VANCOUVER, BC, Nov. 1, 2023
/CNW/ - (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining
Corporation ("Lundin Mining" or the "Company") today
reported its third quarter 2023 financial results.
"Our operations continued with a strong performance in the
third quarter. As a result, we are increasing our production
guidance for Caserones and Eagle. The acquisition of Caserones
enabled us to achieve a new record in quarterly consolidated copper
production, and we also achieved a record in quarterly zinc
production. This led the Company to an adjusted EBITDA of
$415 million for the period."
commented Peter Rockandel,
CEO.
Mr. Rockandel added, "During the integration process of
Caserones, our team has identified and outlined synergies between
Caserones and Candelaria, which are expected to yield initial
annual savings of $20 to $30 million per year. We are excited about
launching the largest exploration program at Caserones since
production commenced, targeting resource extensions and near-mine
discoveries. The corporate office move to Vancouver is complete and all senior executive
positions are in place. As we approach 2024, Lundin Mining is
strategically, operationally, and financially, in a strong position
to continue to deliver on our plans and execute on the next phase
of growth. On a personal note, as this is my last quarter as CEO, I
would like to thank all our employees, partners and stakeholders
for their dedication, hard work and support, all of which have been
integral to our current and future success. I am extremely proud of
what the team has been able to accomplish during my tenure as
CEO."
Third Quarter Highlights
- Copper Production: The Company achieved consolidated
production of 89,942 tonnes of copper, a new quarterly record.
- Other Production: During the quarter a total of 49,774
tonnes of zinc, 4,290 tonnes of nickel and approximately 35,000
ounces of gold were produced. A quarterly zinc production record
was achieved as the zinc expansion project ("ZEP") at Neves-Corvo
ramps up and a full quarter of operation from the sequential
flotation project at Zinkgruvan was realized.
- Revenue: $992.2 million in
the quarter.
- Adjusted Earnings: Net loss attributable to shareholders
of the Company was $3.0 million
($0.00 per share). Adjusted earnings
attributable to shareholders of the Company1 was
$85.6 million ($0.11 per share).
- Adjusted EBITDA: Adjusted earnings before interest,
taxes, depreciation and
amortization1 ("EBITDA") of $415.1 million in the third quarter.
- Cash Generation: Cash provided by operating activities
was $303.8 million and cash and cash
equivalents at September 30, 2023 was
$357.3 million. Adjusted operating
cash flow1 was $316.5
million ($0.41 per share),
after removing the impact of working capital. Free cash
flow1 was $71.1
million.
- Caserones Acquisition: Completed the acquisition of 51%
of the Caserones copper-molybdeum mine on July 13, 2023, adding another long-life asset in
a tier one jurisdiction. The Company anticipates initial annual
synergies from supply chain and service contracts between Caserones
and Candelaria to be $20 million to
$30 million per year.
- Term Loan: To fund the Caserones acquisition, the
Company obtained a term loan in July
2023 of a principal amount of $800.0
million with an additional $400.0
million accordion option maturing in July 2026. As at September
30, 2023, the Company had a net debt1 balance of
$1,158.9 million.
- CEO Succession: Peter
Rockandel, the current Chief Executive Officer announced
that he will be stepping down from the role of CEO and from the
Board of Directors as of December 31,
2023. Those responsibilities will be assumed by Jack Lundin, current President, and former
Director of the Company.
- Outlook: Revised annual production guidance, including
an increase in copper production from 296,000 - 325,000 tonnes to
305,000 - 325,000 tonnes. Cash cost guidance was lowered at
Caserones and Eagle and increased at Candelaria. Annual capital
expenditure guidance is lower by $30
million.
__________________________________
|
1 These are
non-GAAP measures. Please refer to the Company's discussion of
non-GAAP and other performance measures in its Management's
Discussion and Analysis for the three and nine months ended
September 30, 2023 and the Reconciliation of Non-GAAP measures
section at the end of this news release.
|
Summary Financial Results
|
Three months
ended
September
30,
|
|
Nine
months ended
September
30,
|
US$ Millions (except
per share amounts)
|
2023
|
2022
|
|
2023
|
2022
|
Revenue
|
992.2
|
648.5
|
|
2,332.1
|
2,229.8
|
Gross profit
|
197.3
|
82.5
|
|
463.5
|
607.3
|
Attributable net
earnings (loss)2
|
(3.0)
|
(11.2)
|
|
202.8
|
281.3
|
Net earnings
(loss)
|
21.9
|
(11.2)
|
|
248.5
|
318.2
|
Adjusted earnings
1,2,3
|
85.6
|
30.9
|
|
256.9
|
288.9
|
Adjusted
EBITDA1,3
|
415.1
|
202.4
|
|
943.8
|
938.8
|
Basic and diluted
earnings per share ("EPS")2
|
—
|
(0.01)
|
|
0.26
|
0.37
|
Adjusted
EPS1,2,3
|
0.11
|
0.04
|
|
0.33
|
0.38
|
Cash provided by
operating activities
|
303.8
|
36.3
|
|
710.5
|
720.0
|
Adjusted operating cash
flow1
|
316.5
|
181.3
|
|
662.2
|
703.9
|
Adjusted operating cash
flow per share1
|
0.41
|
0.23
|
|
0.86
|
0.93
|
Free cash flow from
(used in) operations1
|
136.5
|
(43.9)
|
|
228.3
|
417.1
|
Free cash
flow1
|
71.1
|
(163.2)
|
|
(47.7)
|
158.3
|
Cash and cash
equivalents
|
357.3
|
226.9
|
|
357.3
|
226.9
|
Net
debt1
|
(1,158.9)
|
177.6
|
|
(1,158.9)
|
177.6
|
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 nine months ended
September 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.
|
3 Q2 2023
amounts have been adjusted from those presented in the Company's
MD&A for the three and six months ended June 30,
2023.
|
Quarter Ended September 30,
2023
- The Company generated revenue of $992.2
million, gross profit of $197.3
million and adjusted EBITDA of $415.1
million (Q3 2022 - $202.4
million).
- Net loss attributable to shareholders of the Company was
$3.0 million ($0.00 per share) in the third quarter, impacted
by higher interest expense, non-cash unrealized losses on
derivative contracts and increased deferred tax expense as a result
of the enactment of the mining royalty law in Chile4.
- Adjusted earnings attributable to shareholders of the Company
for the quarter of $85.6 million
($0.11 per share attributable to
shareholders of the Company) were $49.5
million higher than the prior year quarter after adjusting
for the non-cash revaluation of derivative contracts, fair value
adjustments relating to the Caserones acquisition and deferred tax
relating to the mining royalty rate change4, among other
things.
- Cash and cash equivalents as at September 30, 2023 were $357.3 million. Cash generated from operations of
$303.8 million during the quarter was
used to fund investing activities of $908.8
million. Investing activities in the third quarter included
$648.6 million net cash paid at
closing for the acquisition of Caserones, consisting of
$796.6 million upfront cash
consideration after adjustments, net of $148
million cash and cash equivalents held by SCM Minera Lumina
Copper Chile at closing on a 100% basis.
- Free cash flow of $71.1 million
was $234.3 million higher than the
prior year comparable period and benefited from the inclusion of
production from Caserones, combined with higher realized copper
prices and higher overall changes in working capital.
- As at November 1, 2023, the
Company had cash and net debt balances of approximately
$368.6 million and $1,137.6 million, respectively.
4 Refer
to Management's Discussion and Analysis for the three and nine
months ended September 30, 2023 for further information related to
the deferred tax relating to the mining royalty rate
change.
|
Corporate Highlights
- Candelaria EIA: A new Environmental Impact Assessment
("EIA") was granted at Candelaria for the extension of operations
from 2030 to 2040.
- Exploration: Exploration programs continue at our
existing assets while new exploration drilling campaigns are
underway at Caserones and Josemaria. Drilling at Caserones will be
the largest exploration program since the mine began operation in
2013. The initial phase of the drill program is expected to be over
10,000 meters and results are expected in H1 2024.
- Copper Mark: Caserones has achieved the Copper Mark at
its operations, a designation that highlights the Company's
commitment to sustainable mining practices.
- Josemaria Project: The Company continues to derisk and
advance the Josemaria project through optimization and trade off
studies. These studies will continue into 2024.
- Senior Leadership Appointments: The corporate office
move to Vancouver has been
completed. The Company is pleased to announce the following
executive appointments, Peter Brady
has been hired as General Counsel, Ricardo
Checura as Vice President, Health and Safety and
Nathan Monash as Vice President,
Sustainability.
Outlook
Production and cash cost guidance for 2023 is updated from that
disclosed in the Company's Management's Discussion and Analysis for
the three and six months ended June 30,
2023.
Most production guidance ranges are tightening and improving,
with the lower end of the range increasing for copper, nickel and
gold. Cash cost guidance is lower for Caserones and
Eagle driven by higher production volumes and by-product
credits, and increasing for Candelaria, reflecting higher operating
costs. Production continues to be weighted to the second half of
the year, notably at Chapada due to the first half seasonal
operating conditions and forecast grade and recovery profiles.
2023 Production and Cash Cost Guidance
|
|
|
Previous
Guidancea
|
Revised
Guidance
|
|
(contained
metal)
|
Production
|
Cash Cost
($/lb)f
|
Production
|
Cash Cost
($/lb)b,f
|
|
Copper
(t)
|
Candelaria
(100%)
|
145,000
- 155,000
|
1.80 –
1.95c
|
147,000 - 153,000
|
2.00 –
2.20c
|
|
|
Caserones
(100%)e
|
60,000
- 65,000
|
2.30 – 2.45
|
65,000 -
69,000
|
2.00 –
2.20
|
|
|
Chapada
|
43,000
- 48,000
|
2.35 –
2.55d
|
45,000 -
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 -
36,000
|
2.10 –
2.30c
|
|
|
Zinkgruvan
|
3,000
- 4,000
|
|
3,000
- 4,000
|
|
|
|
Total
|
296,000
- 325,000
|
|
305,000 - 325,000
|
|
|
Zinc
(t)
|
Neves-Corvo
|
100,000
- 110,000
|
|
103,000 - 110,000
|
|
|
|
Zinkgruvan
|
80,000
- 85,000
|
0.45 –
0.50c
|
78,000 -
82,000
|
0.45 –
0.50c
|
|
|
Total
|
180,000
- 195,000
|
|
181,000 - 192,000
|
|
|
Molybdenum
(t)
|
Caserones
(100%)e
|
1,500 -
2,000
|
|
1,500 -
2,000
|
|
|
Gold
(koz)
|
Candelaria
(100%)
|
85 - 90
|
|
87 -
92
|
|
|
|
Chapada
|
55 - 60
|
|
55 - 60
|
|
|
|
Total
|
140 - 150
|
|
142 -
152
|
|
|
Nickel
(t)
|
Eagle
|
13,000
- 16,000
|
2.30 – 2.45
|
15,000 -
17,000
|
2.00 –
2.20
|
a. Guidance as outlined
in the MD&A for the three and six months ended June 30,
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:
$1.10/lb, Mo: $20.00/lb Pb: $0.90/lb, Au: $1,850/oz), foreign
exchange rates (€/USD:1.05, 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.
|
f. 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 nine months ended September 30, 2023 and
the Reconciliation of Non-GAAP measures section at the end of this
news release.
|
As a result of re-phasing several projects at Neves-Corvo and
Zinkgruvan, capital expenditure guidance is lower by an additional
$30 million for 2023. As disclosed in
the Company's Management's Discussion and Analysis for the three
and six months ended June 30, 2023,
capital spend guidance at Josemaria was previously lowered to
$350 million for 2023 due to foreign
exchange, a delay in planned equipment deliveries and reduced
activities.
2023 Capital Expenditure
|
($ millions)
|
Previous
Guidancea
|
Revisions
|
Revised
Guidance
|
|
Candelaria (100%
basis)
|
375
|
—
|
375
|
|
Caserones (100%
basis)c
|
110
|
—
|
110
|
|
Chapada
|
70
|
—
|
70
|
|
Eagle
|
20
|
—
|
20
|
|
Neves-Corvo
|
130
|
(25)
|
105
|
|
Zinkgruvan
|
70
|
(5)
|
65
|
|
Other
|
10
|
—
|
10
|
|
Total
Sustaining
|
785
|
(30)
|
755
|
|
Josemaria
|
350
|
—
|
350
|
|
Total Capital
Expenditures
|
1,135
|
(30)
|
1,105
|
|
a. Guidance as outlined
in the MD&A for the three and six months ended June 30,
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.
|
2023 Exploration Investment Guidance
Total exploration expenditures are on target to be $45.0 million in 2023, unchanged from previous
guidance.
Operational Performance
Total Production
(contained
metal)a
|
2023
|
2022
|
YTD
|
Q3
|
Q2
|
Q1
|
Total
|
Q4
|
Q3
|
Q2
|
Q1
|
Copper
(t)b
|
211,461
|
89,942
|
60,057
|
61,462
|
249,659
|
56,552
|
63,930
|
64,096
|
65,081
|
Zinc (t)
|
134,442
|
49,774
|
36,115
|
48,553
|
158,938
|
44,308
|
40,327
|
41,912
|
32,391
|
Molybdenum
(t)b
|
1,096
|
1,096
|
—
|
|
|
|
|
|
|
Gold
(koz)b
|
105
|
35
|
34
|
36
|
154
|
36
|
45
|
39
|
34
|
Nickel (t)
|
12,700
|
4,290
|
4,686
|
3,724
|
17,475
|
4,096
|
4,379
|
4,719
|
4,281
|
a. Tonnes (t) and
thousands of ounces (koz)
|
b. Candelaria and
Caserones production is on a 100% basis. Caserones results are from
July 13, 2023.
|
Candelaria (80% owned): Candelaria produced
34,275 tonnes of copper and approximately 20,000 ounces of gold in
concentrate on a 100% basis in the quarter. Copper production was
lower than the prior year quarter primarily due to lower grades
partially offset by higher throughput. Gold production was lower
than the prior year quarter due to lower grades and recoveries.
Current quarter production costs and copper cash cost of
$2.19/lb were higher than the prior
year quarter largely owing to higher contractor and maintenance
costs and unfavorable foreign exchange. Cash cost was further
impacted by lower sales volumes.
Caserones (51% owned): In the
three months ended September 30, 2023
Caserones produced 34,427 tonnes of copper and 1,321 tonnes of
molybdenum on a 100% basis, of which 29,821 tonnes of copper and
1,096 tonnes of molybdenum were produced from the acquisition
closing date of July 13. Copper and
molybdenum production were higher than planned due to increased
throughput and recoveries. Production costs in the quarter were
negatively impacted by the recognition of fair market value
adjustments to inventory due to the acquisition. Copper cash cost
of $1.60/lb benefited from higher
than planned production and by-product credits.
Chapada (100% owned): Chapada produced 12,286
tonnes of copper and approximately 15,000 ounces of gold in
concentrate in the quarter. Copper and gold production was lower
than the prior year quarter primarily due to lower throughput and
grades. Production costs were lower than the prior year quarter due
to lower sales volumes. Copper cash cost of $2.28/lb for the quarter increased from the prior
year quarter due to lower sales volumes, unfavorable foreign
exchange variances, and lower by-product credits and
production.
Eagle (100% owned): During the quarter Eagle
produced 4,290 tonnes of nickel and 3,245 tonnes of copper which
were lower than the prior year quarter due to lower planned grades.
Production costs were higher than the comparable prior year quarter
due to inflationary contractual cost increases. Nickel cash cost in
the quarter of $2.07/lb was higher
than the prior year quarter primarily due to lower by-product
credits and higher production costs.
Neves-Corvo (100% owned): Neves-Corvo
produced 9,016 tonnes of copper and 25,807 tonnes of zinc in the
quarter. Copper production was higher than in the prior year
quarter due to higher throughput, grades and recoveries. Zinc
production was higher than in the prior year quarter primarily due
to increased grades and recoveries driven by the Zinc Expansion
Project ("ZEP"). Production costs during the quarter were lower
than the prior year quarter despite higher sales, primarily due to
reduced electricity costs. Current quarter copper cash cost per
pound of $2.27/lb was lower than the
prior year quarter primarily as a result of lower input costs and
benefited from higher production and sales.
Zinkgruvan (100% owned): Zinc production of
23,967 tonnes and lead production of 8,643 tonnes were higher than
the prior year quarter primarily due to higher throughput and
grades. Copper production of 1,299 tonnes was lower than the prior
year quarter due to lower throughput. Production costs were higher
than the prior year quarter primarily due to higher sales volumes.
Zinc cash cost per pound of $0.28/lb
during the quarter was higher than the prior year quarter primarily
as a result of lower by-product costs per pound and higher
treatment and refining charges.
Senior Leadership Appointments
The Company is pleased to announce the executive appointments of
Peter Brady as General Counsel,
Ricardo Checura as Vice President,
Health and Safety, and Nathan Monash
as Vice President, Sustainability.
Peter Brady
General
Counsel
Mr. Brady has joined Lundin Mining's Executive
Leadership Team as General Counsel. He has over 20 years of
experience in industry and private practice working with major
international mining companies. Prior to joining Lundin Mining, he
most recently was Chief Legal & Governance Officer with Vale
Base Metals, responsible for advising their senior leadership team
on all legal and business risk, compliance, and corporate
governance matters. Previous to Vale Base Metals, he was a Partner
at McCarthy Tetrault. Mr. Brady holds a Bachelor of Laws from
Queen's University and a Master of Arts in Environmental Law from
the University of Windsor.
Ricardo Checura
Vice President Health and
Safety
Mr. Checura was previously at BHP Inc, where he spent
the past 12 years in various leadership roles, most recently as
Head of Risk Operations. He was a member of BHP's Global Risk
Leadership Team and managed the risk management activities of their
Global Operating Assets. Prior to his most recent role, Ricardo
served as their Head of Safety – Minerals Americas between 2018 to
2021. Mr. Checura's experience also includes implementing Fatal
Risk Management from his previous roles in the mining industry.
Ricardo holds a Bachelor of Science in Engineering from the
University of Concepción and a Master of Business Administration
from the University of Chile.
Nathan Monash
Vice
President, Sustainability
Mr. Monash has joined Lundin
Mining's Senior Leadership Team as Vice President, Sustainability.
He has over 20 years of experience in the mining sector, developing
and integrating sustainability strategy and governance structures
and advising operations on community relations, local government
relations, human rights and communications. Prior to joining Lundin
Mining, he most recently led Lundin
Gold's sustainability activities during the construction and
operation of the Fruta del Norte mine in Ecuador and prior to that led AngloGold
Ashanti's sustainability efforts in the Americas. Nathan has also
worked with International Finance Corporation, guiding extractive
industry clients on the structure and implementation of sustainable
development strategies, and spent several years with the World
Economic Forum where he worked closely with leaders from business,
academia and government to identify and address key economic,
social and environmental issues facing the mining and metals
industry. Mr. Monash holds a Bachelor of Science in Biology from
McGill University and a Master of Arts
from the Fletcher School at
Tufts 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,
molybdenum, 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 November 1, 2023 at 3:00
pm Pacific Standard 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.
For further Technical Information on the Company's material
properties, refer to the following technical reports, each of which
is available on the Company's SEDAR profile at www.sedarplus.ca:
Candelaria: technical report entitled Technical Report for the
Candelaria Copper Mining Complex, Atacama Region, Region III,
Chile dated February 22, 2023. Caserones: Caserones Mining
Operation, Chile, NI 43-101
Technical Report on the Caserones Mining Operation, dated
July 13, 2023 Chapada: technical
report entitled Technical Report on the Chapada Mine, Goiás State,
Brazil dated October 10, 2019. Eagle Mine: technical report
entitled Technical Report on the Eagle Mine, Michigan, U.S.A. dated February 22, 2023. Neves-Corvo: technical report
entitled NI 43-101 Technical Report on the Neves-Corvo Mine,
Portugal dated February 22, 2023. Josemaria Project: technical
report entitled NI 43-101 Technical Report, Feasibility Study for
the Josemaria Copper-Gold Project, San Juan Province, Argentina, September
28, 2020, which is available on Josemaria Resources' SEDAR
profile at www.sedarplus.ca.
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 nine months
ended September 30, 2023 which is
available on SEDAR+ at www.sedarplus.ca.
Net (debt) cash can be reconciled as follows:
($thousands)
|
September 30,
2023
|
December 31,
2022
|
|
Debt and lease
liabilities
|
(1,130,754)
|
(27,179)
|
|
Current portion of
total debt and lease liabilities
|
(380,645)
|
(170,149)
|
|
Less deferred financing
fees (netted in above)
|
(4,810)
|
(4,926)
|
|
|
(1,516,209)
|
(202,254)
|
|
Cash and cash
equivalents
|
357,337
|
191,387
|
|
Net
debt
|
(1,158,872)
|
(10,867)
|
|
|
|
|
|
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
September
30,
|
|
Nine
months ended
September
30,
|
($thousands, except
share and per share amounts)
|
2023
|
2022
|
|
2023
|
2022
|
Cash provided by
operating activities
|
303,812
|
36,331
|
|
710,531
|
719,999
|
Changes in non-cash
working capital items
|
12,655
|
145,006
|
|
(48,360)
|
(16,111)
|
Adjusted operating
cash flow
|
316,467
|
181,337
|
|
662,171
|
703,888
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
773,147,920
|
775,563,527
|
|
772,214,160
|
759,726,506
|
Adjusted operating
cash flow per share
|
$
0.41
|
0.23
|
|
0.86
|
0.93
|
Free cash flow from operations can be reconciled to cash
provided by operating activities as follows:
|
Three months
ended
September
30,
|
|
Nine
months ended
September
30,
|
($thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Cash provided by
operating activities
|
303,812
|
36,331
|
|
710,531
|
719,999
|
General exploration and
business development
|
12,734
|
72,446
|
|
41,192
|
132,259
|
Sustaining capital
expenditures
|
(180,013)
|
(152,722)
|
|
(523,397)
|
(435,145)
|
Free cash flow from
operations
|
136,533
|
(43,945)
|
|
228,326
|
417,113
|
General exploration and
business development
|
(12,734)
|
(72,446)
|
|
(41,192)
|
(132,259)
|
Expansionary capital
expenditures
|
(52,662)
|
(46,766)
|
|
(234,831)
|
(126,523)
|
Free cash
flow
|
71,137
|
(163,157)
|
|
(47,697)
|
158,331
|
Adjusted EBITDA can be reconciled to the Company's Consolidated
Statement of Earnings as follows:
|
Three months
ended
September
30,
|
|
Nine
months ended
September
30,
|
($thousands)
|
2023
|
2022
|
|
2023
|
2022
|
Net earnings
(loss)
|
21,883
|
(11,245)
|
|
248,496
|
318,238
|
Add back:
|
|
|
|
|
|
Depreciation, depletion
and amortization
|
179,788
|
140,161
|
|
430,540
|
412,040
|
Finance income and
costs
|
36,212
|
15,240
|
|
67,808
|
47,521
|
Income taxes
|
84,891
|
10,766
|
|
113,983
|
136,975
|
|
322,774
|
154,922
|
|
860,827
|
914,774
|
Unrealized foreign
exchange
|
9,096
|
14,426
|
|
(1,545)
|
25,000
|
Revaluation loss on
derivatives1
|
47,874
|
—
|
|
43,407
|
—
|
Sinkhole
costs
|
(1,247)
|
7,789
|
|
15,235
|
7,789
|
Revaluation loss (gain)
on marketable securities
|
3,449
|
(554)
|
|
(453)
|
1,712
|
Caserones inventory
fair value adjustment
|
32,185
|
—
|
|
32,185
|
—
|
Unrealized foreign
exchange and trading loss on equity
investments
|
—
|
18,848
|
|
—
|
—
|
Write-down of fixed
assets
|
—
|
3,617
|
|
—
|
3,619
|
Gain on disposal of
subsidiary
|
—
|
—
|
|
(5,718)
|
(16,828)
|
Other
|
990
|
3,325
|
|
(120)
|
2,724
|
Total adjustments -
EBITDA
|
92,347
|
47,451
|
|
82,991
|
24,016
|
Adjusted
EBITDA1
|
415,121
|
202,373
|
|
943,818
|
938,790
|
|
|
|
|
|
|
1 Q2
2023 amounts have been adjusted from those presented in the
Company's MD&A for the three and six months ended June 30,
2023.
|
Adjusted earnings and adjusted earnings per share can be
reconciled to the Company's Consolidated Statement of Earnings as
follows:
|
Three months
ended
September
30,
|
|
Nine
months ended
September
30,
|
($thousands, except
share and per share amounts)
|
2023
|
2022
|
|
2023
|
2022
|
Net earnings
(loss) attributable to Lundin
Mining shareholders
|
(2,964)
|
(11,212)
|
|
202,765
|
281,289
|
Add back:
|
|
|
|
|
|
Total adjustments -
EBITDA
|
92,347
|
47,451
|
|
82,991
|
24,016
|
Tax effect on
adjustments
|
(20,114)
|
(12,012)
|
|
(23,295)
|
(11,323)
|
Deferred tax expense
due to change in tax rate
|
25,700
|
—
|
|
25,700
|
—
|
Deferred tax arising
from foreign exchange translation
|
9,669
|
5,599
|
|
(12,327)
|
(6,264)
|
Non-controlling
interest on adjustments
|
(19,049)
|
1,070
|
|
(18,980)
|
1,197
|
Total
adjustments
|
88,552
|
42,108
|
|
54,089
|
7,626
|
Adjusted
earnings1
|
85,588
|
30,896
|
|
256,854
|
288,915
|
|
|
|
|
|
|
Basic weighted
average number of shares outstanding
|
773,147,920
|
775,563,527
|
|
772,214,160
|
759,726,506
|
|
|
|
|
|
|
Net (loss)
earnings attributable to
shareholders
|
—
|
(0.01)
|
|
0.26
|
0.37
|
Total
adjustments
|
0.11
|
0.05
|
|
0.07
|
0.01
|
Adjusted earnings
per
share1
|
0.11
|
0.04
|
|
0.33
|
0.38
|
1 Q2 2023
amounts have been adjusted from those presented in the Company's
MD&A for the three and six months ended June 30,
2023.
|
Cash and All-in Sustaining Costs can be reconciled to the
Company's operating costs as follows:
|
Three months ended
September 30, 2023
|
|
Operations
|
Candelaria
|
Caserones
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal):
|
|
|
|
|
|
|
|
Tonnes
|
33,668
|
30,385
|
11,445
|
3,640
|
8,799
|
22,042
|
|
Pounds
(000s)
|
74,225
|
66,987
|
25,232
|
8,025
|
19,398
|
48,594
|
|
Production costs
|
|
|
|
|
|
|
615,109
|
Less: Royalties and
other
|
|
|
|
|
|
|
(21,662)
|
Inventory fair
value
adjustment
|
|
|
|
|
|
|
(32,185)
|
|
|
|
|
|
|
|
561,262
|
Deduct:
By-product
|
|
|
|
|
|
|
(216,150)
|
Add: Treatment
and
|
|
|
|
|
|
|
56,261
|
Cash cost
|
162,672
|
106,866
|
57,501
|
16,598
|
44,043
|
13,693
|
401,373
|
Cash cost per
pound
|
2.19
|
1.60
|
2.28
|
2.07
|
2.27
|
0.28
|
|
Add: Sustaining capital
|
86,693
|
28,849
|
16,716
|
4,989
|
27,357
|
12,350
|
|
Royalties
|
—
|
7,550
|
2,142
|
7,385
|
1,055
|
—
|
|
Reclamation and
other closure
accretion and
depreciation
|
2,349
|
1,133
|
2,141
|
2,742
|
1,462
|
1,011
|
|
Leases &
other
|
2,841
|
11,531
|
865
|
797
|
131
|
86
|
|
All-in sustaining
cost
|
254,555
|
155,929
|
79,365
|
32,511
|
74,048
|
27,140
|
|
AISC per pound
($/lb)
|
3.43
|
2.33
|
3.15
|
4.05
|
3.82
|
0.56
|
|
|
Three months ended
September 30, 2022
|
|
Operations
|
Candelaria
|
Caserones
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal):
|
|
|
|
|
|
|
|
Tonnes
|
35,587
|
—
|
12,817
|
3,715
|
8,574
|
13,722
|
|
Pounds
(000s)
|
78,456
|
—
|
28,257
|
8,190
|
18,903
|
30,252
|
|
Production costs
|
|
|
|
|
|
|
425,814
|
Less: Royalties
and
|
|
|
|
|
|
|
(8,593)
|
|
|
|
|
|
|
|
417,221
|
Deduct:
By-product
|
|
|
|
|
|
|
(172,179)
|
Add: Treatment
and
|
|
|
|
|
|
|
28,829
|
Cash cost
|
154,633
|
—
|
54,147
|
8,637
|
50,888
|
5,566
|
273,871
|
Cash cost per
pound
|
1.97
|
—
|
1.92
|
1.05
|
2.69
|
0.18
|
|
Add: Sustaining capital
|
103,486
|
—
|
19,197
|
3,062
|
15,860
|
8,415
|
|
Royalties
|
—
|
—
|
3,055
|
5,705
|
(1,213)
|
—
|
|
Reclamation and
other closure
accretion and
depreciation
|
1,951
|
—
|
1,784
|
4,809
|
630
|
962
|
|
Leases &
other
|
2,327
|
—
|
1,017
|
484
|
173
|
149
|
|
All-in sustaining
cost
|
262,397
|
—
|
79,201
|
22,697
|
66,338
|
15,092
|
|
AISC per pound
($/lb)
|
3.34
|
—
|
2.80
|
2.77
|
3.51
|
0.50
|
|
|
Nine
months ended September 30, 2023
|
|
Operations
|
Candelaria
|
Caserones
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal):
|
|
|
|
|
|
|
|
Tonnes
|
105,585
|
30,385
|
30,681
|
10,234
|
23,000
|
48,028
|
|
Pounds
(000s)
|
232,775
|
66,987
|
67,640
|
22,562
|
50,706
|
105,883
|
|
Production costs
|
|
|
|
|
|
|
1,438,071
|
Less: Royalties and
other
|
|
|
|
|
|
|
(41,717)
|
Inventory fair value
adjustment
|
|
|
|
|
|
|
(32,185)
|
|
|
|
|
|
|
|
1,364,169
|
Deduct: By-product
credits
|
|
|
|
|
|
|
(495,751)
|
Add: Treatment
and
|
|
|
|
|
|
|
125,390
|
Cash cost
|
507,884
|
106,866
|
165,170
|
47,228
|
128,206
|
38,454
|
993,808
|
Cash cost per pound
($/lb)
|
2.18
|
1.60
|
2.44
|
2.09
|
2.53
|
0.36
|
|
Add: Sustaining capital
|
300,796
|
28,849
|
52,433
|
15,653
|
74,551
|
42,812
|
|
Royalties
|
—
|
7,550
|
6,394
|
17,991
|
2,868
|
—
|
|
Reclamation and
other closure
accretion and
depreciation
|
7,100
|
1,133
|
5,789
|
8,711
|
4,082
|
2,811
|
|
Leases &
other
|
9,638
|
11,531
|
3,002
|
2,441
|
437
|
288
|
|
All-in sustaining
cost
|
825,418
|
155,929
|
232,788
|
92,024
|
210,144
|
84,365
|
|
AISC per pound
($/lb)
|
3.55
|
2.33
|
3.44
|
4.08
|
4.14
|
0.80
|
|
|
|
|
|
|
|
|
|
|
Nine
months ended September 30, 2022
|
|
Operations
|
Candelaria
|
Caserones
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal):
|
|
|
|
|
|
|
|
Tonnes
|
113,690
|
—
|
33,526
|
11,188
|
25,241
|
48,049
|
|
Pounds
(000s)
|
250,643
|
—
|
73,912
|
24,665
|
55,647
|
105,930
|
|
Production costs
|
|
|
|
|
|
|
1,210,431
|
Less: Royalties and
other
|
|
|
|
|
|
|
(38,121)
|
|
|
|
|
|
|
|
1,172,310
|
Deduct:
By-product
|
|
|
|
|
|
|
(487,914)
|
Add: Treatment
and
|
|
|
|
|
|
|
90,944
|
Cash cost
|
450,858
|
—
|
157,456
|
7,999
|
125,889
|
33,138
|
775,340
|
Cash cost per
pound
($/lb)
|
1.80
|
—
|
2.13
|
0.32
|
2.26
|
0.31
|
|
Add: Sustaining capital
|
272,557
|
—
|
63,412
|
10,445
|
49,136
|
31,537
|
|
Royalties
|
—
|
—
|
9,161
|
24,129
|
984
|
—
|
|
Reclamation and
closure accretion
and depreciation
|
6,002
|
—
|
5,533
|
14,109
|
1,081
|
3,035
|
|
Leases &
other
|
6,953
|
—
|
3,056
|
1,766
|
569
|
547
|
|
All-in sustaining
cost
|
736,370
|
—
|
238,618
|
58,448
|
177,659
|
68,257
|
|
AISC per pound
($/lb)
|
2.94
|
—
|
3.23
|
2.37
|
3.19
|
0.64
|
|
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.sedarplus.ca 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.
SOURCE Lundin Mining Corporation