TORONTO, July 27,
2022 /CNW/ - (TSX: LUN) (Nasdaq Stockholm: LUMI)
Lundin Mining Corporation ("Lundin Mining" or the
"Company") today reported net loss attributable to Lundin Mining
shareholders of $52.6 million
(($0.07) per share) in the second
quarter and earnings of $292.5
million ($0.39 per share) for
the six months ended June 30, 2022.
Adjusted loss1 was $35.3
million (($0.05) per share)
for the quarter and adjusted earnings were $260.3 million ($0.35 per share) for the six months ended
June 30, 2022. Adjusted
EBITDA1 for the three and six months ended June 30, 2022 were $148.6
million and $736.4 million,
respectively.
"Despite challenging inflationary conditions in the second
quarter, Lundin Mining generated over $365
million of cash from operating activities and $215 million of free cash flow. Unfortunately,
our earnings were affected by significant provisional pricing
adjustments given the late-quarter decline in base metal prices.
Our balance sheet remains very strong with $470 million of net cash and total liquidity of
roughly $2.3 billion at the end of
the quarter," commented Peter
Rockandel, President and CEO.
"Our operations continue to perform well with Candelaria,
Eagle and Zinkgruvan all on-track to deliver annual production
guidance. We have revised production guidance for Chapada given
impacts of the very wet start to the year, and for Neves-Corvo zinc
as we progress ramping the Zinc Expansion Project towards full
capacity. We expect inflationary impacts on mining consumables to
persist, which is reflected in our revised cash cost and capital
expenditure guidance for Chapada and Candelaria. Chapada's Saúva
discovery continues to deliver impressive results, expanding the
mineralized footprint once again this quarter. We are excited to
now have the Josemaria Project under Lundin Mining stewardship and
are advancing the project in a deliberate and disciplined
manner."
Summary Financial Results
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
US$ Millions (except
per share amounts)
|
2022
|
2021
|
|
2022
|
2021
|
Revenue
|
590.2
|
872.3
|
|
1,581.3
|
1,553.8
|
Gross profit
|
46.0
|
380.2
|
|
524.8
|
632.6
|
Attributable net (loss)
earnings2
|
(52.6)
|
242.6
|
|
292.5
|
377.8
|
Net (loss)
earnings
|
(48.6)
|
268.4
|
|
329.5
|
422.7
|
Adjusted (loss)
earnings 1,2
|
(35.3)
|
226.3
|
|
260.3
|
370.7
|
Adjusted
EBITDA1
|
148.6
|
480.7
|
|
736.4
|
835.2
|
Basic and diluted
earnings per share ("EPS")2
|
(0.07)
|
0.33
|
|
0.39
|
0.51
|
Adjusted
EPS1,2
|
(0.05)
|
0.31
|
|
0.35
|
0.50
|
Cash flow from
operations
|
366.4
|
419.0
|
|
683.7
|
577.7
|
Adjusted operating cash
flow1
|
49.7
|
431.6
|
|
522.6
|
711.5
|
Adjusted operating cash
flow per share1
|
0.06
|
0.58
|
|
0.70
|
0.96
|
Free cash
flow1
|
214.7
|
298.9
|
|
401.2
|
354.9
|
Cash and cash
equivalents
|
498.2
|
294.9
|
|
498.2
|
294.9
|
Net
cash1
|
469.9
|
153.4
|
|
469.9
|
153.4
|
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 six months ended June 30,
2022 and the Reconciliation of Non-GAAP Measures section at
the end of this news release.
|
2 Attributable to shareholders of
Lundin Mining Corporation.
|
Highlights
Operational Performance
Copper and zinc production during the current quarter was higher
than the prior year quarter. Production cost and cash cost were
higher this quarter than the comparable prior year quarter
primarily due to the inflationary impacts on consumables,
particularly diesel and electricity, as well as on contractor and
maintenance costs.
Candelaria (80% owned): Candelaria produced 40,949
tonnes of copper, and approximately 23,000 ounces of gold in
concentrate on a 100% basis in the quarter. Copper production was
higher than the comparable prior year quarter due to grades, while
gold production was lower primarily due to lower gold recoveries.
Production costs were higher in the current quarter reflecting
higher consumable costs, partially offset by favourable foreign
exchange. Copper cash cost of $1.86/lb for the current quarter was higher than
the prior year quarter largely owing to the impact of higher mining
costs and lower by-product credits.
Chapada (100% owned): Chapada produced 10,345
tonnes of copper and approximately 16,000 ounces of gold in
concentrate in the quarter. Copper and gold production was lower
than the prior year quarter primarily due to processed ore types
impacting throughput and metal recoveries. Production costs were
higher due to higher consumable costs. Copper cash cost of
$2.98/lb for the quarter was higher
than the prior year quarter due mainly to higher mining costs from
inflationary pressures, as well as lower sales volumes.
Eagle (100% owned): Eagle produced 4,719
tonnes of nickel and 4,400 tonnes of copper during the quarter,
which was lower than the prior year quarter due to lower grades.
Production costs were higher due to higher consumable costs. Nickel
cash cost in the quarter of $0.90/lb
was higher than the prior year quarter due primarily to lower
by-product copper price and higher production costs.
Neves-Corvo (100% owned): Neves-Corvo
produced 7,867 tonnes of copper for the quarter and 20,647 tonnes
of zinc. Copper production was lower than the prior year comparable
period, due to throughput. Zinc production was higher primarily due
to increased throughput driven by the ramp-up of the Zinc Expansion
Project ("ZEP"). Production costs were higher due to inflationary
cost increases. Copper cash cost of $2.39/lb for the quarter was higher than the
prior year quarter primarily due to inflationary increases,
primarily electricity, as well as lower sales volumes.
Zinkgruvan (100% owned): Zinc production of
21,265 tonnes and lead production of 9,124 tonnes were both higher
than the prior year comparable period due to higher throughput.
Production costs were higher due to higher sales volumes, partially
offset by favourable foreign exchange. Zinc cash cost of
$0.44/lb was comparable to the prior
year quarter.
Total Production
(Contained metal in
concentrate)a
|
2022
|
2021
|
YTD
|
Q2
|
Q1
|
Total
|
Q4
|
Q3
|
Q2
|
Q1
|
Copper
(t)b
|
129,177
|
64,096
|
65,081
|
262,884
|
76,996
|
65,077
|
63,457
|
57,354
|
Zinc (t)
|
74,303
|
41,912
|
32,391
|
143,797
|
36,830
|
38,769
|
34,833
|
33,365
|
Gold
(koz)b
|
73
|
39
|
34
|
167
|
46
|
46
|
41
|
34
|
Nickel (t)
|
9,000
|
4,719
|
4,281
|
18,353
|
4,101
|
4,124
|
4,774
|
5,354
|
a. Tonnes (t) and
thousands of ounces (koz)
|
b. Candelaria's
production is on a 100% basis.
|
Corporate Updates
- On April 26, 2022, the Company
executed a fourth amended and restated credit agreement that
increased its revolving credit facility ("the Credit Facility") to
$1,750.0 million (previously
$800.0 million with a $200.0 million accordion option), reduced the
cost of borrowing, and extended the term to April 2027, from August
2023. The amended Credit Facility bears interest on drawn
funds at rates of Term Secured Overnight Financing Rate ("Term
SOFR") + Credit Spread Adjustment ("CSA") + 1.45% to Term
SOFR+CSA+2.50% depending upon the Company's net leverage ratio,
reduced from LIBOR+1.75% to LIBOR+2.75%, previously. The amendment
and restatement provides the Company with more favourable
covenants, reduced security on assets and included other
customary revisions.
- On April 28, 2022, the Company
completed the previously announced plan of arrangement (the
"Arrangement") to acquire all of the issued and outstanding shares
of Josemaria Resources Inc. ("Josemaria Resources"). Under the
terms of the Arrangement, Josemaria Resources shareholders were
provided with the right to elect to receive 0.1487 of a
common share of Lundin Mining ("Lundin Mining Share") per Josemaria
Resources common share ("Josemaria Resources Share") plus
C$0.11 for each whole Lundin Mining
Share issued to such shareholder or C$1.60 in cash for each Josemaria Resources Share
or any combination thereof, subject to pro-ration of a total
maximum number of Lundin Mining Shares and cash consideration.
- On May 12, 2022, at the Annual
Meeting, the Company announced the appointment of Mr. Adam Lundin as the Chair of the Board of
Directors following the retirement of Mr. Lukas Lundin.
Financial Performance
- Gross profit for the quarter ended June
30, 2022 was $46.0 million, a
decrease of $334.2 million in
comparison to the prior year quarter due to lower metal prices net
of price adjustments ($256.7 million)
and higher production costs due to inflationary price increases. On
a year-to-date basis, gross profit was also lower than the prior
year comparative period due to the same
impacts.
- For the three and six months ended June
30, 2022, net loss of $48.6
million and net earnings of $329.5
million were $317.1 million
and $93.2 million lower than the
prior year comparable periods, respectively. Lower net earnings
were attributable to lower gross profit, partially offset by
favourable foreign exchange.
- Adjusted loss of $35.3 million
and adjusted earnings of $260.3
millionfor the three and six months ended June 30, 2022, respectively, and were lower than
the prior year comparable periods due to lower net earnings.
Financial Position and Financing
- Cash and cash equivalents as at June 30,
2022 were $498.2 million, a
decrease during the quarter of $235.6
million. Cash flow from operations of $366.4 million was used to fund investing
activities of $333.0 million which
includes the Josemaria Resources acquisition. In addition,
financing activities included shareholder dividends of $171.2 million , distributions of
$20.0 million to non-controlling
interests and $47.0 million in
Josemaria debentures which were paid in the quarter.
- On a year-to-date basis, cash and cash equivalents decreased by
$95.8 million. Cash flow from
operations of $683.7 million was used
to fund investing activities of $505.5
million, and financing activities described above.
- As at June 30, 2022, the Company
had a net cash balance of $469.9
million. As at July 27, 2022,
the Company had cash and net cash balances of approximately
$485.0 million and $460.0 million, respectively.
Outlook
The Company continues to experience continuing risks associated
with global inflation as well as supply chain delivery. To date,
there have been no significant impacts on our operations relating
to supply chain availability; however, inflationary impacts on
diesel, electricity and contractor costs are expected to continue
to increase operating costs for the remainder of the year. The
Company has implemented procurement strategies to try to mitigate
the impact and continues to monitor these risks.
Chapada production guidance has been revised to reflect delayed
access to planned ore types primarily as a result of above average
rainfall experienced in the first half of the year which impacted
planned waste stripping activities. Neves-Corvo zinc production
guidance has been revised to reflect ZEP ramp-up progress achieved
to date and expected underground mining rates.
Cash cost guidance for Candelaria and Chapada has been updated
to reflect anticipated inflationary impacts.
2022 Production and Cash Cost Guidance
|
|
|
Previous
Guidancea
|
Revised
Guidance
|
|
(contained metal in
concentrate)
|
Production
|
Cash Cost
($/lb)
|
Production
|
Cash Cost
($/lb)b
|
|
Copper
(t)
|
Candelaria
(100%)
|
155,000 -
165,000
|
1.55
|
155,000 -
165,000
|
1.75c
|
|
|
Chapada
|
53,000 -
58,000
|
1.60
|
45,000 -
50,000
|
2.25d
|
|
|
Eagle
|
15,000 -
18,000
|
|
15,000 -
18,000
|
|
|
|
Neves-Corvo
|
33,000 -
38,000
|
1.80
|
33,000 -
38,000
|
1.80c
|
|
|
Zinkgruvan
|
2,000 -
3,000
|
|
2,000 -
3,000
|
|
|
|
Total
|
258,000 -
282,000
|
|
250,000 -
274,000
|
|
|
Zinc
(t)
|
Neves-Corvo
|
110,000 -
120,000
|
|
90,000 -
100,000
|
|
|
|
Zinkgruvan
|
78,000 -
83,000
|
0.55
|
78,000 -
83,000
|
0.55c
|
|
|
Total
|
188,000 -
203,000
|
|
168,000 -
183,000
|
|
|
Gold
(koz)
|
Candelaria
(100%)
|
83 - 88
|
|
83 - 88
|
|
|
|
Chapada
|
70 - 75
|
|
62 -
67
|
|
|
|
Total
|
153 - 163
|
|
145 -
155
|
|
|
Nickel
(t)
|
Eagle
|
15,000 -
18,000
|
(0.25)
|
15,000 -
18,000
|
(0.25)
|
a. Guidance as outlined
in the MD&A for the year ended December 31, 2021.
|
b. Cash costs are based
on various assumptions and estimates, including but not limited to:
production volumes, commodity prices (Cu: $3.75/lb, Zn: $1.50/lb,
Pb: $0.90/lb, Au: $1,850/oz), foreign exchange rates (€/USD:1.10,
USD/SEK:9.00, USD/CLP:900, USD/BRL:5.00) and production
costs.
|
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 $420/oz gold and $4.20/oz to
$4.52/oz silver.
|
d. Chapada cash cost is
calculated on a by-product basis and does not include the effects
of its copper stream agreements. Effects of the copper stream
agreements are reflected in copper revenue and will impact realized
price per pound.
|
2022 Capital Expenditure
Capital expenditure guidance has been updated for Candelaria and
Chapada and reflects higher expected capitalized deferred stripping
costs due to inflationary impacts on energy and other mining
consumables.
|
($ millions)
|
Previous
Guidancea
|
Revisions
|
Revised
Guidance
|
|
Candelaria (100%
basis)
|
370
|
30
|
400
|
|
Chapada
|
65
|
15
|
80
|
|
Eagle
|
10
|
—
|
10
|
|
Neves-Corvo
|
95
|
—
|
95
|
|
Zinkgruvan
|
60
|
—
|
60
|
|
Other
|
25
|
—
|
25
|
|
Total Sustaining
Capital
|
625
|
45
|
670
|
|
Zinc Expansion
Project (Neves-Corvo)
|
30
|
—
|
30
|
|
Total Capital
Expenditures
|
655
|
45
|
700
|
a.
|
Guidance as outlined in
MD&A for the year ended December 31, 2021.
|
Josemaria Project Guidance
The large scale copper-gold Josemaria project ("Josemaria
Project") was acquired on April 28,
2022 through the acquisition of Josemaria Resources. The
Company had previously estimated Josemaria Project spend of
$300 million to advance the project
which included engineering, commitments for long lead items,
pre-construction activities and drilling, as outlined in the news
release dated April 28, 2022,
entitled "Lundin Mining Announces Closing of Acquisition of
Josemaria Resources and Provides Update on Josemaria Project". The
expected project spend remains unchanged.
2022 Exploration Investment Guidance
Total planned exploration expenditures are expected to be
$45.0 million in 2022, unchanged from
previous guidance. Approximately $40.0
million will be spent supporting significant in-mine and
near-mine targets at our operations ($14.0
million at Candelaria, $11.0
million at Chapada, $7.0
million at Neves-Corvo, $4.0
million at Zinkgruvan and $4.0
million at Eagle). The remaining amounts are planned to
advance activities on exploration stage and new business
development projects.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining
company with projects and operations in Argentina, Brazil, Chile, Portugal, Sweden and the United States of America, primarily
producing copper, zinc, gold and nickel.
The information in this release is subject to the disclosure
requirements of Lundin Mining under the EU Market Abuse Regulation.
The information was submitted for publication, through the agency
of the contact persons set out below on July
27, 2022 at 17:30 Eastern
Time.
Technical Information
The scientific and technical information in this press release
has been prepared in accordance with the disclosure standards of
National Instrument 43-101 ("NI 43-101") and has been reviewed and
approved by Jeremy Weyland, P.Eng.,
Director, Studies of the Company, a "Qualified Person" under NI
43-101. Mr. Weyland has verified the data disclosed in this release
and no limitations were imposed on his verification process.
Reconciliation on Non-GAAP Measures
The Company uses certain performance measures in its analysis.
These performance measures have no standardized meaning within
generally accepted accounting principles under International
Financial Reporting Standards and, therefore, amounts presented may
not be comparable to similar data presented by other mining
companies. For additional details please refer to the Company's
discussion of non-GAAP and other performance measures in its
Management's Discussion and Analysis for the three and six months
ended June 30, 2022 which is
available on SEDAR at www.sedar.com.
Adjusted EBITDA can be reconciled to the Company's Consolidated
Statement of Earnings as follows:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
($thousands)
|
2022
|
2021
|
|
2022
|
2021
|
Net (loss)
earnings
|
(48,626)
|
268,432
|
|
329,483
|
422,651
|
Add back:
|
|
|
|
|
|
Depreciation, depletion
and amortization
|
142,042
|
130,850
|
|
271,879
|
256,760
|
Finance income and
costs
|
17,309
|
9,078
|
|
32,281
|
20,174
|
Income taxes
|
49,003
|
62,614
|
|
126,209
|
132,516
|
|
159,728
|
470,974
|
|
759,852
|
832,101
|
Unrealized foreign
exchange
|
2,721
|
5,296
|
|
10,574
|
6,258
|
Unrealized foreign
exchange and trading gains on equity investments
|
(18,848)
|
—
|
|
(18,848)
|
—
|
Revaluation of
derivative liability
|
(745)
|
5,084
|
|
2,548
|
(2,019)
|
Revaluation of
marketable securities
|
1,626
|
(3,513)
|
|
(2,266)
|
(4,062)
|
Income from investment
in associates
|
1,321
|
(773)
|
|
(3,375)
|
(1,146)
|
Gain on disposal of
subsidiary
|
—
|
—
|
|
(16,828)
|
—
|
Other
|
2,840
|
3,659
|
|
4,760
|
4,034
|
Total adjustments -
EBITDA
|
(11,085)
|
9,753
|
|
(23,435)
|
3,065
|
Adjusted
EBITDA
|
148,643
|
480,727
|
|
736,417
|
835,166
|
Adjusted earnings and adjusted earnings per share can be
reconciled to the Company's Consolidated Statement of Earnings as
follows:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
($thousands, except
share and per share amounts)
|
2022
|
2021
|
|
2022
|
2021
|
Net (loss) earnings
attributable to Lundin Mining shareholders
|
(52,577)
|
242,643
|
|
292,501
|
377,828
|
Add back:
|
|
|
|
|
|
Total adjustments -
EBITDA
|
(11,085)
|
9,753
|
|
(23,435)
|
3,065
|
Tax effect on
adjustments
|
5,035
|
(2,302)
|
|
3,001
|
827
|
Deferred tax arising
from foreign exchange translation
|
23,091
|
(24,133)
|
|
(11,863)
|
(11,225)
|
Other
|
260
|
320
|
|
128
|
155
|
Total
|
17,301
|
(16,362)
|
|
(32,169)
|
(7,178)
|
Adjusted (loss)
earnings
|
(35,276)
|
226,281
|
|
260,332
|
370,650
|
|
|
|
|
|
|
Basic weighted
average number of shares outstanding
|
766,775,032
|
738,612,506
|
|
751,676,764
|
737,756,508
|
|
|
|
|
|
|
Net (loss) earnings
attributable to shareholders
|
(0.07)
|
0.33
|
|
0.39
|
0.51
|
Total
adjustments
|
0.02
|
(0.02)
|
|
(0.04)
|
(0.01)
|
Adjusted earnings
per share
|
(0.05)
|
0.31
|
|
0.35
|
0.50
|
Adjusted operating cash flow and adjusted operating cash flow
per share can be reconciled to cash provided by operating
activities as follows:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
($thousands, except
share and per share amounts)
|
2022
|
2021
|
|
2022
|
2021
|
Cash provided by
operating activities
|
366,411
|
418,998
|
|
683,668
|
577,673
|
Changes in non-cash
working capital items
|
(316,665)
|
12,629
|
|
(161,117)
|
133,799
|
Adjusted operating
cash flow
|
49,746
|
431,627
|
|
522,551
|
711,472
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
766,775,032
|
738,612,506
|
|
751,676,764
|
737,756,508
|
Adjusted operating
cash flow per share
|
$
0.06
|
0.58
|
|
0.70
|
0.96
|
Free cash flow can be reconciled to cash provided by operating
activities as follows:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
($thousands)
|
2022
|
2021
|
|
2022
|
2021
|
Cash provided by
operating activities
|
366,411
|
418,998
|
|
683,668
|
577,673
|
Sustaining capital
expenditures
|
(151,665)
|
(120,100)
|
|
(282,423)
|
(222,744)
|
Free cash flow
|
214,746
|
298,898
|
|
401,245
|
354,929
|
Net cash can be reconciled as follows:
($thousands)
|
June 30,
2022
|
June 30,
2021
|
Cash and cash
equivalents
|
498,243
|
294,914
|
Current portion of
total debt and lease liabilities
|
(14,344)
|
(119,780)
|
Debt and lease
liabilities
|
(13,959)
|
(21,752)
|
|
(28,303)
|
(141,532)
|
Net cash
|
469,940
|
153,382
|
Cash and All-in Sustaining Costs can be reconciled to the
Company's operating costs as follows:
|
Three months ended
June 30, 2022
|
|
|
Operations
|
Candelaria
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal in concentrate):
|
|
|
|
|
|
Tonnes
|
39,655
|
7,905
|
4,206
|
8,183
|
18,525
|
|
Pounds
(000s)
|
87,424
|
17,427
|
9,273
|
18,040
|
40,841
|
|
Production costs
|
|
|
|
|
|
402,190
|
Less: Royalties and
other
|
|
|
|
|
|
(13,657)
|
|
|
|
|
|
|
388,533
|
Deduct: By-product
credits
|
|
|
|
|
|
(134,728)
|
Add: Treatment and
refining
|
|
|
|
|
|
29,960
|
Cash cost
|
162,240
|
51,872
|
8,341
|
43,198
|
18,114
|
283,765
|
Cash cost per pound
($/lb)
|
1.86
|
2.98
|
0.90
|
2.39
|
0.44
|
|
Add: Sustaining capital
|
86,107
|
29,760
|
2,923
|
13,760
|
14,083
|
|
Royalties
|
—
|
2,442
|
10,633
|
(616)
|
—
|
|
Interest
expense
|
1,348
|
1,720
|
401
|
35
|
21
|
|
Leases &
other
|
3,392
|
1,254
|
4,913
|
279
|
1,095
|
|
All-in sustaining
cost
|
253,087
|
87,048
|
27,211
|
56,656
|
33,313
|
|
AISC per pound
($/lb)
|
2.89
|
5.00
|
2.93
|
3.14
|
0.82
|
|
|
Three months ended
June 30, 2021
|
|
|
Operations
|
Candelaria
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal in concentrate):
|
|
|
|
|
|
Tonnes
|
35,537
|
12,247
|
4,258
|
10,314
|
14,305
|
|
Pounds
(000s)
|
78,346
|
27,000
|
9,387
|
22,738
|
31,537
|
|
Production costs
|
|
|
|
|
|
361,317
|
Less: Royalties and
other
|
|
|
|
|
|
(22,564)
|
|
|
|
|
|
|
338,753
|
Deduct: By-product
credits
|
|
|
|
|
|
(180,782)
|
Add: Treatment and
refining
|
|
|
|
|
|
28,915
|
Cash cost
|
119,000
|
35,731
|
(18,827)
|
37,611
|
13,371
|
186,886
|
Cash cost per pound
($/lb)
|
1.52
|
1.32
|
(2.01)
|
1.65
|
0.42
|
|
Add: Sustaining capital
|
81,573
|
12,461
|
5,346
|
11,211
|
9,415
|
|
Royalties
|
—
|
3,567
|
8,629
|
3,033
|
—
|
|
Interest
expense
|
1,165
|
859
|
177
|
19
|
18
|
|
Leases &
other
|
3,096
|
827
|
2,470
|
1,417
|
1,175
|
|
All-in sustaining
cost
|
204,834
|
53,445
|
(2,205)
|
53,291
|
23,979
|
|
AISC per pound
($/lb)
|
2.61
|
1.98
|
(0.23)
|
2.34
|
0.76
|
|
|
Six months ended
June 30, 2022
|
|
|
Operations
|
Candelaria
|
Chapada
|
Eagle
|
Neves-Corvo
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal in concentrate):
|
|
|
|
|
|
Tonnes
|
78,103
|
20,709
|
7,473
|
16,667
|
34,327
|
|
Pounds
(000s)
|
172,187
|
45,655
|
16,475
|
36,744
|
75,678
|
|
Production costs
|
|
|
|
|
|
784,617
|
Less: Royalties and
other
|
|
|
|
|
|
(29,528)
|
|
|
|
|
|
|
755,089
|
Deduct: By-product
credits
|
|
|
|
|
|
(315,735)
|
Add: Treatment and
refining
|
|
|
|
|
|
62,115
|
Cash cost
|
296,225
|
103,309
|
(638)
|
75,001
|
27,572
|
501,469
|
Cash cost per pound
($/lb)
|
1.72
|
2.26
|
(0.04)
|
2.04
|
0.36
|
|
Add: Sustaining capital
|
169,071
|
44,215
|
7,383
|
33,276
|
23,122
|
|
Royalties
|
—
|
6,106
|
18,424
|
2,197
|
—
|
|
Interest
expense
|
2,781
|
3,441
|
802
|
71
|
43
|
|
Leases &
other
|
5,896
|
2,346
|
9,780
|
776
|
2,428
|
|
All-in sustaining
cost
|
473,973
|
159,417
|
35,751
|
111,321
|
53,165
|
|
AISC per pound
($/lb)
|
2.75
|
3.49
|
2.17
|
3.03
|
0.70
|
|
($000s, unless
otherwise noted)
|
|
2022 Revised Guidance
|
|
|
|
Cash cost
|
620,000
|
230,000
|
(10,000)
|
140,000
|
80,000
|
|
Cash cost per
pound($/lb)
|
1.75
|
2.25
|
(0.25)
|
1.80
|
0.55
|
|
|
Six months ended
June 30, 2021
|
|
|
Operations
|
Candelaria
|
Chapada
|
Eagle
|
Neves-
|
Zinkgruvan
|
|
($000s, unless
otherwise noted)
|
(Cu)
|
(Cu)
|
(Ni)
|
(Cu)
|
(Zn)
|
Total
|
Sales volumes
(Contained metal in concentrate):
|
|
|
|
|
|
Tonnes
|
71,053
|
19,626
|
8,376
|
16,879
|
30,008
|
|
Pounds
(000s)
|
156,645
|
43,268
|
18,466
|
37,212
|
66,156
|
|
Production costs
|
|
|
|
|
|
664,430
|
Less: Royalties and
other
|
|
|
|
|
|
(29,069)
|
|
|
|
|
|
|
635,361
|
Deduct: By-product
credits
|
|
|
|
|
|
(306,162)
|
Add: Treatment and
refining
|
|
|
|
|
|
57,908
|
Cash cost
|
248,071
|
57,430
|
(33,557)
|
75,364
|
39,799
|
387,107
|
Cash cost per pound
($/lb)
|
1.58
|
1.33
|
(1.82)
|
2.03
|
0.60
|
|
Add: Sustaining capital
|
152,315
|
21,431
|
8,875
|
20,157
|
19,826
|
|
Royalties
|
—
|
5,640
|
15,475
|
3,737
|
—
|
|
Interest
expense
|
2,284
|
1,718
|
354
|
39
|
36
|
|
Leases &
other
|
5,152
|
1,496
|
5,061
|
2,963
|
2,556
|
|
All-in sustaining
cost
|
407,822
|
87,715
|
(3,792)
|
102,260
|
62,217
|
|
AISC per pound
($/lb)
|
2.60
|
2.03
|
(0.21)
|
2.75
|
0.94
|
|
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; 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 labor;
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: 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; global financial conditions and
inflation; changes in the Company's share price, and volatility in
the equity markets in general; volatility and fluctuations in metal
and commodity demand and prices; changing taxation regimes; delays
or the inability to obtain, retain or comply with permits; reliance
on a single asset; unavailable or inaccessible infrastructure,
infrastructure failures, and risks related to ageing
infrastructure; risks related to negative publicity with respect to
the Company or the mining industry in general; health and safety
risks; pricing and availability of key supplies and services; the
threat associated with outbreaks of viruses and infectious
diseases, including the COVID-19 virus; exchange rate fluctuations;
risks relating to attracting and retaining of highly skilled
employees; risks inherent in and/or associated with operating in
foreign countries and emerging markets; climate change; regulatory
investigations, enforcement, sanctions and/or related or other
litigation; existence of significant shareholders; uncertain
political and economic environments, including in Argentina, Brazil and Chile; 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; indebtedness; liquidity risks and limited financial
resources; funding requirements and availability of financing;
exploration, development or mining results not being consistent
with the Company's expectations; risks related to the environmental
regulation and environmental impact of the Company's operations and
products and management thereof; activist shareholders and proxy
solicitation matters; reliance on key personnel and reporting and
oversight systems, as well as third parties and consultants in
foreign jurisdictions; historical environmental liabilities and
ongoing reclamation obligations; information technology and
cybersecurity risks; risks related to mine closure activities,
reclamation obligations, and closed and historical sites; social
and political unrest, including civil disruption in Chile; the inability to effectively compete in
the industry; financial projections, including estimates of future
expenditures and cash costs, and estimates of future production may
be unreliable; 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; 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; enforcing legal rights in
foreign jurisdictions; community and stakeholder opposition;
changes in laws, regulations or policies including but not limited
to those related to mining regimes, permitting and approvals,
environmental and tailings management, labor, trade relations, and
transportation; risks associated with the structural stability of
waste rock dumps or tailings storage facilities; dilution; risks
relating to dividends; conflicts of interest; counterparty and
credit risks and customer concentration; the estimation of asset
carrying values; challenges or defects in title; internal controls;
relationships with employees and contractors, and the potential for
and effects of labor disputes or other unanticipated difficulties
with or shortages of labor or interruptions in production;
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; compliance with
environmental, health and safety regulations and laws; and other
risks and uncertainties, including but not limited to those
described in the "Risk and Uncertainties" section of the Company's
AIF and the "Managing Risks" section of the Company's MD&A for
the year ended December 31, 2021,
which are available on SEDAR at www.sedar.com 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.
SOURCE Lundin Mining Corporation