TORONTO, Aug. 2, 2023 /PRNewswire/ -- (TSX: LUN) (Nasdaq
Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining"
or the "Company") today reported net earnings attributable to
Lundin Mining shareholders of $59.1
million ($0.08 per share)
and $205.7 million
($0.27 per share) for the three and
six months ended June 30, 2023,
respectively. The Company also generated adjusted
earnings1 of $16.0 million
($0.02 per share) and adjusted
EBITDA1 of $162.2 million
in the second quarter. Adjusted earnings were $141.7 million ($0.18 per share) and adjusted EBITDA were
$499.1 million for the six months
ended June 30, 2023. Adjusted
operating cash flow1 were $110.6
million ($0.14 per share) and
$345.7 million ($0.45 per share) for the three and six months
ended June 30, 2023.
"Overall, we are pleased with the performance of our
operations during the second quarter. We are currently tracking at
the midpoint or higher for copper, gold and nickel guidance and the
lower end for zinc. We generated adjusted EBITDA of over
$160 million despite a decline in
metal prices early in the second quarter and resulting provisional
pricing adjustments. Lundin Mining's earnings and cash-generation
potential has further increased with the addition of Caserones
which closed early in the third quarter. On a 100% proforma basis,
including Caserones, Lundin Mining's operations produced
approximately 280,000 tonnes of copper-equivalent metal in the
first half of this year. Caserones produced approximately 70,000
tonnes of copper in the first half of the year and is off to a
strong start in the third quarter," commented Peter Rockandel, CEO.
Mr. Rockandel added, "With the free cash flow from
operations, the new $800 million Term
Loan, and the existing $1.75 billion
revolving credit facility, Lundin Mining retains a strong balance
sheet and significant liquidity to progress growth
projects."
Summary Financial Results
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
US$ Millions (except
per share amounts)
|
2023
|
2022
|
|
2023
|
2022
|
Revenue
|
588.5
|
590.2
|
|
1,339.9
|
1,581.3
|
Gross profit
|
52.8
|
46.0
|
|
266.2
|
524.8
|
Attributable net
earnings (loss)2
|
59.1
|
(52.6)
|
|
205.7
|
292.5
|
Net earnings
(loss)
|
61.3
|
(48.6)
|
|
226.6
|
329.5
|
Adjusted earnings
1,2
|
16.0
|
(35.3)
|
|
141.7
|
260.3
|
Adjusted
EBITDA1
|
162.2
|
148.6
|
|
499.1
|
736.4
|
Basic and diluted
earnings per share ("EPS")2
|
0.08
|
(0.07)
|
|
0.27
|
0.39
|
Adjusted
EPS1,2
|
0.02
|
(0.05)
|
|
0.18
|
0.35
|
Cash flow from
operations
|
194.8
|
366.4
|
|
406.7
|
683.7
|
Adjusted operating cash
flow1
|
110.6
|
49.7
|
|
345.7
|
522.6
|
Adjusted operating cash
flow per share1
|
0.14
|
0.06
|
|
0.45
|
0.70
|
Free cash flow from
operations1
|
20.7
|
266.3
|
|
91.8
|
461.1
|
Free cash
flow1
|
(84.6)
|
149.1
|
|
(118.8)
|
321.5
|
Cash and cash
equivalents
|
190.2
|
498.2
|
|
190.2
|
498.2
|
Net
debt1
|
(229.8)
|
469.9
|
|
(229.8)
|
469.9
|
|
1 These are
non-GAAP measures. Please refer to the Company's discussion of
non-GAAP and other performance measures in its Management's
Discussion and Analysis for the three and six months ended June
30, 2023 and the Reconciliation of Non-GAAP Measures
section at the end of this news release.
|
2
Attributable to shareholders of Lundin Mining
Corporation.
|
Highlights
For the quarter ended June 30,
2023 the Company generated revenue of $588.5 million (Q2 2022 - $590.2 million), gross profit of $52.8 million (Q2 2022 - $46.0 million) and adjusted EBITDA of
$162.2 million (Q2 2022 -
$148.6 million).
Overall, the operations performed well during the second quarter
of 2023 and the Company remains on track to achieve production
guidance.
Operational Performance
Candelaria (80% owned): Candelaria produced
36,952 tonnes of copper, and approximately 21,000 ounces of gold in
concentrate on a 100% basis in the quarter. Copper production was
lower than the prior year quarter due to grades partially offset by
higher throughput. Gold production was lower than the prior year
quarter due to recoveries. Current quarter production costs and
copper cash cost1 of $2.14/lb were higher than the prior year quarter
largely owing to higher contractor and maintenance costs. Cash cost
was further impacted by lower sales volumes.
Chapada (100% owned): Chapada produced 10,697
tonnes of copper and approximately 13,000 ounces of gold in
concentrate in the quarter. Copper production was higher than the
prior year quarter primarily due to higher recoveries in the
quarter. Current quarter production for both metals was better than
the first quarter of 2023, due to higher grades and recoveries. In
aggregate, production costs were higher than the prior year
comparable quarter due to higher sales volumes achieved, while the
higher sales volumes also led to improvement on a unit basis with a
copper cash cost of$2.69/lb for the quarter.
Eagle (100% owned): During the quarter Eagle
produced 4,686 tonnes of nickel and 3,881 tonnes of copper which
were lower than the prior year quarter due to lower grades and
lower throughput. Production costs were lower than the comparable
prior year quarter due to lower consumable costs. Nickel cash cost
in the quarter of $1.88/lb was higher
than the prior year quarter due primarily to lower by-product
copper price and lower sales volumes.
Neves-Corvo (100% owned): Neves-Corvo
produced 7,610 tonnes of copper for the quarter and 24,177 tonnes
of zinc. Copper production was lower than the prior year comparable
quarter, due to lower grades, while zinc production was higher
primarily due to increased throughput and recoveries driven by the
ramp-up of the Zinc Expansion Project ("ZEP"). Production costs
were comparable to the prior year quarter. Copper cash cost of
$3.99/lb was higher than the prior
year quarter due primarily to lower copper sales volumes.
Zinkgruvan (100% owned): Zinc production of 11,938
tonnes and lead production of 3,816 tonnes were lower than the
prior year quarter due to lower throughput due to a shut-down of
the mill to perform the planned implementation of the sequential
flotation circuit. Copper production of 917 tonnes was higher than
the prior year quarter due to higher grades. Production costs were
lower than the prior year quarter due to lower mine and mill costs.
Zinc cash cost of $0.24/lb was lower
than the prior year quarter due to lower production costs.
Total Production
(contained
metal)a
|
2023
|
|
2022
|
YTD
|
|
Q2
|
|
Q1
|
|
Total
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
Copper
(t)b
|
121,519
|
|
60,057
|
|
61,462
|
|
249,659
|
|
56,552
|
|
63,930
|
|
64,096
|
|
65,081
|
Zinc (t)
|
84,668
|
|
36,115
|
|
48,553
|
|
158,938
|
|
44,308
|
|
40,327
|
|
41,912
|
|
32,391
|
Gold
(koz)b
|
70
|
|
34
|
|
36
|
|
154
|
|
36
|
|
45
|
|
39
|
|
34
|
Nickel (t)
|
8,410
|
|
4,686
|
|
3,724
|
|
17,475
|
|
4,096
|
|
4,379
|
|
4,719
|
|
4,281
|
a. Tonnes (t) and
thousands of ounces (koz)
|
b. Candelaria's
production is on a 100% basis.
|
|
|
|
1 These are
non-GAAP measures. Please refer to the Company's discussion of
non-GAAP and other performance measures in its Management's
Discussion and Analysis for the three and six months ended June 30,
2023 and the Reconciliation of Non-GAAP Measures section at
the end of this news release.
|
Corporate Updates
- On July 10, 2023, the Company
published its 2022 Sustainability Report.
- On July 13, 2023, the Company
announced the closing of the acquisition of 51% of the issued and
outstanding equity of SCM Minera Lumina Copper Chile ("Lumina
Copper"), which owns the Caserones copper-molybdenum mine
("Caserones") located in Chile.
The Company paid an aggregate of approximately $800 million in cash consideration at closing.
Remaining deferred cash consideration of $150 million will be payable in installments over
the six‑year period following the closing date. Lundin Mining also
has the right to acquire up to an additional 19% interest in Lumina
Copper for $350 million over a
five-year period commencing on the first anniversary of the date of
closing. A technical report for the Caserones mine titled
"Caserones Mining Operation, Chile, NI 43-101 Technical Report on the
Caserones Mining Operation" was filed under the Company's
profile.
- On July 27, 2023, the Company
announced it had obtained a three-year term loan ("Term Loan") in a
principal amount of $800 million with
an additional $400 million accordion
and closing of up to an additional 19% interest in Lumina
Copper.
Financial Performance
- Gross profit for the quarter ended June
30, 2023 was $52.8 million, an
increase of $6.8 million and largely
comparable to the prior year quarter. On a year-to-date basis,
gross profit for the period ended June 30,
2023 was $266.2 million and
was lower than the prior year period due to lower sales volumes and
lower metal prices.
- For the three months ended June 30,
2023, net earnings of $61.3
million were $109.9 million
higher than the prior year quarter due primarily to lower general
exploration and business development costs and lower income taxes.
On a year-to-date basis net earnings of $226.6 million were lower than the prior year
period due to lower gross profit resulting from lower realized
prices, partially offset by lower taxes.
- Adjusted earnings for the three months ended June 30, 2023, of $16.0
million were $51.3 million
higher than the adjusted loss of the prior year quarter due to the
same factors as the change in net earnings described above. On a
year-to-date basis adjusted earnings of $141.7 million were lower than the prior year
period due to lower gross profit partially offset by lower income
taxes.
Financial Position and Financing
- Cash and cash equivalents as at June 30,
2023 was $190.2 million. Cash
flow from operations of $194.8
million was used to fund investing activities of
$283.5 million. Cash from financing
activities was $99.9 million, which
was comprised primarily of the proceeds from debt on a net basis
partially offset by dividends paid to shareholders. Cash and cash
equivalents remained relatively unchanged during the six months
ended June 30, 2023.
- As at June 30, 2023, the Company
had a net debt balance of $229.8
million.
- As at August 2, 2023, the Company
had cash and net debt balances of approximately $270.0 million and $930.0
million, respectively. The net debt increase was
attributable to debt financing of the acquisition of
Caserones.
Outlook
Overall, the operations performed well during the second quarter
of 2023. The Company is currently tracking to the midpoint or
higher for copper, gold and nickel guidance and the lower end for
zinc. Production continues to be weighted to the second half of the
year. Candelaria and Eagle production is forecast to be modestly
weighted to the second half of the year, primarily owing to mine
sequencing and the resultant grade profiles. Chapada production is
forecast to be weighted to the second half of the year due to first
half seasonal operating considerations, and forecast grade and
recovery profiles.
Expected cash costs remain consistent with reported guidance for
Candelaria, Caserones and Neves-Corvo. Chapada's cash cost guidance
range has been improved to $2.35 -
$2.55/lb of copper, reflecting lower
pricing of consumables. Eagle's forecast nickel cash cost guidance
has been increased to $2.30 -
$2.45/lb of nickel. While Eagle's
overall operating costs remain consistent with the Company's
previous expectations, nickel cash cost guidance has been increased
primarily driven by lower by-product credits, mainly pricing.
Zinkgruvan's cash cost guidance has been improved to $0.45 - $0.50/lb of
zinc, reflecting greater by-product credits.
A reduction in capital expenditure guidance is expected for the
remainder of the year as the timing of several projects at
Candelaria has been deferred into next year. At Josemaria, foreign
exchange, a delay in planned equipment deliveries and reduced
activities have lowered capital spend guidance.
2023 Production and Cash Cost Guidance
|
|
|
Previous
Guidancea
|
Revised
Guidance
|
|
(contained
metal)
|
Production
|
Cash Cost
($/lb)
|
Production
|
Cash Cost
($/lb)b
|
|
Copper
(t)
|
Candelaria
(100%)
|
145,000 -
155,000
|
1.80 –
1.95c
|
145,000 -
155,000
|
1.80 –
1.95c
|
|
|
Caserones
(100%)e
|
60,000 -
65,000
|
2.30 - 2.45
|
60,000 -
65,000
|
2.30 - 2.45
|
|
|
Chapada
|
43,000 -
48,000
|
2.55 –
2.75d
|
43,000 -
48,000
|
2.35 –
2.55d
|
|
|
Eagle
|
12,000 -
15,000
|
|
12,000 -
15,000
|
|
|
|
Neves-Corvo
|
33,000 -
38,000
|
2.10 –
2.30c
|
33,000 -
38,000
|
2.10 –
2.30c
|
|
|
Zinkgruvan
|
3,000 -
4,000
|
|
3,000 -
4,000
|
|
|
|
Total
|
296,000 -
325,000
|
|
296,000 -
325,000
|
|
|
Zinc
(t)
|
Neves-Corvo
|
100,000 -
110,000
|
|
100,000 -
110,000
|
|
|
|
Zinkgruvan
|
80,000 -
85,000
|
0.60 –
0.65c
|
80,000 -
85,000
|
0.45 –
0.50c
|
|
|
Total
|
180,000 -
195,000
|
|
180,000 -
195,000
|
|
|
Molybdenum
(t)
|
Caserones
(100%)e
|
1,500 -
2,000
|
|
1,500 -
2,000
|
|
|
Gold
(koz)
|
Candelaria
(100%)
|
85 - 90
|
|
85 - 90
|
|
|
|
Chapada
|
55 - 60
|
|
55 - 60
|
|
|
|
Total
|
140 - 150
|
|
140 - 150
|
|
|
Nickel
(t)
|
Eagle
|
13,000 -
16,000
|
1.50 – 1.65
|
13,000 -
16,000
|
2.30 –
2.45
|
a. Guidance as outlined
in the MD&A for the year ended December 31, 2022 and for
Caserones as outlined in the news release "Lundin Mining
Announces
Closing of the Acquisition of Majority Interest in Caserones
Copper-Molybdenum Mine in Chile and Commitments for New $800
Million Term Loan"
provided on July 13, 2023.
b. Cash costs are based
on various assumptions and estimates, including but not limited to:
production volumes, commodity prices (Cu: $3.75/lb, Zn:
$1.30/lb, Mo: $20.00/lb Pb: $0.90/lb, Au: $1,850/oz), foreign
exchange rates (€/USD:1.00, USD/SEK:10.50, USD/CLP:800,
USD/BRL:5.00) and production costs
for the remainder of 2023.
c. 68% of Candelaria's
total gold and silver production are subject to a streaming
agreement, and silver production at Zinkgruvan and Neves-Corvo are
also
subject to streaming agreements. Cash costs are calculated based on
receipt of approximately $425/oz gold and $4.25/oz to $4.57/oz
silver.
d. Chapada's cash cost
is calculated on a by-product basis and does not include the
effects of its copper stream agreements. Effects of the copper
stream
agreements are reflected in copper revenue and will impact realized
price per pound.
e. Caserones guidance
is for the second half of 2023. Closing of the Caserones
Acquisition occurred on July 13, 2023.
|
2023 Capital Expenditureb
|
($ millions)
|
Previous
Guidancea
|
Revisions
|
Revised
Guidance
|
|
Candelaria (100%
basis)
|
400
|
(25)
|
375
|
|
Caserones (100%
basis)c
|
110
|
—
|
110
|
|
Chapada
|
70
|
—
|
70
|
|
Eagle
|
20
|
—
|
20
|
|
Neves-Corvo
|
130
|
—
|
130
|
|
Zinkgruvan
|
70
|
—
|
70
|
|
Other
|
10
|
—
|
10
|
|
Total
Sustaining
|
810
|
(25)
|
785
|
|
Josemaria
|
400
|
(50)
|
350
|
|
Total Capital
Expenditures
|
1,210
|
(75)
|
1,135
|
|
a. Guidance as outlined
in the MD&A for the year ended December 31, 2022 and for
Caserones as outlined in the news release "Lundin Mining
Announces Closing of the Acquisition of Majority Interest in
Caserones Copper-Molybdenum Mine in Chile and Commitments for New
$800 Million
Term Loan" provided on July 13,
2023.
b. Sustaining capital expenditure is a supplementary financial
measure, and expansionary capital expenditure is a non-GAAP measure
- see the
Company's Management Discussion and Analysis for the three and six
months ended June 30, 2023 and the Reconciliation of Non-GAAP
Measures at
the end of this news
release.
c. Caserones guidance is for the second half of 2023. Closing
of the Caserones Acquisition occurred on July 13, 2023.
|
2023 Exploration Investment Guidance
Total exploration expenditures are on target to be $45.0 million in 2023, unchanged from previous
guidance.
Senior Leadership Appointments
The Company would also like to announce the executive
appointments of Cara Allaway as Vice
President, Finance, Steve Little as
Vice President, Technology and Innovation, Tim Walmsley as Vice President, Exploration and
Stephen Williams as Vice President,
Investor Relations.
Cara Allaway
Ms.
Allaway has joined Lundin Mining's Senior Leadership Team as Vice
President, Finance. In her previous role with Eldorado Gold, Cara
was Vice President, Finance, where she was responsible for
overseeing accounting, financial reporting and planning and
analysis functions. Previous to Eldorado Gold, she held similar
roles at Nevsun Resources Ltd. and Dominion Diamond Mines, and
spent 12 years at PwC in the Assurance groups in Halifax and Toronto, and in the Capital Markets Group in
Russia. Cara is a Chartered
Professional Accountant and holds a Bachelor of Science in
Chemistry from Mount Allison University
and a Master of Management and Professional Accounting from the
University of Toronto.
Steve Little
Mr. Little
has joined Lundin Mining's Senior Leadership Team as Vice
President, Technology and Innovation. He has over 30 years of
experience in providing technology leadership within asset
intensive industries such as power generation and heavy
manufacturing, as well as high tech. Prior to joining Lundin
Mining, he was most recently Vice President, Business Technology
Solutions for Seaspan Shipyards and Seaspan Marine Transportation.
A registered Professional Engineer, Mr. Little holds a Bachelor of
Engineering (Electrical) from the Royal
Military College of Canada and an MBA from Queen's
University.
Tim Walmsley
Mr.
Walmsley is the Vice President, Exploration for Lundin Mining and
has more than 30 years of international experience in all stages of
mineral exploration. Prior to his VP position, he held the
role of Senior Director, Exploration. Timothy joined Lundin
Mining as Chile Exploration Manager in 2013. Before joining
Lundin Mining, Timothy held progressively more senior technical
roles with Xstrata plc, Falconbridge Limited, and Noranda Inc.,
based initially in Canada and then
primarily in Chile.
During his career Mr. Walmsley has been responsible for various
aspects of exploration and new business development throughout much
of North and South America and has
contributed to numerous mineral deposit discoveries.
Timothy holds a Bachelor of Applied Science (Honours) in
Geological Engineering from Queen's University in Canada.
Stephen Williams
Mr.
Williams has joined Lundin Mining's Senior Leadership Team as Vice
President, Investor Relations. Stephen is joining from Bluestone
Resources, where he was the Vice President, Corporate Development
& Investor Relations. Previously he was a member of the Metals
& Mining investment banking team at Canaccord Genuity Corp,
where he provided strategic advice to clients on acquisitions,
mergers, and equity financings.
Stephen is a professional engineer by background having worked
for Freeport-McMoRan in an operational and process development
capacity. He holds a B.A.Sc. in Metallurgical Engineering from the
University of British Columbia and an
MBA from the W. P. Carey School of
Business, Arizona State University.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining
company with projects and operations in Argentina, Brazil, Chile, Portugal, Sweden and the
United States of America, primarily producing copper, zinc,
gold and nickel.
The information in this release is subject to the disclosure
requirements of Lundin Mining under the EU Market Abuse Regulation.
The information was submitted for publication, through the agency
of the contact persons set out below on August 2, 2023 at 5:30 pm
Eastern Time.
Technical Information
The scientific and technical information in this press release
has been prepared in accordance with the disclosure standards of
National Instrument 43-101 ("NI 43-101") and has been reviewed by
Arman Barha, P.Eng., Vice President,
Technical Services, a "Qualified Person" under NI 43-101. Mr. Barha
has verified the data disclosed in this release and no limitations
were imposed on his verification process.
Reconciliation of Non-GAAP Measures
The Company uses certain performance measures in its analysis.
These performance measures have no standardized meaning within
generally accepted accounting principles under International
Financial Reporting Standards and, therefore, amounts presented may
not be comparable to similar data presented by other mining
companies. For additional details please refer to the Company's
discussion of non-GAAP and other performance measures in its
Management's Discussion and Analysis for the three and six months
ended June 30, 2023 which is
available on SEDAR at www.sedar.com.
Adjusted EBITDA can be reconciled to the Company's Consolidated
Statement of Earnings as follows:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
($thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Net earnings
(loss)
|
61,302
|
(48,626)
|
|
226,613
|
329,483
|
Add back:
|
|
|
|
|
|
Depreciation, depletion
and amortization
|
130,505
|
142,042
|
|
250,752
|
271,879
|
Finance income and
costs
|
15,897
|
17,309
|
|
31,596
|
32,281
|
Income taxes
|
(19,601)
|
49,003
|
|
29,092
|
126,209
|
|
188,103
|
159,728
|
|
538,053
|
759,852
|
Unrealized foreign
exchange
|
(19,285)
|
2,721
|
|
(10,641)
|
10,574
|
Revaluation gain on
derivatives
|
(14,783)
|
(19,593)
|
|
(34,033)
|
(16,300)
|
Sinkhole
costs
|
11,900
|
—
|
|
16,482
|
—
|
Revaluation gain on
marketable securities
|
(3,464)
|
1,626
|
|
(3,902)
|
(2,266)
|
Gain on disposal of
subsidiary
|
—
|
—
|
|
(5,718)
|
(16,828)
|
Other
|
(283)
|
4,161
|
|
(1,110)
|
1,385
|
Total adjustments -
EBITDA
|
(25,915)
|
(11,085)
|
|
(38,922)
|
(23,435)
|
Adjusted
EBITDA
|
162,188
|
148,643
|
|
499,131
|
736,417
|
|
|
|
|
|
|
Adjusted earnings and adjusted earnings per share can be
reconciled to the Company's Consolidated Statement of Earnings as
follows:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
($thousands, except
share and per share amounts)
|
2023
|
2022
|
|
2023
|
2022
|
Net earnings (loss)
attributable to Lundin Mining shareholders
|
59,109
|
(52,577)
|
|
205,729
|
292,501
|
Add back:
|
|
|
|
|
|
Total adjustments -
EBITDA
|
(25,915)
|
(11,085)
|
|
(38,922)
|
(23,435)
|
Tax effect on
adjustments
|
(554)
|
5,035
|
|
(3,180)
|
3,001
|
Deferred tax arising
from foreign exchange translation
|
(15,989)
|
23,091
|
|
(21,996)
|
(11,863)
|
Other
|
(634)
|
260
|
|
69
|
128
|
Total
adjustments
|
(43,092)
|
17,301
|
|
(64,029)
|
(32,169)
|
Adjusted
earnings
|
16,017
|
(35,276)
|
|
141,700
|
260,332
|
|
|
|
|
|
|
Basic weighted
average number of shares outstanding
|
772,255,656
|
766,775,032
|
|
771,739,532
|
751,676,764
|
|
|
|
|
|
|
Net earnings (loss)
attributable to shareholders
|
0.08
|
(0.07)
|
|
0.27
|
0.39
|
Total
adjustments
|
(0.06)
|
0.02
|
|
(0.09)
|
(0.04)
|
Adjusted earnings
per share
|
0.02
|
(0.05)
|
|
0.18
|
0.35
|
Adjusted operating cash flow and adjusted operating cash flow
per share can be reconciled to cash provided by operating
activities as follows:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
($thousands, except
share and per share amounts)
|
2023
|
2022
|
|
2023
|
2022
|
Cash provided by
operating activities
|
194,844
|
366,411
|
|
406,719
|
683,668
|
Changes in non-cash
working capital items
|
(84,207)
|
(316,665)
|
|
(61,015)
|
(161,117)
|
Adjusted operating
cash flow
|
110,637
|
49,746
|
|
345,704
|
522,551
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
772,255,656
|
766,775,032
|
|
771,739,532
|
751,676,764
|
Adjusted operating
cash flow per share
|
$
0.14
|
0.06
|
|
0.45
|
0.70
|
Free cash flow from operations can be reconciled to cash
provided by operating activities as follows:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
($thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Cash provided by
operating activities
|
194,844
|
366,411
|
|
406,719
|
683,668
|
Sustaining capital
expenditures
|
(187,820)
|
(151,665)
|
|
(343,384)
|
(282,423)
|
General exploration and
business development
|
13,693
|
51,531
|
|
28,458
|
59,813
|
Free cash flow from
operations
|
20,717
|
266,277
|
|
91,793
|
461,058
|
General exploration and
business development
|
(13,693)
|
(51,531)
|
|
(28,458)
|
(59,813)
|
Expansionary capital
expenditures
|
(91,650)
|
(65,603)
|
|
(182,169)
|
(79,757)
|
Free cash
flow
|
(84,626)
|
149,143
|
|
(118,834)
|
321,488
|
Net (debt) cash can be reconciled as follows:
($thousands)
|
June 30,
2023
|
December 31,
2022
|
Cash and cash
equivalents
|
190,182
|
191,387
|
Current portion of
total debt and lease liabilities
|
(284,656)
|
(170,149)
|
Debt and lease
liabilities
|
(130,359)
|
(27,179)
|
|
(415,015)
|
(197,328)
|
Deferred financing fees
(netted in above)
|
(4,998)
|
(4,926)
|
|
(420,013)
|
(202,254)
|
Net
debt
|
(229,831)
|
(10,867)
|
|
|
|
Cash and All-in Sustaining Costs can be reconciled to the
Company's operating costs as follows:
|
Six months ended
June 30, 2023
|
|
|
|
Operations
|
Candelaria
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
|
Sales volumes
(Contained metal):
|
|
|
|
|
|
|
Tonnes
|
71,917
|
19,236
|
6,594
|
14,201
|
25,986
|
|
|
Pounds
(000s)
|
158,550
|
42,408
|
14,537
|
31,308
|
57,289
|
|
|
Production costs
|
|
|
|
|
|
822,962
|
|
Less: Royalties and
other
|
|
|
|
|
|
(20,055)
|
|
|
|
|
|
|
|
802,907
|
|
Deduct: By-product
credits
|
|
|
|
|
|
(279,601)
|
|
Add: Treatment and
refining
|
|
|
|
|
|
69,129
|
|
Cash cost
|
345,212
|
107,669
|
30,630
|
84,163
|
24,761
|
592,435
|
|
Cash cost per pound
($/lb)
|
2.18
|
2.54
|
2.11
|
2.69
|
0.43
|
|
|
Add: Sustaining capital
|
214,103
|
35,717
|
10,664
|
47,194
|
30,462
|
|
|
Royalties
|
—
|
4,252
|
10,606
|
1,813
|
—
|
|
|
Reclamation and other
closure
accretion and depreciation
|
4,751
|
3,648
|
5,969
|
2,620
|
1,800
|
|
|
Leases &
other
|
6,797
|
2,137
|
1,644
|
306
|
202
|
|
|
All-in sustaining
cost
|
570,863
|
153,423
|
59,513
|
136,096
|
57,225
|
|
|
AISC per pound
($/lb)
|
3.60
|
3.62
|
4.09
|
4.35
|
1.00
|
|
|
($000s, unless
otherwise noted)
|
2023
Guidance
|
|
|
Cash cost
|
620,000
|
260,000
|
90,000
|
180,000
|
90,000
|
|
|
Cash cost per
pound($/lb)
|
1.80 – 1.95
|
2.35 – 2.55
|
2.30 – 2.45
|
2.10 – 2.30
|
0.45 – 0.50
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2022
|
|
|
Operations
|
Candelaria
|
Chapada
|
Eagle
|
Neves-
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal):
|
|
|
|
|
|
Tonnes
|
78,103
|
20,709
|
7,473
|
16,667
|
34,327
|
|
Pounds
(000s)
|
172,187
|
45,655
|
16,475
|
36,744
|
75,678
|
|
Production costs
|
|
|
|
|
|
784,617
|
Less: Royalties and
other
|
|
|
|
|
|
(29,528)
|
|
|
|
|
|
|
755,089
|
Deduct: By-product
credits
|
|
|
|
|
|
(315,735)
|
Add: Treatment and
refining
|
|
|
|
|
|
62,115
|
Cash cost
|
296,225
|
103,309
|
(638)
|
75,001
|
27,572
|
501,469
|
Cash cost per pound
($/lb)
|
1.72
|
2.26
|
(0.04)
|
2.04
|
0.36
|
|
Add: Sustaining capital
|
169,071
|
44,215
|
7,383
|
33,276
|
23,122
|
|
Royalties
|
—
|
6,106
|
18,424
|
2,197
|
—
|
|
Reclamation and other
closure
accretion and depreciation
|
4,051
|
3,749
|
9,300
|
451
|
2,073
|
|
Leases &
other
|
4,626
|
2,039
|
1,282
|
396
|
398
|
|
All-in sustaining
cost
|
473,973
|
159,417
|
35,751
|
111,321
|
53,165
|
|
AISC per pound
($/lb)
|
2.75
|
3.49
|
2.17
|
3.03
|
0.70
|
|
|
Three months ended
June 30, 2023
|
|
|
Operations
|
Candelaria
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal):
|
|
|
|
|
|
Tonnes
|
36,347
|
10,164
|
3,859
|
6,170
|
9,374
|
|
Pounds
(000s)
|
80,132
|
22,408
|
8,507
|
13,603
|
20,666
|
|
Production costs
|
|
|
|
|
|
405,198
|
Less: Royalties and
other
|
|
|
|
|
|
(7,969)
|
|
|
|
|
|
|
397,229
|
Deduct: By-product
credits
|
|
|
|
|
|
(122,636)
|
Add: Treatment and
refining
|
|
|
|
|
|
32,514
|
Cash cost
|
171,520
|
60,351
|
15,990
|
54,271
|
4,975
|
307,107
|
Cash cost per pound
($/lb)
|
2.14
|
2.69
|
1.88
|
3.99
|
0.24
|
|
Add: Sustaining capital
|
123,417
|
19,690
|
3,562
|
22,133
|
15,994
|
|
Royalties
|
—
|
2,029
|
4,920
|
83
|
—
|
|
Interest
expense
|
2,444
|
1,847
|
3,011
|
1,296
|
739
|
|
Leases &
other
|
3,654
|
1,171
|
897
|
148
|
100
|
|
All-in sustaining
cost
|
301,035
|
85,088
|
28,380
|
77,931
|
21,808
|
|
AISC per pound
($/lb)
|
3.76
|
3.80
|
3.34
|
5.73
|
1.06
|
|
|
Three months ended
June 30, 2022
|
|
|
Operations
|
Candelaria
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal):
|
|
|
|
|
|
Tonnes
|
39,655
|
7,905
|
4,206
|
8,183
|
18,525
|
|
Pounds
(000s)
|
87,424
|
17,427
|
9,273
|
18,040
|
40,841
|
|
Production costs
|
|
|
|
|
|
402,190
|
Less: Royalties and
other
|
|
|
|
|
|
(13,657)
|
|
|
|
|
|
|
388,533
|
Deduct: By-product
credits
|
|
|
|
|
|
(134,728)
|
Add: Treatment and
refining
|
|
|
|
|
|
29,960
|
Cash cost
|
162,240
|
51,872
|
8,341
|
43,198
|
18,114
|
283,765
|
Cash cost per pound
($/lb)
|
1.86
|
2.98
|
0.90
|
2.39
|
0.44
|
|
Add: Sustaining capital
|
86,107
|
29,760
|
2,923
|
13,760
|
14,083
|
|
Royalties
|
—
|
2,442
|
10,633
|
(616)
|
—
|
|
Interest
expense
|
2,082
|
1,865
|
4,683
|
120
|
956
|
|
Leases &
other
|
2,658
|
1,110
|
631
|
194
|
160
|
|
All-in sustaining
cost
|
253,087
|
87,049
|
27,211
|
56,656
|
33,313
|
|
AISC per pound
($/lb)
|
2.89
|
5.00
|
2.93
|
3.14
|
0.82
|
|
Cautionary Statement on Forward-Looking
Information
Certain of the statements made and information contained
herein is "forward-looking information" within the meaning of
applicable Canadian securities laws. All statements other than
statements of historical facts included in this document constitute
forward-looking information, including but not limited to
statements regarding the Company's plans, prospects and business
strategies; the Company's guidance on the timing and amount of
future production and its expectations regarding the results of
operations; expected costs; permitting requirements and timelines;
timing and possible outcome of pending litigation; the results of
any Preliminary Economic Assessment, Feasibility Study, or Mineral
Resource and Mineral Reserve estimations, life of mine estimates,
and mine and mine closure plans; anticipated market prices of
metals, currency exchange rates, and interest rates; the
development and implementation of the Company's Responsible Mining
Management System; the Company's ability to comply with contractual
and permitting or other regulatory requirements; anticipated
exploration and development activities at the Company's projects;
the Company's integration of acquisitions and any anticipated
benefits thereof, including the Caserones transaction; and
expectations for other economic, business, and/or competitive
factors. Words such as "believe", "expect", "anticipate",
"contemplate", "target", "plan", "goal", "aim", "intend",
"continue", "budget", "estimate", "may", "will", "can", "could",
"should", "schedule" and similar expressions identify
forward-looking statements.
Forward-looking information is necessarily based upon various
estimates and assumptions including, without limitation, the
expectations and beliefs of management, including that the Company
can access financing, appropriate equipment and sufficient labour;
assumed and future price of copper, nickel, zinc, gold and other
metals; anticipated costs; ability to achieve goals; the prompt and
effective integration of acquisitions; that the political
environment in which the Company operates will continue to support
the development and operation of mining projects; and assumptions
related to the factors set forth below. While these factors and
assumptions are considered reasonable by Lundin Mining as at the
date of this document in light of management's experience and
perception of current conditions and expected developments, these
statements are inherently subject to significant business, economic
and competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements and undue reliance
should not be placed on such statements and information. Such
factors include, but are not limited to: global financial
conditions, market volatility and inflation, including pricing and
availability of key supplies and services; risks inherent in mining
including but not limited to risks to the environment, industrial
accidents, catastrophic equipment failures, unusual or unexpected
geological formations or unstable ground conditions, and natural
phenomena such as earthquakes, flooding or unusually severe
weather; uninsurable risks; project financing risks, liquidity
risks and limited financial resources; volatility and fluctuations
in metal and commodity demand and prices; delays or the inability
to obtain, retain or comply with permits; significant reliance on a
single asset; reputation risks related to negative publicity with
respect to the Company or the mining industry in general; health
and safety risks; risks relating to the development of the
Josemaria Project; inability to attract and retain highly skilled
employees; risks associated with climate change; compliance with
environmental, health and safety laws and regulations; unavailable
or inaccessible infrastructure, infrastructure failures, and risks
related to ageing infrastructure; risks inherent in and/or
associated with operating in foreign countries and emerging
markets, including with respect to foreign exchange and capital
controls; economic, political and social instability and mining
regime changes in the Company's operating jurisdictions, including
but not limited to those related to permitting and approvals,
environmental and tailings management, labour, trade relations, and
transportation; risks relating to indebtedness; the inability to
effectively compete in the industry; risks associated with
acquisitions and related integration efforts, including the ability
to achieve anticipated benefits, unanticipated difficulties or
expenditures relating to integration and diversion of management
time on integration, including with respect to the Caserones
transaction; changing taxation regimes; risks related to mine
closure activities, reclamation obligations, environmental
liabilities and closed and historical sites; reliance on key
personnel and reporting and oversight systems, as well as third
parties and consultants in foreign jurisdictions; information
technology and cybersecurity risks; risks associated with the
estimation of Mineral Resources and Mineral Reserves and the
geology, grade and continuity of mineral deposits including but not
limited to models relating thereto; actual ore mined and/or metal
recoveries varying from Mineral Resource and Mineral Reserve
estimates, estimates of grade, tonnage, dilution, mine plans and
metallurgical and other characteristics; ore processing efficiency;
community and stakeholder opposition; financial projections,
including estimates of future expenditures and cash costs, and
estimates of future production may not be reliable; enforcing legal
rights in foreign jurisdictions; environmental and regulatory risks
associated with the structural stability of waste rock dumps or
tailings storage facilities; activist shareholders and proxy
solicitation matters; risks relating to dilution; regulatory
investigations, enforcement, sanctions and/or related or other
litigation; risks relating to payment of dividends; counterparty
and customer concentration risks; the estimation of asset carrying
values; risks associated with the use of derivatives; relationships
with employees and contractors, and the potential for and effects
of labour disputes or other unanticipated difficulties with or
shortages of labour or interruptions in production; conflicts of
interest; existence of a significant shareholder; exchange rate
fluctuations; challenges or defects in title; internal controls;
compliance with foreign laws; potential for the allegation of fraud
and corruption involving the Company, its customers, suppliers or
employees, or the allegation of improper or discriminatory
employment practices, or human rights violations; the threat
associated with outbreaks of viruses and infectious diseases; risks
relating to minor elements contained in concentrate products; and
other risks and uncertainties, including but not limited to those
described in the "Risk and Uncertainties" section of the Company's
Annual Information Form and the "Managing Risks" section of the
Company's MD&A for the year ended December 31, 2022, which are available on SEDAR
at www.sedar.com under the Company's profile.
All of the forward-looking statements made in this document
are qualified by these cautionary statements. Although the Company
has attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated, forecast or intended
and readers are cautioned that the foregoing list is not exhaustive
of all factors and assumptions which may have been used. Should one
or more of these risks and uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described in forward-looking information.
Accordingly, there can be no assurance that forward-looking
information will prove to be accurate and forward-looking
information is not a guarantee of future performance. Readers are
advised not to place undue reliance on forward-looking information.
The forward-looking information contained herein speaks only as of
the date of this document. The Company disclaims any intention or
obligation to update or revise forward‐looking information or to
explain any material difference between such and subsequent actual
events, except as required by applicable law.
Mark Turner, Vice President,
Business Valuations and Investor Relations: +1 416 342 5565;
Stephen Williams, Vice President,
Investor Relations +1 416 342 5117; Irina
Kuznetsova, Manager, Investor Relations: +1 416 342 5583;
Robert Eriksson, Investor Relations
Sweden: +46 8 440 54 40
View original
content:https://www.prnewswire.co.uk/news-releases/lundin-mining-second-quarter-2023-results-301892114.html