Le Lézard
Classified in: Mining industry, Business
Subject: ERN

LUNDIN GOLD REPORTS FOURTH QUARTER AND FULL YEAR RESULTS


Lundin Gold Logo (CNW Group/Lundin Gold Inc.)

Production and Cost Performance Meets Upgraded Guidance

VANCOUVER, BC, Feb. 22, 2024 /CNW/ - Lundin Gold Inc. (TSX: LUG); (Nasdaq Stockholm: LUG); (OTCQX: LUGDF) ("Lundin Gold" or the "Company") is pleased to report results for the fourth quarter and year ended December 31, 2023. Lundin Gold's year is highlighted by its production of 481,274 oz of gold at an all-in sustaining cost ("AISC")1 of $860 per oz sold, meeting upwardly revised production guidance of 450,000 to 485,000 oz and AISC1 guidance of $820 to $870 per oz sold. Cash from operating activities of $519 million was generated for the year resulting in free cash flow¹ of $263 million which is net of a one-time interest and finance charge payment of $129 million from the full repayment of the gold prepay facility (the "Gold Prepay Facility"). All amounts are in U.S. dollars unless otherwise indicated. PDF Version

Ron Hochstein, President and CEO commented, "Lundin Gold continues its strong track record by meeting its upgraded production and improved cost guidance for 2023, and in doing so generating significant cash flow. Looking ahead to 2024, we are focused on operational excellence and delivering the Process Plant Expansion Project to achieve increased throughput and recovery improvements. Furthermore, we continue to make significant headway on our exciting exploration programs; 2024 will be the largest drilling program ever conducted in the district that hosts Fruta del Norte. We expect continued generation of free cash flow, which will enable the Company to continue to pursue debt reduction, M&A and potential increase in returns to shareholders through increased dividends."

OPERATING AND FINANCIAL RESULTS SUMMARY

The following two tables provide an overview of key operating and financial results.


Three months ended 
December 31,

Year ended 
December 31,


2023

2022

2023

2022

Tonnes ore mined

405,705

365,250

1,635,550

1,492,230

Tonnes ore milled

427,743

420,838

1,654,520

1,559,178

Average head grade (g/t)

8.2

10.0

10.2

10.6

Average recovery

88.1 %

89.6 %

88.4 %

89.5 %

Average mill throughput (tpd)

4,649

4,574

4,533

4,272

Gold ounces produced

99,310

121,139

481,274

476,329

Gold ounces sold

98,005

119,890

474,365

470,103

 

________________________________

1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 16 to 18 of the Company's MD&A for the year ended December 31, 2023 available on SEDAR+.

 


Three months ended 
December 31,

Year ended 
December 31,


2023

2022

2023

2022

Net revenues ($'000)

190,688

210,961

902,518

815,666

Average realized gold price ($/oz sold)1

2,021

1,814

1,958

1,789

Income from mining operations ($'000)

78,051

92,095

435,180

369,754

Earnings before interest, taxes, depreciation, and amortization ($'000)2

67,274

141,274

493,976

543,660

Adjusted earnings before interest, taxes, depreciation, and amortization ($'000)1

95,908

112,057

526,045

467,343

Net income (loss) ($'000)

11,062

(68,259)

179,457

73,558

Basic income (loss) per share ($)

0.05

(0.29)

0.76

0.31

Cash provided by operating activities ($'000)

92,574

133,390

519,395

426,145

Free cash flow ($'000)1

62,330

91,179

263,473

269,435

Cash operating cost ($/oz sold)1

832

713

697

671

All-in sustaining costs ($/oz sold)1

1,062

865

860

805

Free cash flow per share ($)1

0.26

0.39

1.11

1.15

Adjusted net earnings ($'000)1

33,236

33,584

204,310

125,003

Adjusted net earnings per share ($)1

0.14

0.14

0.86

0.53

Dividends paid ($'000)

23,782

-

94,914

47,033

Dividends paid per share ($)

0.10

-

0.40

0.20

FOURTH QUARTER AND FULL YEAR HIGHLIGHTS
Financial Results ? Cash Flow Story Intact

 

________________________________ 

1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 16 to 18 of the Company's MD&A for the year ended December 31, 2023 available on SEDAR+.

 

Production Results ? Another Strong Quarter, Room to Improve
Outlook

 

________________________________

1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 16 to 18 of the Company's MD&A for the year ended December 31, 2023 available on SEDAR+.

 

Liquidity and Capital Resources

At the end of 2023, the Company is in a strong financial position.




(in thousands of U.S. dollars)

As at December 31, 
2023

As at December 31, 
2022

Financial Position:



Cash

268,025

363,400

Working capital

346,859

194,804

Total assets

1,468,209

1,668,865




Long-term debt



Senior debt facility



Principal and accrued interest

-

183,638

Deferred transaction costs

-

(10,784)

Fair value of stream credit facility and offtake

305,647

287,666

Fair value of gold prepay credit facility

-

207,446

Total long-term debt

305,647

667,966

As at December 31, 2023, the Company had cash of $268 million and a working capital balance of $347 million compared to cash of $363 million and a working capital balance of $195 million at December 31, 2022.

The change in cash during 2023 was primarily due to the full repayment of the Gold Prepay Facility of $208 million; full repayment of the Senior Facility totalling $193 million, including interest; principal repayments, interest and finance charges, including associated taxes, under the Stream Facility totalling $79.9 million; dividends of $94.9 million; and cash outflows of $53.5 million relating to investing activities. This is offset by cash generated from operating activities of $519 million, which is net of a $25 million voluntary advance income tax payment to the Government of Ecuador during the fourth quarter that will reduce the Company's corporate income tax payment due in April 2024, and proceeds from the exercise of stock options and anti-dilution rights totalling $14.2 million.

The Stream Facility is the last remaining debt on the Company's balance sheet following the full repayment of both the Gold Prepay Facility and Senior Facility during 2023. The Company has the option to repay (i) 50% of the Stream Facility outstanding on June 30, 2024 for $150 million and / or (ii) the other 50% outstanding on June 30, 2026 for $225 million.

Capital Expenditures
Sustaining Capital
Process Plant Expansion Project

The Process Plant Expansion Project is expected to deliver increased plant throughput to 5,000 tpd and increased metallurgical recoveries of approximately 3% by the end of 2024 with upgrades to the concentrate dewatering, new tailings and reclaim lines, the addition of three Jameson cells, and other ancillary works.  During the fourth quarter, expenditures of $0.9 million were incurred of the total estimated expansion project capital estimate of $36.0 million.

Health and Safety

During 2023 there were no Lost Time Incidents ("LTIs") and seven Medical Aid Incident ("MAIs"). The Total Recordable Incident Rate across exploration and operations was 0.24 per 200,000 hours worked during 2023. FDN operations had more than one year and over 7.6 million hours worked without a LTI as of December 31, 2023.  Subsequent to year end, FDN operations experienced an LTI on February 2, 2024.

Community

Various community projects supported by the Company progressed during the year including initiatives focused on community health and education. Lundin Gold continued to support an innovative program which provides mental health services to local community members. Education programs sponsored by the Company which improve local student access to higher education continued to show success as a cohort of local students prepare to graduate from university in the coming months, a significant milestone for the Los Encuentros Parish. The Company also launched a complementary program designed to improve the quality of local education during the year.

Infrastructure investment continues to be a priority for Lundin Gold. In addition to the Company's long-standing commitment to support road maintenance, Lundin Gold co-funded with the Ministry of Education the rehabilitation of the local school, which more than 1,300 children from the Los Encuentros Parish attend. Work on this project was nearing completion at the end of the year.

Lundin Gold continued to support local businesses in conjunction with the Lundin Foundation, including women-led businesses through the third series of the program "Soy Emprendadora". Among the supported businesses, the local textile manufacturer, fire extinguisher maintenance company, and pest control/fumigation company all increased their business activities during the year with Lundin Gold as an anchor client. Efforts have continued to ensure that local farmers retain access to local, national, and international markets. The Company also continued to engage with local indigenous people, especially the Shuar Federation of Zamora Chinchipe, to jointly implement projects that promote economic opportunities and the Shuar culture.

Following the election of new local authorities, the round table dialogue process restarted during the third quarter, with high participation rates by local community members.

EXPLORATION

Near-Mine Exploration Program
During the year, the Company completed a total of 35,305 metres across 68 holes from surface and underground, of which approximately 13,372 metres across 31 holes were drilled in the fourth quarter. Drilling from underground explored to the east and at depth of the FDN deposit, while drilling from surface continued to test along the extensions of the controlling structures of the FDN deposit.

Regional Exploration Program
The regional program continued to advance the identification of important indicators that point toward the presence of buried epithermal deposits in the southern basin. The 2023 drilling program focused on distinct sectors along the southeastern and southwestern borders of the Suarez basin and a total of 3,120 metres across five drill holes were completed in the fourth quarter resulting in 8,461 metres completed under the 2023 program across 12 drill holes. Regional drilling focused on the Crisbel, Barbasco SE and Quebrada La Negra targets.

Newcrest Earn-In Agreement
At the end of the fourth quarter, Newcrest Mining Limited ("Newcrest"), a subsidiary of Newmont Corporation ("Newmont"), elected not to exercise its option to proceed to earn a 25% interest in Surnorte S.A., which holds eight exploration concessions located to the north and south of Fruta del Norte. As a result, the earn-in agreement has been terminated. The Company is now assessing various options for some or all of these concessions.

CORPORATE

The Company paid quarterly dividends of $0.10 per share for a total of $94.9 million during the year. With the release of its 2023 year-end results, the Company has declared a cash dividend of $0.10 per share which is payable on March 25, 2024 (March 28, 2024 for shares trading on Nasdaq Stockholm) to shareholders of record on March 8, 2024.

The Company's second TCFD-aligned climate change report and seventh annual sustainability report were published in May. Based on publicly available data from 152 gold mines that reported their Scopes 1 and 2 greenhouse gas emissions in 2021 and on Lundin Gold's 2022 emissions performance, the emissions intensity of Fruta del Norte was among the lowest in the industry. The Company has set a target to be carbon neutral by 2030 with respect to its Scopes 1 and 2 emissions based on its current life of mine plan.

A number of changes to the Company's directors took place in 2023. At the Company's annual shareholders' meeting on May 15, 2023, Ms. Angelina Mehta was elected as a director, replacing Ms. Chantal Gosselin who did not stand for re-election. Furthermore, upon the acquisition of the Company's largest shareholder, Newcrest Mining Limited ("Newcrest"), by Newmont Corporation ("Newmont") on November 6, 2023, the Company appointed two new directors to the Board as Newmont nominees: Ms. Melissa Harmon and Mr. Scott Langley. Mr. Craig Jones and Ms. Jill Terry, the former Newcrest nominees, resigned from the Board on the same day.

The Company also announced several changes to the Company's officers during the year including the appointment of Mr. Christopher Kololian as Chief Financial Officer, shortly after the retirement of Mr. Alessandro Bitelli, and Mr. Terry Smith as Chief Operating Officer. With the departure of Mr. Nathan Monash, Vice President, Sustainability, Ms. Sheila Colman took on the role of Vice President, Legal and Sustainability and Corporate Secretary, while Ms. Iliana Rodriguez, Vice President, Human Resources, departed the Company early in the first quarter.

Qualified Persons

The technical information relating to FDN contained in this News Release has been reviewed and approved by Ron Hochstein P. Eng, Lundin Gold's President and CEO who is a Qualified Person under NI 43-101. The disclosure of exploration information contained in this press release was prepared by Andre Oliveira, P.Geo, Lundin Gold's V.P. Exploration, who is a Qualified Person in accordance with the requirements of NI 43-101.

Webcast and Conference Call

The Company will host a conference call and webcast to discuss its results on Friday, February 23 at 7:00 a.m. PT, 10:00 a.m. ET, 4:00 p.m. CET.

Conference Call Dial-In Numbers:

Participant Dial-In North America:

+1 416-764-8659

Toll-Free Participant Dial-In North America:

+1 888-664-6392

Participant Dial-In Sweden:

0200899189

Conference ID:

Lundin Gold / 89101592

A link to the webcast will be available on the Company's website, www.lundingold.com.

A replay of the conference call will be available two hours after its completion until February 28, 2024.

Toll Free North America Replay Number:

+1 888-390-0541

International Replay Number:

+1 416-764-8677

Replay passcode:

101592 #

About Lundin Gold

Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador and a large exploration land package that hosts the Fruta del Norte deposit at its northern edge. Fruta del Norte is among the highest-grade operating gold mines in the world.

The Company's board and management team have extensive expertise in mine operations and are dedicated to operating Fruta del Norte responsibly. The Company operates with transparency and in accordance with international best practices. Lundin Gold is committed to delivering value to its shareholders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact. The Company believes that the value created through the development of Fruta del Norte will benefit its shareholders, the Government and the citizens of Ecuador.

Non-IFRS Measures 

This news release refers to certain financial measures, such as average realized gold price per oz sold, EBITDA, adjusted EBITDA, cash operating cost per oz sold, all-in sustaining cost, free cash flow, free cash flow per share, and adjusted earnings, which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies. These measures have been derived from the Company's financial statements because the Company believes that they are of assistance in the understanding of the results of operations and its financial position. Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on page 16 of the Company's MD&A for the year ended December 31, 2023 available on SEDAR+.

Additional Information

The information in this release is subject to the disclosure requirements of Lundin Gold under the EU Market Abuse Regulation. This information was publicly communicated on February 22, 2024 at 4:00 p.m. Pacific Time through the contact persons set out below.

Caution Regarding Forward-Looking Information and Statements 

Certain of the information and statements in this press release are considered "forward-looking information" or "forward-looking statements" as those terms are defined under Canadian securities laws (collectively referred to as "forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as "believes", "anticipates", "expects", "is expected", "scheduled", "estimates", "pending", "intends", "plans", "forecasts", "targets", or "hopes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "will", "should" "might", "will be taken", or "occur" and similar expressions) are not statements of historical fact and may be forward-looking statements. By their nature, forward-looking statements and information involve assumptions, inherent risks and uncertainties, many of which are difficult to predict, and are usually beyond the control of management, that could cause actual results to be materially different from those expressed by these forward-looking statements and information. Lundin Gold believes that the expectations reflected in this forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct. Forward-looking information should not be unduly relied upon. This information speaks only as of the date of this press release, and the Company will not necessarily update this information, unless required to do so by securities laws.

This press release contains forward-looking information in several places, such as in statements relating to : the Company's 2024 production outlook, including estimates of gold production, grades recoveries and AISC; operating plans and costs; cash flow forecasts and financing obligations; the potential to exercise the buyback of the Stream Facility; the Company's estimated capital and sustaining costs;  completion of sustaining capital projects; benefits of the Company's community programs; the Company's declaration and payment of dividends pursuant to its dividend policy; the timing and the success of its drill program at Fruta del Norte and its other exploration activities; estimates of Mineral Resources and Reserves at Fruta del Norte and plans to update the same; and completion of the process plant expansion project and benefits to be derived therefrom.  There can be no assurance that such statements will prove to be accurate, as Lundin Gold's actual results and future events could differ materially from those anticipated in this forward-looking information as a result of the factors discussed in the "Risk Factors" section in Lundin Gold's Mangement's Discussion and Analysis dated February 22, 2024 which is available at www.lundingold.com or on SEDAR+ at www.sedarplus.ca.

Lundin Gold's actual results could differ materially from those anticipated. Factors that could cause actual results to differ materially from any forward-looking statement or that could have a material impact on the Company or the trading price of its shares include risks relating to: instability in Ecuador; community relations; forecasts relating to production and costs; mining operations; security; non-compliance with laws and regulations and compliance costs; tax changes in Ecuador; waste disposal and tailings; government or regulatory approvals; environmental compliance; gold price; infrastructure; dependence on a single mine; exploration and development; control of Lundin Gold; availability of workforce and labour relations; dividends; information systems and cyber security; Mineral Reserve and Mineral Resource estimates; title matters and surface rights and access; health and safety; human rights; employee misconduct; measures to protect biodiversity; endangered species and critical habitats; global economic conditions; shortages of critical resources; competition for new projects; key talent recruitment and retention; market price of the Company's shares;  social media and reputation; insurance and uninsured risks;  pandemics, epidemics or infectious disease outbreak; climate change; illegal mining;  conflicts of interest; ability to maintain obligations or comply with debt; violation of anti-bribery and corruption laws; internal controls; claims and legal proceedings; and reclamation obligations.

SOURCE Lundin Gold Inc.


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