Industria
Lundin Mining First Quarter 2022 Results
Overall, operations performed well during the quarter and the Company remains on track to achieve overall production guidance. Operations adapted to new challenges of the fast-spreading COVID Omicron variant, which had the greatest impact on absences since the onset of the pandemic, as the Company continued to adhere to precautionary measures necessary to protect the safety of the workforce and communities. Copper and gold production exceeded the prior year quarter, while zinc production was in-line and nickel production was lower than the prior year quarter, as expected. Cash costs for the quarter were better than the prior year quarter at all sites except Eagle and Chapada, where cash costs were in accordance with expectations.
Candelaria produced 39,503 tonnes of copper, and approximately 22,000 ounces of gold in concentrate on a 100% basis in the quarter, in-line with expectations. Copper and gold production were higher than the prior year quarter primarily due to better grades. Copper cash cost of $1.58 /lb for the current quarter was better than the prior year quarter due mainly to positive foreign exchange effects and higher sales volumes.
Chapada produced 10,100 tonnes of copper and approximately 12,000 ounces of gold in concentrate in the quarter. First quarter production was less than planned as ore release and mining activities were impacted by abnormally high rainfall and COVID related absences necessitating a greater portion of the mill feed to be sourced from stockpile; however copper production was higher than the prior year quarter due to higher recoveries. Copper cash cost of $1.82 /lb for the quarter was higher than the prior year quarter due mainly to higher mining costs resulting from inflation.
Eagle produced 4,281 tonnes of nickel and 4,420 tonnes of copper during the quarter. While production was better than planned, it was lower than the prior year quarter, primarily due to lower head grades. Nickel cash cost of negative $1.25 /lb was unfavourable compared to the prior year quarter due to lower sales volumes, partially offset by increased by-product credits, and remained in the first quartile of industry cash cost.
Neves-Corvo produced 9,860 tonnes of copper for the quarter and 14,751 tonnes of zinc. Higher copper production in the current quarter compared to the prior year quarter resulted from better grades and throughput. Zinc production was higher in the quarter over prior year quarter largely driven by the recent start-up of the Zinc Expansion Project ("ZEP"), though partially offset by lower recoveries. A voluntary temporary suspension of operations took place following a fatal accident on March 30, 2022 . Initial lessons learned from the fatality have been shared across the Company's operations, and Lundin Mining remains committed to safe production. Copper cash cost of $1.70 /lb for the quarter was better than the prior year quarter due to favourable zinc by-product credits.
Zinc production of 17,640 tonnes was lower than the prior year comparable period but in-line with expected volumes. Lead production of 6,728 tonnes was higher than the prior year quarter due to better grades and recoveries. Zinc cash cost of $0.27 /lb was better than the prior year quarter largely due to higher by-product credits.
During the quarter, continuing risks associated with global inflation as well as supply chain delivery persisted. These risks have been further heightened with the Russian-Ukraine conflict. To date, there has not been a significant impact on our operations relating to supply chain availability; however, inflationary increases on energy, fuel, contractor costs and consumables are expected to impact operating costs for the remainder of the year. The Company has implemented procurement strategies to mitigate the impact and to continue to monitor these risks.
Total copper, zinc and nickel production are all tracking above the mid-point of the Company's 2022 guidance ranges of 258,000t – 282,000t of copper, 188,000t – 203,000t of zinc, and 15,000t – 18,000t of nickel. Gold production is currently trending at the low end of the 153,000oz – 163,000oz range.
Candelaria, Neves-Corvo, Eagle and Zinkgruvan metal production are on plan and tracking well to achieve annual guidance. Opportunities to increase waste stripping to improve ore availability and production over the remainder of the year at Chapada are being evaluated and actioned; production is currently trending below the annual guidance.
Forecast cash costs remain in-line with annual guidance for Candelaria, Neves-Corvo and Zinkgruvan with expected inflationary impacts on consumables being largely offset by production volumes and by-product metal prices. Chapada's forecast copper cash cost is trending above annual guidance considering the impact of inflation on prices of consumables, the strengthening local currency and production volumes. Eagle's forecast nickel cash cost is trending positively compared to annual guidance, primarily due to copper by-product prices.
Capital expenditures at Eagle, Neves-Corvo and Zinkgruvan are all tracking well to annual guidance. Candelaria and Chapada capital expenditures are trending above annual guidance with inflationary cost increases on capitalized stripping, including diesel, explosives and other consumables.
Total exploration expenditures are on target to be $45.0 million in 2022.
Lundin Mining is a diversified Canadian base metals mining company with operations in 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 April 27, 2022 at 18:15 Eastern Time .
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 months ended March 31, 2022 which is available on SEDAR at www.sedar.com.
Adjusted EBITDA can be reconciled to the Company's Condensed Interim Consolidated Statement of Earnings as follows:
Adjusted earnings and adjusted earnings per share can be reconciled to the Company's Condensed Interim Consolidated Statement of Earnings as follows:
Adjusted operating cash flow and adjusted operating cash flow per share can be reconciled to cash flow provided by operating as follows:
Free cash flow can be reconciled to cash provided by operating activities as follows:
Net cash (debt) can be reconciled as follows:
Cash Cost and AISC can be reconciled to the Company's production costs as follows:
For further information: Mark Turner , Vice President, Business Valuations and Investor Relations: +1 416 342 5565; Irina Kuznetsova , Manager, Investor Relations: +1 416 342 5583; Robert Eriksson, Investor Relations Sweden: +46 8 440 54 50