Safety stand downs across our organization have given us time to honour our colleague at Neves-Corvo and reflect on our shared commitment to our goal of Zero Harm. Both our Alcaparrosa mine at Candelaria and Eagle mine were recognized by national governing bodies for their outstanding safety records, and our Company is on-track for our lowest injury rate year.
Operationally, noticeable progress has been made at Candelaria to improve overall mill throughput. The operation is well positioned for a return to full production rates once fair and sustainable labour agreements are reached. Chapada's strong performance continued until late in the quarter. The team has done an excellent job to minimize the expected impact and to take advantage of the downtime, as seen by reinstated 2020 guidance. Official restart of the
Summary Financial Results
[][][][][][][][][][]
Three Nine
months months
ended ended
September September
30, 30,
US$ Millions (except per 2020 2019 2020 2019
share amounts)
Revenue 600.7 538.7 1,512.0 1,324.4
Gross profit 199.3 128.6 318.8 294.9
Attributable net 122.4 26.4 49.6 70.2
earnings[1]
Net earnings 133.6 32.1 68.3 84.4
Adjusted earnings [1,2] 106.4 25.6 120.0 77.5
Adjusted EBITDA[2] 300.3 224.3 622.1 476.9
Basic and diluted net 0.17 0.04 0.07 0.10
earnings per share[1]
Adjusted basic and 0.14 0.03 0.16 0.11
diluted earnings per
share[1,2]
Cash flow from operations 272.2 111.6 393.2 378.2
Adjusted operating cash 262.0 155.0 468.9 344.1
flow[2]
Adjusted operating cash 0.36 0.21 0.64 0.47
flow per share[2]
Cash and cash equivalents 220.0 184.6 220.0 184.6
Net debt[2] 124.0 185.0 124.0 185.0
[1 ]Attributable to
shareholders of
Mining Corporation
[2] These are non-GAAP
measures. Please refer to
the Company's discussion
of non-GAAP measures in
its Management's
Discussion and Analysis
for the three and nine
months ended September
30, 2020.
Highlights
Operational Performance
All operations continued to effectively manage costs, but metal production was impacted by lower grades and throughput. In addition, while there was no significant impact to production, the Company had two unplanned operational suspensions in the last week of the quarter.
The Company continues to manage and respond to the COVID-19 pandemic and has implemented preventative measures to ensure the safety of its workforce, local communities and other key stakeholders. To date, production disruptions as a result of COVID-19 have been minimal and there has been no significant disruption in the delivery or receipt of goods at our operations.
Candelaria (80% owned): Candelaria produced 35,836 tonnes of copper, and approximately 21 thousand ounces of gold in concentrate on a 100% basis in the quarter. Copper production for the quarter was lower than the prior year quarter primarily due to lower grades. Ore milled during the third quarter of 2020 significantly improved over that achieved in the first two quarters of the year as measures to address variability in ore hardness and mill circuit availabilities began to take hold. Mining is advancing through the areas of Phase 10 which were in proximity to where pit wall displacement issues occurred in Phase 9, without issue. Copper cash costs[1] of
Chapada (100% owned): Chapada produced 12,990 tonnes of copper and approximately 24 thousand ounces of gold which were lower than the prior year quarter due primarily to lower throughput as a result of expected increase in ore hardness as well as the mill interruption at quarter-end. Processing activities were interrupted on
Eagle (100% owned): Eagle produced 4,854 tonnes of nickel and 5,055 tonnes of copper during the quarter. Nickel and copper production was higher than the prior year quarter due to higher grades from
Neves-Corvo (100% owned): Neves-Corvo produced 6,518 tonnes of copper and 15,459 tonnes of zinc for the quarter. Copper and zinc production were lower than the prior year quarter due to lower throughput. A voluntary 5-day suspension of mining and milling operations took place following a fatal accident on
Restart of the
Zinkgruvan (100% owned): Zinc production of 17,328 tonnes was higher than the prior year quarter due to higher achieved throughput. Lead production of 5,571 tonnes was lower than the prior year quarter due to lower feed grades. Zinc cash costs of
[1] This is a non-GAAP measure. Please refer to the Company's discussion of non-GAAP measures in its Management's Discussion and Analysis for the three and nine months ended
Total Production
[][]
(Contained 2020 2019
metal
in
concentrate)
YTD Q3 Q2 Q1 Total Q4 Q3 Q2 Q1
Copper 188,896 61,444 65,285 62,167 235,498 67,131 74,560 47,685 46,122
(t)[a,b]
Zinc (t) 101,316 32,787 31,582 36,947 151,515 38,925 35,028 37,116 40,446
Gold 128 45 44 39 142 43 58 21 20
(koz)[a,b]
Nickel (t) 11,809 4,854 3,380 3,575 13,494 2,651 3,232 3,398 4,213
a -
Candelaria's
production
is on
a 100%
basis.
b - Chapada
results
included
are for the
Company's
ownership
period.
Corporate Updates
·
On
·
On
· On
· On
On
Both the
Financial Performance
·
Gross profit for the quarter ended
On a year-to-date basis, gross profit was
· Net earnings for the quarter ended
On a year-to-date basis, net earnings were
· Adjusted earnings for the quarter were
Financial Position and Financing
·
Cash and cash equivalents of
On a year-to-date basis, cash and cash equivalents decreased by
· Net debt of
· As of
Outlook
Candelaria's guidance was withdrawn on
Cash costs at Chapada and Eagle have been better than expected due to continued favourable by-product metal prices and, at Chapada, favourable foreign exchange; accordingly, cash cost guidance for these two operations has been reduced.
While the Company has not experienced significant disruptions to production, shipments of concentrate, or its supply chain due to COVID-19, we caution that a localized outbreak at the operations may require the need to implement increased isolation and containment measures which could impact production, delay maintenance activities or disrupt supply chains. Given the uncertainty of the duration and magnitude of the impact of COVID-19, production and cash cost estimates are subject to a higher than normal degree of uncertainty. The guidance below does not reflect any potential for additional suspensions or other significant disruption to operations due to COVID-19.
2020 Production and Cash Cost Guidance
[][][][][][][]
Previous Revised
Guidance[a] Guidance
(contained Tonnes Cash Cash
metal in Costs Tonnes Costs[b]
concentrate)
Copper (t) Candelaria 145,000
(100%) - 155,00 lb[c]
0
Chapada 51,000
- 56,000 lb[d] 50,000 d]
Eagle 17,000 17,000 -
- 19,000 19,000
Neves 35,000
-Corvo - 40,000 lb 34,000 c]
Zinkgruvan 3,000 - 3,000 -
4,000 4,000
Total 251,000
- 274,00
0
Zinc (t) Neves 70,000 70,000 -
-Corvo - 75,000 75,000
Zinkgruvan 72,000
- 77,000 lb 74,000 c]
Total 142,000
- 152,00
0
Gold (oz) Candelaria 90,000 N/A
(100%) - 100,00
0
Chapada 85,000 80,000 -
- 90,000 85,000
Total 175,000
- 190,00
0
Nickel (t) Eagle 15,000
- 18,000 lb 18,000
a. Guidance
as outlined
in the
Management's
Discussion
and Analysis
for the three
and six
months ended
2020.
Chapada's
guidance was
subsequently
withdrawn on
2020.
Candelaria's
guidance was
subsequently
withdrawn on
2020.b. Cash
costs are
based on
various
assumptions
and
estimates,
including but
not limited
to;
production
volumes, as
noted above,
commodity
prices (Cu:
foreign
exchange
rates
(€/USD:1.20,
USD/SEK:8.50,
USD/BRL:5.00)
and operating
costs, for
the remainder
of 2020.c.
Silver
production at
Zinkgruvan
and Neves
-Corvo is
subject to
streaming
agreements,
and cash
costs are
calculated
based on
receipt of
approximately
respectively,
on silver
sales.d.
Chapada cash
costs are
calculated on
a by-product
basis and do
not include
the effects
of copper
stream
agreements.
Effects of
copper stream
agreements
are reflected
in copper
revenue and
will impact
realized
revenue per
pound.
2020 Capital Expenditure Guidance Candelaria's guidance for capital expenditures has been withdrawn reflecting the temporary suspension of operations due to the current labour action. Guidance for the other operations remains unchanged from previous guidance.
($millions) Guidance
Sustaining Capital
Candelaria (100% basis) N/A
Chapada 40
Eagle 15
Neves-Corvo 55
Zinkgruvan 45
2020 Exploration Investment Guidance
Planned exploration expenditures of
The information in this release is subject to the disclosure requirements of
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 or labour disputes; timing for any required repairs and resumption of any interrupted operations; the results of any 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; and the Company's integration of acquisitions and any anticipated benefits thereof. 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
News release dated October 28, 2020 (https://mb.cision.com/Public/18388/3227396/a4901e2c319c78b1.pdf)
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