s a dividend with a twist—they now own a piece of their gold mining investment and a direct stake in an emerging royalty player.

A Strategic Sharpening of Focus

For Lundin Gold, this move is all about purity and focus. The company's identity is inextricably linked to Fruta del Norte, one of the highest-grade operating gold mines in the world. Since commencing commercial production in 2020, the mine has been a cash-generating powerhouse, delivering impressive financial metrics like a return on equity above 60% and net profit margins hovering in the mid-40% range. It’s a single-asset company, a fact that brings both immense profitability and significant concentration risk.

The silver produced at Fruta del Norte has always been a minor by-product, accounting for just 1-2% of the company's total revenue. While valuable, it was a footnote in the larger gold story. Earlier this year, management saw an opportunity to unlock the value of this footnote. They struck a deal with the then-fledgling LunR Royalties, trading a life-of-mine silver stream from Fruta del Norte for a significant equity stake in LunR.

Rather than hold onto that stake, which would have complicated its pure-play gold narrative, Lundin Gold committed to distributing the shares directly to its own investors. “This distribution highlights management's focus on capital allocation and shareholder returns, while preserving the company's core gold mining profile,” noted one market analyst. By spinning off the silver asset, Lundin Gold maintains a “cleaner corporate structure,” allowing investors who want pure gold exposure to have it, while giving them a separate, tradable security for the silver component.

The Dawn of an Independent LunR Royalties

With Lundin Gold stepping away, LunR Royalties now emerges from the shadow of its larger affiliate as a fully independent entity. This is a critical milestone for the company, which itself was only spun out from NGEx Minerals in late 2025. Its graduation to the main board of the Toronto Stock Exchange on June 8 was a clear signal of its ambitions.

LunR operates on the royalty and streaming model, a distinct and often preferred way for investors to gain exposure to mining. Instead of owning and operating mines—with all the attendant capital costs, operational risks, and environmental liabilities—royalty companies provide upfront financing to miners in exchange for a percentage of future production or revenue. It's a business model that offers high margins and exposure to commodity price upside with less operational risk.

The Fruta del Norte silver stream is now LunR's cornerstone asset, projected to generate between US$27.5 million and US$29 million in annual free cash flow at current silver prices. This instantly transforms LunR from a development-stage company into a cash-flowing enterprise. Its portfolio is further bolstered by net smelter return royalties on promising exploration projects in Argentina and Chile, including NGEx Minerals' Lunahuasi and Los Helados sites. While the silver stream provides the immediate cash, a significant part of LunR's long-term valuation is tied to the exploration upside of these other royalties.

A Practical Guide for Shareholders

For Lundin Gold investors, the dividend-in-kind has immediate practical and financial implications that vary by location. The company has structured the distribution to accommodate a complex global shareholder base.

Shareholders in Canada received LunR shares directly, with the dividend qualifying as an “eligible dividend” for Canadian tax purposes. The situation is different for investors in the United States and other jurisdictions where securities laws would make a direct distribution overly complex. These “ineligible shareholders” will not receive LunR shares. Instead, a designated agent will sell the shares they were entitled to on the open market, and the shareholders will receive the net cash proceeds.

This process of “forced selling” by a segment of the shareholder base could create near-term volatility. “We could see a 'technical dislocation' in LunR’s stock price,” commented one expert. “Patient buyers who understand the story could see this as an asymmetric entry opportunity.”

Meanwhile, shareholders who hold Lundin Gold through Euroclear Sweden will receive Swedish Depository Receipts (SDRs) representing their LunR shares. As is standard, no fractional shares were issued; any fractional entitlements were rounded down and the value paid out in cash.

The immediate result of the distribution is a much wider shareholder base for LunR. A clear example was the disclosure from Nemesia S.à.r.l., a major Lundin family holding company, which announced its receipt of over 13.2 million LunR shares, instantly making it a cornerstone investor with an approximate 26.7% stake.