Lundin Gold Inc. (TSX: LUG) (Nasdaq Stockholm: LUG) (OTCQX: LUGDF) is pleased to report results for the third quarter of 2024, highlighted by record high cash flow with cash from operating activities of $218 million and adjusted free cash flow1 of $182 million or $0.76 per share. This was achieved through record revenues of $323 million realized from the sale of 125,887 ounces at an average realized gold price1 of $2,615 per oz. Record adjusted earnings before interest, taxes, depreciation, and amortization1 of $220 million were also achieved during the quarter. Cash operating costs1 and all-in sustaining costs1 this quarter were $681 and $877 per oz sold, respectively. All amounts are in U.S. dollars unless otherwise indicated.
“I’m pleased to announce that Lundin Gold has achieved another quarter of record results. Our operating cash flow reached a record high of $218 million, and we again set new records for both revenue and adjusted EBITDA1. This was underscored by both the team’s operating performance and a high gold price.” Ron Hochstein, President and CEO commented, “As we move into the last quarter of the year, we expect to achieve the high end of production guidance of 450,000 to 500,000 oz and the upper end of AISC1 guidance of $820 to $890 per oz largely due to higher sustaining capital. Lastly, the Process Plant Expansion remains on track, and we are looking forward to bringing the major components online by year end to increase throughput to 5,000 tonnes per day and improve recoveries.”
OPERATING AND FINANCIAL RESULTS SUMMARY
The following two tables provide an overview of key operating and financial results.
Three months ended
September 30, |
Nine months ended
September 30, |
|||
2024 | 2023 | 2024 | 2023 | |
Tonnes ore mined | 427,389 | 397,702 | 1,266,320 | 1,229,845 |
Tonnes ore milled | 425,340 | 416,072 | 1,263,835 | 1,226,777 |
Average mill throughput (tpd) | 4,623 | 4,523 | 4,613 | 4,494 |
Average head grade (g/t) | 10.3 | 9.7 | 10.3 | 10.9 |
Average recovery | 86.8 % | 86.5 % | 88.0 % | 88.5 % |
Gold ounces produced | 122,154 | 112,212 | 366,788 | 381,964 |
Gold ounces sold | 125,887 | 112,711 | 364,199 | 376,360 |
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1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 14 to 18 of the Company’s MD&A for the third quarter ended September 30, 2024 available on SEDAR+. |
Three months ended
September 30, |
Nine months ended
September 30, |
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2024 | 2023 | 2024 | 2023 | |
Revenues ($’000) | 323,087 | 211,172 | 851,259 | 711,830 |
Income from mining operations ($’000) | 203,184 | 99,620 | 488,178 | 357,129 |
Earnings before interest, taxes, depreciation, and amortization ($’000)[2] | 220,469 | 133,170 | 789,150 | 426,702 |
Adjusted earnings before interest, taxes, depreciation, and amortization ($’000)1 | 220,469 | 121,492 | 547,326 | 430,137 |
Net income ($’000) | 135,715 | 53,782 | 296,903 | 168,395 |
Basic income per share ($) | 0.57 | 0.23 | 1.24 | 0.71 |
Cash provided by operating activities ($’000) | 218,286 | 120,030 | 470,369 | 426,821 |
Adjusted free cash flow ($’000)1 | 181,609 | 80,937 | 376,016 | 201,143 |
Adjusted free cash flow per share ($)1 | 0.76 | 0.34 | 1.57 | 0.85 |
Average realized gold price ($/oz sold)1 | 2,615 | 1,931 | 2,390 | 1,942 |
Cash operating cost ($/oz sold)1 | 681 | 704 | 713 | 662 |
All-in sustaining costs ($/oz sold)1 | 877 | 907 | 874 | 807 |
Adjusted earnings ($’000)1 | 135,715 | 44,673 | 292,449 | 171,074 |
Adjusted earnings per share ($)1 | 0.57 | 0.19 | 1.22 | 0.72 |
Dividends paid per share ($) | 0.20 | 0.10 | 0.40 | 0.30 |
THIRD QUARTER HIGHLIGHTS – STRONG FINANCIAL PERFORMANCE UNDERPINNED BY CONTINUED OPERATIONAL EXCELLENCE
Financial Results
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1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 14 to 18 of the Company’s MD&A for the third quarter ended September 30, 2024 available on SEDAR+. |
Production Results
Outlook
___________________________ |
1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 14 to 18 of the Company’s MD&A for the third quarter ended September 30, 2024 available on SEDAR+. |
Liquidity and Capital Resources
At the end of the third quarter of 2024, the Company is in a strong financial position:
(in thousands of U.S. dollars) | As at September 30,
2024 |
As at December 31,
2023 |
Financial Position: | ||
Cash | 225,728 | 268,025 |
Working capital | 357,410 | 346,859 |
Total assets | 1,364,106 | 1,468,209 |
Long-term debt | – | 305,647 |
The change in cash during the nine months ended September 30, 2024 was primarily due to cash generated from operating activities of $470 million and proceeds from the exercise of stock options and anti-dilution rights totalling $18.2 million. This is offset by scheduled principal, interest, and finance expense repayments under the Stream Facility totaling $35.8 million; the buy out of the Stream Facility and Offtake of $330 million; dividends of $95.8 million; cash outflows of $65.3 million relating to investing activities; and settlement of vested share units with cash of $4.0 million.
Capital Expenditures
Health and Safety
During the third quarter there were no Lost Time Incidents and three Medical Aid Incidents. The Total Recordable Incident Rate across the Company was 0.33 per 200,000 hours worked for the quarter and 0.67 for the first nine months of 2024. The operations team continue to focus on safety through improved awareness of the workforce and contractors with more leadership presence in the field, as well as a review of activities where the potential for hand injuries is high.
Community
Lundin Gold continued to support several community projects in the third quarter of 2024. One of the Company’s most significant programs, run by the non-governmental organization Educación para Compartir, focuses on mental health and well-being in our local communities. The program is now advancing into its second year and continues to show increasing participation by local community members. From inception of the program in July 2023 to the end of the third quarter of 2024, over 2,700 counselling sessions occurred, and more than 400 youth registered in regular extra-curricular activities, including English studies, basketball, soccer, dance, music, and boxing.
Engagement with the local governments of Yantzaza and Los Encuentros continues through support agreements for rural road maintenance, basic service infrastructure, and local communities’ well-being programs. During the quarter, the Company committed to three significant projects including an electrification and public lighting project in El Pangui, which is approximately 40 kilometres from Fruta del Norte, a maintenance project for the Cultural Interpretation Centre of the Shuar Indigenous people, and an improvement and maintenance project for the local park in Los Encuentros.
Two community dialogue roundtable sessions were held in the third quarter which focused on six topics with 416 participants. Senior members of the Company’s sustainability, community, environment, supply chain, IT, and human resources departments, along with representatives of the Lundin Foundation, participated in the sessions.
Local businesses continue to be supported by the Company in conjunction with the Lundin Foundation. The local companies that participate in the Lundin Foundation’s local supplier development program are continuing to provide products and services to FDN, while also advancing growth strategies. The Lundin Foundation’s Soy Emprendadora program which supports women led businesses in the Province of Zamora Chinchipe continues to show positive impacts and results. Three businesses selected through the third cohort of the program received seed capital and technical assistance during the third quarter.
EXPLORATION
Near-Mine Exploration Program
During the third quarter of 2024, the Company completed a total of 19,268 metres across 56 holes from surface and underground. Drilling from underground mainly explored the FDNS target located in the southern part of the FDN deposit, while drilling from surface continued to test sectors located along the extensions of the controlling structures of FDN, such as Bonza Sur and FDN East.
A complete table of FDNS results received to date can be found in Lundin Gold’s press release dated November 4, 2024. At Bonza Sur, several results remain pending which are expected later in the year.
Regional Exploration Program
The 2024 regional program continues to advance the identification of important indicators that point toward the presence of buried epithermal deposits in the southern basin. During the quarter, regional drilling focused on the Robles and Crisbel targets, both located in the southern border of the Suarez Basin, where detailed geological interpretation of exploration data and additional surface works identified major structures and zones of hydrothermal alteration. A total of 2,323 metres across four holes were completed. At Robles, the drilling program aimed to step out the wide disseminated gold mineralization zone intercepted in prior drilling. Results are pending. At Crisbel, one drill hole tested the presence of the Suarez Basin west fault in this sector and showed limited hydrothermal alteration with no significant results.
Geophysical Program
During the quarter, the geophysical survey designed to provide high resolution resistivity and chargeability imaging of exploration targets significantly advanced in the entire near-mine area and parts of the regional district.
CORPORATE
A payment of $150 million, representing the second and final tranche of the buy out of the Stream Facility and Offtake, was made at the end of the third quarter.
The Company doubled its quarterly dividend and subsequently paid a quarterly dividend of $0.20 per share on September 25, 2024(September 30, 2024 for shares trading on Nasdaq Stockholm) based on a record date of September 10, 2024, for a total of $48.0 million.
With the release of its third quarter 2024 results, the Company declared a cash dividend of $0.20 per share, which is payable on December 20, 2024 (December 30, 2024 for shares trading on Nasdaq Stockholm) to shareholders of record on December 5, 2024.
Mr. Chester See assumed the role of Chief Financial Officer at the start of the quarter following Mr. Christopher Kololian’s departure. Subsequent to quarter end, the Company announced the appointment of Mr. Brendan Creaney as Vice President, Corporate Development and Investor Relations.
Qualified Persons
The technical information relating to FDN contained in this News Release has been reviewed and approved by Terry Smith P. Eng, Lundin Gold’s COO, who is a Qualified Person in accordance with the requirements of NI 43-101. The disclosure of exploration information contained in this press release was prepared by Andre Oliveira, P.Geo, Lundin Gold’s V.P. Exploration, who is a Qualified Person in accordance with the requirements of NI 43-101.
Webcast and Conference Call
The Company will host a conference call and webcast to discuss its results on Friday, November 8 at 7:00 a.m. PT, 10:00 a.m. ET, 4:00 p.m. CET.
Conference Call Dial-In Numbers:
Participant Dial-In North America: | +1 437-900-0527 |
Toll-Free Participant Dial-In North America: | +1 888-510-2154 |
Participant Dial-In Sweden: | 46850524649 |
Conference ID: | Lundin Gold / 10863 |
A link to the webcast will be available on the Company’s website, www.lundingold.com.
A replay of the conference call will be available two hours after the completion of the call until Friday, November 15, 2024.
Toll Free North America Replay Number: | +1 888-660-6345 |
International Replay Number: | +1 289-819-1450 |
Replay passcode: | 10863 # |
About Lundin Gold
Lundin Gold, headquartered in Vancouver, Canada, is committed to positive and long-lasting impact on our host communities, while delivering significant value to stakeholders through operational excellence, cash flow generation and focused growth. Lundin Gold currently operates its 100% owned Fruta del Norte gold mine in southeast Ecuador, which is one of the highest-grade gold mines in production in the world today. The Company also owns a portfolio of prospective exploration properties close to FDN.
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