Industria
Lundin Mining Fourth Quarter and Full Year 2023 Results
"The Company's record copper production was driven by our strategic acquisition of a majority interest in Chile's Caserones copper mine, as well as organically through our expansion project at Neves-Corvo, which also contributed to record fourth quarter zinc production for the Company. Going forward, we will be disciplined in our growth plans and capital allocation as we continue to optimize assets and operational efficiencies to drive down costs.
"At Josemaria, we're derisking the project via optimization and trade-off studies that aim to enhance the overall value of the Project. We are concurrently continuing to explore potential partnership opportunities and actively working towards establishing stability agreements in Argentina ."
Candelaria produced, on a 100% basis, 152,012 tonnes of copper, approximately 90,000 ounces of gold and 1.5 million ounces of silver in concentrate during the year. Copper production was consistent with the prior year due to higher throughput being offset by lower grades and recoveries. Gold production was higher than in the prior year due to higher throughput and grades. Both metals were within the most recently disclosed 2023 production guidance ranges. Total production costs were higher than the prior year primarily due to inflationary cost increases and unfavourable foreign exchange. Copper cash cost of $2.07 /lb was within the most recently disclosed 2023 cash cost guidance range.
Caserones produced 65,210 tonnes of copper and 2,024 tonnes of molybdenum on a 100% basis during the year, from the acquisition closing date of July 13, 2023 to the end of the year. Both metals met or exceeded the most recently disclosed 2023 production guidance ranges due to strong throughput, grade and recoveries. Copper cash cost of $1.99 /lb was slightly below the low end of the most recently disclosed cash cost guidance range as a result of higher production.
Chapada produced 45,719 tonnes of copper and approximately 59,000 ounces of gold, with copper production remaining consistent to the prior year and gold production being negatively impacted by lower grade, throughput, and recoveries. Both metals were within the most recently disclosed 2023 production guidance ranges. Total production costs were lower than the prior year due to lower sales volumes. Full year copper cash cost of $2.27 /lb was below the low end of the most recently disclosed cash cost guidance.
Eagle's production of 16,429 tonnes of nickel and 13,600 tonnes of copper were near the higher ends of recently disclosed 2023 production guidance ranges but lower than that in the prior year due to planned lower grades. Total production costs were lower than the prior year due to lower sales volumes. Nickel cash cost of $2.16 /lb was within the most recently disclosed 2023 cash cost guidance range but higher than the prior year as a result of lower grade, lower by-product credits and higher repair and maintenance costs.
Neves-Corvo produced 33,823 tonnes of copper and 108,812 tonnes of zinc during the year. Zinc production increased significantly from the prior year due to higher throughput as a result of the zinc expansion project ("ZEP"). Copper production also increased due to higher throughput and production of both metals was within the most recently disclosed 2023 production guidance ranges. Total production costs were lower than in the prior year despite higher sales, primarily due to lower input costs, in particular lower electricity and diesel prices, partially offset by unfavourable foreign exchange. Copper cash cost of $2.37 /lb for the year exceeded the most recently disclosed 2023 cash cost guidance range and was higher than in the prior year primarily due to lower zinc by-product credits, higher treatment and refining charges, and unfavourable foreign exchange.
Zinc production of 76,349 tonnes was consistent with the prior year, but slightly below the most recently disclosed 2023 production guidance range. Installation of a sequential flotation system during the year achieved improved recoveries, but a longer than anticipated ramp-up limited mill availability and reduced recoveries, limiting production of both lead and zinc. Lead production of 26,284 tonnes was also lower than in the prior year. Total production costs and sales volumes were consistent with the prior year and zinc cash cost of $0.43 /lb was below the most recently disclosed 2023 cash cost guidance range but higher than in the prior year, primarily due to lower by-product credits.
Production, cash cost, capital expenditures and exploration investment guidance for 2024 remains unchanged from the most recently reported guidance as outlined in the news release 'Lundin Mining Provides 2024 Guidance & Announces 2023 Production Results" dated January 14, 2024 .
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 $429/oz gold and $4.28/oz to $4.68/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.
Total exploration expenditure guidance for 2024 is $48.0 million .
Exploration drilling campaigns are underway at Caserones, Josemaria, Chapada and Zinkgruvan. Drilling at Caserones is targeting the Angelica target and Caserones sulphide deep target with three rigs. Initial holes are underway at Josemaria's Cumbre Verde target, and additional roads are being developed to gain access to higher priority areas. At Chapada, drilling is focused on higher grade corridors within known areas of mineralization that could contribute higher grades to the mine plan. At Zinkgruvan, drilling with six rigs is focused on extending multiple deposits, with the priority on the high-grade Borta Barkom area.
The Company would also like to announce the executive appointments of Patrick Merrin as Executive Vice President, Technical Services and Joel Adams as Vice President, Commercial.
Mr. Merrin was appointed Executive Vice President, Technical Services and brings over 25 years of international experience in mining and metals including 10 years in executive and senior technical, project and operating roles. Mr. Merrin was appointed CEO of Copper Mountain Mining prior to its acquisition in 2024. He has also worked as Senior Vice President Canadian Operations with Newcrest Mining, COO of Mining with the Washington Companies and Senior Vice President of Canadian Operations with Goldcorp. Earlier in his career he also held positions with Hudbay Minerals, Xstrata and Anglo American .
Mr. Merrin holds a Bachelor of Chemical Engineering from McGill University , a Master of Business Administration from the Rotman School of Business at the University of Toronto and is a registered Professional Engineer ( Ontario ).
Mr. Adams was appointed Vice President, Commercial and will lead Lundin Mining's commercial strategy. He has more than 15 years of experience as a base metal trader and in logistics management.
Prior to joining Lundin Mining, Joel was a Portfolio Manager with Balyasny Asset Management where he was focused on commodity trading. In addition, Mr. Adams was a senior base metals trader at Trafigura and prior to that held diverse roles within Glencore's base metals business from 2010 to 2020 as a senior member of the copper division in Switzerland.
Joel holds a Bachelor's degree in International Business from the University of Colorado .
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, nickel and gold.
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 February 21, 2024 at 15:30 Pacific Standard Time .
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.
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 year ended December 31, 2023 which is available on SEDAR+ at www.sedarplus.ca.
Cash Cost per Pound and All-in Sustaining Costs can be reconciled to Production Costs on the Company's Consolidated Statement of Earnings as follows:
Adjusted EBITDA can be reconciled to Net Earnings on the Company's Consolidated Statement of Earnings as follows:
Adjusted earnings and adjusted earnings per share can be reconciled to Net Earnings Attributable to Lundin Mining Shareholders on the Company's Consolidated Statement of Earnings as follows:
Free Cash Flow from Operations and Free Cash Flow can be reconciled to Cash provided by Operating Activities on the Company's Consolidated Statement of Earnings as follows:
Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share can be reconciled to Cash Provided by Operating Activities on the Company's Consolidated Statement of Earnings as follows:
Net (debt) cash and Net (debt) cash excluding lease liabilities can be reconciled to Debt and Lease Liabilities, Current Portion of Debt and Lease Liabilities and Cash and Cash Equivalents on the Company's Consolidated Statement of Earnings as follows:
CONTACT: Stephen Williams, Vice President, Investor Relations +1 604 806 3074; Robert Eriksson , Investor Relations Sweden: +46 8 440 54 40
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