Industria
Lundin Mining Third Quarter 2023 Results
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.
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.
Total exploration expenditures are on target to be $45.0 million in 2023, unchanged from previous guidance.
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.
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 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.
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 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.
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.
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.
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 .
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 .
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 .
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 .
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.
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:
Adjusted operating cash flow and adjusted operating cash flow per share can be reconciled to cash provided by operating activities as follows:
Free cash flow from operations can be reconciled to cash provided by operating activities as follows:
Adjusted EBITDA can be reconciled to the Company's Consolidated Statement of Earnings as follows:
Adjusted earnings and adjusted earnings per share can be reconciled to the Company's Consolidated Statement of Earnings as follows:
Cash and All-in Sustaining Costs can be reconciled to the Company's operating costs as follows:
Stephen Williams , Vice President, Investor Relations +1 604 806 3074; Robert Eriksson , Investor Relations Sweden: +46 8 440 54 40
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