Industria
Lundin Mining Third Quarter 2024 Results
"During the quarter the Company realized two significant growth opportunities. We increased our ownership at our Caserones copper-molybdenum mine from 51% to 70%, which immediately added attributable copper production to the Company. Caserones, located within the Vicuña District, is a long-life mine that yields strong cash flow generation. It is within this District where we also announced a transformational transaction with BHP to jointly acquire Filo Corp. and form a new joint arrangement incorporating the world-class Filo del Sol Project and the Josemaria Project in Argentina to create a top-tier multi-generational mining complex. Filo shareholders have overwhelmingly voted in favour of the transaction which is expected to close in the first quarter of 2025. Around the time of closing, we will also provide an update to the market on the key milestones and next steps to advance these projects.
"On exploration we are ramping up for another drill season in the Vicuña District. We will continue the near-mine campaign at Caserones and follow up on our Cumbre Verde target near Josemaria. During the quarter we continued to drill near-mine targets at our other operations with the objective to replace resources, add mine life and seek out future expansion opportunities, such as the Saúva resource located near our Chapada operation.
"As we enter the final quarter of 2024, we have tightened the production guidance ranges at our sites and are re-affirming our full-year consolidated production guidance for copper and gold. For our other metals, we have marginally reduced our full year guidance for zinc and are maintaining our revised nickel guidance."
Candelaria produced 50,018 tonnes of copper and approximately 29,000 ounces of gold in concentrate on a 100% basis during the quarter. Production in the quarter was positively impacted by higher copper head grades from Phase 11. Access to higher grade Phase 11 ore is anticipated to continue through most of the fourth quarter of 2024 as per the planned mine sequence. Production costs in the quarter were higher than in the prior year quarter due to higher copper sales, but also partially offset by favourable foreign exchange. Cash cost of $1.55 /lb was positively impacted by higher sales volumes, favourable foreign exchange and favourable by-product credits.
Caserones produced 29,033 tonnes of total copper and 693 tonnes of molybdenum on a 100% basis during the quarter. Copper and molybdenum production in the quarter was impacted by labour action in August lasting 14 days which reduced throughput during that period to approximately 50% of capacity. Lower head grades were realized during the quarter as a result of a higher proportion of ore from Phase 6 due to hydrogeologic conditions in Phase 5. Production costs in the quarter were lower than in the prior year comparable period due to lower copper concentrate and molybdenum volumes and favourable foreign exchange. Cash cost of $2.96 /lb was negatively impacted by lower sales volumes as a result of the labour action.
Chapada produced 11,694 tonnes of copper and approximately 18,000 ounces of gold in concentrate during the quarter. Copper production was positively impacted by higher throughput that was offset by lower grades and recoveries as a result of processing of stockpiled ore as part of an optimized mine plan that significantly reduces waste movement. Gold production reflected higher grades as a result of increased ore mined from the South and Central pits replacing older low-grade stockpiles. Production costs increased due to higher sales volumes, partially offset by favourable foreign exchange. Cash cost of $1.37/lb benefited from higher gold by-product credits and favourable foreign exchange combined with mining cost decreases due to operational improvements.
Eagle produced 893 tonnes of nickel and 1,027 tonnes of copper in the quarter. Production has been impacted by the fall of ground in the lower ramp in Eagle East during the second quarter of 2024 which restricted access to Eagle East, and reduced mining rates until ramp rehabilitation is completed. Normal throughput rates are expected to resume in late 2024. Production costs were reduced by lower sales and production volumes leading to reduced spend in milling, transportation and lower royalty expense. Production costs in the quarter excluded approximately $14 .8 million of overhead costs that have been recorded in Other Income and Expense as a result of the partial suspension of underground mining operations. Nickel cash cost of $7.24 /lb was impacted by lower sales volumes, partially offset by higher by-product credits as a result of higher realized copper prices.
Neves-Corvo produced 6,698 tonnes of copper and 29,509 tonnes of zinc during the quarter. Copper production was impacted by lower throughput and grades. The decrease in throughput and grades is attributed to changes in mine sequencing as a result of adjustments made to the mining method and cable bolting requirements. Additional development work in Lombador North and rehabilitation work also limited ore availability. Zinc production benefitted from higher throughput and recoveries as a result of the zinc expansion project. During the month of August, there was a record in shaft hoisting of 440,000 tonnes over the month, in addition to record zinc production of 10,527 tonnes. During the month of September, the daily shaft hoisting of 19,000 tonnes set a new record for the mine. Production costs increased due to an increase in zinc and lead sales volumes and cash cost of $2.13 /lb benefitted from higher by-product credits.
Zinkgruvan produced 17,101 tonnes of zinc and 5,693 tonnes of lead in the quarter reflecting lower grades and throughput which were driven by changes in mine sequencing from operational and maintenance interruptions. Copper production of 1,385 tonnes in the quarter reflected higher throughput. Production costs decreased due to lower sales volumes and zinc cash cost of $0.16 /lb benefitted from higher copper by-product credits as a result of higher realized copper prices.
Annual guidance for 2024 has been updated from that disclosed in the Company's Management's Discussion and Analysis for the three and six months ended June 30, 2024 .
The Company remains on track to meet annual consolidated copper production guidance. The total production guidance range for copper has been tightened with the top end of the range at Candelaria increased as a result of continued access to higher grade ore in the second half of the year. Copper production guidance ranges at Caserones and Neves-Corvo have been tightened and lowered slightly. At Caserones, this reflects the impact of the labour action during the quarter that reduced operations for 14 days. At Neves-Corvo, changes in mine sequencing due to rehabilitation and development efforts led to the change in guidance.
Total production guidance for zinc has been revised, guidance range for Zinkgruvan increased slightly and the guidance range for Neves-Corvo reduced as a result of rehabilitation and development work impacting mine sequencing. Annual gold guidance has remained unchanged, incorporating an increase in guidance at Chapada offset by a reduction at Candelaria. For molybdenum, the guidance range has increased to reflect expected results according to the mine plan.
Cash cost guidance at Chapada and Zinkgruvan was lowered with cash costs continuing to benefit from increased realized prices on by-product sales and weaker local currencies. Cash cost guidance at Eagle has increased due to reduced mining rates following a fall of ground that continues to limit production.
Annual sustaining capital expenditure guidance has been lowered to $720 million from $795 million with reductions primarily at Caserones and Candelaria. Expenditure guidance related to the Josemaria Project of $230 million and exploration guidance of $55 .0 million have been revised for 2024. The increase in exploration expenditure is primarily due to accelerating exploration efforts at Caserones where drilling is targeting the higher-grade copper breccia bodies to improve grades in the resource, as well as follow-up drilling at Cumbre Verde after positive results in the first half of 2024.
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.
During the quarter, 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 Soplona, La Portuguesa and La Española. Drilling at Chapada concentrated on adding high grade resources to Saúva and testing near-mine geochemical and geophysical anomalies in Cava Norte , Santa Cruz , Castanhal and Jatoba.
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. Preparations to restart near-mine drilling at Angelica were made at the end of the quarter.
At Josemaria, preparations are underway to recommence the drilling campaign at Cumbre Verde.
Drilling started at Eagle during the quarter with two surface holes targeting a geophysical anomaly east of Eagle East. Drilling also commenced during the quarter at Neves-Corvo and focused on extending inferred resources at Lombador North and near-mine drilling at Neves Southwest.
Lundin Mining is a diversified Canadian base metals mining company with projects or 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 November 6, 2024 at 14:30 Vancouver Time.
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 Patrick Merrin , P.Eng., Executive Vice President, Technical Services, a "Qualified Person" under NI 43-101. Mr. Merrin has verified the data disclosed in this release and no limitations were imposed on his verification process.
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, 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:
Adjusted EBITDA can be reconciled to Net Earnings (Loss) on the Company's Condensed Interim Consolidated Statement of Earnings as follows:
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:
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:
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:
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:
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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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