Lundin Mining Third Quarter 2023 Results

Report this content

Vancouver, November 1, 2023 /CNW/ - (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”) today reported its third quarter 2023 financial results.

"Our operations continued with a strong performance in the third quarter. As a result, we are increasing our production guidance for Caserones and Eagle. The acquisition of Caserones enabled us to achieve a new record in quarterly consolidated copper production, and we also achieved a record in quarterly zinc production. This led the Company to an adjusted EBITDA of $415 million for the period." commented Peter Rockandel, CEO.

Mr. Rockandel added, "During the integration process of Caserones, our team has identified and outlined synergies between Caserones and Candelaria, which are expected to yield initial annual savings of $20 to $30 million per year. We are excited about launching the largest exploration program at Caserones since production commenced, targeting resource extensions and near-mine discoveries. The corporate office move to Vancouver is complete and all senior executive positions are in place. As we approach 2024, Lundin Mining is strategically, operationally, and financially, in a strong position to continue to deliver on our plans and execute on the next phase of growth. On a personal note, as this is my last quarter as CEO, I would like to thank all our employees, partners and stakeholders for their dedication, hard work and support, all of which have been integral to our current and future success. I am extremely proud of what the team has been able to accomplish during my tenure as CEO.”

Third Quarter Highlights

  • Copper Production: The Company achieved consolidated production of 89,942 tonnes of copper, a new quarterly record.
  • Other Production: During the quarter a total of 49,774 tonnes of zinc, 4,290 tonnes of nickel and approximately 35,000 ounces of gold were produced. A quarterly zinc production record was achieved as the zinc expansion project ("ZEP") at Neves-Corvo ramps up and a full quarter of operation from the sequential flotation project at Zinkgruvan was realized.
  • Revenue: $992.2 million in the quarter.
  • Adjusted Earnings: Net loss attributable to shareholders of the Company was $3.0 million ($0.00 per share). Adjusted earnings attributable to shareholders of the Company1 was $85.6 million ($0.11 per share).
  • Adjusted EBITDA: Adjusted earnings before interest, taxes, depreciation and amortization1 (“EBITDA”) of $415.1 million in the third quarter.
  • Cash Generation: Cash provided by operating activities was $303.8 million and cash and cash equivalents at September 30, 2023 was $357.3 million. Adjusted operating cash flow1 was $316.5 million ($0.41 per share), after removing the impact of working capital. Free cash flow1 was $71.1 million.
  • Caserones Acquisition: Completed the acquisition of 51% of the Caserones copper-molybdeum mine on July 13, 2023, adding another long-life asset in a tier one jurisdiction. The Company anticipates initial annual synergies from supply chain and service contracts between Caserones and Candelaria to be $20 million to $30 million per year.
  • Term Loan: To fund the Caserones acquisition, the Company obtained a term loan in July 2023 of a principal amount of $800.0 million with an additional $400.0 million accordion option maturing in July 2026. As at September 30, 2023, the Company had a net debt1 balance of $1,158.9 million.
  • CEO Succession: Peter Rockandel, the current Chief Executive Officer announced that he will be stepping down from the role of CEO and from the Board of Directors as of December 31, 2023. Those responsibilities will be assumed by Jack Lundin, current President, and former Director of the Company.
  • Outlook: Revised annual production guidance, including an increase in copper production from 296,000 - 325,000 tonnes to 305,000 - 325,000 tonnes. Cash cost guidance was lowered at Caserones and Eagle and increased at Candelaria. Annual capital expenditure guidance is lower by $30 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 for the three and nine months ended September 30, 2023 and the Reconciliation of Non-GAAP measures section at the end of this news release.
 

Summary Financial Results        

Three months ended September 30, Nine months endedSeptember 30,
US$ Millions (except per share amounts) 2023   2022 2023   2022
Revenue                992.2                648.5            2,332.1             2,229.8
Gross profit                197.3                  82.5                463.5                607.3
Attributable net earnings (loss)2                  (3.0)                (11.2)                202.8                281.3
Net earnings (loss)                  21.9                (11.2)                248.5                318.2
Adjusted earnings 1,2,3                  85.6                  30.9                256.9                288.9
Adjusted EBITDA1,3                415.1                202.4                943.8                938.8
Basic and diluted earnings per share ("EPS")2                      —                (0.01)                  0.26                  0.37
Adjusted EPS1,2,3                  0.11                  0.04                  0.33                  0.38
Cash provided by operating activities                303.8                  36.3                710.5                720.0
Adjusted operating cash flow1                316.5                181.3                662.2                703.9
Adjusted operating cash flow per share1                  0.41                  0.23                  0.86                  0.93
Free cash flow from (used in) operations1                136.5                (43.9)                228.3                417.1
Free cash flow1                  71.1              (163.2)                (47.7)                158.3
Cash and cash equivalents                357.3                226.9                357.3                226.9
Net debt1          (1,158.9)                177.6          (1,158.9)                177.6
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 for the three and nine months ended September 30, 2023 and the Reconciliation of Non-GAAP Measures section at the end of this news release.
2 Attributable to shareholders of Lundin Mining Corporation.
3 Q2 2023 amounts have been adjusted from those presented in the Company's MD&A for the three and six months ended June 30, 2023.

Quarter Ended September 30, 2023

  • The Company generated revenue of $992.2 million, gross profit of $197.3 million and adjusted EBITDA of $415.1 million (Q3 2022 - $202.4 million).
  • Net loss attributable to shareholders of the Company was $3.0 million ($0.00 per share) in the third quarter, impacted by higher interest expense, non-cash unrealized losses on derivative contracts and increased deferred tax expense as a result of the enactment of the mining royalty law in Chile4.
  • Adjusted earnings attributable to shareholders of the Company for the quarter of $85.6 million ($0.11 per share attributable to shareholders of the Company) were $49.5 million higher than the prior year quarter after adjusting for the non-cash revaluation of derivative contracts, fair value adjustments relating to the Caserones acquisition and deferred tax relating to the mining royalty rate change4, among other things.
  • Cash and cash equivalents as at September 30, 2023 were $357.3 million. Cash generated from operations of $303.8 million during the quarter was used to fund investing activities of $908.8 million. Investing activities in the third quarter included $648.6 million net cash paid at closing for the acquisition of Caserones, consisting of $796.6 million upfront cash consideration after adjustments, net of $148 million cash and cash equivalents held by SCM Minera Lumina Copper Chile at closing on a 100% basis.
  • Free cash flow of $71.1 million was $234.3 million higher than the prior year comparable period and benefited from the inclusion of production from Caserones, combined with higher realized copper prices and higher overall changes in working capital.
  • As at November 1, 2023, the Company had cash and net debt balances of approximately $368.6 million and $1,137.6 million, respectively.
     

4 Refer to Management's Discussion and Analysis for the three and nine months ended September 30, 2023 for further information related to the deferred tax relating to the mining royalty rate change.
 

Corporate Highlights

  • Candelaria EIA: A new Environmental Impact Assessment (“EIA”) was granted at Candelaria for the extension of operations from 2030 to 2040.
  • Exploration: Exploration programs continue at our existing assets while new exploration drilling campaigns are underway at Caserones and Josemaria. Drilling at Caserones will be the largest exploration program since the mine began operation in 2013. The initial phase of the drill program is expected to be over 10,000 meters and results are expected in H1 2024.
  • Copper Mark: Caserones has achieved the Copper Mark at its operations, a designation that highlights the Company’s commitment to sustainable mining practices.
  • Josemaria Project: The Company continues to derisk and advance the Josemaria project through optimization and trade off studies. These studies will continue into 2024.
  • Senior Leadership Appointments: The corporate office move to Vancouver has been completed. The Company is pleased to announce the following executive appointments, Peter Brady has been hired as General Counsel, Ricardo Checura as Vice President, Health and Safety and Nathan Monash as Vice President, Sustainability.
     

Outlook

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.

2023 Production and Cash Cost Guidance

Previous Guidancea Revised Guidance
(contained metal) Production Cash Cost ($/lb)f Production Cash Cost ($/lb)b,f
Copper (t) Candelaria (100%) 145,000 - 155,000 1.80 – 1.95c 147,000 - 153,000 2.00 – 2.20c
Caserones (100%)e 60,000 - 65,000 2.30 – 2.45 65,000 - 69,000 2.00 – 2.20
Chapada 43,000 - 48,000 2.35 – 2.55d 45,000 - 48,000 2.35 – 2.55d
Eagle 12,000 - 15,000 12,000 - 15,000
Neves-Corvo 33,000 - 38,000 2.10 – 2.30c 33,000 - 36,000 2.10 – 2.30c
Zinkgruvan 3,000 - 4,000 3,000 - 4,000
Total 296,000 - 325,000 305,000 - 325,000
Zinc (t) Neves-Corvo 100,000 - 110,000 103,000 - 110,000
Zinkgruvan 80,000 - 85,000 0.45 – 0.50c 78,000 - 82,000 0.45 – 0.50c
Total 180,000 - 195,000 181,000 - 192,000
Molybdenum (t) Caserones (100%)e 1,500 - 2,000 1,500 - 2,000
Gold (koz) Candelaria (100%) 85 - 90 87 - 92
Chapada 55 - 60 55 - 60
Total 140 - 150 142 - 152
Nickel (t) Eagle 13,000 - 16,000 2.30 – 2.45 15,000 - 17,000 2.00 – 2.20
a. Guidance as outlined in the MD&A for the three and six months ended June 30, 2023.        
b. Cash costs are based on various assumptions and estimates, including but not limited to: production volumes, commodity prices (Cu: $3.75/lb, Zn: $1.10/lb, Mo: $20.00/lb Pb: $0.90/lb, Au: $1,850/oz), foreign exchange rates (€/USD:1.05, USD/SEK:10.50, USD/CLP:800, USD/BRL:5.00) and production costs for the remainder of 2023.
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.
f. 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 and nine months ended September 30, 2023 and the Reconciliation of Non-GAAP measures section at the end of this news release.

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.

2023 Capital Expenditure

($ millions) Previous Guidancea Revisions Revised Guidance
Candelaria (100% basis) 375 375
Caserones (100% basis)c 110 110
Chapada 70 70
Eagle 20 20
Neves-Corvo 130 (25) 105
Zinkgruvan 70 (5) 65
Other 10 10
Total Sustaining 785 (30) 755
Josemaria 350 350
Total Capital Expenditures 1,135 (30) 1,105
a. Guidance as outlined in the MD&A for the three and six months ended June 30, 2023.   
b. Sustaining capital expenditure is a supplementary financial measure and expansionary capital expenditure is a non-GAAP measure - see the Company's Management Discussion and Analysis for the three and six months ended June 30, 2023 and the Reconciliation of Non-GAAP Measures at the end of this news release.        

c. Caserones guidance is for the second half of 2023.

2023 Exploration Investment Guidance

Total exploration expenditures are on target to be $45.0 million in 2023, unchanged from previous guidance.
 

Operational Performance

Total Production

(contained metal)a 2023 2022
YTD Q3 Q2 Q1 Total Q4 Q3 Q2 Q1
Copper (t)b      211,461       89,942       60,057       61,462     249,659       56,552       63,930       64,096       65,081
Zinc (t)      134,442       49,774       36,115       48,553     158,938       44,308       40,327       41,912       32,391
Molybdenum (t)b          1,096          1,096                —
Gold (koz)b              105               35               34               36             154               36               45               39               34
Nickel (t)        12,700          4,290          4,686          3,724       17,475          4,096          4,379          4,719          4,281
a. Tonnes (t) and thousands of ounces (koz)
b. Candelaria and Caserones production is on a 100% basis. Caserones results are from July 13, 2023.

Candelaria (80% owned): 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.

Caserones (51% owned): 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 (100% owned): 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.

Eagle (100% owned): 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 (100% owned): 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. 

Zinkgruvan (100% owned): 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. 
 

Senior Leadership Appointments

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.

Peter Brady
General Counsel
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.

Ricardo Checura
Vice President Health and Safety
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.

Nathan Monash
Vice President, Sustainability
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.

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.

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 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.
 

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 and nine months ended September 30, 2023 which is available on SEDAR+ at www.sedarplus.ca.

Net (debt) cash can be reconciled as follows:

($thousands) September 30, 2023 December 31, 2022
Debt and lease liabilities      (1,130,754)    (27,179)
Current portion of total debt and lease liabilities              (380,645)   (170,149)
Less deferred financing fees (netted in above)            (4,810)   (4,926)
     (1,516,209)  (202,254)
Cash and cash equivalents     357,337  191,387
Net debt   (1,158,872)  (10,867)

Adjusted operating cash flow and adjusted operating cash flow per share can be reconciled to cash provided by operating activities as follows:

Three months endedSeptember 30, Nine months endedSeptember 30,
($thousands, except share and per share amounts) 2023 2022 2023 2022
Cash provided by operating activities           303,812              36,331           710,531           719,999
Changes in non-cash working capital items             12,655           145,006           (48,360)            (16,111)
Adjusted operating cash flow              316,467           181,337           662,171           703,888
Basic weighted average number of shares outstanding   773,147,920   775,563,527   772,214,160   759,726,506
Adjusted operating cash flow per share         $            0.41    0.23        0.86                  0.93

Free cash flow from operations can be reconciled to cash provided by operating activities as follows:

Three months endedSeptember 30, Nine months endedSeptember 30,
($thousands) 2023 2022 2023 2022
Cash provided by operating activities           303,812              36,331           710,531           719,999
General exploration and business development             12,734              72,446             41,192           132,259
Sustaining capital expenditures         (180,013)          (152,722)         (523,397)          (435,145)
Free cash flow from operations           136,533            (43,945)           228,326           417,113
General exploration and business development           (12,734)            (72,446)           (41,192)          (132,259)
Expansionary capital expenditures           (52,662)            (46,766)         (234,831)          (126,523)
Free cash flow             71,137          (163,157)           (47,697)           158,331

Adjusted EBITDA can be reconciled to the Company's Consolidated Statement of Earnings as follows:

Three months endedSeptember 30, Nine months endedSeptember 30,
($thousands) 2023 2022 2023 2022
Net earnings (loss)             21,883            (11,245)           248,496           318,238
Add back:
Depreciation, depletion and amortization    179,788  140,161 430,540 412,040
Finance income and costs             36,212              15,240             67,808              47,521
Income taxes             84,891              10,766           113,983           136,975
          322,774           154,922           860,827           914,774
Unrealized foreign exchange                9,096              14,426              (1,545)              25,000
Revaluation loss on derivatives1             47,874                      —             43,407                      —
Sinkhole costs              (1,247)                7,789             15,235                7,789
Revaluation loss (gain) on marketable securities                3,449                  (554)                 (453)                1,712
Caserones inventory fair value adjustment             32,185                      —             32,185                      —
Unrealized foreign exchange and trading loss on equity investments                      —              18,848                      —                      —
Write-down of fixed assets                      —                3,617                      —                3,619
Gain on disposal of subsidiary                      —                      —              (5,718)            (16,828)
Other                   990                3,325                 (120)                2,724
Total adjustments - EBITDA             92,347              47,451             82,991              24,016
Adjusted EBITDA1           415,121           202,373           943,818           938,790

1 Q2 2023 amounts have been adjusted from those presented in the Company's MD&A for the three and six months ended June 30, 2023.                                                                                                                                                           

Adjusted earnings and adjusted earnings per share can be reconciled to the Company's Consolidated Statement of Earnings as follows:

Three months endedSeptember 30, Nine months endedSeptember 30,
($thousands, except share and per share amounts) 2023 2022 2023 2022
Net earnings (loss) attributable to Lundin Mining shareholders              (2,964)            (11,212)           202,765           281,289
Add back:
Total adjustments - EBITDA             92,347              47,451             82,991              24,016
Tax effect on adjustments           (20,114)            (12,012)           (23,295)            (11,323)
Deferred tax expense due to change in tax rate             25,700                      —             25,700                      —
Deferred tax arising from foreign exchange translation                9,669                5,599           (12,327)              (6,264)
Non-controlling interest on adjustments           (19,049)                1,070           (18,980)                1,197
Total adjustments             88,552              42,108             54,089                7,626
Adjusted earnings1                           85,588              30,896           256,854           288,915
Basic weighted average number of shares outstanding   773,147,920   775,563,527   772,214,160   759,726,506
Net (loss) earnings attributable to shareholders                                        —                (0.01)                  0.26                  0.37
Total adjustments                                                                0.11               0.05                  0.07                  0.01
Adjusted earnings per share1                         0.11                  0.04                  0.33                  0.38

1 Q2 2023 amounts have been adjusted from those presented in the Company's MD&A for the three and six months ended June 30, 2023.

Cash and All-in Sustaining Costs can be reconciled to the Company's operating costs as follows:

Three months ended September 30, 2023
Operations Candelaria Caserones Chapada Eagle Neves-Corvo Zinkgruvan
($000s, unless otherwise noted) (Cu) (Cu) (Cu)  (Ni)  (Cu) (Zn) Total
Sales volumes (Contained metal):
Tonnes                               33,668           30,385           11,445             3,640             8,799           22,042 
Pounds (000s)           74,225           66,987           25,232             8,025           19,398           48,594 
Production costs                            615,109
Less: Royalties and other         (21,662)
Inventory fair value adjustment         (32,185)
        561,262
Deduct: By-product       (216,150)
Add: Treatment and           56,261
Cash cost        162,672        106,866           57,501           16,598           44,043           13,693          401,373
Cash cost per pound               2.19               1.60               2.28               2.07               2.27               0.28 
Add: Sustaining capital                             86,693           28,849           16,716             4,989           27,357           12,350 
Royalties                   —             7,550             2,142             7,385             1,055                   — 
Reclamation and other closure accretion and depreciation             2,349             1,133             2,141             2,742             1,462             1,011 
Leases & other             2,841           11,531                865                797                131                   86 
All-in sustaining cost        254,555        155,929           79,365           32,511           74,048           27,140 
AISC per pound ($/lb)               3.43               2.33               3.15               4.05               3.82               0.56 

Three months ended September 30, 2022

Operations Candelaria Caserones Chapada Eagle Neves-Corvo Zinkgruvan
($000s, unless otherwise noted) (Cu) (Cu) (Cu)  (Ni)  (Cu) (Zn) Total
Sales volumes (Contained metal):
Tonnes                               35,587                   —           12,817             3,715             8,574           13,722 
Pounds (000s)           78,456                   —           28,257             8,190           18,903           30,252 
Production costs                            425,814
Less: Royalties and            (8,593)
        417,221
Deduct: By-product       (172,179)
Add: Treatment and           28,829
Cash cost        154,633                   —           54,147             8,637           50,888             5,566          273,871
Cash cost per pound               1.97                   —               1.92               1.05               2.69               0.18 
Add: Sustaining capital                          103,486                   —           19,197             3,062           15,860             8,415 
Royalties                   —                   —             3,055             5,705           (1,213)                   — 
Reclamation and other closure accretion and depreciation             1,951                   —             1,784             4,809                630                962 
Leases & other             2,327                   —             1,017                484                173                149 
All-in sustaining cost        262,397                   —           79,201           22,697           66,338           15,092 
AISC per pound ($/lb)               3.34                   —               2.80               2.77               3.51               0.50 

Nine months ended September 30, 2023

Operations  Candelaria Caserones Chapada Eagle Neves-Corvo Zinkgruvan
($000s, unless otherwise noted) (Cu) (Cu) (Cu)  (Ni)  (Cu) (Zn) Total
Sales volumes (Contained metal):
Tonnes                            105,585           30,385           30,681           10,234           23,000           48,028 
Pounds (000s)        232,775           66,987           67,640           22,562           50,706        105,883 
Production costs                        1,438,071
Less: Royalties and other         (41,717)
Inventory fair value adjustment         (32,185)
    1,364,169
Deduct: By-product credits       (495,751)
Add: Treatment and         125,390
Cash cost        507,884        106,866        165,170           47,228        128,206           38,454          993,808
Cash cost per pound ($/lb)               2.18               1.60               2.44               2.09               2.53               0.36 
Add: Sustaining capital               300,796           28,849           52,433           15,653           74,551           42,812 
Royalties                   —             7,550             6,394           17,991             2,868                   — 
Reclamation and other closure accretion and depreciation             7,100             1,133             5,789             8,711             4,082             2,811 
Leases & other             9,638           11,531             3,002             2,441                437                288 
All-in sustaining cost        825,418        155,929        232,788           92,024        210,144           84,365 
AISC per pound ($/lb)               3.55               2.33               3.44               4.08               4.14               0.80 

Nine months ended September 30, 2022
Operations Candelaria Caserones Chapada Eagle Neves-Corvo Zinkgruvan
($000s, unless otherwise noted) (Cu) (Cu) (Cu)  (Ni)  (Cu) (Zn) Total
Sales volumes (Contained metal):
Tonnes                            113,690                   —           33,526           11,188           25,241           48,049 
Pounds (000s)        250,643                   —           73,912           24,665           55,647        105,930 
Production costs                        1,210,431
Less: Royalties and other         (38,121)
    1,172,310
Deduct: By-product       (487,914)
Add: Treatment and           90,944
Cash cost        450,858                   —        157,456             7,999        125,889           33,138          775,340
Cash cost per pound ($/lb)               1.80                   —               2.13               0.32               2.26               0.31 
Add: Sustaining capital               272,557                   —           63,412           10,445           49,136           31,537 
      Royalties                   —                   —             9,161           24,129                984                   — 
      Reclamation and closure accretion and depreciation             6,002                   —             5,533           14,109             1,081             3,035
      Leases & other             6,953                   —             3,056             1,766                569                547
All-in sustaining cost        736,370                   —        238,618           58,448        177,659           68,257
AISC per pound ($/lb)               2.94                   —               3.23               2.37               3.19               0.64


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, including the Caserones transaction; 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 Lundin Mining as at the date of this document in light of management’s experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: global financial conditions, market volatility and inflation, including pricing and availability of key supplies and services; risks inherent in mining including but not limited to risks to the environment, industrial accidents, catastrophic equipment failures, unusual or unexpected geological formations or unstable ground conditions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable risks; project financing risks, liquidity risks and limited financial resources; volatility and fluctuations in metal and commodity demand and prices; delays or the inability to obtain, retain or comply with permits; significant reliance on a single asset; reputation risks related to negative publicity with respect to the Company or the mining industry in general; health and safety risks; risks relating to the development of the Josemaria Project; inability to attract and retain highly skilled employees; risks associated with climate change; compliance with environmental, health and safety laws and regulations; unavailable or inaccessible infrastructure, infrastructure failures, and risks related to ageing infrastructure; risks inherent in and/or associated with operating in foreign countries and emerging markets, including with respect to foreign exchange and capital controls; economic, political and social instability and mining regime changes in the Company’s operating jurisdictions, including but not limited to those related to permitting and approvals, environmental and tailings management, labour, trade relations, and transportation; risks relating to indebtedness; the inability to effectively compete in the industry; risks associated with acquisitions and related integration efforts, including the ability to achieve anticipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration, including with respect to the Caserones transaction; changing taxation regimes; risks related to mine closure activities, reclamation obligations, environmental liabilities and closed and historical sites; reliance on key personnel and reporting and oversight systems, as well as third parties and consultants in foreign jurisdictions; information technology and cybersecurity risks; risks associated with the estimation of Mineral Resources and Mineral Reserves and the geology, grade and continuity of mineral deposits including but not limited to models relating thereto; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing efficiency; community and stakeholder opposition; financial projections, including estimates of future expenditures and cash costs, and estimates of future production may not be reliable; enforcing legal rights in foreign jurisdictions; environmental and regulatory risks associated with the structural stability of waste rock dumps or tailings storage facilities; activist shareholders and proxy solicitation matters; risks relating to dilution; regulatory investigations, enforcement, sanctions and/or related or other litigation; risks relating to payment of dividends; counterparty and customer concentration risks; the estimation of asset carrying values; risks associated with the use of derivatives; relationships with employees and contractors, and the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; conflicts of interest; existence of a significant shareholder; exchange rate fluctuations; challenges or defects in title; internal controls; compliance with foreign laws; potential for the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights violations; the threat associated with outbreaks of viruses and infectious diseases; risks relating to minor elements contained in concentrate products; and other risks and uncertainties, including but not limited to those described in the “Risk and Uncertainties” section of the Company’s Annual Information Form and the “Managing Risks” section of the Company’s MD&A for the year ended December 31, 2022, which are available on SEDAR+ at www.sedarplus.ca under the Company’s profile.

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.

View PDF Version

For further information, please contact:

Stephen Williams, Vice President, Investor Relations +1 604 806 3074
Robert Eriksson, Investor Relations Sweden: +46 8 440 54 40

About Lundin Mining

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.