First Quarter Operational and Financial Highlights
- Copper Production: Consolidated production of 88,013 tonnes of copper in the first quarter.
- Other Production: During the quarter, a total of 45,688 tonnes of zinc, 3,255 tonnes of nickel and approximately 33,000 ounces of gold were produced. All metals are tracking to meet full year guidance.
- Revenue:
$937.0 million in the first quarter with a realized copper price1 of$3.98 /lb. - Adjusted EBITDA1:
$362.9 million generated during the quarter. - Adjusted Earnings1: Net earnings attributable to shareholders of the Company were
$13.9 million or$0.02 per share in the first quarter with adjusted earnings1 of$45.2 million or$0.06 per share. - Cash Generation: Cash provided by operating activities was
$267.5 million and free cash flow from operations1 was$67.7 million , which was reduced by a working capital build of$46.1 million . - Resource Growth: Earlier in the quarter the Company updated Mineral Reserve and Mineral Resource estimates and grew overall Proven and Probable copper reserves by 26% on a 100% basis.
- Outlook: With first quarter 2024 production and cash costs being in line with expectations, the Company's full year guidance remains unchanged:
- Copper production guidance of 366,000 – 400,000 t.
- Zinc production guidance of 195,000 – 215,000 t.
- Gold production guidance of 155,000 – 170,000 oz.
- Nickel production guidance of 10,000 – 13,000 t.
____________________________ |
1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the three months ended |
Summary Financial Results
Three months ended | ||
US$ Millions (except per share amounts) | 2024 | 2023 |
Revenue | 937.0 | 751.3 |
Gross profit | 185.4 | 213.3 |
Attributable net earningsa | 13.9 | 146.6 |
Net earnings | 58.6 | 165.3 |
Adjusted earningsa,b | 45.2 | 125.7 |
Adjusted EBITDAb | 362.9 | 336.9 |
Basic and diluted earnings per share ("EPS")a | 0.02 | 0.19 |
Adjusted EPSa,b | 0.06 | 0.16 |
Cash provided by operating activities | 267.5 | 211.9 |
Adjusted operating cash flowb | 313.7 | 235.1 |
Adjusted operating cash flow per shareb | 0.41 | 0.30 |
Free cash flow from operationsb | 67.7 | 71.1 |
Free cash flowb | (1.7) | (34.2) |
Cash and cash equivalents | 365.5 | 184.2 |
Net debt excluding lease liabilitiesb | 981.4 | 9.1 |
Net debtb | 1,241.9 | 34.6 |
a Attributable to shareholders of | ||
b 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 months ended |
- For the three months ended
March 31, 2024 , the Company generated revenue of$937.0 million (Q1 2023 -$751.3 million ), including 86,189 tonnes of copper sold at a realized price of$3.98 /lb. The increase from the prior year comparable period is primarily due to the inclusion of Caserones revenue and somewhat offset by lower sales volumes at most mines and lower realized copper and zinc prices. - Gross profit of
$185.4 million (2023 -$213.3 million ) and Adjusted EBITDA of$362.9 million (Q1 2023 -$336.9 million ) benefited from the inclusion of Caserones, favourable foreign exchange, and operational improvements at Chapada. - Net earnings attributable to shareholders of the Company were
$13.9 million or$0.02 per share in the three months endedMarch 31, 2024 , which were lower than in the prior year comparable period primarily due to non-cash unrealized losses related to the mark-to-market valuation of unexpired foreign exchange contracts, lower gross profit, and higher financing costs. - Adjusted earnings attributable to shareholders of the Company for the three months ended
March 31, 2024 of$45.2 million or$0.06 per share were$80.5 million lower than in the prior year comparable period primarily due to lower net attributable earnings. - Cash and cash equivalents as at
March 31, 2024 were$365.5 million . Cash provided by operating activities amounted to$267.5 million and cash used to fund investing activities amounted to$269.7 million . - Free cash flow[2] for the three months ended
March 31, 2024 of negative$1.7 million was$32.5 million higher than in the prior year comparable period as a result of reduced spending relating to theJosemaria Project . - For the three months ended
March 31, 2024 , the Company recognized a non-cash unrealized loss of approximately$53 million on a pre-tax basis related to the mark-to-market valuation of the Company's unexpired foreign exchange and diesel derivative contracts. For the three months endedMarch 31, 2024 , the Company entered into zero cost collar contracts in the total amounts of$24 million (equivalent toBRL 121 million ) and$950 million (equivalent toCLP 926 billion ) with collar ranges ofBRL 5.10 toBRL 6.07 andCLP 900 toCLP 1,085 , respectively. - As at
May 1, 2024 , the Company had a cash balance of approximately$395.0 million and a net debt excluding lease liabilities balance of approximately$1,020.0 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 ("MD&A") for the three months ended |
Operational Performance
Total Production
(Contained metal)a | 2024 | 2023 | ||||
Q1 | Total | Q4 | Q3 | Q2 | Q1 | |
Copper (t)b | 88,013 | 314,798 | 103,337 | 89,942 | 60,057 | 61,462 |
Zinc (t) | 45,688 | 185,161 | 50,719 | 49,774 | 36,115 | 48,553 |
Nickel (t) | 3,255 | 16,429 | 3,729 | 4,290 | 4,686 | 3,724 |
Gold (koz)b | 33 | 149 | 44 | 35 | 34 | 36 |
Molybdenum (t)b | 864 | 2,024 | 928 | 1,096 | — | — |
a. Tonnes (t) and thousands of ounces (koz) | ||||||
b. Candelaria and Caserones production is on a 100% basis. |
Candelaria (80% owned): Candelaria produced 32,527 tonnes of copper and approximately 19,000 ounces of gold in concentrate on a 100% basis in the three months ended
Caserones (51% owned): During the three months ended
Chapada (100% owned): Chapada produced 10,138 tonnes of copper and approximately 14,000 ounces of gold in concentrate in the three months ended
Eagle (100% owned): During the three months ended
Neves-Corvo (100% owned): Neves-Corvo produced 7,044 tonnes of copper and 26,487 tonnes of zinc in the three months ended
Zinkgruvan (100% owned): Zinc production of 19,201 tonnes was lower than in the prior year comparable period primarily due to lower grades. Lead production of 6,748 tonnes and copper production of 1,574 tonnes were lower than in the prior year comparable period primarily due to lower grades as a result of delays in mining high-grade stopes. Production costs were slightly higher than in the prior year comparable period and zinc cash cost per pound of
Outlook
Overall, operations performed well in the first quarter of 2024 and the Company is expected to meet annual production and cash cost guidance as disclosed in the Company's MD&A for the year ended
Metal production continues to be weighted to the second half of the year at Candelaria, Chapada and Neves-Corvo due to mine sequencing and resultant forecasted grade profiles. As a result of production challenges at Neves-Corvo in the first quarter of 2024, copper production at that operation is tracking to the lower end of its annual production guidance range. Production challenges at Neves-Corvo, Eagle and Zinkgruvan in the first quarter of 2024 led to higher-than-expected cash costs per pound, which are expected to improve later in 2024.
Capital expenditure guidance also remains consistent as disclosed in the Company's MD&A for the year ended
Exploration
During the quarter ended
At Caserones, exploration remains in the early stages. Geophysical surveys were recently carried out on the land package and the data collected will help to refine our targets and advance our efforts. Exploration drilling was completed in the lower portion of the mineral resource and at the Angelica oxide and sulphide targets, both near-mine targets that would add potential mineral resources and extend the life of the operation.
At Josemaria, seasonal exploration drilling is coming to a close at the Cumbre Verde target near the Josemaria ore body. Six holes were drilled targeting the same mineralized system and structures that hosted high grade mineralization on the neighbouring property that run towards Josemaria. Exploration remains in its early stages and initial results highlight copper/gold/silver mineralization. The data obtained will help further refine and target this mineralization. Work will continue throughout the remainder of 2024, although it will be minimized during the winter season.
There was no exploration drilling at Neves-Corvo and Eagle in the quarter.
About
The information in this release is subject to the disclosure requirements of
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
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 months ended
Cash Cost per Pound and All-in Sustaining Costs per pound can be reconciled to Production Costs on the Company's Condensed Interim Consolidated Statement of Earnings as follows:
Three months ended | |||||||
Operations | Candelaria | Caserones | Chapada | Eagle | Neves-Corvo | Zinkgruvan | |
($000s, unless otherwise noted) | (Cu) | (Cu) | (Cu) | (Ni) | (Cu) | (Zn) | Total |
Sales volumes (Contained metal): | |||||||
Tonnes | 33,536 | 35,211 | 8,742 | 2,163 | 5,886 | 15,825 | |
Pounds (000s) | 73,934 | 77,627 | 19,273 | 4,769 | 12,976 | 34,888 | |
Production costs | 567,134 | ||||||
Less: Royalties and other | (19,970) | ||||||
547,164 | |||||||
Deduct: By-product credits | (165,308) | ||||||
Add: Treatment and refining | 46,951 | ||||||
Cash cost | 139,490 | 166,439 | 38,735 | 19,249 | 42,057 | 22,837 | 428,807 |
Cash cost per pound | 1.89 | 2.14 | 2.01 | 4.04 | 3.24 | 0.65 | |
Add: Sustaining capital | 99,532 | 42,754 | 29,199 | 4,078 | 22,413 | 14,341 | |
Royalties | 2,968 | 8,814 | 1,617 | 2,678 | 735 | — | |
Reclamation and other closure accretion and depreciation | 2,167 | 1,040 | 2,679 | 1,968 | 1,335 | 1,186 | |
Leases & other | 3,033 | 15,381 | 765 | 1,236 | 64 | 78 | |
All-in sustaining cost | 247,190 | 234,428 | 72,995 | 29,209 | 66,604 | 38,442 | |
AISC per pound ($/lb) | 3.34 | 3.02 | 3.79 | 6.12 | 5.13 | 1.10 |
Three months ended | |||||||
Operations | Candelaria | Caserones | Chapada | Eagle | Neves-Corvo | Zinkgruvan | |
($000s, unless otherwise noted) | (Cu) | (Cu) | (Cu) | (Ni) | (Cu) | (Zn) | Total |
Sales volumes (Contained metal): | |||||||
Tonnes | 35,570 | — | 9,072 | 2,735 | 8,031 | 16,612 | |
Pounds (000s) | 78,418 | — | 20,000 | 6,030 | 17,705 | 36,623 | |
Production costs | 417,764 | ||||||
Less: Royalties and other | (12,086) | ||||||
405,678 | |||||||
Deduct: By-product credits | (156,965) | ||||||
Add: Treatment and refining | 36,615 | ||||||
Cash cost | 173,692 | — | 47,318 | 14,640 | 29,892 | 19,786 | 285,328 |
Cash cost per pound | 2.21 | — | 2.37 | 2.43 | 1.69 | 0.54 | |
Add: Sustaining capital | 90,686 | — | 16,027 | 7,102 | 25,061 | 14,468 | |
Royalties | — | — | 2,223 | 5,686 | 1,730 | — | |
Reclamation and other closure accretion and depreciation | 2,307 | — | 1,801 | 2,958 | 1,324 | 1,061 | |
Leases & other | 3,143 | — | 966 | 747 | 158 | 102 | |
All-in sustaining cost | 269,828 | — | 68,335 | 31,133 | 58,165 | 35,417 | |
AISC per pound ($/lb) | 3.44 | — | 3.42 | 5.16 | 3.29 | 0.97 |
Adjusted EBITDA can be reconciled to Net Earnings (Loss) on the Company's Condensed Interim Consolidated Statement of Earnings as follows:
Three months ended | ||
($thousands) | 2024 | 2023 |
Net earnings | 58,555 | 165,311 |
Add back: | ||
Depreciation, depletion and amortization | 184,492 | 120,247 |
Finance income and costs | 35,694 | 15,699 |
Income taxes | 50,566 | 48,693 |
329,307 | 349,950 | |
Unrealized foreign exchange loss (gain) | (15,500) | 8,644 |
Unrealized losses (gains) on derivative contracts | 52,832 | (20,666) |
Ojos | (1,031) | 4,582 |
Revaluation loss (gain) on marketable securities | (2,430) | (438) |
Gain on disposal of subsidiary | — | (5,718) |
Other | (322) | 589 |
Total adjustments - EBITDA | 33,549 | (13,007) |
Adjusted EBITDA | 362,856 | 336,943 |
Adjusted Earnings and Adjusted EPS can be reconciled to Net Earnings (Loss) Attributable to Lundin Mining Shareholders on the Company's Condensed Interim Consolidated Statement of Earnings as follows:
Three months ended | ||
($thousands, except share and per share amounts) | 2024 | 2023 |
Net earnings attributable to | 13,883 | 146,620 |
Add back: | ||
Total adjustments - EBITDA | 33,549 | (13,007) |
Tax effect on adjustments | (1,767) | (3,126) |
Deferred tax arising from foreign exchange translation | (6,300) | (6,007) |
Non-controlling interest on adjustments | 5,852 | 1,202 |
Total adjustments | 31,335 | (20,938) |
Adjusted earnings | 45,218 | 125,682 |
Basic weighted average number of shares outstanding | 773,048,710 | 771,216,060 |
Net earnings attributable to shareholders | 0.02 | 0.19 |
Total adjustments | 0.04 | (0.03) |
Adjusted earnings per share | 0.06 | 0.16 |
Free Cash Flow from Operations and Free Cash Flow can be reconciled to Cash provided by Operating Activities on the Company's Condensed Interim Consolidated Statement of Cash Flows as follows:
Three months ended | ||
($thousands) | 2024 | 2023 |
Cash provided by operating activities | 267,531 | 211,875 |
Sustaining capital expenditures | (213,260) | (155,564) |
General exploration and business development | 13,451 | 14,765 |
Free cash flow from operations | 67,722 | 71,076 |
General exploration and business development | (13,451) | (14,765) |
Expansionary capital expenditures | (55,981) | (90,519) |
Free cash flow | (1,710) | (34,208) |
Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share can be reconciled to Cash Provided by Operating Activities on the Company's Condensed Interim Consolidated Statement of Cash Flows as follows:
Three months ended | ||
($thousands, except share and per share amounts) | 2024 | 2023 |
Cash provided by operating activities | 267,531 | 211,875 |
Changes in non-cash working capital items | 46,135 | 23,192 |
Adjusted operating cash flow | 313,666 | 235,067 |
Basic weighted average number of shares outstanding | 773,048,710 | 771,216,060 |
Adjusted operating cash flow per share | $ 0.41 | 0.30 |
Net debt and net debt 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 condensed interim consolidated balance sheet as follows:
($thousands) | ||
Debt and lease liabilities | (1,417,892) | (1,273,162) |
Current portion of total debt and lease liabilities | (183,702) | (212,646) |
Less deferred financing fees (netted in above) | (5,729) | (6,374) |
(1,607,323) | (1,492,182) | |
Cash and cash equivalents | 365,451 | 268,793 |
Net debt | (1,241,872) | (1,223,389) |
Lease liabilities | 260,463 | 277,208 |
Net debt excluding lease liabilities | (981,409) | (946,181) |
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; 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
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
© Canada Newswire, source