TORONTO, April 28, 2021 /CNW/ - (TSX: LUN) (Nasdaq
Stockholm: LUMI) Lundin Mining
Corporation ("Lundin Mining" or the "Company") today
reported cash flows of $158.7 million
generated from operations in its first quarter 2021. Adjusted
operating cash flow2 for the quarter was $279.8 million ($0.38 per share). Net earnings attributable to
Lundin Mining shareholders for the quarter was $135.2 million ($0.18 per share) and adjusted
earnings2 was $144.4
million ($0.20 per share).
Adjusted EBITDA2 was $354.4
million for the quarter.
Marie Inkster, President and CEO
commented, "Our operations performed well in the first quarter.
Candelaria and Chapada significantly increased mill throughput
quarter-over-quarter and a new record for zinc ore was set at
Zinkgruvan. With increasing ore grades at Candelaria and Chapada,
we are well positioned to deliver our annual guidance.
While first quarter financial results were impacted by timing
with a shipment from Chapada pushed into early April, we generated
significant operating cash flow. Eagle achieved a cash
cost2 of negative $1.62/lb
nickel and contributed over $75
million of operating cash flow. The Zinc Expansion Project
at Neves-Corvo restarted in early January and is on-track for
commissioning later this year. Lastly, in early April, at Chapada
we were successful in the acquisition of 23 highly prospective
near-mine exploration claims through government auction, increasing
our overall land position by 80%.
We continue to expect 2021 to be an exciting and rewarding
year for Lundin Mining, as we benefit from the recent investments
made in our operations to take full advantage of the favourable
metal price environment and to generate meaningful free cash flow
for our shareholders."
Summary Financial Results
|
Three months
ended
|
|
March
31
|
US$ Millions (except
per share amounts)
|
2021
|
2020
|
Revenue
|
681.5
|
378.0
|
Gross profit
(loss)
|
252.5
|
(22.7)
|
Attributable net
earnings (loss)1
|
135.2
|
(111.5)
|
Net earnings
(loss)
|
154.2
|
(113.6)
|
Adjusted earnings
(loss)2
|
144.4
|
(40.6)
|
Adjusted
EBITDA2
|
354.4
|
90.3
|
Basic and diluted
earnings (loss) per share1
|
0.18
|
(0.15)
|
Basic and diluted
adjusted earnings (loss) per share2
|
0.20
|
(0.06)
|
Cash flow from
operations
|
158.7
|
83.4
|
Adjusted operating
cash flow2
|
279.8
|
27.9
|
Adjusted operating
cash flow per share2
|
0.38
|
0.04
|
Cash and cash
equivalents
|
181.3
|
366.9
|
Net
debt2
|
8.1
|
117.7
|
1
Attributable to shareholders of Lundin Mining
Corporation.
|
2 This is a non-GAAP measure. Please
refer to the Company's discussion of non-GAAP measures in its
Management's Discussion and Analysis for the three months ended
March 31, 2021.
|
Highlights
Operational Performance
Operations performed well during the quarter with production
in-line with expectations. Full-year metal production at all mines
remains on track to achieve or exceed previously reported guidance.
Cash costs are also trending at or better than previously reported
guidance.
The Company continues to manage and respond to the COVID-19
pandemic and has implemented preventative measures to ensure the
safety of its workforce, local communities and other key
stakeholders. Candelaria and Chapada have experienced a recent
increase in case levels as infection rates in Brazil and Chile have been increasing. The sites have
reinforced safety procedures and implemented additional controls
and mass testing to identify and control further spread. To date,
production disruptions as a result of COVID-19 have been minimal
and there has been no significant disruption in the delivery or
receipt of goods at our operations.
Candelaria (80% owned): Candelaria produced 34,203
tonnes of copper, and approximately 21,000 ounces of gold in
concentrate on a 100% basis in the quarter. While mill throughput
was higher than the prior year quarter, copper production was lower
primarily due to planned lower grades in the current year quarter.
Gold production was comparable to the prior year quarter. Copper
cash costs1 of $1.65/lb
for the quarter were higher than the prior year comparable quarter
largely owing to the impact of lower sales volumes.
Chapada (100% owned): Chapada produced 9,841 tonnes
of copper and approximately 13,000 ounces of gold in concentrate.
Copper and gold production for the quarter were lower than the
prior year quarter primarily due to planned lower grades and
recoveries. Processed ore of over 5.8 million tonnes was the second
highest quarterly throughput achieved since acquisition. Copper
cash costs of $1.33/lb for the
quarter were higher than the prior year quarter due mainly to lower
sales volumes, impacted by timing of sales.
Eagle (100% owned): Eagle produced 5,354 tonnes of
nickel and 5,391 tonnes of copper during the quarter. Nickel and
copper production were higher than the prior year quarter as a
result of a greater proportion of mining in the higher grade Eagle
East orebody. By-product credits, aided by rising copper prices,
exceeded gross cash costs in the quarter resulting in nickel cash
costs of negative $1.62/lb.
Neves-Corvo (100% owned): Neves-Corvo produced 7,441
tonnes of copper and 14,710 tonnes of zinc for the quarter. Copper
and zinc production were lower than the prior year quarter due to
lower mill throughput and grades. Copper cash costs of $2.61/lb for the quarter were higher than the
prior year quarter primarily due to lower sales volumes.
The Zinc Expansion Project ("ZEP") officially restarted in
January 2021, following proactive
suspension in March 2020 due to the
COVID-19 pandemic. It is expected that the project construction
will be substantially completed by the end of 2021 with
commissioning of the mine materials handling systems, shaft upgrade
and the expanded zinc processing plant.
Zinkgruvan (100% owned): Zinc production of 18,655
tonnes was comparable with the prior year quarter. Lead production
of 4,709 tonnes was lower than the prior year quarter due to lower
feed grades. Zinc cash costs of $0.76/lb were higher than the prior year quarter
as a result of lower by-product credits.
1 This is
a non-GAAP measure. Please refer to the Company's discussion of
non-GAAP measures in its Management's Discussion and Analysis for
the three months ended March 31, 2021.
|
Total Production
(Contained metal in
concentrate)
|
2021
|
2020
|
Q1
|
Total
|
Q4
|
Q3
|
Q2
|
Q1
|
Copper
(t)a
|
57,354
|
230,781
|
41,885
|
61,444
|
65,285
|
62,167
|
Zinc (t)
|
33,365
|
142,744
|
41,428
|
32,787
|
31,582
|
36,947
|
Gold
(koz)a
|
34
|
163
|
35
|
45
|
44
|
39
|
Nickel (t)
|
5,354
|
16,718
|
4,909
|
4,854
|
3,380
|
3,575
|
a - Candelaria's
production is on a 100% basis.
|
Corporate Highlights
- On February 18, 2021, the Company
announced a 50% increase in its cash dividend, to C$0.06 per share or C$0.24 per share annualized, compared to the
quarterly dividend paid in 2020.
Financial Performance
- Gross profit for the quarter ended March
31, 2021 was $252.5 million,
an increase in gross profit of $275.2
million compared to the first quarter of 2020. The increase
was primarily due to higher revenues driven by higher metal prices
and price adjustments ($331.0
million), partially offset by lower copper sales
volumes.
- Net earnings for the current quarter were $154.2 million, a $267.8
million increase over the net loss from the first quarter of
2020. The increase was primarily attributable to higher gross
profit.
- Adjusted earnings for the quarter were $144.4 million, compared to adjusted loss of
$40.6 million in the prior year
quarter and reflects higher gross profit partially offset by higher
income taxes and non-controlling interest.
Financial Position and Financing
- Cash and cash equivalents increased by $39.9 million during the quarter ended
March 31, 2021 to $181.3 million. Cash flow from operations of
$158.7 million exceeded capital
expenditures of $112.5 million,
partially offset by the effects of foreign exchange on cash
balances.
- Net debt as at March 31, 2021 was
$8.1 million, a decrease of
$55.1 million from the net debt
balance as at December 31, 2020. The
decrease in net debt is attributable to the positive cash flow
impacts previously described.
- As of April 28, 2021, the Company
had a cash and net cash balance of approximately $215.0 million and $25.0
million, respectively.
Outlook
Annual nickel production guidance has been increased, reflecting
excellent first quarter 2021 results from Eagle. All other
production guidance for 2021 remains unchanged from that previously
provided.
Cash cost guidance for Eagle has been improved given the first
quarter performance and the expectation of continued favourable
copper by-product metal prices. Cash cost guidance for all other
operations are unchanged from those previously provided.
While the Company has not experienced significant disruptions to
production, shipments of concentrate, or its supply chain due to
COVID-19, we continue to caution that a localized outbreak at the
operations may require the need to implement increased isolation
and containment measures which could impact production, delay
maintenance activities or disrupt supply chains. Given the
uncertainty of the duration and magnitude of the impact of
COVID-19, production and cash cost estimates are subject to a
higher than normal degree of uncertainty. The guidance below does
not reflect any potential for additional suspensions or other
significant disruption to operations due to COVID-19.
2021 Production and Cash Cost Guidance
|
|
Previous
Guidancea
|
Revised
Guidance
|
|
|
Production
|
Cash
Costs
|
Production
|
Cash
Costsb
|
Copper
(t)
|
Candelaria
(100%)
|
172,000
|
-
|
182,000
|
$1.35/lb
|
172,000
|
-
|
182,000
|
$1.35/lbc
|
|
Chapada
|
48,000
|
-
|
53,000
|
$1.10/lb
|
48,000
|
-
|
53,000
|
$1.10/lbd
|
|
Eagle
|
17,000
|
-
|
20,000
|
|
17,000
|
-
|
20,000
|
|
|
Neves-Corvo
|
35,000
|
-
|
40,000
|
$2.20/lb
|
35,000
|
-
|
40,000
|
$2.20/lbc
|
|
Zinkgruvan
|
3,000
|
-
|
4,000
|
|
3,000
|
-
|
4,000
|
|
|
Total
|
275,000
|
-
|
299,000
|
|
275,000
|
-
|
299,000
|
|
Zinc
(t)
|
Neves-Corvo
|
70,000
|
-
|
75,000
|
|
70,000
|
-
|
75,000
|
|
|
Zinkgruvan
|
71,000
|
-
|
76,000
|
$0.65/lb
|
71,000
|
-
|
76,000
|
$0.65/lbc
|
|
Total
|
141,000
|
-
|
151,000
|
|
141,000
|
-
|
151,000
|
|
Gold
(oz)
|
Candelaria
(100%)
|
95,000
|
-
|
100,000
|
|
95,000
|
-
|
100,000
|
|
|
Chapada
|
75,000
|
-
|
80,000
|
|
75,000
|
-
|
80,000
|
|
|
Total
|
170,000
|
-
|
180,000
|
|
170,000
|
-
|
180,000
|
|
Nickel
(t)
|
Eagle
|
15,000
|
-
|
18,000
|
$0.50/lb
|
17,000
|
-
|
20,000
|
$(0.25)/lb
|
|
|
|
|
|
|
|
|
|
|
a. Guidance as
outlined in the Management's Discussion and Analysis for the year
ended December 31, 2020. b.
Cash costs are based on various assumptions and estimates,
including but not limited to: production volumes, as noted above,
commodity prices (Cu: $3.75/lb, Zn: $1.15/lb, Pb: $0.85/lb, Au:
$1,700/oz), foreign exchange rates (€/USD:1.20, USD/SEK:8.20,
USD/CLP:700, USD/BRL:5.10) and operating costs for the remaining of
2021. 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 the receipt of approximately $4.16/oz gold
$4.16/oz to $4.48/oz silver. d.
Chapada cash costs are calculated on a by-product basis and do not
include the effects of its copper stream agreements. Effects of
copper stream agreements are reflected in copper revenue and will
impact realized revenue per pound.
|
2021 Capital Expenditure Guidance
Capital expenditures, excluding capitalized interest, are
outlined below.
2020 Guidance
($millions)
|
Previous
Guidancea
|
Revisions
|
Revised
Guidance
|
Sustaining
Capital
|
|
|
|
Candelaria (100%
basis)
|
345
|
|
345
|
Chapada
|
65
|
|
65
|
Eagle
|
15
|
5
|
20
|
Neves-Corvo
|
65
|
|
65
|
Zinkgruvan
|
50
|
|
50
|
Total Sustaining
Capital
|
540
|
5
|
545
|
Zinc Expansion
Project (Neves-Corvo)
|
70
|
|
70
|
Total Capital
Expenditures
|
610
|
5
|
615
|
a. Guidance as
outlined in the Management's Discussion and Analysis for the year
ended December 31, 2020.
|
2021 Exploration Investment Guidance
Total planned exploration expenditures are expected to be
$40.0 million in 2021, unchanged from
previous guidance. Approximately $38.0
million will be spent supporting significant in-mine and
near-mine targets at our operations ($14.0
million at Candelaria, $6.0
million at Zinkgruvan, $14.0
million at Chapada, and $4.0
million at Neves-Corvo). The remaining amount is 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 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 28, 2021 at 17:00
Eastern Time.
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;
and the Company's integration of acquisitions and any anticipated
benefits thereof. 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 prices; the threat associated with outbreaks of
viruses and infectious diseases, including the COVID-19 virus;
changing taxation regimes; reliance on a single asset; delays or
the inability to obtain, retain or comply with permits; risks
related to negative publicity with respect to the Company or the
mining industry in general; health and safety risks; exploration,
development or mining results not being consistent with the
Company's expectations; unavailable or inaccessible infrastructure
and risks related to ageing infrastructure; 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; 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; ore processing efficiency;
community and stakeholder opposition; information technology and
cybersecurity risks; 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; regulatory
investigations, enforcement, sanctions and/or related or other
litigation; uncertain political and economic environments,
including in Brazil and
Chile; risks associated with the
structural stability of waste rock dumps or tailings storage
facilities; estimates of future production and operations;
estimates of operating, cash and all-in sustaining cost estimates;
civil disruption in Chile; the
potential for and effects of labor disputes or other unanticipated
difficulties with or shortages of labor or interruptions in
production; risks related to the environmental regulation and
environmental impact of the Company's operations and products and
management thereof; exchange rate fluctuations; reliance on third
parties and consultants in foreign jurisdictions; climate change;
risks relating to attracting and retaining of highly skilled
employees; compliance with environmental, health and safety laws;
counterparty and credit risks and customer concentration;
litigation; risks inherent in and/or associated with operating in
foreign countries and emerging markets; risks related to mine
closure activities and closed and historical sites; 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; internal controls; challenges or defects in title;
the estimation of asset carrying values; historical environmental
liabilities and ongoing reclamation obligations; the price and
availability of key operating supplies or services; competition;
indebtedness; compliance with foreign laws; existence of
significant shareholders; liquidity risks and limited financial
resources; funding requirements and availability of financing;
enforcing legal rights in foreign jurisdictions; dilution; risks
relating to dividends; 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; activist shareholders and proxy solicitation matters;
and other risks and uncertainties, including but not limited to
those described in the "Risk and Uncertainties" section of the
Annual Information Form and the "Managing Risks" section of the
Company's MD&A for the year ended December 31, 2020, 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