Industria
Lundin Mining Second Quarter 2023 Results
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.
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 cost 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 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.
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 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.
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.
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.
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.
Total exploration expenditures are on target to be $45.0 million in 2023, unchanged from previous guidance.
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.
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 .
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.
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 .
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 .
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 .
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 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:
Adjusted earnings and adjusted earnings per share can be reconciled to 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 as follows:
Free cash flow from operations can be reconciled to cash provided by operating activities as follows:
Net (debt) cash can be reconciled as follows:
Cash and All-in Sustaining Costs can be reconciled to the Company's operating costs as follows:
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