VANCOUVER, BC, July 30, 2024 /PRNewswire/ -- Lundin Mining Corporation ("Lundin Mining" or the "Company") today reported its second quarter 2024 financial results. Unless otherwise stated, results are presented in United States dollars on a 100% basis.
Jack Lundin, President and CEO commented, "During the quarter we generated record quarterly revenue of $1.1 billion which contributed to a strong financial performance for the Company. Adjusted EBITDA(1 )for the quarter was $461 million and free cash flow from operations(1) was $338 million driven by stronger commodity prices and working capital inflows.
"At Candelaria, while mill throughput in the first half of the year was strong, we expect to achieve a significant step-up in production in the second half of the year with planned higher grades and higher mining rates from ore in Phase 11. This production step-up has started to materialize during the month of July from the open pit.
"Our team remains dedicated to enhancing operational performance, prioritizing safety and cost optimization. Cash costs(1 )for the quarter were at the lower end of our guidance range. We are well-positioned for a strong second half of the year and are on track to meet our consolidated production guidance for copper, gold, and zinc. Additionally, we have reduced our guidance for sustaining capital expenditures by $45 million."
Second Quarter Operational and Financial Highlights
-- Copper Production: Consolidated production of 79,708 tonnes of copper in
the second quarter.
-- Other Production: During the quarter, a total of 47,460 tonnes of zinc,
1,721 tonnes of nickel and approximately 32,000 ounces of gold were
produced.
-- Revenue: $1,083.6 million in the second quarter with a realized copper
price(1) of $4.79 /lb.
-- Net Earnings and Adjusted Earnings(1): Net earnings attributable to
shareholders of the Company were $121.6 million or $0.16 per share in
the second quarter with adjusted earnings of $122.1 million or $0.16 per
share.
-- Adjusted EBITDA(1): $460.9 million generated during the quarter.
-- Cash Generation: Cash provided by operating activities was $491.8
million and free cash flow from operations(1) was $337.5 million, which
was increased by a working capital release of $121.9 million.
-- Growth: On July 2, 2024, the Company exercised its option to increase
ownership in Caserones to 70%, which adds an additional 25,000 tonnes of
attributable copper production to Lundin Mining's production profile(2).
-- Sustainability Report: On July 10, 2024 the Company published its annual
2023 Sustainability Report that highlights the Company's material
environmental, health & safety, governance and social performance during
the year.
-- Outlook: Second quarter 2024 production and cash costs were aligned with
expectations, the Company's full year guidance remains unchanged with
the exception of nickel:
-- Caserones: Annual copper production guidance range for the Caserones
mine for 2024 has been increased to 124,000 - 135,000 tonnes
(previously 120,000 - 130,000 tonnes). Cash cost guidance for
Caserones remains unchanged.
-- Eagle Mine: Annual nickel production guidance range for the Eagle
mine for 2024 has been reduced to 7,000 - 9,000 tonnes (previously
10,000 - 13,000 tonnes) and the copper production guidance range has
been reduced to 5,000 - 7,000 tonnes (previously 9,000 - 12,000
tonnes). Cash cost guidance per pound of nickel for the Eagle mine
has increased to $3.20/lb - $3.40/lb (previously $2.80/lb -
$3.00/lb)
-- Sustaining Capital Expenditures: Will be reduced by $45 million and
are expected to total $795 million (previously $840 million) due to
reductions in planned spending at Caserones, Neves-Corvo and
Zinkgruvan.
_________________________________ (1) These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2024 and the Reconciliation of Non-GAAP measures section at the end of this news release. (2) Based on Caserones 2024 production guidance as outlined in the news release 'Lundin Mining Provides 2024 Guidance & Announces 2023 Production Results' dated January 14, 2024.
Summary Financial Results
Three months ended Six months ended June 30, June 30, US$ Millions (except per share amounts) 2024 2023 2024 2023 Revenue 1,083.6 588.5 2,020.6 1,339.9 Gross profit 279.5 52.8 464.9 266.2 Attributable net earningsa 121.6 59.1 135.5 205.7 Net earnings 156.7 61.3 215.3 226.6 Adjusted earningsa,b 122.1 45.6 167.3 171.3 Adjusted EBITDAb 460.9 191.8 823.7 528.7 Basic earnings per share ("EPS")a 0.16 0.08 0.18 0.27 Diluted EPSa 0.16 0.08 0.17 0.27 Adjusted EPSa,b 0.16 0.06 0.22 0.22 Cash provided by operating activities 491.8 194.8 759.3 406.7 Adjusted operating cash flowb 369.9 110.6 683.5 345.7 Adjusted operating cash flow per shareb 0.48 0.14 0.88 0.45 Free cash flow from operationsb 337.5 20.7 405.2 91.8 Free cash flowb 236.8 (84.6) 235.1 (118.8) Cash and cash equivalents 452.8 190.2 452.8 190.2 Net debt excluding lease liabilitiesb 893.8 201.3 893.8 201.3 Net debtb 1,152.9 229.8 1,152.9 229.8
a Attributable to shareholders of Lundin Mining Corporation. 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 and six months ended June 30, 2024 and the Reconciliation of Non-GAAP Measures section at the end of this news release.
-- For the three months ended June 30, 2024, the Company generated revenue
of $1,083.6 million, driven by 78,662 tonnes of copper sold at a
realized price of $4.79 /lb. Revenue benefited from higher realized
copper and zinc prices, including $94.5 million positive provisional
pricing adjustments on prior period concentrate sales.
-- Gross profit of $279.5 million and Adjusted EBITDA of $460.9 million in
the three months ended June 30, 2024 reflect higher realized copper and
zinc prices despite the impacts of planned lower grades and maintenance
activities on copper concentrate sales from Candelaria and Caserones,
respectively.
-- Net earnings attributable to shareholders of the Company were $121.6
million or $0.16 per share in the three months ended June 30, 2024, and
included higher tax expense due to higher taxable earnings and the
utilization of prior period tax losses.
-- Adjusted earnings attributable to shareholders of the Company for the
three months ended June 30, 2024 were $122.1 million or $0.16 per share
after removing a loss on foreign exchange due to the translation of
deferred tax balances and expenses relating to the partial suspension of
underground operations at Eagle, among other things.
-- Cash and cash equivalents as at June 30, 2024 were $452.8 million. Cash
provided by operating activities amounted to $491.8 million and cash
used to fund investing activities amounted to $252.2 million. The
Company had a net debt excluding lease liabilities(1) balance of $893.8
million as at June 30, 2024 (December 31, 2023 - $946.2 million).
-- Free cash flow(1) for the three months ended June 30, 2024 of $236.8
million reflected higher copper and zinc realized prices, positive
working capital changes and reduced capital expenditure at Candelaria.
-- During the three months ended June 30, 2024, the Company entered into
zero cost collar contracts in the total amount of $222 million
(equivalent to BRL 1.1 billion) with collar ranges of BRL 5.00 to BRL
6.11.
-- As at July 30, 2024, the Company had a cash balance of approximately
$288.0 million and a net debt excluding lease liabilities balance of
approximately $1,338.0 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 and six months ended June 30, 2024 and the Reconciliation of Non-GAAP measures section at the end of this news release.
Operational Performance
Total Production
(Contained metal)a 2024 2023 YTD Q2 Q1 Total Q4 Q3 Q2 Q1 Copper (t)b 167,721 79,708 88,013 314,798 103,337 89,942 60,057 61,462 Zinc (t) 93,148 47,460 45,688 185,161 50,719 49,774 36,115 48,553 Nickel (t) 4,976 1,721 3,255 16,429 3,729 4,290 4,686 3,724 Gold (koz)b 65 32 33 149 44 35 34 36 Molybdenum (t)b 1,578 714 864 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 31,170 tonnes of copper and approximately 17,000 ounces of gold in concentrate on a 100% basis in the three months ended June 30, 2024. Production in the quarter was impacted by lower grades and recoveries, partially offset by higher throughput. During the three months ended June 30, 2024, mining rates were impacted by the interface of the open pit and historic underground mining stopes, requiring more stockpiled ore to be processed which reduced grades and recoveries. Access to higher grade ore is anticipated in the second half of 2024 as per the mine sequence. Three of four stopes have now been filled and blasted, with work on the fourth expected to begin in Q3, and not expected to impact production in the second half of 2024. Production costs were reduced by lower sales volumes and favourable foreign exchange as a result of the CLP weakening against the US dollar; however, cash cost of $2.18/lb was negatively impacted by lower sales volumes.
Caserones (51% owned): Caserones produced 29,775 tonnes of total copper and 714 tonnes of molybdenum on a 100% basis in the three months ended June 30, 2024. Copper and molybdenum concentrate production was impacted in the quarter by extended mill maintenance and weather events which reduced mining activities and limited tailings deposition. Recoveries were also temporarily reduced by changes in the mining sequence and flotation circuit disruptions. Production costs in the quarter were lower than planned primarily due to lower copper concentrate and molybdenum sales volume, as well as favourable foreign exchange. Cash cost also benefitted from favourable foreign exchange.
Chapada (100% owned): Chapada produced 9,106 tonnes of copper and approximately 15,000 ounces of gold in concentrate in the three months ended June 30, 2024 and was impacted by lower grades and recoveries combined with lower mill availability due to unplanned conveyor maintenance and vibration screen failure. Lower grades were a result of a shift to processing increased amounts of stockpiled ore and an optimized mine plan that significantly reduces waste movement. Production costs were reduced by lower sales volumes and favourable foreign exchange. Cash cost of $2.05/lb benefited from higher gold by-product credits combined with favourable foreign exchange and mining cost decreases due to operational improvements.
Eagle (100% owned): Eagle produced 1,721 tonnes of nickel and 1,563 tonnes of copper in the three months ended June 30, 2024. A fall of ground in the lower ramp restricted access to Eagle East, limiting production. Mining rates are expected to be reduced until late 2024 while ramp rehabilitation is completed, deferring the extraction of ore from Eagle East into future years. Production costs were reduced by lower sales volumes and royalty expense, partially offset by higher maintenance costs. Nickel cash cost(1) of $3.23/lb was impacted by lower sales volumes, partially offset by higher by-product credits.
Neves-Corvo (100% owned): Neves-Corvo produced 7,347 tonnes of copper and 25,696 tonnes of zinc in the three months ended June 30, 2024, both of which were impacted by lower grades due to changes in mine sequencing as a result of Lombador south requiring additional development work. Production costs increased due to an increase in sales volumes and cash cost of $1.70/lb benefited from increased sales volumes and higher by-product credits.
Zinkgruvan (100% owned): Zinkgruvan produced 21,764 tonnes of zinc and 8,966 tonnes of lead in the three months ended June 30, 2024 reflecting higher throughput and grades. Copper production of 747 tonnes was impacted by reduced availability of copper ore. Production costs increased due to higher sales volumes and zinc cash cost of $0.39/lb reflected lower copper by-product credits.
Outlook
Production and cash cost guidance for 2024 has been updated from that disclosed in the Company's Management's Discussion and Analysis for the year ended December 31, 2023.
The Company remains on track to meet annual production and cash cost guidance for all metals with the exception of nickel, and has reduced sustaining capital expenditure guidance from $840 million to $795 million with reductions at Caserones, Neves-Corvo, and Zinkgruvan. Expenditure guidance related to the Josemaria Project of $225 million and exploration of $48 million each remain on target for 2024.
Metal production continues to be weighted to the second half of the year at Candelaria, Chapada and Neves-Corvo due to mine sequencing and resultant forecasted grade profiles. Grade is expected to increase significantly at Candelaria in the second half of 2024 once access is opened to higher-grade ore. As a result of production challenges at Neves-Corvo in the first half of 2024, copper production at that operation continues to track to the lower end of its annual production guidance range. In the first half of 2024, cash cost per pound at most operations benefited from increased realized prices on by-product sales.
Guidance at Caserones has been increased to reflect production from the first half of the year and expected throughput and grades for the remainder of the year. At the Eagle mine, a fall of ground in the lower ramp restricted access to Eagle East, limiting production. Mining rates are expected to be reduced until late 2024 while ramp rehabilitation is completed, deferring the extraction of ore from Eagle East into future years. As a result, the annual nickel and copper production guidance ranges for the Eagle mine for 2024 have been reduced.
2024 Production and Cash Cost Guidance
Guidancea Revised Guidance (contained metal) Production Cash Cost Production Cash Cost ($/lb)b ($/lb)b Copper (t) Candelaria 160,000 - 1.60 - 1.80c 160,000 - (100%) 170,000 170,000 1.60 - 1.80c Caserones (100%) 120,000 - 2.60 - 2.80 124,000 130,000 - 135,000 2.60 - 2.80 Chapada 43,000 - 48,000 1.95 - 2.15d 43,000 - 48,000 1.95 - 2.15d Eagle 9,000 - 12,000 5,000 - 7,000 Neves-Corvo 30,000 - 35,000 1.95 - 2.15c 30,000 - 35,000 1.95 - 2.15c Zinkgruvan 4,000 - 5,000 4,000 - 5,000 Total 366,000 - 366,000 - 400,000 400,000 Zinc (t) Neves-Corvo 120,000 - 120,000 - 130,000 130,000 Zinkgruvan 75,000 - 85,000 0.45 - 0.50c 75,000 - 85,000 0.45 - 0.50c Total 195,000 - 195,000 - 215,000 215,000 Nickel (t) Eagle 10,000 - 13,000 2.80 - 3.00 7,000 - 9,000 3.20 - 3.40 Gold (koz) Candelaria (100%) 100 - 110 100 - 110 Chapada 55 - 60 55 - 60 Total 155 - 170 155 - 170 Molybdenum (t) Caserones (100%) 2,500 -3,000 2,500 - 3,000
a. Guidance as outlined in the Company's Management Discussion and Analysis ("MD&A") for the year ended December 31, 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, Pb: $0.90/lb, Au: $1,800/oz, Mo: $20.00/lb, Ag: $23.00/oz), foreign exchange rates (EUR/USD:1.05, USD/SEK:10.50, USD/CLP:850, USD/BRL:5.00) and production costs. Cash cost is a non-GAAP measure - see the Company's Management Discussion and Analysis for the three and six months ended June 30, 2024 and the Reconciliation of Non-GAAP Measures at the end of this news release. 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 $429/oz gold and $4.28/oz to $4.68/oz silver. d. Chapada's cash cost is calculated on a by-product basis and does not include the effects of its copper stream agreements. Effects of the copper stream agreements are reflected in copper revenue and will impact realized price per pound.
2024 Capital Expenditure Guidance(b)
($ millions) Guidancea Revisions Revised Guidance Candelaria (100% basis) 300 300 Caserones (100% basis) 205 (30) 175 Chapada 110 110 Eagle 25 25 Neves-Corvo 125 (10) 115 Zinkgruvan 75 (5) 70 Other Total Sustaining 840 (45) 795 Josemaria 225 225 Total Capital Expenditures 1,065 (45) 1,020
a. Guidance as outlined in the Company's Management Discussion and Analysis ("MD&A") for the year ended December 31, 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, 2024 and the Reconciliation of Non- GAAP Measures at the end of this news release.
Exploration
During the quarter ended June 30, 2024, exploration activity focused on in-mine and near-mine targets at the Company's operations. Exploration drilling at Zinkgruvan was focused on resource expansion and drilling at Candelaria was focused on Candelaria Norte and La Espanola. Drilling at Chapada concentrated on delineating the high-grade, near-mine trend at Corpo Sul, adding high grade resources to Sauva and testing geochemical anomalies in the Sauva area Curicaca and Curio.
At Caserones, exploration activity remains lower during the winter season. Exploration drilling continues in the lower portion of the mineral resource in search of higher-grade copper breccia bodies that could improve the average grade of the resource, and potentially expand it. Near-mine drilling at Angelica has been paused for winter since April.
At Josemaria, seasonal exploration drilling ended in early April at the Cumbre Verde Target, located west of 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 may potentially run towards the Cumbre Verde Target. Initial results highlight favorable levels of copper/gold/silver mineralization in veins and porphyry. The data obtained will help further refine and target this mineralization. Work will continue throughout the remainder of 2024 with drilling to recommence after the winter season.
There was no exploration drilling at Neves-Corvo and Eagle in the quarter.
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, nickel and gold.
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 July 30, 2024 at 14:30 Vancouver 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.
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 six months ended June 30, 2024 which is available on SEDAR+ at www.sedarplus.com.
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 June 30, 2024 Operations Candelaria Caserones Chapada Eagle Neves-Corvo Zinkgruvan ($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total Sales volumes (Contained metal): Tonnes 29,999 29,862 8,293 2,018 7,898 18,510 Pounds (000s) 66,137 65,834 18,283 4,449 17,412 40,808 Production costs 606,426 Less: Royalties and other (22,324) 584,102 Deduct: By-product credits (210,112) Add: Treatment and refining 38,577 Cash cost 143,935 171,255 37,570 14,381 29,682 15,744 412,567 Cash cost per pound ($/lb) 2.18 2.60 2.05 3.23 1.70 0.39 Add: Sustaining capital 60,544 35,328 25,241 3,980 27,921 13,301 Royalties 3,551 9,275 1,631 3,906 1,207 Reclamation and other closure accretion and depreciation 1,858 1,094 2,727 1,592 1,320 951 Leases & other 3,026 18,619 775 1,533 194 78 All-in sustaining cost 212,914 235,571 67,944 25,392 60,324 30,074 AISC per pound ($/lb) 3.22 3.58 3.72 5.71 3.46 0.74
Three months ended June 30, 2023 Operations Candelaria Caserones Chapada Eagle Neves-Corvo Zinkgruvan ($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total Sales volumes (Contained metal): Tonnes 36,347 10,164 3,859 6,170 9,374 Pounds (000s) 80,132 22,408 8,507 13,603 20,666 Production costs 405,198 Less: Royalties and other (7,969) 397,229 Deduct: By-product credits (122,636) Add: Treatment and refining 32,514 Cash cost 171,520 60,351 15,990 54,271 4,975 307,107 Cash cost per pound ($/lb) 2.14 2.69 1.88 3.99 0.24 Add: Sustaining capital 123,417 19,690 3,562 22,133 15,994 Royalties 2,029 4,920 83 Reclamation and other closure accretion and depreciation 2,444 1,847 3,011 1,296 739 Leases & other 3,654 1,171 897 148 100 All-in sustaining cost 301,035 85,088 28,380 77,931 21,808 AISC per pound ($/lb) 3.76 3.80 3.34 5.73 1.06
Six months ended June 30, 2024 Operations Candelaria Caserones Chapada Eagle Neves-Corvo Zinkgruvan ($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total Sales volumes (Contained metal): Tonnes 63,535 65,073 17,035 4,181 13,784 34,335 Pounds (000s) 140,071 143,461 37,556 9,218 30,388 75,696 Production costs 1,173,560 Less: Royalties and other (42,294) 1,131,266 Deduct: By-product credits (375,420) Add: Treatment and refining 85,528 Cash cost 283,425 337,694 76,305 33,630 71,739 38,581 841,374 Cash cost per pound ($/lb) 2.02 2.35 2.03 3.65 2.36 0.51 Add: Sustaining capital 160,076 78,082 54,440 8,058 50,334 27,642 Royalties 6,519 18,089 3,248 6,584 1,942 Reclamation and other closure accretion and depreciation 4,025 2,134 5,406 3,560 2,655 2,137 Leases & other 6,059 34,000 1,540 2,769 258 156 All-in sustaining cost 460,104 469,999 140,939 54,601 126,928 68,516 AISC per pound ($/lb) 3.28 3.28 3.75 5.92 4.18 0.91
Six months ended June 30, 2023 Operations Candelaria Caserones Chapada Eagle Neves-Corvo Zinkgruvan ($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total Sales volumes (Contained metal): Tonnes 71,917 19,236 6,594 14,201 25,986 Pounds (000s) 158,550 42,408 14,537 31,308 57,289 Production costs 822,962 Less: Royalties and other (20,055) 802,907 Deduct: By-product credits (279,601) Add: Treatment and refining 69,129 Cash cost 345,212 107,669 30,630 84,163 24,761 592,435 Cash cost per pound ($/lb) 2.18 2.54 2.11 2.69 0.43 Add: Sustaining capital 214,103 35,717 10,664 47,194 30,462 Royalties 4,252 10,606 1,813 Reclamation and other closure accretion and depreciation 4,751 3,648 5,969 2,620 1,800 Leases & other 6,797 2,137 1,644 306 202 All-in sustaining cost 570,863 153,423 59,513 136,096 57,225 AISC per pound ($/lb) 3.60 3.62 4.09 4.35 1.00
Adjusted EBITDA can be reconciled to Net Earnings (Loss) on the Company's Condensed Interim Consolidated Statement of Earnings as follows:
Three months ended Six months ended June 30, June 30, ($thousands) 2024 2023 2024 2023 Net earnings 156,733 61,302 215,288 226,613 Add back: Depreciation, depletion and amortization 197,658 130,505 382,150 250,752 Finance income and costs 36,307 15,897 72,001 31,596 Income taxes 56,162 (19,601) 106,728 29,092 446,860 188,103 776,167 538,053 Unrealized foreign exchange loss (gain) 3,173 (19,285) (12,327) (10,641) Unrealized losses (gains) on derivative contracts (3,974) 14,403 48,858 (6,263) Ojos del Salado sinkhole (recoveries) expenses 710 11,900 (321) 16,482 Revaluation loss (gain) on marketable securities (85) (3,464) (2,515) (3,902) Partial suspension of underground operations at Eagle 9,824 9,824 Revaluation gain on Caserones purchase option (12,431) (11,728) Write-down of capital works in progress 17,188 17,188 Gain on disposal of subsidiary (5,718) Other (407) 97 (1,432) 686 Total adjustments - EBITDA 13,998 3,651 47,547 (9,356) Adjusted EBITDA 460,858 191,754 823,714 528,697
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 Six months ended June 30, June 30, ($thousands, except share and per share amounts) 2024 2023 2024 2023 Net earnings attributable to Lundin Mining shareholders 121,589 59,109 135,472 205,729 Add back: Total adjustments - EBITDA 13,998 3,651 47,547 (9,356) Tax effect on adjustments 1,981 (54) 214 (3,180) Deferred tax arising from foreign exchange translation (13,666) (20,175) (19,966) (28,289) Non-controlling interest on adjustments (1,821) (1,134) 4,031 69 Other 4,186 6,293 Total adjustments 492 (13,526) 31,826 (34,463) Adjusted earnings 122,081 45,583 167,298 171,266 Basic weighted average number of shares outstanding 776,173,888 772,255,656 774,033,611 771,739,532 Net earnings attributable to shareholders 0.16 0.08 0.18 0.27 Total adjustments (0.02) 0.04 (0.05) Adjusted earnings per share 0.16 0.06 0.22 0.22
Free Cash Flow from Operations and Free Cash Flow can be reconciled to Cash provided by Operating Activities on the Company's Condensed Interim Consolidated Statement of Cash Flows as follows:
Three months ended Six months ended June 30, June 30, ($thousands) 2024 2023 2024 2023 Cash provided by operating activities 491,770 194,844 759,301 406,719 Sustaining capital expenditures (167,803) (187,820) (381,063) (343,384) General exploration and business development 13,536 13,693 26,987 28,458 Free cash flow from operations 337,503 20,717 405,225 91,793 General exploration and business development (13,536) (13,693) (26,987) (28,458) Expansionary capital expenditures (87,120) (91,650) (143,101) (182,169) Free cash flow 236,847 (84,626) 235,137 (118,834)
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 Six months ended June 30, June 30, ($thousands, except share and per share amounts) 2024 2023 2024 2023 Cash provided by operating activities 491,770 194,844 759,301 406,719 Changes in non-cash working capital items (121,896) (84,207) (75,761) (61,015) Adjusted operating cash flow 369,874 110,637 683,540 345,704 Basic weighted average number of shares outstanding 776,173,888 772,255,656 774,033,611 771,739,532 Adjusted operating cash flow per share $0.48 0.14 0.88 0.45
Net debt and net debt excluding lease liabilities can be reconciled to Debt and Lease Liabilities, Current Portion of Debt and Lease Liabilities and Cash and Cash Equivalents on the Company's condensed interim consolidated balance sheet as follows:
($thousands) June 30, December 31, 2024 2023 Debt and lease liabilities (1,282,492) (1,273,162) Current portion of total debt and lease liabilities (315,695) (212,646) Less deferred financing fees (netted in above) (7,547) (6,374) (1,605,734) (1,492,182) Cash and cash equivalents 452,809 268,793 Net debt (1,152,925) (1,223,389) Lease liabilities 259,164 277,208 Net debt excluding lease liabilities (893,761) (946,181)
Cautionary Statement on Forward-Looking Information
Certain of the statements made and information contained herein are "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, Pre-Feasibility Study, 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; expansion projects and the realization of additional value; expectations regarding, and ability to complete, the acquisition of Filo Corp. and the 50/50 joint venture with BHP; the anticipated development and other plans with respect to the acquisition and joint venture; the Company's integration of acquisitions and expansions 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 information.
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, zinc, gold, nickel 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 information and undue reliance should not be placed on such 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; volatility and fluctuations in metal and commodity demand and prices; significant reliance on assets in Chile; reputation risks related to negative publicity with respect to the Company or the mining industry in general; delays or the inability to obtain, retain or comply with permits; risks relating to the development of the Josemaria Project; health and safety laws and regulations; risks associated with climate change; risks relating to indebtedness; 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, nationalization or expropriation without fair compensation, environmental and tailings management, labour, trade relations, and transportation; inability to attract and retain highly skilled employees; risks inherent in and/or associated with operating in foreign countries and emerging markets, including with respect to foreign exchange and capital controls; project financing risks, liquidity risks and limited financial resources; health and safety risks; compliance with environmental, unavailable or inaccessible infrastructure, infrastructure failures, and risks related to ageing infrastructure; changing taxation regimes; the inability to effectively compete in the industry; the inability to currently control Filo Corp. and the ability to satisfy the conditions and consummate the acquisition of Filo Corp. and the joint venture transaction with BHP on the proposed terms and expected schedule; risks associated with acquisitions, expansions 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; 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; regulatory investigations, enforcement, sanctions and/or related or other litigation; 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; risks associated with the use of derivatives; risks relating to joint ventures and operations; environmental and regulatory risks associated with the structural stability of waste rock dumps or tailings storage facilities; exchange rate fluctuations; 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; risks relating to dilution; risks relating to payment of dividends; counterparty and customer concentration risks; activist shareholders and proxy solicitation matters; estimation of asset carrying values; 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 significant shareholders; challenges or defects in title; internal controls; risks relating to minor elements contained in concentrate products; the threat associated with outbreaks of viruses and infectious diseases; mining rates and rehabilitation projects; mill shut downs; and other risks and uncertainties, including but not limited to those described in the "Risks and Uncertainties" section of the Company's MD&A for the three and six months ended June 30, 2024 and the "Risks and Uncertainties" section of the Company's Annual Information Form for the year ended December 31, 2023, which are available on SEDAR+ at www.sedarplus.com under the Company's profile.
All of the forward-looking information 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, forecasted 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.
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
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Lundin Mining Corporation