FULLTEXT DEL 2 AV 3
Årsredovisning 2024
concern and using the going concern basis of accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s responsibilities for the audit of theconsolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
===== SIDA 60 =====
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Company as a basis for forming an opinion on
the consolidated financial statements. We are responsible for the direction, supervision and review of
the audit work performed for purposes of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Mark Patterson.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants
Vancouver, British Columbia
February 19, 2025
===== SIDA 61 =====
LUNDIN MINING CORPORATION
CONSOLIDATED BALANCE SHEETS As at
(in thousands of US dollars) December 31,
2024
December 31,
2023
ASSETS
Cash and cash equivalents (Note 5) $ 357,478 $ 268,793
Trade and other receivables (Note 6) 510,854 828,871
Income taxes receivable 14,520 34,542
Inventories (Note 7) 590,685 599,407
Marketable securities (Note 8) 50,105 —
Current portion of derivative assets (Note 26) 964 38,114
Other current assets 22,667 21,421
Assets held for sale (Note 3) 1,389,670 —
Total current assets 2,936,943 1,791,148
Restricted funds 8,665 59,979
Long-term inventory (Note 7) 871,885 797,597
Derivative assets (Note 26) 665 9,397
Other non-current assets (Note 9) 18,382 67,090
Mineral properties, plant and equipment (Note 10) 6,244,634 7,725,169
Deferred tax assets (Note 25) 191,254 170,203
Goodwill (Note 11) 134,284 240,616
7,469,769 9,070,051
Total assets $ 10,406,712 $ 10,861,199
LIABILITIES
Trade and other payables (Note 12) $ 674,204 $ 805,763
Income taxes payable 128,251 62,926
Current portion of derivative liabilities (Note 26) 39,416 26,389
Current portion of debt and lease liabilities (Note 13) 395,232 212,646
Current portion of deferred revenue (Note 14) 60,604 87,867
Current portion of reclamation and other closure provisions (Note 15) 20,876 14,442
Liabilities held for sale (Note 3) 393,109 —
Total current liabilities 1,711,692 1,210,033
Derivative liabilities (Note 26) 24,487 3,148
Debt and lease liabilities (Note 13) 1,610,925 1,273,162
Deferred revenue (Note 14) 447,133 535,363
Reclamation and other closure provisions (Note 15) 323,310 529,734
Deferred consideration and other long-term liabilities (Note 16) 128,783 133,199
Provision for pension obligations 768 6,752
Deferred tax liabilities (Note 25) 643,850 751,688
3,179,256 3,233,046
Total liabilities 4,890,948 4,443,079
SHAREHOLDERS' EQUITY
Share capital (Note 17) 4,585,607 4,574,830
Contributed surplus 51,308 55,201
Accumulated other comprehensive loss (375,837) (296,617)
Retained earnings 161,063 627,903
Equity attributable to Lundin Mining Corporation shareholders 4,422,141 4,961,317
Non-controlling interests (Note 18) 1,093,623 1,456,803
Total shareholders' equity 5,515,764 6,418,120
Total liabilities and shareholders' equity $ 10,406,712 $ 10,861,199
Commitments and contingencies (Note 27)
Subsequent events (Note 4, 8, 26)
The accompanying notes are an integral part of these consolidated financial statements.
APPROVED BY THE BOARD OF DIRECTORS
(Signed) Adam I. Lundin - Director (Signed) Dale C. Peniuk - Director
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===== SIDA 62 =====
LUNDIN MINING CORPORATION
CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS
For the years ended December 31, 2024 and 2023
(in thousands of US dollars, except for shares and per share amounts)
2024 2023
Continuing Operations:
Revenue (Note 19) $ 3,422,604 $ 2,743,444
Cost of goods sold
Production costs (Note 20) (1,898,627) (1,644,037)
Depreciation, depletion and amortization (607,744) (497,873)
Reversal of inventory write-down (Note 7) 26,626 —
Gross profit 942,859 601,534
General and administrative expenses (Note 21) (58,349) (66,723)
Exploration and business development (Note 22) (45,352) (44,010)
Finance income (Note 23) 16,689 10,879
Finance costs (Note 23) (158,144) (102,308)
Other (expense) income (Note 24) (24,085) 91,844
Goodwill and asset impairment (Note 11) (254,218) —
Mine suspension costs (36,073) —
Earnings before income taxes from continuing operations 383,327 491,216
Current tax expense (Note 25) (294,938) (141,432)
Deferred tax recovery (expense) (Note 25) 64,965 (72,934)
Net earnings from continuing operations $ 153,354 $ 276,850
Net (loss) earnings from discontinued operations, net of taxes (Note 3) (214,671) 38,399
Net (loss) earnings $ (61,317) $ 315,249
Net earnings from continuing operations attributable to:
Lundin Mining Corporation shareholders $ 11,144 $ 203,163
Non-controlling interests 142,210 73,687
Net earnings from continuing operations $ 153,354 $ 276,850
Net (loss) earnings attributable to
Lundin Mining Corporation shareholders $ (203,527) $ 241,562
Non-controlling interests 142,210 73,687
Net (loss) earnings $ (61,317) $ 315,249
Basic and diluted earnings per share from continuing operations attributable to Lundin Mining
Corporation shareholders: $ 0.01 $ 0.26
Basic and diluted (loss) earnings per share from discontinued operations attributable to Lundin
Mining Corporation shareholders: $ (0.27) $ 0.05
Basic and diluted (loss) earnings per share attributable to Lundin Mining Corporation
shareholders: $ (0.26) $ 0.31
Weighted average number of shares outstanding (Note 17)
Basic 774,825,230 772,532,260
Diluted 777,569,041 773,292,895
The accompanying notes are an integral part of these consolidated financial statements.
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===== SIDA 63 =====
LUNDIN MINING CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
For the years ended December 31, 2024 and 2023
(in thousands of US dollars)
2024 2023
Net (loss) earnings $ (61,317) $ 315,249
Other comprehensive (loss) income, net of taxes
Item that will not be reclassified to net earnings:
Remeasurements for post-employment benefit plans 573 2,320
Item that may be reclassified subsequently to net earnings:
Effects of foreign exchange (79,684) 43,710
Other comprehensive (loss) income (79,111) 46,030
Total comprehensive (loss) income $ (140,428) $ 361,279
Comprehensive (loss) income attributable to:
Lundin Mining Corporation shareholders $ (282,747) $ 287,232
Non-controlling interests 142,319 74,047
Total comprehensive (loss) income $ (140,428) $ 361,279
Total comprehensive income (loss) attributable to Lundin Mining Corporation shareholders
arising from:
Continuing operations $ 22,061 $ 197,723
Discontinued operations (304,808) 89,509
Comprehensive (loss) income attributable to Lundin Mining Corporation shareholders $ (282,747) $ 287,232
The accompanying notes are an integral part of these consolidated financial statements.
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===== SIDA 64 =====
LUNDIN MINING CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the years ended December 31, 2024 and 2023
(in thousands of US dollars, except for shares)
Number of
shares
Share
capital
Contributed
surplus
Accumulated
other
comprehensive
(loss) income
Retained
earnings
Non-
controlling
interests Total
Balance, December 31, 2023 773,667,789 $ 4,574,830 $ 55,201 $ (296,617) $ 627,903 $ 1,456,803 $ 6,418,120
Distributions — — — — — (152,000) (152,000)
Exercise of Caserones purchase option (Note 9) — — — — (52,667) (353,499) (406,166)
Exercise of share-based awards 3,250,382 31,181 (10,158) — — — 21,023
Share-based compensation — — 6,265 — — — 6,265
Dividends declared (Note 17(f)) — — — — (202,962) — (202,962)
Shares purchased (Note 17(g)) (2,815,200) (16,690) — — (7,684) — (24,374)
Accrued liability for automatic share purchase plan
commitment (Note 17(g)) — (3,714) — — — — (3,714)
Net (loss) earnings — — — — (203,527) 142,210 (61,317)
Other comprehensive (loss) income — — — (79,220) — 109 (79,111)
Total comprehensive (loss) income — — — (79,220) (203,527) 142,319 (140,428)
Balance, December 31, 2024 774,102,971 $ 4,585,607 $ 51,308 $ (375,837) $ 161,063 $ 1,093,623 $ 5,515,764
Balance, December 31, 2022 770,746,531 $ 4,555,125 $ 55,769 $ (342,287) $ 592,425 $ 564,089 $ 5,425,121
Distributions — — — — — (55,100) (55,100)
Caserones acquisition — — — — — 873,767 873,767
Exercise of share-based awards 2,921,258 19,705 (8,329) — — — 11,376
Share-based compensation — — 7,761 — — — 7,761
Dividends declared — — — — (206,084) — (206,084)
Net earnings — — — — 241,562 73,687 315,249
Other comprehensive income — — — 45,670 — 360 46,030
Total comprehensive income — — — 45,670 241,562 74,047 361,279
Balance, December 31, 2023 773,667,789 $ 4,574,830 $ 55,201 $ (296,617) $ 627,903 $ 1,456,803 $ 6,418,120
The accompanying notes are an integral part of these consolidated financial statements.
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===== SIDA 65 =====
LUNDIN MINING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2024 and 2023
(in thousands of US dollars)
Cash provided by (used in) 2024 2023
Operating activities
Net earnings $ 153,354 $ 276,850
Items not involving cash and other adjustments
Depreciation, depletion and amortization 607,744 497,873
Share-based compensation 6,422 7,301
Unrealized foreign exchange (gain) loss (10,994) 1,804
Finance costs, net (Note 23) 141,455 91,429
Recognition of deferred revenue (Note 14) (78,083) (64,698)
Deferred tax (recovery) expense (64,965) 72,934
Revaluation of Caserones purchase option (Note 24) (11,728) 5,150
Goodwill and asset impairment (Note 11) 254,218 —
Revaluation of foreign currency and diesel derivatives (Note 26) 87,218 (16,624)
Reversal of inventory write-down (Note 7) (26,626) —
Write-down of assets (Note 24) 22,129 —
Inventory write-down 19,445 49,793
Other 7,220 7,893
Reclamation payments (Note 15) (17,061) (9,823)
Pension payments (2,618) (690)
Changes in long-term inventory (7,162) (71,916)
Changes in non-cash working capital items (Note 32) 220,880 (20,032)
Cash provided by operating activities related to continuing operations 1,300,848 827,244
Cash provided by operating activities related to discontinued operations 218,009 189,368
1,518,857 1,016,612
Investing activities
Investment in mineral properties, plant and equipment (807,307) (857,138)
Acquisition of Caserones, net of cash acquired — (648,569)
Purchase of marketable securities (Note 8) (41,686) —
Cash received from disposal of subsidiary (Note 24) — 5,718
Payment of Chapada derivative liability (Note 26) (25,000) (25,000)
Interest received 16,135 10,328
Other 2,489 (4,151)
Cash used in investing activities related to continuing operations (855,369) (1,518,812)
Cash used in investing activities related to discontinued operations (151,537) (155,722)
(1,006,906) (1,674,534)
Financing activities
Proceeds from debt (Note 13) 1,500,551 2,490,597
Principal repayments of debt (Note 13) (944,330) (1,449,488)
Principal payments of lease liabilities (66,529) (46,400)
Interest paid (119,234) (57,140)
Payment of Caserones deferred consideration (Note 26) (10,000) —
Exercise of Caserones purchase option (Note 9) (350,000) —
Dividends paid to shareholders (202,497) (206,540)
Shares purchased (Note 17) (24,374) —
Proceeds from common shares issued 21,023 11,376
Distributions paid to non-controlling interests (152,000) (55,100)
Net proceeds from settlement of foreign currency and commodity derivatives (520) 24,062
Other (1,864) 543
Cash (used in) provided by financing activities related to continuing operations (349,774) 711,910
Cash provided by financing activities related to discontinued operations 5,547 16,676
(344,227) 728,586
Effect of foreign exchange on cash balances (4,238) 6,742
Increase in cash and cash equivalents during the year 163,486 77,406
Cash and cash equivalents, beginning of year 268,793 191,387
Less: Cash and cash equivalents included in assets held for sale, end of year (Note 3) (74,801) —
Cash and cash equivalents, end of year $ 357,478 $ 268,793
Supplemental cash flow information (Note 32)
The accompanying notes are an integral part of these consolidated financial statements.
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===== SIDA 66 =====
1. NATURE OF OPERATIONS
Lundin Mining Corporation ("Lundin Mining" or the "Company") is a diversified Canadian base metals mining company
primarily producing copper, zinc, nickel and gold. The Company owns 80% of the Candelaria and Ojos del Salado
mining complex ("Candelaria") located in Chile. On July 2, 2024, the Company completed the exercise of its option to
acquire an additional 19% interest in the issued and outstanding equity of SCM Minera Lumina Copper Chile ("Lumina
Copper"), bringing the Company's ownership of the Caserones copper-molybdenum mine (“Caserones”) in Chile from
51% to 70%. The Company’s wholly-owned operating assets include the Chapada mine located in Brazil, the Eagle mine
located in the United States of America (“USA”), the Neves-Corvo mine located in Portugal, and the Zinkgruvan mine
located in Sweden. In addition, the Company owns the large scale copper-gold Josemaria project ("Josemaria Project"),
located in Argentina.
In December 2024, the Company announced that it had entered into a definitive agreement to sell its 100% interest in
Somincor-Sociedade Mineira de Neves-Corvo, S.A. ("Neves-Corvo Mine") and its 100% interests in each of Zinkgruvan
Mining AB and North Atlantic Natural Resources AB (together "Zinkgruvan Mine") to Boliden AB ("Boliden"). As a
result, the Company determined that the Neves-Corvo and Zinkgruvan reporting segments met the criteria to be
considered assets held for sale. The assets of the Neves-Corvo Mine and the Zinkgruvan Mine have been classified as
current assets held for sale, the liabilities of the Neves-Corvo Mine and the Zinkgruvan Mine have been classified as
current liabilities associated with assets held for sale, and re-presented the operating results of these segments as a
single line item of earnings (loss) from discontinued operations on the consolidated statement of (loss) earnings (Note
3).
The Company’s common shares are listed on the Toronto Stock Exchange (“TSX”) in Canada and the Nasdaq Stockholm
Exchange in Sweden. The Company is incorporated under the Canada Business Corporations Act. The Company is
domiciled in Canada and its principal place of business is 1055 Dunsmuir Street, Suite 2800, Vancouver, British
Columbia, Canada.
2. BASIS OF PRESENTATION AND SUMMARY OF MATERIAL ACCOUNTING POLICIES
(i) Basis of presentation and measurement
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") and which
the Canadian Accounting Standards Board has approved for incorporation into Part 1 of the CPA Canada
Handbook – Accounting.
The consolidated financial statements have been prepared on a historical cost basis except for certain financial
instruments which have been measured at fair value.
The Company's presentation currency is United States (“US”) dollars. Reference herein of $ or USD is to US
dollars, C$ or CAD is to Canadian dollars, SEK is to Swedish krona, € refers to the Euro, CLP refers to the Chilean
peso, BRL refers to the Brazilian real, and ARS refers to the Argentine peso.
These consolidated financial statements were approved by the Board of Directors of the Company for issue on
February 19, 2025.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 67 =====
(ii) Material accounting policies
The Company has consistently applied the accounting policies to all the years presented. The material accounting
policies applied in these consolidated financial statements are set out below.
(a) Basis of consolidation
The financial statements consist of the consolidation of the financial statements of the Company and its
subsidiaries.
Subsidiaries are entities over which the Company has control, including the power to govern the financial
and operating policies in order to obtain benefits from their activities. The existence and effect of potential
voting rights that are currently exercisable or convertible are considered when assessing whether the
Company controls another entity. Subsidiaries are fully consolidated from the date on which control is
obtained by the Company and are de-consolidated from the date that control ceases.
Where necessary, adjustments are made to the results of the subsidiaries and associates to bring their
accounting policies in line with those used by the Company. Intra-group transactions, balances, income and
expenses are eliminated on consolidation.
For non wholly-owned subsidiaries, the net assets attributable to outside equity shareholders are presented
as non-controlling interests in the equity section of the consolidated balance sheet. Net earnings for the
period that are attributable to non-controlling interests are calculated based on the ownership of the
minority shareholders in the subsidiary.
(b) Translation of foreign currencies
The functional currency of each entity within the Company is the currency of the primary economic
environment in which it operates. The Company’s presentation currency is US dollars.
Transactions denominated in currencies other than the functional currency are recorded using the exchange
rates prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated
in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items
that are measured at historical cost in a foreign currency are translated using the exchange rate at the date
of the transaction. Non-monetary items measured at fair value in a foreign currency are translated at the
rates prevailing on the date when the fair value was determined. Foreign currency translation differences on
deferred foreign tax liabilities and assets are reported in deferred tax expense/recovery in the consolidated
statement of (loss) earnings.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary
items, are recognized in the consolidated statement of (loss) earnings in the period in which they arise.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in
the consolidated statement of (loss) earnings.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of the
Company’s foreign operations are translated into US dollars, which is the presentation currency of the
group, at the rate of exchange prevailing at the end of the reporting period. Income and expenses are
translated at the average exchange rates for the period where these approximate the rates on the dates of
transactions.
On disposal of a foreign operation, the historical, cumulative amount of exchange differences recognized as
a separate component of equity is reclassified and recognized in the consolidated statement of (loss)
earnings.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 68 =====
(c) Cash and cash equivalents
Cash and cash equivalents comprise cash on deposit with banks and highly liquid short-term interest-
bearing investments with a term to maturity at the date of purchase of 90 days or less which are subject to
an insignificant risk of change in value.
(d) Restricted funds
Restricted funds include reclamation funds and cash on deposit that have been pledged for reclamation and
closure activities which are not available for immediate disbursement.
(e) Inventories
Ore and concentrate stockpiles and cathode inventory are valued at the lower of production cost and net
realizable value (“NRV”). Production costs include costs of materials and labour related directly to mining
and processing activities, including production phase stripping costs, depreciation and amortization of
mineral property, plant and equipment directly involved in the related mining and production process,
amortization of any stripping costs previously capitalized and directly attributable overhead costs.
Dump leach pad inventory represents ore that has been mined and placed on leach pads where a solution is
applied to the surface of the heap to dissolve the copper and by-products. The resulting solution is further
processed in a plant to recover the copper. The cost of dump leach inventory is derived from current mining
and leaching costs and is removed at the weighted average cost per recoverable pound ("lb") of copper on
the leach pads as lbs of copper are recovered. Estimates of recoverable copper on the dump leach are
calculated based on the quantities of ore placed on the leach pads (measured in tonnes added to the leach
pads), the grade of ore placed on the leach pads (based on assay data), and an estimated recovery
percentage (based on estimated recovery assumptions from the block model). The nature of the leaching
process inherently limits the ability to precisely monitor inventory levels. As a result, estimates are refined
based on actual results and engineering studies over time. The final recovery of copper from the dump leach
will not be known until the leaching process is concluded at the end of the mine life. Ore on the dump leach
that is not expected to be recovered within the next twelve months is classified as non-current.
Materials and supplies inventories are valued at the lower of average cost less allowances for obsolescence
and NRV.
If the carrying value of inventories exceeds NRV, a write-down is recognized. The write-down may be
reversed in a subsequent period if the circumstances which caused the write-down no longer exist.
(f) Mineral properties
Mineral properties are carried at cost, less accumulated depletion and any accumulated impairment
charges. Expenditures on mineral properties include:
i. Acquisition costs which consist of payments for property rights and leases, including the
estimated fair value of exploration properties acquired as part of a business combination or the
acquisition of a group of assets.
ii. Exploration, evaluation and project investigation costs incurred on an area of interest once a
determination has been made that a property has economically recoverable Mineral Resources
and Mineral Reserves (“R&R”) and there is a reasonable expectation that costs can be
recovered by future exploitation or sale of the property. Exploration, evaluation and project
investigation expenditures made prior to a determination that a property has economically
recoverable R&R are expensed as incurred.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 69 =====
iii. Deferred stripping costs which represent the costs incurred to remove overburden and other
waste materials to access ore in an open pit mine. Stripping costs incurred prior to the
production phase of the mine are capitalized and included as part of the carrying value of the
mineral property. During the production phase, stripping costs which provide probable future
economic benefits, identifiable improved access to the ore body and which can be measured
reliably are capitalized to mineral properties. Capitalized stripping costs are amortized using a
unit-of-production basis over the Proven and Probable Mineral Reserve to which they relate.
iv. Development costs incurred in an area of interest, once management has determined the
technical feasibility and commercial viability of a project, the project presents an appropriate
rate of return on investment, and the Board of Directors has demonstrated commitment to
advance the project. When additional development expenditures are made on a property after
commencement of production, the expenditure is capitalized as mineral property when it is
probable that additional economic benefit will be derived from future operations. Development
costs are amortized using a unit-of-production basis over the Proven and Probable Mineral
Reserve to which they relate.
v. Interest and financing costs on debt or other liabilities that are directly attributed to the
acquisition, construction and development of a qualifying asset. All other borrowing costs are
expensed as incurred.
vi. Easement costs incurred to support access to the Company's operating sites and the Josemaria
Project.
(g) Plant and equipment
Plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment
charges. For production plant and equipment, depreciation is recorded on a units-of-production basis.
Depreciation on all other plant and equipment is recorded on a straight-line basis over the estimated useful
life of the asset or over the estimated remaining life of the mine, if shorter. Residual values and useful lives
are reviewed annually. Gains and losses on disposals are calculated as proceeds received less the carrying
amount and are recognized in the consolidated statement of (loss) earnings.
Useful lives are as follows:
Number of years
Buildings 8-20
Plant and machinery 3-20
Equipment 3-8
(h) Intangible assets
Separately acquired intangible assets are initially measured at cost which comprises of its purchase price
and any directly attributable costs of preparing the asset for its intended use. The Company depreciates
intangible assets with finite useful lives on a straight-line basis over the estimated useful life of the asset.
For intangibles with an indefinite useful life, no amortization is calculated.
(i) Impairment and impairment reversals
At the end of each reporting period, the Company assesses whether there is an indication that an asset or
group of assets within a cash generating unit (“CGU”) may be impaired. When impairment indicators exist,
the Company estimates the recoverable amount of the asset or CGU and compares it against the asset or
CGU’s carrying amount. The recoverable amount is the higher of the fair value less cost of disposal
(“FVLCD”) and the asset or CGU’s value in use (“VIU”). If the carrying value exceeds the recoverable amount,
an impairment loss is recorded in the consolidated statement of (loss) earnings during the period. If either
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 70 =====
FVLCD or VIU exceeds the asset or CGU’s carrying amount, the asset or CGU is not impaired, and the
Company does not estimate the other amount.
In assessing VIU, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to
the CGU for which the estimates of future cash flows have not been adjusted. The cash flows are based on
best estimates of expected future cash flows from the continued use of the asset or the CGU and its
eventual disposal.
FVLCD is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants, which is best evidenced if obtained from an active market or
binding sale agreement. Where neither exists, the fair value is based partly on a discounted cash flow
projections model. Costs of disposal, other than those that have been recognized as liabilities, are deducted
in measuring FVLCD.
Reversals of impairment are assessed at each reporting period where there is an indication that an
impairment loss recognized previously may no longer exist or has decreased. If an impairment reversal
indicator exists, the recoverable amount is calculated. If the recoverable amount exceeds the carrying
amount, the carrying value of the CGU is increased to the recoverable amount net of depreciation. The
increased carrying amount cannot exceed the carrying amount that would have been determined had no
impairment loss been recognized for the CGU in prior years. A reversal of an impairment loss is recognized
as a gain in the consolidated statement of (loss) earnings in the period it is determined.
(j) Business combinations and goodwill
Acquisitions of businesses are accounted for using the purchase method of accounting whereby all
identifiable assets and liabilities are recorded at their fair values as at the date of acquisition. Any excess
purchase price over the aggregate fair value of net assets is recorded as goodwill. Goodwill is identified and
allocated to CGUs, or groups of CGUs, that are expected to benefit from the synergies of the acquisition.
Goodwill is not amortized. Any excess of the aggregate fair value of net assets over the purchase price is
recognized in the consolidated statement of (loss) earnings.
A CGU to which goodwill has been allocated is tested for impairment at least annually or when events or
changes in circumstances indicate that the related carrying amount may not be recoverable. For goodwill
arising on an acquisition in a financial year, the CGU to which the goodwill has been allocated is tested for
impairment before the end of that financial year.
When the recoverable amount of the CGU is less than the carrying amount of that CGU, the impairment loss
is allocated to reduce the carrying amount of any goodwill allocated to that CGU first, and then to the other
assets of that CGU on a pro-rata basis of the carrying amount of each asset in the CGU. Any impairment loss
for goodwill is recognized directly in the consolidated statement of (loss) earnings. An impairment loss for
goodwill is not reversed in subsequent periods.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain
or loss on disposal.
(k) Leases
At inception of a contract, the Company assesses whether the contract is, or contains a lease. A contract is,
or contains a lease, if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that
have a lease term of 12 months or less, and leases of low-value assets. For these leases, the Company
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 10 -
===== SIDA 71 =====
recognizes the lease payments as an expense in the consolidated statement of (loss) earnings on a straight-
line basis over the term of the lease.
The Company recognizes a lease liability and a right-of-use asset at the lease commencement date.
The lease liability is initially measured as the present value of future lease payments discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, each operation’s applicable
incremental borrowing rate. The incremental borrowing rate is the rate which the operation would have to
pay to borrow, over a similar term and with a similar security, the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment.
Lease payments included in the measurement of the lease liability comprise the following:
- fixed payments, including in-substance fixed payments, less any lease incentives receivable;
- variable lease payments that depend on an index or a rate, initially measured using the index or
rate as at the commencement date;
- amounts expected to be payable by the Company under residual value guarantees;
- the exercise price of a purchase option if the Company is reasonably certain to exercise that option;
and
- payments of penalties for terminating the lease, if the Company expects to exercise an option to
terminate the lease.
The lease liability is subsequently measured by:
- increasing the carrying amount to reflect interest on the lease liability;
- reducing the carrying amount to reflect lease payments made; and
- remeasuring the carrying amount to reflect any reassessment or lease modifications.
Variable lease payments that do not depend on an index or rate are not included in the measurement of the
lease liability.
The lease liability is remeasured when there is a change in future lease payments arising from a change in an
index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a
residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option.
Each lease payment is allocated between the lease liability and finance cost. The finance cost is recorded as
an expense in the consolidated statement of (loss) earnings over the lease period to produce a constant
periodic rate of interest on the remaining balance of the liability for each period.
The right-of-use asset is initially measured at cost, which comprises the following:
- the amount of the initial measurement of the lease liability;
- any lease payments made at or before the commencement date, less any lease incentives received;
- any initial direct costs incurred by the Company; and
- an estimate of costs to be incurred by the Company in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease, unless those costs are incurred to produce
inventories.
The right-of-use asset is subsequently measured at cost, less any accumulated depreciation and any
accumulated impairment losses, and adjusted for any remeasurement of the lease liability. It is depreciated
in accordance with the Company’s accounting policy for plant and equipment, from the commencement
date to the earlier of the end of its useful life or the end of the lease term.
On the consolidated balance sheet, right-of-use assets and lease liabilities are reported in mineral
properties, plant and equipment and debt and lease liabilities, respectively.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 11 -
===== SIDA 72 =====
(l) Non-current assets held for sale and discontinued operations
Assets and businesses are classified as held for sale if their carrying amount will be recovered or settled
principally through a sale transaction rather than through continuing use. The asset or business must be
available for immediate sale and the sale must be highly probable within one year.
Assets and businesses classified as held for sale are measured at the lower of carrying amount and fair value
less costs to sell ("FVLCS"). Immediately prior to reclassification to assets held for sale, the Company is
required to assess for impairment of assets of CGU's under its normal impairment policies. If the carrying
value related to a specific asset or business classified as held for sale exceeds its FVLCS an impairment loss is
recognized in the consolidated statement of (loss) earnings. No depreciation is charged on assets and
businesses classified as held for sale. Assets and liabilities classified as held for sale are presented separately
as current items in the consolidated balance sheet.
A discontinued operation is a component of the Company’s business that represents a separate major line
of business or geographical area of operations that has been disposed of, has been abandoned, or meets
the criteria to be classified as held for sale. Discontinued operations are excluded from the results of
continuing operations and are presented as a single amount as profit or loss after tax from discontinued
operations in the consolidated statement of (loss) earnings.
(m) Reclamation and other closure provisions
The Company incurs reclamation and other closure costs related to its mining properties such as facility
decommissioning and dismantling, end of mine life severance, site restoration and ongoing environmental
monitoring. These costs are a normal consequence of mining and are dependent on the requirements of the
Company’s legal and constructive obligations, as well as any other commitments made to stakeholders. The
majority of these expenditures will be incurred at the end of the life of mine and are dependent upon a
number of factors such as the life and nature of the asset, the operating license conditions and the
environment in which the mine operates.
The future obligations for mine closure activities are estimated by the Company using mine closure plans or
other similar studies which outline the activities to be undertaken to meet regulatory and internal
requirements. Since the obligations are dependent on the laws and regulations of the countries in which the
mines operate, they are regularly evaluated by management and external experts. Costs included in the
obligations encompass all reclamation and other closure activities expected to occur progressively over the
life of the operation at the time of closure and post-closure in connection with disturbances as at the
reporting date.
Obligations may change as a result of amendments in laws and regulations relating to environmental
protection and/or other legislation affecting resource companies. Included in the estimated obligations are
a number of significant assumptions made by management in determining closure provisions. Accordingly,
closure provisions are more uncertain the further into the future mine closure activities are expected to be
carried out.
The Company records the present value of its reclamation and other closure provisions as a liability with a
corresponding increase in the carrying value of the related asset. The provision is discounted to its net
present value using a country specific, current market, pre-tax discount rate. The unwinding of the discount,
referred to as an accretion expense, is included in finance costs in the consolidated statement of (loss)
earnings and results in an increase in the carrying amount of the liability. Reclamation obligations settled in
the year are offset against the corresponding liability. Unplanned reclamation costs are reported as either
part of the cost of inventory or recognized as a cost in the consolidated statement of (loss) earnings, if they
relate to either production activities or a closed site.
The capitalized cost of the reclamation and other closure activities is recognized in the mineral property and
plant & equipment and depreciated on a unit-of-production basis over the expected mine life of the
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 73 =====
operation or asset to which it relates. Depreciation costs are included in the consolidated statement of (loss)
earnings as part of cost of goods sold.
Changes in obligations resulting from revisions to the timing or amount of expenditures, discount rate or
foreign exchange rate are recognized as an increase or decrease in the reclamation and other closure
provision liability, and a corresponding change in the carrying amount of the related assets.
(n) Revenue recognition
Revenue from contracts with customers is recognized when a customer obtains control of the promised
asset and the Company satisfies its performance obligation. Revenue is allocated to each performance
obligation. The Company considers the terms of the contract in determining the transaction price. The
transaction price is based upon the amount the entity expects to be entitled to in exchange for the
transferring of promised goods. The Company earns revenue from contracts with customers related to its
concentrate and copper cathode sales, and its copper, gold and silver streaming arrangements.
The Company satisfies its performance obligations for its concentrate and copper cathode sales per
specified contract terms which are generally upon shipment or delivery of an individual parcel. Revenue
from concentrate and copper cathode sales is recorded based upon forward market prices of the expected
final sales price date. The Company typically recognizes revenue when concentrate or copper cathodes have
been placed on board a vessel for shipment or delivered to a location specified by the customer.
Deferred revenue arises from up-front payments received by the Company or obligations acquired in
consideration for future commitments as specified in its various streaming arrangements. The accounting
for streaming arrangements is dependent on the facts and terms of each of the arrangements. Revenue
from streaming arrangements is recognized when the customer obtains control of the copper, gold and/or
silver metal and the Company has satisfied its performance obligations.
The Company identified significant financing components related to its streaming arrangements resulting
from a difference in the timing of the up-front consideration received and delivery of the promised goods.
Interest expense on deferred revenue is recognized in finance costs, or in mineral properties, plant and
equipment if directly attributable to the acquisition, construction and development of a qualifying asset.
The interest rate is determined based on the rate implicit in each streaming agreement at the date of
inception or acquisition.
The initial consideration received from the streaming arrangements is considered variable, subject to
changes in the total copper, gold and silver volumes to be delivered. Changes to variable consideration are
reflected in revenue in the consolidated statement of (loss) earnings.
(o) Share-based compensation
The Company grants share-based awards in the form of share options and share units to certain employees
in exchange for the provision of services. The share options and share units are equity-settled awards. The
Company determines the fair value of the awards on the date of grant. This fair value is charged to the
consolidated statement of (loss) earnings using a graded vesting attribution method over the vesting period
of the awards, with a corresponding credit to contributed surplus. When the share options or share units
are exercised, the applicable amounts of contributed surplus are transferred to share capital. At the end of
the reporting period, the Company updates its estimate of the number of awards that are expected to vest
and adjusts the total expense to be recognized over the vesting period. The Company also grants share-
based awards to non-employee Directors in the form of deferred share units (“DSUs”) in exchange for the
provision of services. DSUs are liability awards settled in cash and measured at the quoted market price at
the grant date. The corresponding liability is adjusted for changes in fair value at each subsequent reporting
date until the awards are settled. The fair value of the DSUs are expensed at the grant date and subsequent
changes to fair value are charged to the consolidated statement of (loss) earnings.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 74 =====
(p) Current and deferred income taxes
Income tax expense represents the sum of current and deferred tax. Current taxes payable is based on
taxable earnings for the year. Taxable earnings may differ from earnings before income tax as reported in
the consolidated statement of (loss) earnings because it may exclude items of income or expense that are
taxable or deductible in other years and it may further exclude items of income or expense that are never
taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted at the balance sheet date.
Income tax assets and liabilities are offset when there is a legally enforceable right to offset the assets and
liabilities and when they relate to income taxes levied by the same tax authority on either the same taxable
entity or different taxable entities where there is an intention to settle the balance on a net basis.
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable earnings. Deferred
tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against which
deductible temporary differences or tax loss carryforwards can be utilized. Such assets and liabilities are not
recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects neither the taxable earnings
nor the accounting earnings. Deferred tax liabilities are recognized for taxable temporary differences arising
on investments in subsidiaries and investments in associates, except where the Company is able to control
the reversal of the temporary differences and it is probable that the temporary differences will not reverse
in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date
and reduced to the extent that it is no longer probable that sufficient taxable earnings will be available to
allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is
settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date. Deferred tax is charged or credited to earnings, except when it relates to
items charged or credited directly to equity, in which case the deferred tax is reflected in equity.
(q) Earnings per share
Basic earnings per share is calculated using the weighted average number of common shares outstanding
during each reporting period. Diluted earnings per share is calculated assuming the proceeds from the
exercise of “in-the-money” share-based arrangements are used to purchase common shares at the average
market price during the period.
(r) Accounting for debt and equity investments
As part of the capital funding process for ongoing activities at the Josemaria Project, the Company purchases
debt and equity instruments via a third-party investment broker. The instruments are held for a pre-
determined period and then sold. The Company only purchases equity instruments with high trading
volumes and low volatilities. The instruments are designated as held-for-trading, and as such all changes in
the fair value of the underlying instruments are recognized through the consolidated statement of (loss)
earnings.
Upon receipt of the transferred equity instruments, or in the case of bonds the sale, by the local investment
broker, the Company realizes an immediate foreign exchange impact. This foreign exchange impact is
incurred directly as a result of holding debt and equity instruments with the intention of trading, and as such
the foreign exchange impact is also recognized through the consolidated statement of (loss) earnings in
Other income.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 75 =====
(s) Financial instruments
Financial instruments are recognized on the consolidated balance sheet on the trade date, the date on
which the Company becomes a party to the contractual provisions of the financial instrument. The Company
classifies its financial instruments in the following categories:
Financial Assets at Amortized Cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortized cost. The Company intends to hold these
receivables until cash flows are collected. Receivables are recognized initially at fair value, net of any
transaction costs incurred and subsequently measured at amortized cost using the effective interest
method. The Company recognizes a loss allowance for expected credit losses on a financial asset that is
measured at amortized cost.
Financial Assets at Fair Value through Profit or Loss (“FVTPL”)
Financial assets measured at FVTPL are assets which do not qualify as financial assets at amortized cost or
those not designated in hedge relationships.
Provisionally priced trade receivables are measured at FVTPL as some or all of the cash flows are dependent
on commodity prices. These receivables are initially measured at their transaction price. Subsequent
changes to provisionally priced trade receivables are recorded in the consolidated statement of (loss)
earnings as revenue from other sources.
Marketable securities, equity investments, and derivative assets not designated in hedge relationships are
classified as FVTPL. These financial assets are initially recognized at their fair value with changes to fair
values recognized in the consolidated statement of (loss) earnings.
Financial Liabilities at Amortized Cost
Financial liabilities are measured at amortized cost using the effective interest method, unless they are
required to be measured at FVTPL, or the Company has opted to measure them at FVTPL. Long-term debt is
recognized initially at fair value, net of any transaction costs incurred, and subsequently at amortized cost
using the effective interest method.
Financial Liabilities at FVTPL
Financial liabilities at FVTPL are liabilities which include embedded derivatives and cannot be classified as
amortized cost or derivative liabilities not designated in hedge relationships. Financial liabilities at FVTPL are
initially recognized at fair value with changes to fair values recognized in the consolidated statement of
(loss) earnings.
The Company derecognizes financial assets only when the contractual rights to cash flows from the financial
assets expire, or when it transfers the financial assets and substantially all of the associated risks and
rewards of ownership. Gains and losses on derecognition are generally recognized in the consolidated
statement of (loss) earnings.
The Company derecognizes financial liabilities only when its obligations under the financial liabilities are
discharged, cancelled or expelled. The difference between the carrying amount of the financial liability
derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities
assumed, is recognized in the consolidated statement of (loss) earnings.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 76 =====
The Company may enter into derivative instruments to mitigate exposures to commodity price and currency
exchange rate fluctuations, among other exposures. Unless the derivative instruments qualify for hedge
accounting, and management undertakes appropriate steps to designate them as such, they are classified as
financial assets or liabilities at FVTPL and recorded at their fair value with realized and unrealized gains or
losses arising from changes in the fair value recorded in the consolidated statement of (loss) earnings in the
period they occur. Fair values for derivative instruments are determined using valuation techniques. The
valuations use assumptions based on prevailing market conditions on the reporting date.
(iii) New standards and interpretations adopted January 1, 2024
Amendments to IAS 1 - Classification of Liabilities as Current or Non-Current
In January 2020, the International Accounting Standards Board ("IASB") issued Classification of Liabilities as
Current or Non-Current (Amendments to IAS 1) providing a more general approach to the classification of
liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. Under pre-existing
requirements, a liability was current if an entity expected to settle it in the normal operating cycle or
unconditional right to defer settlement of the liability for at least twelve months after the reporting period did
not exist. With the introduction of the two amendments to IAS 1 in 2024, for a liability to be classified as non-
current, a company must have the right to defer settlement of the liability for at least twelve months after the
reporting period. The right must have substance and exist at the end of the reporting period, and the
classification of the liability must be unaffected by the likelihood that the company will exercise that right. The
amendments apply retrospectively for annual reporting periods beginning on or after 1 January 2024, with early
application permitted and have been applied with no material impact on the Company in the current reporting
period.
Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules
In May 2023, the IASB issued amendments to IAS 12 – Income Taxes. The amendments provide an exception to
the requirements regarding the recognition of deferred tax assets and liabilities related to the Pillar Two global
minimum tax rules and were effective immediately. The Company has applied the exception to recognizing and
disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.
Additionally, the amendments to IAS 12 require disclosure of the Company's current tax expense or income
related to Pillar Two income taxes and disclosure of known or reasonably estimable information regarding the
Company's exposure to Pillar Two income taxes. Among the jurisdictions where the Company operates, Pillar Two
legislation is enacted in Sweden, the Netherlands, Portugal and Canada. On October 3, 2024, Brazil issued a
Provisional Measure introducing Qualified Domestic Minimum Top-Up Tax to be effective from 2025 onwards.
The Company has performed an analysis of the country-by-country reporting (CbCR) safe harbour test, and
concluded that no top-up tax was required in 2024.
(iv) New standards and interpretations not yet adopted
IFRS 18 - Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18 - Presentation and Disclosure in Financial Statements, which replaces IAS 1 -
Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by
requiring income and expenses to be presented into three defined categories (operating, investing, and
financing) and by specifying certain defined totals and subtotals. Where company-specific measures related to
the income statement are provided ("management-defined performance measures"), IFRS 18 requires disclosure
of the explanations around those measures. IFRS 18 also provides additional guidance on principles of
aggregation and disaggregation which apply to the primary financial statements and notes. IFRS 18 will not
impact the recognition and measurement of items in the financial statements, nor will it impact which items are
classified in other comprehensive income and how these items are classified. The standard is effective for
reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective
application is required and early application is permitted. The Company is currently assessing the effect of this
new standard on its financial statements.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 77 =====
IFRS 9 - Financial Instruments and IFRS 7 – Financial Instruments: Disclosures
In May 2024, the IASB issued amendments to the classification and measurement of financial instruments. These
amendments updated classification and measurement requirements in IFRS 9 Financial Instruments and related
disclosure requirements in IFRS 7 Financial Instruments: disclosures. The IASB clarified the recognition and
derecognition date of certain financial assets and liabilities, and amended the requirements related to settling
financial liabilities using an electronic payment system. Moreover, the amendments clarify the assessment of the
contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of
principal and interest (SPPI) criterion, including financial assets that have environmental, social and corporate
governance (ESG)-linked features and other similar contingent features. The IASB added disclosure requirements
for financial instruments with contingent features that do not relate directly to basic lending risks and costs, and
amended disclosures relating to equity instruments designated at fair value through other comprehensive
income.
Additionally in December 2024, the IASB published amendments to IFRS 9 and IFRS 7 - Contracts Referencing
Nature dependent Electricity. The amendments clarify the application of the ‘own-use’ requirements for in-scope
contracts, amend the designation requirements for a hedged item in a cash flow hedging relationship for in-scope
contracts, and add new disclosure requirements.
These amendments apply retrospectively for annual reporting periods beginning on or after 1 January 2026, with
early application permitted. The Company is currently evaluating the impact of these amendments on its
consolidated financial statements.
(v) Estimation uncertainty and judgements in applying the entity’s accounting policies
The preparation of consolidated financial statements in accordance with IFRS Accounting Standards requires the
use of certain critical accounting estimates and judgements. These estimates and judgements are based on
management’s best knowledge of the relevant facts and circumstances taking into account previous experience,
but actual results may differ materially from the amounts included in the financial statements.
Areas where estimation uncertainty have the most significant effect on the amounts recognized in the
consolidated financial statements include:
Depreciation, depletion and amortization of mineral properties, plant and equipment - Mineral properties,
plant and equipment comprise a large component of the Company’s assets and as such, the depreciation,
depletion and amortization of these assets have a significant effect on the Company’s financial statements. Upon
commencement of commercial production, the Company depletes mineral property over the life of the mine
based on the depletion of the mine’s Proven and Probable Mineral Reserves. In the case of mining equipment or
other assets, if the useful life of the asset is shorter than the life of the mine, the asset is amortized over its
expected useful life.
Proven and Probable Mineral Reserves are determined based on a professional evaluation using accepted
international standards for the estimation of Mineral Reserves. The assessment involves geological and
geophysical studies, economic data and the reliance on a number of assumptions. The estimates of the Mineral
Reserves may change based on additional knowledge gained subsequent to the initial assessment. This may
include additional data available from continuing exploration, results from the reconciliation of actual mining
production data against the original Mineral Reserve estimates, or the impact of economic factors such as
changes in the price of commodities or the cost of components of production.
A change in the original estimate of Mineral Reserves would result in a change in the rate of depreciation,
depletion and amortization of the related mineral assets. The effect of a change in the estimates of Mineral
Reserves would have a relatively greater effect on the amortization of the current mining operations at Eagle
because of the relatively short mine life of this operation. A short mine life results in a higher rate of amortization
and depreciation, and mineral assets may exist at these sites that have a useful life in excess of the revised life of
the related mine.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 17 -
===== SIDA 78 =====
Valuation of long-term inventory - The Company carries its long-term inventory at the lower of production cost
and NRV. If the carrying value exceeds the net realizable amount, a write-down is required. The write-down may
be reversed in a subsequent period if the circumstances which caused it no longer exist.
The Company reviews NRV at least annually. In particular, for the NRV of long-term inventory, the Company
makes significant estimates in its use of a discounted NRV model related to future production plans, forecasted
commodity prices, foreign exchange rates, R&R quantities, future capital and production costs to complete,
estimates of recoverable copper in leach pads, and the discount rate. These estimates are subject to various risks
and uncertainties and may have an effect on the NRV estimate and the carrying value of the long-term inventory.
Valuation of mineral properties - The Company carries its mineral properties at cost less accumulated depletion
and any accumulated provision for impairment. The Company expenses exploration costs which are related to
specific projects until technical feasibility and commercial viability of extracting a mineral resource are
demonstrable. The costs of each property and related capitalized development expenditures are depleted over
the economic life of the property on a unit-of-production basis. Costs are charged to the consolidated statement
of (loss) earnings when a property is abandoned or when there is a recognized impairment in value.
The Company undertakes a review of the carrying values of mineral properties and related expenditures
whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net
recoverable amounts determined by reference to estimated future operating results and discounted net cash
flows. An impairment loss is recognized when the carrying value of those assets is not recoverable. Where a
previous impairment has been recorded, the Company analyzes any reverse impairment indicators. Impairment
reversals are recognized in subsequent periods when there has been a change in the estimates used to determine
the asset’s recoverable amount since the last impairment loss was recognized. In undertaking this review,
management of the Company is required to make significant estimates of, amongst other things, future
production and sale volumes, metal prices, foreign exchange rates, R&R quantities, future capital and production
costs and reclamation costs to the end of the mine’s life. These estimates are subject to various risks and
uncertainties which may ultimately have an effect on the expected recoverability of the carrying values of the
mineral properties and related expenditures.
Goodwill - The amount by which the purchase price of a business acquisition exceeds the fair value of identifiable
assets and liabilities acquired is recorded as goodwill. Goodwill is allocated to the CGUs acquired based on the
assessment of which CGU would be expected to benefit from the synergies of the acquisition. Estimates of
recoverable value may be impacted by changes in future metal prices, foreign exchange rates, production based
on estimated quantities of R&R, production and capital expenditures, pricing of in-situ mineral resources implied
by the market value of selected comparable transactions involving the sale of similar companies and mineral
properties, discount rates, and other factors that may be different from those used in determining fair value.
Changes in estimates could have a material impact on the carrying value of the goodwill. Management's
estimates of production based on quantities of R&R are based on information compiled by qualified persons
(management's experts).
Reclamation and other closure provisions - The Company incurs reclamation and other closure costs related to
its mining properties. The future obligations for mine closure activities are estimated by the Company using mine
closure plans or other similar studies which outline the activities to be undertaken to meet regulatory and
internal requirements. Since the obligations are dependent on the laws and regulations of the countries in which
the mines operate, they are regularly reviewed by management and external experts, and could change as a
result of amendments to the laws and regulations. Included in the estimated obligations are a number of
significant assumptions made by management in determining closure provisions. Accordingly, closure provisions
are more uncertain the further into the future the mine closure activities are to be carried out.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 79 =====
The Company’s policy for recording reclamation and other closure provisions is to establish provisions for future
mine closure costs based on the present value of the future cash flows required to satisfy the obligations. This
provision is updated as the estimate for future closure costs change. The amount of the present value of the
provision is added to the cost of the related mineral property and plant & equipment and depreciated over the
life of the mine. The provision is accreted to its future value over the life of mine through a charge to finance
costs.
Areas where accounting policy judgements have the most significant effect on the amounts recognized in the
consolidated financial statements include:
Income taxes - Deferred tax assets and liabilities are determined based on differences between the financial
statement carrying values of assets and liabilities and their respective income tax bases (“temporary differences”)
and losses carried forward.
The determination of the ability of the Company to utilize tax loss carry-forwards and deductible temporary
differences to offset deferred tax liabilities requires management to exercise judgment and make certain
assumptions about the future performance of the Company. Management is required to assess whether it is
“probable” that the Company will benefit from these prior losses and other deductible temporary differences.
Changes in economic conditions, metal prices and other factors could result in revisions to the estimates of the
benefits to be realized or the timing of utilization of the losses.
Assessment of impairment and reverse impairment indicators - Management applies significant judgement in
assessing whether indicators of impairment or reversal of impairment exist for a CGU which would necessitate
impairment testing. Internal and external factors used by management to determine whether indicators exist
include, but are not limited to, significant changes in the use of the asset, commodity prices, foreign exchange
rates, the Company's market capitalization, capital and production forecasts, R&R quantities, and discount rates.
Contingent liabilities - Contingent liabilities are possible obligations that arise from past events which will be
confirmed by the occurrence or non-occurrence of future events. These contingencies are not recognized in the
consolidated financial statements when the obligation is not probable or if the obligation cannot be measured
reliably. The Company exercises significant judgment when determining the probability of the future outcome
and with regard to any required disclosure of contingencies, and measuring the liability is a significant estimate.
Joint arrangements - The Company is party to an arrangement over which it does not have control. Judgment is
required in determining whether joint control over the arrangement exists and, if so, which parties have joint
control, and whether the arrangement is a joint venture or a joint operation. In assessing whether the Company
has joint control, management analyzes the activities of an arrangement to determine which activities most
significantly affect the returns of the arrangement over its life. If joint control over the arrangement exists, an
assessment of whether the arrangement is a joint venture or a joint operation is required. This assessment is
based on whether the Company retains rights to the assets, and obligations for the liabilities, relating to the
arrangement or the Company only has the rights to the net assets of the arrangement is more applicable. In
making this determination, management reviews the legal form of the arrangement, the terms of the contractual
arrangement, and other facts and circumstances. In a situation where the legal form and the terms of the
contractual arrangement do not give the Company rights to the assets and obligations for the liabilities, an
assessment of other facts and circumstances is required, including whether the activities of the arrangement are
primarily designed for the provision of output to the parties and whether the parties are substantially the only
source of cash flows contributing to the arrangement. Consideration of other facts and circumstances may result
in the conclusion that a joint arrangement is a joint operation. Such conclusions require judgment and are specific
to each arrangement. Other facts and circumstances, such as the right and the obligation to take a share of the
output of the arrangement have led management to conclude the arrangement formed on January 15, 2025 is a
joint operation (Note 4).
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 80 =====
3. ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS
On December 9, 2024, the Company announced that it had entered into a definitive agreement to sell its 100%
interest in the Neves-Corvo Mine and its 100% interest in the Zinkgruvan Mine to Boliden, with the transaction
expected to close in the first half of 2025 ("Definitive Agreement"). The transaction constitutes the sale of all of the
Company's European operating assets allowing the Company to focus on its copper-dominant assets in South America.
Under the terms of the agreement, the Company will receive at least $1.37 billion in upfront cash consideration, which
increases at a rate of 5% per annum from August 31, 2024 up to closing, and is payable to the Company at closing. The
Company may also receive up to $150.0 million in contingent cash consideration if certain metal price thresholds are
met. These include a percentage of incremental revenue realized at the Neves-Corvo Mine in each of the three
calendar years between 2025 and 2027 and at the Zinkgruvan Mine between 2025 and 2026. The upfront
consideration assumes a normalized level of working capital and is subject to customary working capital adjustments.
Following the date of the definitive agreement, on December 9, 2024, the Neves-Corvo Mine and Zinkgruvan Mine
reporting segments met the criteria to be classified as held-for-sale and discontinued operations. The results of these
operations have been restated for the current and comparative years to reclassify the earnings (loss) as earnings (loss)
from discontinued operations. All assets and liabilities relating to the Neves-Corvo and Zinkgruvan reporting segments
have been classified as current assets and current liabilities held for sale at December 31, 2024.
The Company is required to assess for impairment of the CGU's separately immediately prior to reclassifying the
assets held for sale. An impairment charge of $291.2 million ($270.3 million net of tax) was recorded in December
2024 relating to the Neves-Corvo reporting segment to recognize goodwill, mining rights and mineral properties at
their estimated fair value, based on the expected sales price as established by the Definitive Agreement (level 2
measurement). The impairment charge includes $90.7 million allocated to the Neves-Corvo goodwill (Note 11).
The net loss from discontinued operations from the Neves-Corvo reporting segment, which include the results of
operating activities for the years ended December 31, 2024 and 2023, are as follows:
2024 2023
Revenues $ 438,053 $ 425,042
Production costs (323,163) (326,677)
Depreciation, depletion and amortization (118,324) (121,599)
General exploration and business development (2,810) (7,122)
Finance income 2,961 231
Finance costs (7,810) (6,313)
Other (expense) income (4,829) 2,927
Goodwill and asset impairment (291,178) —
Loss before income taxes (307,100) (33,511)
Current tax recovery (expense) 829 (3,001)
Deferred tax recovery 27,667 11,691
Net loss $ (278,604) $ (24,821)
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 81 =====
The net earnings from discontinued operations from the Zinkgruvan reporting segment, which include the results of
operating activities for the years ended December 31, 2024 and 2023 are as follows:
2024 2023
Revenues $ 256,748 $ 223,591
Production costs (122,064) (115,394)
Depreciation, depletion and amortization (37,020) (34,124)
General exploration and business development (10,033) (4,560)
Finance income 1,576 27
Finance costs (6,520) (5,215)
Other (expense) income (3,969) 9,818
Earnings before income taxes 78,718 74,143
Current tax expense (15,450) (9,983)
Deferred tax recovery (expense) 665 (940)
Net earnings $ 63,933 $ 63,220
As at December 31, 2024, the assets and liabilities that are included in the held for sale categories are summarized
below:
Neves-Corvo Mine Zinkgruvan Mine Total
Assets classified as held-for-sale
Cash and cash equivalents $ 23,901 $ 50,900 $ 74,801
Trade and other receivables 90,160 22,867 113,027
Income taxes receivable 823 — 823
Inventories 39,689 16,496 56,185
Restricted funds 49,590 — 49,590
Mineral properties, plant and equipment 810,587 284,551 1,095,138
Other non-current assets — 106 106
$ 1,014,750 $ 374,920 $ 1,389,670
Liabilities classified as held-for-sale
Trade and other payables $ 99,805 $ 32,357 $ 132,162
Income taxes payable — 7,796 7,796
Debt and lease liabilities 15,702 564 16,266
Deferred revenue 25,078 39,227 64,305
Reclamation and other closure provisions 89,852 44,230 134,082
Other long-term liabilities 7,740 127 7,867
Provision for pension obligations — 4,441 4,441
Deferred tax liabilities — 26,190 26,190
$ 238,177 $ 154,932 $ 393,109
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 82 =====
4. ACQUISITION OF FILO AND FORMATION OF VICUÑA
On January 15, 2025, the Company, together with BHP Investments Canada Inc. ("BHP"), completed the acquisition of
Filo Corp (“Filo”) through a plan of arrangement (the “Arrangement”). The Company’s share of the consideration for
the Arrangement was $612.4 million (C$877.8 million) in cash and 94.1 million of the Company’s shares to Filo
shareholders, along with its existing 1.7% interest in Filo (prior to completion). BHP's share of the consideration for the
Arrangement was $1.4 billion (C$2.0 billion) in cash, along with its existing 7.0% interest in Filo (prior to completion).
Concurrently, the Company and BHP formed a 50/50 joint arrangement, Vicuña Corp. (the “Joint Arrangement” or
"Vicuña") holding the Filo del Sol project and the Josemaria project. BHP paid the Company a cash consideration of
$690 million for a 50% interest in the Josemaria project.
Commencing in 2025 the Company expects to account for Vicuña as a joint operation, and accordingly will include its
50% share of the respective assets, liabilities, revenue, expenses and cash flows of Vicuña in the consolidated financial
statements of the Company. The Company determined that its interest in the Josemaria project did not meet the
criteria to be classified as held for sale as at December 31, 2024.
5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents are comprised of the following:
December 31, 2024 December 31, 2023
Cash $ 197,189 $ 197,537
Short-term deposits 160,289 71,256
$ 357,478 $ 268,793
6. TRADE AND OTHER RECEIVABLES
Trade and other receivables are comprised of the following:
December 31, 2024 December 31, 2023
Trade receivables $ 347,820 $ 643,722
Value added tax 52,959 80,088
Prepaid expenses 42,621 48,901
Other receivables 67,454 56,160
$ 510,854 $ 828,871
The Company does not have any significant balances that are past due nor any significant expected credit losses. The
Company's credit risk is discussed in Note 30.
The carrying amounts of trade and other receivables are mainly denominated as follows:
Currency December 31, 2024 December 31, 2023
USD1 365,006 678,680
CLP 93,826,669 77,982,061
CAD 37,788 22,423
EUR1 8 22,924
SEK1 100,011 114,144
BRL 94,581 34,538
ARS 621,565 341,180
1 As at December 31, 2024, trade and other receivables denominated in the foreign currencies held at discontinued operations have been classified
as assets held for sale.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 83 =====
7. INVENTORIES
Inventories are comprised of the following:
December 31, 2024 December 31, 2023
Materials and supplies $ 279,446 $ 313,966
Ore stockpiles and dump leach 188,812 207,602
Finished goods - concentrate stockpiles 116,567 72,515
Finished goods - copper cathode 5,860 5,324
$ 590,685 $ 599,407
Long-term inventories are comprised of the following:
December 31, 2024 December 31, 2023
Ore stockpiles at Candelaria $ 480,885 $ 427,075
Ore stockpiles at Chapada 299,899 270,570
Dump leach at Caserones 91,101 99,952
$ 871,885 $ 797,597
As at December 31, 2024, as a result of higher market expectations for long-term copper and gold prices, the Company
recognized a partial reversal of $28.3 million of previous net realizable value write-downs of the long-term ore stockpile
at Chapada (December 31, 2023 - $nil), $ 1.7 million of the reversal is included in depreciation, depletion and
amortization (December 31, 2023 - $nil).
8. MARKETABLE SECURITIES
Pursuant to the terms of the Arrangement, in August 2024 the Company subscribed for 1,742,424 Filo shares at a price
of C$33.00 per share. As at December 31, 2024, the Company held 2,264,924 Filo shares with a fair value of the
securities held for trading purposes of $50.1 million (December 31, 2023 - $nil). Subsequent to December 31, 2024, the
Company announced the completion of the Arrangement and the formation of Vicuña (Note 4).
9. OTHER NON-CURRENT ASSETS
Other non-current assets are comprised of the following:
December 31, 2024 December 31, 2023
Marketable securities, non-current portion $ 9,955 $ 14,268
Caserones purchase option (a) — 44,438
Other 8,427 8,384
$ 18,382 $ 67,090
a) Pursuant to the terms of the purchase agreement to acquire 51% of Lumina Copper, the Company in July 2024
exercised its right to purchase an additional 19% interest in the Caserones mine for $350.0 million ("Caserones
Purchase Option"). Prior to exercise on July 2, 2024, the Caserones Purchase Option was recorded at fair value
with changes in fair value recorded in Other Income and Expense. Following the exercise, the Caserones
Purchase Option was derecognized with a corresponding reduction of $52.7 million to retained earnings.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 84 =====
10. MINERAL PROPERTIES, PLANT AND EQUIPMENT
Mineral properties, plant and equipment are comprised of the following:
Cost
Mineral
properties
Plant and
equipment
Assets under
construction1
Development
project2
Software
intangible
assets Total
As at December 31, 2022 $ 5,546,923 $ 3,752,177 $ 236,056 $ 876,419 $ 32,626 $ 10,444,201
Caserones acquisition — 1,243,432 94,110 — — 1,337,542
Additions 280,100 96,281 406,540 253,648 82 1,036,651
Disposals — (82,632) (843) — (323) (83,798)
Transfers 117,462 260,712 (409,084) — 30,910 —
Effects of foreign exchange 70,269 38,027 3,482 — 274 112,052
As at December 31, 2023 6,014,754 5,307,997 330,261 1,130,067 63,569 12,846,648
Additions 239,220 100,009 367,924 265,500 712 973,365
Impairment (Note 11) (331,231) (111,710) (1,066) — — (444,007)
Write-downs — — (4,110) (18,019) — (22,129)
Disposals — (91,513) — — — (91,513)
Transfers 68,593 285,636 (355,823) — 1,594 —
Effects of foreign exchange (134,367) (72,804) (6,299) — (527) (213,997)
Reclassification to assets
held for sale (Note 3) (1,720,451) (1,009,154) (79,266) — (7,220) (2,816,091)
As at December 31, 2024 $ 4,136,518 $ 4,408,461 $ 251,621 $ 1,377,548 $ 58,128 $ 10,232,276
Accumulated depreciation,
depletion and amortization
Mineral
properties
Plant and
equipment
Assets under
construction1
Development
project2
Software
intangible
assets Total
As at December 31, 2022 $ 2,835,431 $ 1,621,439 $ — $ — $ 11,645 $ 4,468,515
Depreciation 313,900 346,669 — — 5,270 665,839
Disposals — (74,790) — — — (74,790)
Effects of foreign exchange 44,744 17,063 — — 108 61,915
As at December 31, 2023 3,194,075 1,910,381 — — 17,023 5,121,479
Depreciation 368,178 419,642 — — 9,313 797,133
Disposals — (85,235) — — — (85,235)
Effects of foreign exchange (88,218) (36,304) — — (260) (124,782)
Reclassification to assets
held for sale (Note 3) (1,187,574) (530,038) — — (3,341) (1,720,953)
As at December 31, 2024 $ 2,286,461 $ 1,678,446 $ — $ — $ 22,735 $ 3,987,642
Net book value
Mineral
properties
Plant and
equipment
Assets under
construction1
Development
project2
Software
intangible
assets Total
As at December 31, 2023 $ 2,820,679 $ 3,397,616 $ 330,261 $ 1,130,067 $ 46,546 $ 7,725,169
As at December 31, 2024 $ 1,850,057 $ 2,730,015 $ 251,621 $ 1,377,548 $ 35,393 $ 6,244,634
¹ Represent assets under construction at the Company's operating mine sites which are currently non-depreciable.
2 Assets relate to the Josemaria Project which are currently non-depreciable.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 85 =====
The Company completed the Caserones acquisition on July 13, 2023, acquiring $1,337.5 million of plant and
equipment and assets under construction during the year ended December 31, 2023.
During the year ended December 31, 2024, the Company capitalized $37.4 million (December 31, 2023 - $20.4 million)
of finance costs to the Josemaria Project at a weighted average interest rate of 6.0% (December 31, 2023 - 6.2%).
During the year ended December 31, 2024, the Company capitalized $226.2 million (December 31, 2023 - $222.4
million) of deferred stripping costs to mineral properties. The depreciation expense related to deferred stripping for
the year was $187.0 million (December 31, 2023 - $109.0 million). Included in the mineral properties balance at
December 31, 2024 is $436.3 million (December 31, 2023 - $277.5 million) related to deferred stripping at Candelaria
and Caserones, which is currently non-depreciable.
The Company leases various assets including power line infrastructure, buildings and storage facilities, rail cars,
vehicles, machinery and equipment. The following table summarizes the changes in right-of-use assets within plant
and equipment:
Net book value
As at December 31, 2022 $ 27,923
Caserones acquisition 257,655
Additions 54,809
Depreciation (51,391)
Disposals (5,363)
Effects of foreign exchange 364
As at December 31, 2023 283,997
Additions 70,844
Depreciation (76,449)
Disposals (2,672)
Effects of foreign exchange (258)
Reclassification to assets held for sale (Note 3) (16,141)
As at December 31, 2024 $ 259,321
11. GOODWILL AND ASSET IMPAIRMENT
a) Goodwill
The Company recognized goodwill on the acquisition of Chapada, Neves-Corvo, and Ojos del Salado ( “Ojos”). Goodwill
is allocated to the following CGUs:
Chapada Neves-Corvo Ojos¹ Total
Balance at December 31, 2022 $ 134,284 $ 92,297 $ 10,713 $ 237,294
Additions — — — —
Impairment charges — — — —
Effects of foreign exchange — 3,322 — 3,322
Balance at December 31, 2023 134,284 95,619 10,713 240,616
Effects of foreign exchange — (4,942) — (4,942)
Impairment charges (Note 3) — (90,677) (10,713) (101,390)
Balance at December 31, 2024 $ 134,284 $ — $ — $ 134,284
¹ Ojos is included in the Candelaria reporting segment.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 86 =====
The Company performs an impairment assessment annually, or more frequently if there are impairment indicators, for
the carrying amount of its CGUs where goodwill is allocated.
The recoverable value of a CGU is determined using the FVLCD method applied by using a discounted cash flow model
based on life-of-mine financial plans, and a market-based approach. Significant assumptions used by management to
determine the recoverable amount include future metal prices, production based on estimated quantities of R&R,
production and capital expenditures, foreign exchange rates, pricing of in-situ mineral resources implied by the market
value of selected comparable transactions involving the sale of similar companies and mineral properties, and discount
rates.
For the 2024 assessment, future metal prices and foreign exchange rates used in the discounted cash flow models are
based on market consensus estimates observed during the fourth quarter of 2024. The valuation of recoverable
amount is most sensitive to changes in metal prices, exchange rates, discount rates and pricing of in-situ mineral
resources.
Production costs and capital expenditures included in the discounted cash flow models are based on operating plans
which consider past and estimated future performance.
Inputs utilized in the discounted cash flow models were based on level 3 fair value measurements (Note 26), which
were not based on observable market data. The R&R were based on the Company’s last published estimate dated
December 31, 2024. Incorporated in the FVLCD are fair value estimates developed by the Company for mineral
resources not captured in the cash flow projections model. These estimates are valued using third-party market
information, which includes pricing of in-situ mineral resources implied by the market value of selected comparable
transactions involving the sale of similar companies and mineral properties.
Chapada
For the Chapada CGU impairment review, the Company used a FVLCD model (level 3 measurement). For the years
ended December 31, 2024 and 2023, the Company determined that the recoverable amount of the Chapada CGU was
higher than its carrying value, and therefore no impairment was recognized. Management applied significant judgment
in estimating the recoverable amount of the Chapada CGU.
Sensitivity analysis was performed on the cash flow model for Chapada. At December 31, 2024, the discount rate
(+/-1%) did not have a material impact on the result of the Company’s goodwill impairment assessment. Changes in
key inputs such as a 5% weaker foreign exchange rate or 5% lower copper and gold prices would result in impairment.
Key assumptions for Chapada
2024 2023
Copper price $/lb 4.30 - 4.70 3.80 - 4.20
Gold price $/oz 2,150 - 2,575 1,750 - 2,000
After-tax discount rate 7.5% 7.5%
BRL/$ exchange rate 5.50 5.00
Life of mine 26 years 28 years
Ojos
In January 2025 the Company received a notice from the Superintendencia del Medio Ambiente (“SMA”), following its
investigative proceedings involving the sinkhole that occurred at the Alcaparrosa mine in 2022. The Alcaparrosa mine
is included in the Ojos CGU. The notice levies a fine of $3.3 million and orders the continued closure of the Alcaparrosa
mine, at which mining operations have been suspended since the incident occurred in 2022 (Note 27(d)). As a result,
an impairment charge of $55.9 million ($41.6 million net of tax) was recorded in December 2024 relating to the Ojos
CGU to write off goodwill and the remaining carrying values of underground development and mine infrastructure.
The impairment charge includes $10.7 million allocated to the Ojos goodwill.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 87 =====
b) Other Asset Impairment
Eagle
At every reporting period, the Company assesses whether there is an indication that an asset or group of assets may
be impaired. When impairment indicators exist, the Company estimates the recoverable amount of the asset and
compares it against the asset's carrying amount.
During the fourth quarter of 2024, factors including a decline in nickel prices and prolonged rehabilitation of the Eagle
East ramp were identified as an impairment indicator for the Eagle mine.
For the Eagle mine CGU impairment review, the Company used a FVLCD model (level 3 measurement). As the
recoverable amount determined for the CGU was lower than the carrying value, an impairment of $104.9 million
($82.8 million net of tax) was recorded to reduce the carrying value of underground development, plant and other
infrastructure to its recoverable value.
Key assumptions for Eagle Mine
2024
Nickel price $/lb 8.50-9.00
Copper price $/lb 4.30-4.70
After-tax discount rate 9.0%
Life of mine 5 years
Suruca
In February 2025, the Company removed the Suruca gold deposit from Mineral Reserves as development is not
contemplated in the current life-of-mine plan. The Suruca gold deposit is included in the Chapada segment. This was
considered an indicator of impairment for the Suruca mineral property asset. An impairment of $ 93.4 million ($ 61.7
million net of tax) was recorded in earnings in December 2024 to reduce the carrying value of the mineral property
asset to nil.
12. TRADE AND OTHER PAYABLES
Trade and other payables are comprised of the following:
December 31, 2024 December 31, 2023
Trade payables $ 297,687 $ 393,829
Unbilled goods and services 175,152 176,444
Employee benefits payable 68,801 114,514
Prepayment from customers 45,027 21,963
Royalties payable 24,548 23,773
Sinkhole provision1 16,918 29,827
Automatic share purchase plan commitment (Note 17) 3,714 —
Pricing provisions on concentrate sales2 15,541 13,201
Deferred consideration, current portion3 10,000 10,000
Other 16,816 22,212
$ 674,204 $ 805,763
1 Relates to expected remediation costs and potential fines directly related to the sinkhole near the Company's Ojos del Salado
operations.
2 Includes balances owing to customers and provisions arising from forward market price adjustments.
3 Relates to the current portion of the remaining deferred cash consideration arising from the Caserones acquisition, payable in
installments over the next five years.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 88 =====
13. DEBT AND LEASE LIABILITIES
Debt and lease liabilities are comprised of the following:
December 31, 2024 December 31, 2023
Revolving credit facility (a) $ 264,659 $ 245,084
Term loan (b) 1,147,685 798,542
Candelaria and Chapada term loans (c) 245,932 48,850
Lease liabilities (d) 249,185 277,208
Commercial paper (e) 98,696 116,025
Line of credit — 99
Debt and lease liabilities 2,006,157 1,485,808
Less: current portion 395,232 212,646
Long-term portion $ 1,610,925 $ 1,273,162
The changes in debt and lease liabilities are comprised of the following:
Leases Debt Total
As at December 31, 2022 $ 27,166 $ 170,162 $ 197,328
Caserones acquisition 257,655 — 257,655
Additions 54,392 2,490,597 2,544,989
Payments (59,841) (1,451,804) (1,511,645)
Disposals (6,221) — (6,221)
Interest 12,521 — 12,521
Financing fee amortization — 846 846
Deferred financing fee — (2,950) (2,950)
Effects of foreign exchange (8,464) 1,749 (6,715)
As at December 31, 2023 277,208 1,208,600 1,485,808
Additions 69,881 1,500,551 1,570,432
Payments (93,461) (944,428) (1,037,889)
Disposals (2,028) — (2,028)
Interest 24,053 — 24,053
Financing fee amortization — 2,360 2,360
Deferred financing fee — (3,643) (3,643)
Reclassified to liabilities held for sale (Note 3) (16,266) — (16,266)
Effects of foreign exchange (10,202) (6,468) (16,670)
As at December 31, 2024 249,185 1,756,972 2,006,157
Less: current portion 50,604 344,628 395,232
Long-term portion $ 198,581 $ 1,412,344 $ 1,610,925
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 89 =====
a) The Company has a revolving credit facility of $1,750.0 million. On April 26, 2024, the credit facility, which
originally matured in April 2028, was amended and extended to April 2029. The credit facility bears interest on
drawn funds at rates of Term Secured Overnight Financing Rate (“Term SOFR”) plus Credit Spread Adjustment
(“CSA”) of 0.10% plus an applicable margin of 1.45% to 2.50%, depending on the Company’s net leverage ratio.
The revolving credit facility is unsecured, save and except for a charge over certain assets in the USA, and is
subject to customary covenants. During the year ended December 31, 2024 , the Company drew down $ 340.0
million (December 31, 2023 - $1.21 billion), and repaid $ 320.0 million (December 31, 2023 - $977.0 million). As
at December 31, 2024 , a principal balance of $270.0 million (December 31, 2023 - $250.0 million) was
outstanding, with unamortized deferred financing fees of $5.3 million (December 31, 2023 - $4.9 million) netted
against borrowings.
b) In July 2023, the Company obtained a term loan of a principal amount of $800.0 million with an additional
$400.0 million accordion, maturing July 2026. On April 26, 2024, the Company amended the terms to extend
maturity to July 2027. The term loan bears interest at an annual rate equal to Term SOFR + CSA + an applicable
margin of 1.60% to 2.65%, depending on the Company’s net leverage ratio. Principal is payable at maturity. The
term loan is unsecured, save and except for a charge over certain assets in the USA, and has similar covenants
to the Company’s existing $1,750.0 million revolving credit facility. In August 2024 the Company exercised the
accordion option and drew down an additional $350.0 million. As at December 31, 2024, a principal balance of
$1,150.0 million (December 31, 2023 - $800.0 million) was outstanding, with unamortized deferred financing
fees of $2.3 million (December 31, 2023 - $1.5 million) netted against borrowings.
c) Compañia Contractual Minera Candelaria S.A. ("Candelaria Mine"), a subsidiary owned 80% by the Company
which owns the Candelaria mine, obtained a series of unsecured fixed term loans during the year ended
December 31, 2024 totalling $215.0 million (December 31, 2023 - $nil). Candelaria Mine repaid $115.0 million
of the outstanding loans during the year ended December 31, 2024 (December 31, 2023 - 50.0 million). As at
December 31, 2024 , there were two term loans outstanding at Candelaria Mine totalling $ 100.0 million
(December 31, 2023 - $nil). The outstanding term loan s accrue interest at rates ranging from 5.07% to 5.30%
per annum with interest payable upon maturity, for which $50 million matures in February 2025 and the
remaining $50 million matures in May 2025.
Mineração Maracá Indústria e Comércio S.A. (“Chapada”), a subsidiary of the Company which owns the
Chapada mine, obtained a series of unsecured fixed term loans during the year ended December 31, 2024
totalling $324.2 million (December 31, 2023 - $205.7 million). Chapada repaid $227.1 million of the outstanding
term loans during the year ended December 31, 2024 (December 31, 2023 - $234.3 million). As at December 31,
2024, there were 41 term loans outstanding at Chapada totalling $145.9 million (December 31, 2023 - 16 term
loans totalling $48.9 million). These outstanding term loans accrue interest at rates ranging from 5.66% to
6.32% per annum with interest payable upon maturity. The maturity dates range from January to May 2025.
d) Lease liabilities relate to leases on power line infrastructure, buildings and storage facilities, rail cars, vehicles,
machinery and equipment which have remaining lease terms of one to thirteen years and interest rates of 1.0%
- 10.0% over the terms of the leases.
Certain leases relating to mine development, exploration, production and transportation equipment contain
variable lease expenses based on tonnage or drilling metres. Variable lease expense for the year ended
December 31, 2024 was $113.7 million (December 31, 2023 - $111.7 million). The Company has short-term
leases related to mining equipment and office space. Short-term lease expense for the period ended December
31, 2024 was $27.9 million (December 31, 2023 - $27.3 million).
e) Neves-Corvo entered into three unsecured commercial paper programs during 2022 and 2023. Total borrowing
capacity available is €115.0 million collectively, with maturities ranging from May 2025 to July 2028. The
commercial papers bear interest on drawn funds at rates of EURIBOR plus an applicable margin of 0.30% to
0.50% .
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 90 =====
During the year ended December 31, 2024, Neves-Corvo drew down $271.3 million (€250.0 million) from the
commercial paper programs (December 31, 2023 - $275.9 million (€255.0 million)) and repaid $282.2 million
(€260.0 million) (December 31, 2023 - $188.2 million (€175.0 million)).
As at December 31, 2024, a principal balance of $98.7 million (€95.0 million) (December 31, 2023 - $116.0
million (€105.0 million)) was outstanding and pursuant to the terms of the Definitive Agreement have not been
classified as held for sale.
The schedule of undiscounted lease payment and debt obligations is as follows:
Leases Debt Total
Less than one year $ 68,649 $ 344,628 $ 413,277
One to five years 164,309 1,420,000 1,584,309
More than five years 133,842 — 133,842
Total undiscounted obligations as at December 31, 2024 $ 366,800 $ 1,764,628 $ 2,131,428
Related to continuing operations $ 348,042 $ 1,764,628 $ 2,112,670
Related to discontinued operations $ 18,758 $ — $ 18,758
14. DEFERRED REVENUE
The following table summarizes the changes in deferred revenue:
As at December 31, 2022 $ 654,106
Recognition of revenue (72,743)
Variable consideration adjustment 3,018
Finance costs 36,004
Effects of foreign exchange 2,845
As at December 31, 2023 623,230
Recognition of revenue (78,267)
Variable consideration adjustment (1,550)
Finance costs 34,331
Reclassified to liabilities held for sale (Note 3) (64,305)
Effects of foreign exchange (5,702)
As at December 31, 2024 507,737
Less: current portion 60,604
Long-term portion $ 447,133
Consideration received under the Company’s gold, silver and copper streaming agreements is deemed to be variable
and can be subject to cumulative adjustments when the contractual volume to be delivered changes. As a result of
changes to the Company’s R&R, adjustments have been made to the deferred revenue liability for 2023 and 2024
which were recognized through revenue and finance costs.
For the year ended December 31, 2024, the Company recognized finance costs at a weighted average rate of 5.5%
(2023 - 5.5%) on the deferred revenue balances.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 91 =====
a) Candelaria
The Company entered into a stream agreement with Franco-Nevada Corporation (“FN”), whereby the Company
has agreed to sell 68% of all the gold and silver contained in production from Candelaria until 720,000 Ounces
("oz") of gold and 12 million oz of silver have been delivered. Thereafter, FN will be entitled to purchase 40% of the
gold and silver production from Candelaria. The Company received an up-front payment of $648 million which is
being recognized as gold and silver are delivered to FN under the contract.
For each ounce of gold and silver delivered, FN makes payments equal to the lesser of the prevailing market prices
and approximately $429/oz of gold and $4.28/oz of silver (2023 - $425/oz of gold and $4.24/oz of silver), subject to
a 1% annual inflationary adjustment. In 2024, approximately 59,000 oz of gold and 1,225,000 oz of silver ( 2023 -
approximately 56,000 oz of gold and 889,000 oz of silver) were subject to the terms of the streaming agreement.
As at December 31, 2024, approximately 603,000 oz of gold and 9,991,000 oz of silver have cumulatively been
subject to the terms of the streaming agreement (2023 - 543,000 oz of gold and 8,765,000 oz of silver).
The deferred revenue balance as at December 31, 2024 at Candelaria is $368.0 million (December 31, 2023 -
$409.7 million).
b) Chapada Mine
The Company assumed the following streaming agreements with Sandstorm Gold Ltd. (“Sandstorm”) and Altius
Minerals Corporation (“Altius”) when the Chapada mine was acquired:
Sandstorm is entitled to purchase the lesser of 3.9 million pounds (“Mlbs”) or 4.2% of the payable copper produced
annually from Chapada at 30% of the market price. The percentage of payable copper is subject to two reduction
thresholds. Once an aggregate of 39 Mlbs has been delivered, the percentage of payable copper reduces to 3.0%.
Upon delivery of 50 Mlbs of copper in aggregate, the percentage of payable copper reduces to 1.5% for the
remaining life of mine. In 2024, approximately 3.6 Mlbs (2023 – 3.5 Mlbs) were delivered under this agreement. As
at December 31, 2024, approximately 33.2 Mlbs (2023 - 29.6 Mlbs) have cumulatively been delivered under this
agreement.
Altius is entitled to purchase 3.7% of the payable copper produced from Chapada at 30% of the market price. The
percentage of payable copper is subject to two reduction thresholds. In the event of a specified expansion at
Chapada, the percentage of payable copper reduces to 2.65%. Also, upon delivery of 75 Mlbs of copper in
aggregate, the percentage of payable copper reduces to 1.5% for the remaining life of mine. In 2024,
approximately 3.3 Mlbs (2023 – 3.4 Mlbs) were delivered under this agreement . As at December 31, 2024,
approximately 33.3 Mlbs (2023 - 30.0 Mlbs) have cumulatively been delivered under this agreement.
The deferred revenue balance as at December 31, 2024 at Chapada is $139.7 million (December 31, 2023 - $146.2
million).
c) Assets Held for Sale and Discontinued Operations
The Neves-Corvo Mine and Zinkgruvan Mine each have an agreement to deliver all of the silver contained in
concentrate produced to Wheaton Precious Metals Corporation (“Wheaton”). Each received an up-front payment
which was deferred and is being recognized in revenue as silver is delivered under the contracts. The assets held
for sale and discontinued operations receive the lesser of a fixed payment (subject to annual inflationary
adjustments) and the market price per ounce of silver. During 2024, Neves-Corvo Mine received approximately
$4.50/oz of silver (2023 - $4.46/oz). The agreement extends to the earlier of September 2057 and the end of mine
life. An aggregate total of approximately 11.5 million oz has been delivered since the inception of the contract.
During 2024, Zinkgruvan Mine received approximately $4.68/oz of silver (2023 - $4.60/oz). The agreement includes
a guaranteed minimum delivery of 40.0 million oz of silver over an initial 25 year term. If at the end of the initial
term the Company has not met its minimum obligation, it must pay $1.00 for each ounce of silver not delivered. An
aggregate total of approximately 35.1 million oz has been delivered since the inception of the contract in 2004.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 92 =====
As at December 31, 2024, Neves-Corvo Mine and Zinkgruvan Mine met the criteria to be classified as held for sale
and discontinued operations (Note 3). The deferred revenue balance as at December 31, 2024 related to assets
held for sale and discontinued operations is $64.3 million (December 31, 2023 - $67.4 million).
15. RECLAMATION AND OTHER CLOSURE PROVISIONS
Reclamation and other closure provisions relating to the Company's mining operations are as follows:
Reclamation
provisions
Other closure
provisions Total
Balance, December 31, 2022 $ 401,020 $ 44,828 $ 445,848
Acquisition of Caserones 92,440 — 92,440
Accretion 23,169 — 23,169
Changes in estimate (30,507) 5,572 (24,935)
Changes in discount rate 14,584 — 14,584
Payments (8,842) (1,649) (10,491)
Effects of foreign exchange 5,281 (1,720) 3,561
Balance, December 31, 2023 497,145 47,031 544,176
Accretion 25,528 — 25,528
Changes in estimate (31,362) 6,740 (24,622)
Changes in discount rate (34,056) — (34,056)
Payments (11,672) (6,046) (17,718)
Reclassification to liabilities held for sale (Note 3) (125,490) (8,592) (134,082)
Effects of foreign exchange (9,748) (5,292) (15,040)
Balance, December 31, 2024 310,345 33,841 344,186
Less: current portion 16,125 4,751 20,876
Long-term portion $ 294,220 $ 29,090 $ 323,310
The Company expects these liabilities to be settled between 2025 and 2110. The reclamation provisions on continuing
operations are discounted using current market pre-tax discount rates which range from 4.3% to 14.4% (2023 - 2.0% to
10.4%)
Reclamation and other closure provisions related to discontinued operations are discounted between 2.3% and 2.8%
(2023 - 2.0% and 2.8%) and are expected to be settled between 2025 and 2062. As at December 31, 2024, the
reclamation and closure provision balance related to discontinued operations is $134.1 million.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 93 =====
16. DEFERRED CONSIDERATION AND OTHER LONG-TERM LIABILITIES
Deferred consideration and other long-term liabilities are comprised of the following:
December 31, 2024 December 31, 2023
Deferred consideration, non-current portion $ 102,833 $ 106,210
Other 25,950 26,989
$ 128,783 $ 133,199
Deferred consideration represents the non-current portion of the remaining cash consideration for the acquisition of
51% of Lumina Copper, completed July 13, 2023. The deferred consideration is payable in installments as follows:
$50.0 million to be paid in five installments of $10.0 million on the anniversary of the transaction closing date in each
of 2024, 2025, 2026, 2027, and 2028; and $100 million to be paid on the anniversary of the closing date in 2029. The
Company paid the first $10.0 million installment in July 2024.
17. SHARE CAPITAL
(a) Authorized and issued shares
Authorized share capital consists of an unlimited number of voting common shares with no par value. As at
December 31, 2024, there were 774,102,971 fully paid voting common shares issued (2023 - 773,667,789 shares).
(b) Share units
The Company has a Share Unit Plan (“SU Plan”) which provides for share unit awards (“SUs”) to be granted by the
Board of Directors to certain employees of the Company. The maximum number of SUs that are issuable under
the SU Plan is 14,000,000. A SU is a unit representing the right to receive one common share (subject to
adjustments) issued from treasury.
The number and terms of SUs awarded will be determined by the Board of Directors based on the closing market
price on the TSX of the Company’s common shares on the date of the grant. The Company uses the fair value
method of accounting for the recording of SU grants to employees and officers.
i) Time-vesting SUs
During 2024, the Company granted 624,250 time-vesting SUs to employees and officers that expire in 2027.
These SUs vest three years from the grant date with the number of SUs being fixed, and with no vesting
conditions other than service. The fair value of the time-vesting SUs are based on the market value of the
shares on the date of the grant and an estimated forfeiture rate of approximately 11% (2023 - 11%). The
weighted average fair value per time-vesting SU granted during 2024 was C$10.71 (2023 - C$8.23). The
Company incurred share-based compensation related expenditures of $2.9 million for 2024 (2023 - $2.9
million) with a corresponding credit to contributed surplus related to time-vesting SUs. As at December 31,
2024, there was $4.3 million (2023 - $3.8 million) of unamortized stock-based compensation expense
related to time-vesting SUs.
ii) Performance-vesting SUs
During 2024, the Company granted 417,200 performance-vesting SUs to officers that expire in 2027. These
SUs vest three years from the grant date with the number of SUs being variable, which can range from zero
to 834,400 contingent upon achieving predetermined performance criteria related to the Company's share
price over the three-year period. The fair value of the performance-vesting SUs are based on a Monte Carlo
model and an estimated forfeiture rate of approximately 11% (2023 - 11%). The weighted average fair value
per performance-vesting SU granted during 2024 was C$10.71 (2023 - C$7.94). The Company incurred
share-based compensation related expenditures of $2.0 million for 2024 (2023 - $1.3 million) with a
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 33 -
===== SIDA 94 =====
corresponding credit to contributed surplus related to performance-vesting SUs. As at December 31, 2024,
there was $3.2 million (2023 - $2.7 million) of unamortized stock-based compensation expense related to
performance-vesting SUs.
During 2024, 318,679 common shares (2023 - 722,822) were issued as a result of SUs being vested.
(c) Stock options
The Company’s Stock Option Plan provides for stock option awards to be granted by the Board of Directors to
certain employees of the Company. The term of any stock options granted under the Stock Option Plan may not
exceed seven years from the date of grant. The maximum number of stock options that are issuable under the
Stock Option Plan is 42,000,000. The vesting requirements are established by the Board of Directors.
The Company uses the fair value method of accounting for the recording of stock options. Under this method, the
Company incurred share-based compensation related expenditures of $1.4 million for 2024 (2023 - $3.6 million)
with a corresponding credit to contributed surplus.
During 2024, the Company granted 1,498,160 stock options to employees and officers that expire in 2031. The
stock options vest over three years from the grant date. The Black-Scholes option pricing model used to
determine the fair value of the stock options at the date of the grant assumed a dividend of $0.36/share, risk-free
interest rate of 2.29% to 3.70% (2023 - 3.09% to 3.96%), expected life of 4.7 years (2023 - 4.4 years) and expected
price volatility of 46% to 48% (2023 - 47% to 48%). Volatility is determined using the historical daily volatility over
the expected life of the options. A forfeiture rate of approximately 11% was applied ( 2023 - 11%). The weighted
average fair value per stock option granted during 2024 was C$2.24 (2023 - C$2.51). As at December 31, 2024,
there was $0.5 million of unamortized stock-based compensation expense ( 2023 - $1.9 million) related to stock
options.
During 2024, 2,822,650 and 109,077 common shares were issued as a result of stock options and replacement
options, respectively, being exercised (2023 - 2,044,059 and 154,377).
The continuity of share-based payments outstanding is as follows:
Number of SUs
Number of
Replacement
options1
Weighted
average
exercise price
(C$)
Number of
options
Weighted
average
exercise price
(C$)
Outstanding, December 31, 2022 1,313,056 435,231 5.09 6,458,997 10.08
Granted 1,380,803 — — 1,918,733 8.06
Forfeited (150,096) — — (824,869) 11.53
Exercised (722,822) (154,377) 5.42 (2,044,059) 7.04
Outstanding, December 31, 2023 1,820,941 280,854 4.91 5,508,802 10.29
Granted 1,041,450 — — 1,498,160 10.71
Forfeited (97,683) (10,189) 5.86 (422,539) 12.51
Exercised (318,679) (109,077) 4.84 (2,822,650) 9.95
Outstanding, December 31, 2024 2,446,029 161,588 4.90 3,761,773 10.46
1 During 2022, the Company issued 2,513,866 replacement options upon completion of the Josemaria Resources Inc.
acquisition.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 95 =====
The following table summarizes options outstanding as at December 31, 2024:
Outstanding Options Exercisable Options
Range of exercise prices (C$)
Number of
Options
Outstanding1
Weighted
Average
Remaining
Contractual
Life (Years)
Weighted
Average
Exercise
Price (C$)
Number of
Options
Exercisable1
Weighted
Average
Remaining
Contractual
Life (Years)
Weighted
Average
Exercise
Price (C$)
4 to 6.99 161,588 0.8 4.89 161,588 0.8 4.89
7 to 9.99 1,275,216 4.8 7.96 243,426 3.4 7.79
10 to 12.99 2,030,957 5.5 10.94 271,705 3.7 11.53
13 to 15.99 455,600 2.2 14.95 455,600 2.2 14.95
3,923,361 4.7 10.19 1,132,319 2.6 11.15
1 Includes Replacement options
(d) Deferred share units
During the year ended December 31, 2023, the Company adopted a Deferred Share Unit ("DSU") Plan effective
January 1, 2024 under which DSUs are granted by the Board of Directors quarterly to eligible non-employee
Directors. During 2024, 33,076 (2023 - nil) DSUs were granted, and 9,455 (2023, nil) DSUs were forfeited under
the plan. As at December 31, 2024, there were 23,621 DSUs outstanding (2023 - nil).
(e) Basic and diluted weighted average number of shares outstanding
December 31, 2024 December 31, 2023
Basic weighted average number of shares outstanding 774,825,230 772,532,260
Effect of dilutive securities 2,743,811 760,635
Diluted weighted average number of shares outstanding 777,569,041 773,292,895
Antidilutive securities 705,931 137,900
The effect of dilutive securities relates to in-the-money outstanding stock options and SUs.
(f) Dividends
The Company declared dividends in the amount of $203.0 million (2023 - $206.1 million), or C$0.36 per share, for
the year ended December 31, 2024 (2023 - C$0.36 per share).
(g) Normal course issuer bid
In December 2023, the Company obtained approval from the TSX for the renewal of its normal course issuer bid
("NCIB") to purchase up to 52,538,870 common shares between December 11, 2023 and December 10, 2024.
Daily purchases (other than pursuant to a block purchase exemption) on the TSX under the NCIB were limited to
a maximum of 564,097 common shares. In connection with the NCIB renewal, the Company entered into an
automatic share purchase plan (“ASPP”) with its broker to allow for the purchase of common shares at times
when the Company ordinarily would not be active in the market due to trading blackout periods, insider trading
rules or otherwise.
In December 2024, the Company obtained approval from the TSX for the renewal of its NCIB to purchase up to
57,597,388 common shares between December 16, 2024 and December 15, 2025. Daily purchases (other than
pursuant to a block purchase exemption) on the TSX under the NCIB are limited to a maximum of 560,989
common shares. In connection with the NCIB renewal, the Company entered into an ASPP with its broker under
the same terms as the ASPP entered in December 2023.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 96 =====
During the year ended December 31, 2024, 2,815,200 shares were purchased under the NCIB at an average price
of C$12.33 per share for total consideration of $ 24.4 million. All of the common shares purchased were
cancelled. As at December 31, 2024, the Company recorded an accrual of $3.7 million in trade and other payables
due to the timing of settlement of the repurchase of 429,800 shares that on the last trading day of the year which
were settled during January 2025.
No shares were purchased under the NCIB during the year ended December 31, 2023.
18. NON-CONTROLLING INTERESTS
Set out below is summarized financial information for each subsidiary with non-controlling interest ("NCI") that is
material to the group. As part of its Candelaria segment, the Company owns 80% of the Candelaria Mine and
Compañia Contractual Minera Ojos del Salado S.A.’s ("Ojos") copper mining operations and supporting infrastructure
in Chile (together the "Candelaria complex").
On July 2, 2024, the Company exercised its option to acquire an additional 19% interest in the issued and outstanding
equity of Lumina Copper, bringing the Company's ownership in Caserones from 51% to 70% and reducing the NCI to
30%.
The continuity of the Company's non-wholly owned subsidiaries with material NCI is as follows:
Candelaria complex Caserones mine Total
NCI in subsidiary at December 31, 2024 20% 30%1
As at December 31, 2022 $ 564,089 $ — $ 564,089
Caserones acquisition — 873,767 873,767
Share of net comprehensive income (loss) 41,753 32,294 74,047
Distributions (11,000) (44,100) (55,100)
As at December 31, 2023 594,842 861,961 1,456,803
Share of net comprehensive income (loss) 71,434 70,885 142,319
Distributions (86,000) (66,000) (152,000)
Acquisition of additional interest in Caserones1 — (353,499) (353,499)
As at December 31, 2024 $ 580,276 $ 513,347 $ 1,093,623
1 Prior to July 2, 2024, NCI in Caserones was 49%.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 97 =====
Summarized financial information for the Company's non-wholly owned subsidiaries on a 100% basis, before
inter-company eliminations is as follows:
Summarized Balance Sheets
Candelaria complex Caserones mine1
As at Dec. 31, 2024 As at Dec. 31, 2023 As at Dec. 31, 2024 As at Dec. 31, 2023
Total current assets $ 627,020 $ 512,217 $ 600,270 $ 708,927
Total non-current assets $ 3,070,339 $ 3,140,799 $ 1,563,113 $ 1,629,052
Total current liabilities $ 452,576 $ 266,314 $ 298,374 $ 323,797
Total non-current liabilities $ 611,134 $ 646,189 $ 231,921 $ 267,263
1Caserones results from July 13, 2023
Summarized Statements of Earnings and Comprehensive Income
Candelaria complex Caserones mine1
For the year ended
December 31, 2024 2023 2024 2023
Total revenue $ 1,858,920 $ 1,529,583 $ 1,147,654 $ 601,775
Net earnings $ 355,225 $ 181,984 $ 171,857 $ 63,349
Net comprehensive income $ 355,334 $ 182,344 $ 171,857 $ 63,349
1Caserones results from July 13, 2023
Summarized Statement of Cash Flows
Candelaria complex Caserones mine1
For the year ended
December 31, 2024 2023 2024 2023
Cash provided by operating
activities $ 745,217 $ 504,464 $ 438,098 $ 179,371
Cash used in investing activities (269,047) (379,946) (136,659) (129,266)
Cash used in financing activities (376,952) (131,127) (313,493) (131,807)
Increase (decrease) in cash and
cash equivalents during the period $ 99,218 $ (6,609) $ (12,054) $ (81,702)
1Caserones results from July 13, 2023
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 37 -
===== SIDA 98 =====
19. REVENUE
The Company's analysis of revenue from contracts with customers, segmented by product, is as follows:
2024 2023
Revenue from contracts with customers:
Copper $ 2,801,428 $ 2,145,132
Gold 294,364 234,318
Molybdenum 136,820 82,069
Nickel 97,167 291,169
Silver 47,236 31,184
Other 30,131 39,664
3,407,146 2,823,536
Provisional pricing adjustments on current year concentrate sales (9,330) (59,889)
Provisional pricing adjustments on prior year concentrate sales 24,788 (20,203)
Revenue $ 3,422,604 $ 2,743,444
The Company's geographical analysis of revenue from contracts with customers, segmented based on the
destination of product, is as follows:
2024 2023
Revenue from contracts with customers:
Japan $ 1,122,739 $ 661,410
China 1,066,198 809,594
Spain 557,012 498,012
Canada 213,660 402,235
Chile 169,384 131,059
Germany 129,752 88,957
Finland 100,028 102,917
Other 48,373 129,352
3,407,146 2,823,536
Provisional pricing adjustments on current year concentrate sales (9,330) (59,889)
Provisional pricing adjustments on prior year concentrate sales 24,788 (20,203)
Revenue $ 3,422,604 $ 2,743,444
Revenue from contracts with customers related to continuing operations for the year ended December 31, 2024
includes a increase of $4.2 million (2023 - decrease of $0.8 million) due to variable consideration adjustments.
Provisional pricing adjustments on prior year concentrate sales include adjustments on pricing from sales during 2023.
During the three months ended December 31, 2024, provisional pricing adjustments on current and prior period
concentrate sales were $31.7 million negative and $46.1 million negative, respectively.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 38 -
===== SIDA 99 =====
20. PRODUCTION COSTS
The Company's production costs are comprised of the following:
2024 2023
Direct mine and mill cost $ 1,729,956 $ 1,491,867
Transportation 104,813 104,788
Royalties 63,858 47,382
Total production costs $ 1,898,627 $ 1,644,037
During the year ended December 31, 2024, the Company incurred $15.8 million related to union negotiation
settlements within operations in Chile, which were reported in direct mine and mill costs (2023 - $6.3 million).
During the year ended December 31, 2024, direct mine and mill costs include a write down totaling $32.7 million
related to inventory items used in repair and maintenance of mineral properties, plant and equipment.
21. GENERAL AND ADMINISTRATIVE EXPENSES
The Company's general and administrative expenses recognized in the consolidated statement of (loss) earnings are
comprised of the following:
2024 2023
Salaries and benefits $ 23,899 $ 33,257
Office related expenses 14,104 12,143
Consulting 10,616 10,322
Stock-based compensation 6,552 7,761
Insurance 1,300 685
Other 1,878 2,555
Total general and administrative expenses $ 58,349 $ 66,723
22. EXPLORATION AND BUSINESS DEVELOPMENT
The Company's exploration and business development costs are comprised of the following:
2024 2023
General exploration $ 38,698 $ 33,048
Project development 5,331 4,814
Corporate development 1,323 6,148
Total exploration and business development $ 45,352 $ 44,010
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 39 -
===== SIDA 100 =====
23. FINANCE INCOME AND COSTS
The Company's finance income and costs are comprised of the following:
2024 2023
Interest income $ 16,689 $ 10,879
Interest expense and bank fees (101,046) (47,150)
Accretion expense on reclamation provisions (22,286) (19,736)
Lease liability interest (23,301) (12,491)
Deferred revenue finance costs (4,888) (19,571)
Other (6,623) (3,360)
Total finance costs, net $ (141,455) $ (91,429)
Finance income $ 16,689 $ 10,879
Finance costs (158,144) (102,308)
Total finance costs, net $ (141,455) $ (91,429)
24. OTHER INCOME AND EXPENSE
The Company's other income and expense are comprised of the following:
Year ended
December 31,
2024 2023
Foreign exchange gain (a) $ 32,861 $ 4,796
Foreign exchange and trading gains on debt and equity investments (b) 28,292 86,784
Revaluation of Caserones purchase option (c) 11,728 (2,556)
Revaluation of marketable securities 7,383 1,846
Realized (losses) gains on derivative contracts (Note 26) (2,050) 25,088
Ojos del Salado sinkhole recovery (expenses) (d) 9,492 (16,922)
Unrealized losses on derivative contracts (Note 26) (85,168) (8,464)
Write-down of assets (e) (22,129) —
Revaluation of Chapada derivative liability (631) (2,594)
Gain on disposal of subsidiary — 5,718
Other expense (3,863) (1,852)
Total other (expense) income, net $ (24,085) $ 91,844
a) Foreign exchange gains during the year ended December 31, 2024 and 2023, relate to the foreign exchange
revaluation of trade payables and lease liabilities held in foreign currencies.
b) Foreign exchange and trading gains on debt and equity investments include the changes in fair value of debt and
equity instruments supporting capital funding for the Josemaria Project.
c) The Caserones purchase option is revalued at each reporting period up to the date of exercise, with changes in
fair value recorded in Other Income and Expense. The purchase option was exercised on July 2, 2024 and
resulting impact during the year ended December 31, 2024 remained in Other Income and Expense.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 40 -
===== SIDA 101 =====
d) Ojos del Salado sinkhole recovery during the year ended December 31, 2024 include adjustments of expenses
originally accrued for as a result of updated information obtained related to the sinkhole near the Company's
Ojos del Salado operations.
e) Write-down of assets during the year ended December 31, 2024 include a non-cash write-down of capital works
in progress at the Josemaria Project that are no longer expected to be required.
25. CURRENT AND DEFERRED INCOME TAXES
2024 2023
Current tax expense:
Current tax on net taxable earnings $ 290,405 $ 139,652
Adjustments in respect of prior years 4,533 1,779
294,938 141,431
Deferred tax (recovery) expense:
Origination and reversal of temporary differences (40,467) 49,778
Change in tax rate — 39,376
Utilization and recognition of previously unrecognized tax losses and temporary
differences (6,863) (11,628)
Temporary differences for which no deferred asset was recognized (17,635) (4,592)
(64,965) 72,934
Total tax expense $ 229,973 $ 214,365
The tax on the Company's earnings before income tax differs from the amount that would arise using the weighted
average rate applicable to earnings of the consolidated entities as follows:
2024 2023
Earnings excluding income taxes $ 383,327 $ 491,216
Combined basic federal and provincial rates 27.0 % 27.0 %
Income taxes based on Canadian statutory income tax rates $ 103,498 $ 132,628
Effect of different tax rates in foreign jurisdictions 107,825 33,147
Tax calculated at domestic tax rates applicable to earnings in the respective
countries 211,323 165,775
Tax effects of:
Non-deductible and non-taxable items (a) 14,917 3,645
Change in tax rates (b) — 39,376
Changes in estimates on Chilean royalty tax rate (c) 14,970
Adjustments in respect of prior years (d) (3,384) (18,919)
Tax losses and temporary differences for which no deferred income tax
asset was recognized (e) (17,635) (4,591)
Foreign exchange impact on temporary differences and other
translation amounts (f) 12,704 29,128
Utilization and recognition of previously unrecognized temporary differences (6,863) (11,628)
Tax recovery associated with government grants and other tax
credits (2,749) (4,265)
Net withholding tax on accrued interest and dividends received 5,498 16,652
Other 1,192 (808)
Total tax expense $ 229,973 $ 214,365
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 41 -
===== SIDA 102 =====
The Company operates in tax jurisdictions that have tax rates (including mining royalty tax) ranging from 20.6% to
37.9%.
a) Includes non-deductible environmental expenses incurred at Caserones of $47.6 million.
b) The new mining royalty law in Chile, which includes a 1% ad-valorem tax on sales, was enacted in the third
quarter of 2023 and became effective January 1, 2024 for Candelaria and will become effective in 2028 for
Caserones when its tax stability agreement expires. In addition to the ad-valorem tax, both operations in Chile
are expected to pay mining tax of approximately 8% - 15% on net mining income. The maximum effective tax
rate for the combined mining royalty, corporate income tax and final taxes in Chile is set at 46.5%.
c) Additional deferred royalty tax impact of $23.3 million in Candelaria and an offsetting $8.3 million of deferred tax
recovery in Caserones were recorded due to increased mining operating margin anticipated in future production
estimates.
d) Adjustments in respect of prior years includes temporary difference of $5.0 million deferred tax expense in
Candelaria associated with adjustments to the severance accrual (2023 - $6.4 million deferred tax recovery),
offset by $8.2 million deferred tax recovery in Chapada related to the reversal of stockpile adjustments booked in
the prior period (2023 - $2.8 million).
e) Deferred tax expense associated with temporary differences not recognized includes $29.7 million in Candelaria
(2023 - $1.6 million), $14.1 million in Canada (2023 - $1.3 million) and $2.4 million in Eagle (2023- $0) offset by
deferred tax recovery of $64.8 million associated with the reversal of deferred tax assets previously not
recognized in Caserones (2023 - $9.2 million).
f) The effects of tax inflation adjustment and revaluation of non-monetary assets in Argentina from the local
currency ARS to USD resulted in a $ 38.6 million tax recovery (2023 - $53.6 million tax expense) in Josemaria. The
revaluation of non-monetary assets in Brazil from the translation of deferred tax liabilities from the local currency
BRL to USD resulted in a net increase to deferred tax expense of $51.3 million in Brazil (2023 - $24.5 million
decrease to deferred tax expense).
Global Minimum Top-up Tax - Pillar Two
The Company is within the scope of OECD Pillar Two model rules. Among the jurisdictions where the Company
operates, Pillar Two legislation has been enacted in Sweden, Canada, Portugal and the Netherlands. On October 3,
2024, Brazil issued a Provisional Measure introducing Qualified Domestic Minimum Top-Up Tax to be effective from
2025 onwards.
The Company applies the exception to recognizing and disclosing information about deferred tax assets and liabilities
as provided by the amendments to IAS 12 in May 2023. The Company also accounts for any top up taxes as a current
tax when it is incurred. The Company has performed an analysis of the country-by-country reporting (CbCR) safe
harbour test, and concluded that no top-up tax was required in 2024.
Deferred tax liabilities, net
December 31, 2024 December 31, 2023
Deferred tax assets $ 191,254 $ 170,203
Deferred tax liabilities (643,850) (751,688)
Deferred tax liabilities, net $ (452,596) $ (581,485)
Net deferred tax liabilities of $430.8 million (2023 - $555.0 million) are expected to be settled after 12 months and net
deferred tax liabilities of $21.8 million (2023 - $26.5 million net deferred tax assets) are expected to be settled within
12 months.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 42 -
===== SIDA 103 =====
The movement in deferred income tax assets and liabilities during the year, without taking into consideration the
offsetting of balances within the same jurisdiction, is as follows:
As at
December 31,
2023
(Expensed)/
recovered
Discontinued
Operations
Balance sheet/
Equity
adjustment
Effects of
foreign
exchange
As at
December 31,
2024
Deferred tax assets:
Loss carryforwards $ 58,062 $ 96,155 — $ — $ (915) $ 153,302
Reclamation and
other closure
provisions 62,018 5,672 (15,263) — (3,633) 48,794
Deferred revenue 12,791 — (12,791) — — —
Future tax credits 4,315 — (4,315) — — —
Leases 5,936 19,988 (304) — (39) 25,581
Sinkhole provision 6,631 — — — — 6,631
Fair value gains/
losses (12,804) 22,022 7,615 — 1,549 18,382
Deferred tax liabilities:
Mineral properties,
plant & equipment (496,140) (10,431) 44,580 — 17,160 (444,831)
Right-of-use assets (31,304) (1,547) 385 — (27) (32,493)
Provisions (88,284) (5,538) 30,689 — (2,117) (65,250)
Mining royalty
taxes (9,589) (23,618) — — — (33,207)
Long-term
inventory (88,197) (34,504) 9,499 — (6,584) (119,786)
Foreign currency
contracts (9,162) 1,552 — — — (7,610)
Pension provision (580) — — — — (580)
Other 4,822 (4,786) (1,650) 290 (205) (1,529)
$ (581,485) $ 64,965 $ 58,445 $ 290 $ 5,189 $ (452,596)
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 43 -
===== SIDA 104 =====
As at
December 31,
2022
(Expensed)/
recovered
Balance Sheet/
Equity
adjustment
Effects of
foreign
exchange
As at
December 31,
2023
Deferred tax assets:
Loss carryforwards $ 5,624 $ 52,438 $ — $ — $ 58,062
Reclamation and other
closure provisions 65,130 (3,623) — 511 62,018
Deferred revenue 12,129 152 — 510 12,791
Future tax credits 6,563 (2,432) — 184 4,315
Leases 5,265 657 — 14 5,936
Sinkhole provision 6,631 — — — 6,631
Other 4,502 1,074 629 (1,383) 4,822
Deferred tax liabilities:
Mineral properties, plant
and equipment (656,975) (34,712) 197,550 (2,003) (496,140)
Right-of-use assets (5,208) (1,758) (24,321) (17) (31,304)
Provisions (23,633) (64,651) — — (88,284)
Mining royalty taxes (22,370) (13,141) 25,922 — (9,589)
Long-term inventory (73,366) (4,046) (10,785) — (88,197)
Fair value gains (15,095) 2,291 — — (12,804)
Foreign currency contracts (14,170) 5,376 (368) (9,162)
Pension provision (792) 192 — 20 (580)
$ (705,765) $ (62,183) $ 188,995 $ (2,532) $ (581,485)
Deferred tax assets are recognized for tax loss carry-forwards and other temporary differences to the extent that the
realization of the related tax benefit through future taxable profits is probable. The Company determined that it is
probable that sufficient future taxable profits will be available to allow the benefit of the deferred tax assets to be
utilized.
The Company did not recognize deferred tax assets of $1,058.7 million (2023 - $1,116.9 million) in respect of losses
amounting to $3,924.3 million (2023 - $4,141.0 million) that can be carried forward against future taxable income.
Caserones has approximately $4.2 billion in net operating losses which can be applied to future taxable income over
the mine life. A deferred tax asset has been recognized to the extent that the Company expects to realize sufficient
taxable profit in the foreseeable future.
The deferred mining tax liability in Candelaria has been revalued based on changes in future production estimates for
the mining royalty in Chile, resulting in a net additional deferred mining tax expense of $23.3 million (2023 -$39.4
million).
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 44 -
===== SIDA 105 =====
26. FINANCIAL INSTRUMENTS
Derivative instruments
From time to time, the Company uses derivative contracts as part of its risk management strategy to mitigate exposure
to foreign currencies and commodities. The Company maintains foreign currency forward and option contracts on
EUR, CAD, BRL, CLP, and SEK foreign currencies intended to limit the foreign exchange exposure of its forecasted
foreign currency denominated after-tax attributable operating and capital expenditures. Additional commodity
forward swap and option contracts are maintained to limit exposure to changes in the price of diesel fuel purchases at
Candelaria, and limit its exposure to changes in the price of copper and gold.
The foreign exchange and commodities contracts have not been designated as hedges for purposes of hedge
accounting and are measured at fair value with changes in fair value recognized in the consolidated statement of (loss)
earnings.
During the years ended December 31, 2024 and 2023, the Company entered into various foreign currency and
commodity contracts continuing its risk mitigation strategy. These include:
a) Foreign currency forward contracts
During the year ended December 31, 2024, the Company entered into USD/CAD foreign currency forward
contracts with a notional value of $499 million and average contract rates of CAD 1.40. These are set to expire
during 2025 with the majority being settled upon the completion of the Arrangement (Note 4).
During 2023, the Company entered into USD/SEK forward contracts with a notional value of SEK 845.7 million
and contract rates ranging from SEK 10.76 to SEK 10.92. These contracts partially expired through 2024 with
SEK 758 million expiring through 2025. During 2022, the Company also entered into EUR/USD forward
contracts.
b) Foreign currency option contracts
During the year ended December 31, 2024, the Company entered into zero cost collar contracts in USD/BRL
and USD/CLP currency pairs totaling $246 million (equivalent to BRL 1.3 billion) and $950 million (equivalent to
CLP 926 billion), respectively. The collar ranges on the respective contracts are an average of BRL 5.00 to BRL
6.11 and CLP 900 to CLP 1,085 and remaining contracts are set to expire through 2025 and 2026.
During 2023, the company entered into zero cost collar contracts in USD/BRL, USD/CLP, and USD/SEK currency
pairs totaling $321 million (equivalent to BRL 1.7 billion), $347 million (equivalent to CLP 303 billion), and SEK
396 million, respectively. The collar ranges on the respective contracts range from BRL 5.00 to BRL 6.12, CLP
800 to CLP 1,035, and SEK 10.35 to SEK 11.15. Remaining contracts are set to expire through 2025. During
2022, the Company also entered into CAD foreign currency option contracts.
c) Commodity contracts
During the year ended December 31, 2024, the Company entered into copper and gold collar contracts with
notional amounts of 21,500 metric tonnes of copper and 105,200 oz of gold. The average collar range for
copper was set between $4.10/lb to $4.52/lb and expired in May 2024. The average collar range for gold is set
between $2,500 to $3,261 per oz and are set to expire through 2025 and 2026.
An additional position was taken on diesel, with collar contracts in the amount of 67.5 million litres ("L"), with
average collar ranges of $0.50/L to $0.65/L. During the year, 13.5 million L expired, with the remainder
expiring through 2025.
During 2023, the Company entered into diesel forward swaps with a notional value of $55 million and average
contract rates of $0.68/L. As at December 31, 2024, the diesel forward swaps are fully expired.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 45 -
===== SIDA 106 =====
As at December 31, 2024, all EUR forwards have expired, while SEK options and forwards are set to expire through
2025 and remain a component of continuing operations.
The following tables outline the foreign currency and commodity derivative notional contract positions and their
expiry dates:
Expired in Expiring throughout:
Foreign currency forward contracts 2024 2025 2026
USD/CAD forwards1
Average contract price — 1.40 —
Position (USD millions) — 499 —
USD/SEK forwards2
Average contract price 10.89 10.83 —
Position (SEK millions) 322 758 —
EUR/USD forwards2
Average contract price 1.02 — —
Position (EUR millions) 52 — —
1 Subsequent to December 31, 2024, $463 million of the USD/CAD forwards were settled to facilitate the acquisition of Filo (Note 4)
2 EUR/USD and USD/SEK forwards expired in 2024 and expiring throughout 2025 reflect the position of continuing operations
Expired in Expiring throughout:
Foreign currency option contracts 2024 2025 2026
USD/BRL collars
Average contract price 5.01/6.33 5.06/6.04 5.07/6.04
Position (USD millions) 213 185 114
USD/CLP collars
Average contract price 882/1,040 872/1,032 904/1,060
Position (USD millions) 552 511 342
USD/CAD collars
Average contract price 1.30/1.40 — —
Position (CAD millions) 19 — —
USD/SEK collars1
Average contract price 10.35/11.15 — —
Position (SEK millions) 132 — —
1 USD/SEK collars expired in 2024 reflect only the position of continuing operations
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 46 -
===== SIDA 107 =====
Expired in Expiring throughout:
Commodity hedge contracts 2024 2025 2026
Copper collars
Average contract price ($/lb) 4.10/4.52 — —
Position (millions lbs) 47 — —
Gold collars
Average contract price ($/oz) — 2,500/3,125 2,500/3,455
Position (oz) — 62,000 43,200
Diesel collars
Average contract price ($/L) 0.50/0.65 0.50/0.65 —
Position (millions litres) 14 54 —
Diesel forward swaps
Average contract price ($/L) 0.667 — —
Position (USD millions) 27 — —
The Company’s net unrealized and realized (loss)/gain on foreign currency and commodity derivative contracts are as
follows:
2024 2023
Unrealized loss on derivative financial instruments:
Foreign currency contracts $ (87,692) $ (7,568)
Commodity hedge contracts 2,524 (896)
(85,168) (8,464)
Realized (loss)/gain on derivative financial instruments:
Foreign currency contracts 2,589 23,302
Commodity hedge contracts (4,639) 1,786
(2,050) 25,088
Total unrealized and realized (loss)/gain on derivative contracts: $ (87,218) $ 16,624
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 47 -
===== SIDA 108 =====
A summary of the fair values of unsettled derivative contracts recorded on the consolidated balance sheet is as
follows:
December 31, 2024 December 31, 2023
Foreign currency contracts:
Current asset position $ — $ 38,114
Non-current asset position — 9,397
Current liability position 39,416 1,124
Non-current liability position 24,487 3,148
Commodity contracts:
Current asset position 964 —
Non-current asset position 665 —
Current liability position — 896
Other contracts:
Chapada derivative current liability — 24,369
Fair values of financial instruments
The Company’s financial assets and financial liabilities have been classified into categories that determine their basis of
measurement. The following table shows the carrying values, fair values and fair value hierarchy of the Company’s
financial instruments as at December 31, 2024 and December 31, 2023:
December 31, 2024 December 31, 2023
Level
Carrying
value Fair value
Carrying
value Fair value
Financial assets
Fair value through profit or loss
Restricted funds 1 $ 8,665 $ 8,665 $ 59,979 $ 59,979
Trade receivables (provisional) 2 337,081 337,081 605,644 605,644
Marketable securities 1 60,060 60,060 14,268 14,268
Foreign currency contracts 2 — — 47,511 47,511
Commodity contracts 2 1,629 1,629 — —
Caserones purchase option 3 — — 44,438 44,438
$ 407,435 $ 407,435 $ 771,840 $ 771,840
Financial liabilities
Amortized cost
Debt 3 $ 1,756,972 $ 1,756,972 $ 1,208,600 $ 1,208,600
Caserones deferred consideration 2 112,833 112,833 116,210 116,210
Fair value through profit or loss
Pricing provisions on concentrate sales 2 $ 7,149 $ 7,149 $ 1,840 $ 1,840
Chapada derivative liability 2 — — 24,369 24,369
Foreign currency contracts 2 63,903 63,903 4,272 4,272
Diesel contracts 2 — — 896 896
$ 71,052 $ 71,052 $ 31,377 $ 31,377
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 48 -
===== SIDA 109 =====
Fair values of financial instruments are determined by valuation methods depending on hierarchy levels as defined
below:
Level 1 – Quoted market price in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted market prices included within Level 1 that are observable for the assets or
liabilities, either directly (i.e. observed prices) or indirectly (i.e. derived from prices).
Level 3 – Inputs for the assets or liabilities are not based on observable market data.
The Company calculates fair values based on the following methods of valuation and assumptions:
Marketable securities/debt and equity investments/restricted funds – The fair value of investments in shares and
bonds is determined based on the quoted market price.
Trade receivables/pricing provisions on concentrate sales – The fair value of trade receivables that contain
provisional pricing sales arrangements are valued using quoted forward market prices. The Company recognized
negative pricing adjustments of $77.7 million in revenue during the three months ended December 31, 2024
(December 31, 2023 - $17.1 million negative pricing adjustments). The Company recognized positive pricing
adjustments of $15.5 million in revenue during the year ended December 31, 2024 (December 31, 2023 - $80.1
million negative pricing adjustments).
Foreign currency and commodity contracts – The fair value of these derivatives are determined by the
counterparties to the contracts and are assessed by Management using pricing models based on active market
prices.
Caserones purchase option – The fair value of the Caserones purchase option was determined using a valuation
model that incorporates such factors as the mine's discounted cash flow projections, metal price volatility, expiry
date, and risk-free interest rate. The Company exercised the Caserones purchase option in July 2024. Upon
exercise, the asset was derecognized into equity of the Company.
Chapada derivative liability – The fair value of this derivative was determined using a valuation model that
incorporates such factors as metal prices, metal price volatility, expiry date, and risk-free interest rate. The
Company paid the final $25.0 million tranche related to the Chapada derivative liability in August 2024.
Caserones deferred consideration – The fair value of the Caserones deferred consideration has been discounted
at the estimated credit adjusted risk free rate applicable to future payments.
Debt – The fair values approximate carrying values as the interest rates are comparable to current market rates.
The carrying values of certain financial instruments maturing in the short-term approximate their fair values.
These financial instruments include cash and cash equivalents, trade and other receivables other than those
provisionally priced, and trade and other payables other than those provisionally priced, which are classified as
amortized cost.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 49 -
===== SIDA 110 =====
27. COMMITMENTS AND CONTINGENCIES
a) The Company has capital commitments of $333.9 million on various initiatives of which $304.1 million and $29.8
million relate to continuing and discontinued operations, respectively. Capital commitments of $157.6 million are
expected to be paid during 2025 of which $127.7 million is related to continuing operations.
b) The Chapada acquisition included contingent consideration of up to $125.0 million payable over five years from
the acquisition date if certain gold price thresholds are met. The Company paid $25.0 million tranches in each of
2020, 2021, 2022, 2023, and 2024. The final contingent consideration payment was made in 2024.
The Company has been provided with an indemnity for any tax liabilities that may arise for periods prior to the
date of the Chapada acquisition. For identified tax claims existing at the date of acquisition, the Company has
agreed to be liable for up to the first $21.0 million (BRL 101.5 million). While it is uncertain, no material liabilities
have been accrued as the Company believes material payment is not likely due to the nature of the tax claims.
c) The following summarizes total tax exposure under two contradictory assessments received from the Chilean
Internal Revenue Service (“IRS”). Given that the assessments relate to the same issue, the Company’s potential
exposure is expected to be limited to one of the below scenarios:
i) For taxation years 2014 through 2019, the IRS issued tax assessments denying tax deductions related to
interest expenses arising from an intercompany debt. The total of all assessments amounts to $265.3
million ($145.6 million in taxes plus interest and penalties of $119.7 million). If the Company loses the
dispute, it may be liable for an additional $96.3 million in accrued interest as of December 2024. All tax
refunds arising from the tax deductions related to the intercompany debt have been received up to
December 2024. The Company maintains its position that the assessments are inconsistent with Chilean tax
law and, therefore, without merit.
ii) On the same intercompany debt for taxation years 2016 through 2019, the Company has also received
assessments from the IRS seeking additional withholding taxes, including interest and penalties, on interest
payments made. The total of all assessments amounts to $246.6 million ($114.2 million in taxes plus interest
and penalties of $132.4 million). The Company may be liable for an additional $90.7 million in accrued
interest as of December 2024. All tax refunds arising from the tax deductions related to the intercompany
debt have been received up to December 2024. The Company maintains its position that the assessments
are inconsistent with Chilean tax law and, therefore, without merit.
The Company has filed claims against the tax assessments related to taxation years 2014 to 2019. No tax expense
has been accrued for these assessments as the Company believes its original filing position is in compliance with
tax regulations and intends to vigorously defend its position. The Company does not expect further assessments
to be issued related to this tax matter as the intercompany loan was amended in 2020 with an interest rate
accepted by the IRS.
d) In July 2022, a sinkhole was detected near the Company's Ojos del Salado operations in Chile. In October 2022,
the Company received an infraction notice from the environmental regulators covering four alleged violations of
its environmental permit for the Alcaparrosa underground mine, which forms part of the Company's Ojos del
Salado operations. In January 2025, the Company received a notice from the environmental regulators levying a
fine of $3.3 million and ordering the continued closure of the Alcaparrosa mine. The Company will review the
notification and determine the next steps relating to the charges that it allegedly breached its environmental
permit at its at Minera Ojos del Salado operation.
In addition, in May 2023, the Company received a civil environmental damage claim along with an injunction to
close the Alcaparrosa mine, from the state defence counsel, alleging that the Company did not fulfill its
environmental obligations under its environmental resolution. With respect to the environmental damage claim,
the Company is contesting the allegations that it allegedly breached its obligations under its environmental
resolution at its at Minera Ojos del Salado operation.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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e) The Company may be involved in legal proceedings arising in the ordinary course of business, including the
actions described below. The potential amount of the liability with respect to such legal proceedings is not
expected to materially affect the Company’s financial position. The Company believes the claims to be without
merit and the loss, if any, cannot be determined at this time for all contingencies. The Company has accordingly
not accrued any amounts related to the litigations below (unless otherwise noted). The Company intends to
vigorously defend these claims.
Two proposed class actions were filed against the Company and certain officers and directors. The first, in the
province of Ontario, on December 7, 2017 (Markowich v. Lundin Mining Corporation et al) and a second
overlapping action in the province of Québec on January 18, 2018 (Prévreau v. Lundin Mining Corporation et al).
Both proposed class actions seek damages of $132.3 million (C$175.0 million) and punitive damages of $7.6
million (C$10.0 million) and assert various statutory and other claims related to, among other things, alleged
misrepresentations and/or failure to make timely disclosure of material information about the Company’s
business and operations and, in particular, the operations of the Candelaria Mine and a rock slide at the
Candelaria Mine on October 31, 2017. The proposed Ontario class action asserts claims on behalf of a putative
class comprising persons who acquired securities of the Company between October 25, 2017, and November 29,
2017, whereas the proposed Québec class action asserts claims on behalf of only such persons who are resident
or domiciled in Québec. In June 2018, counsel to the plaintiffs in the Québec action agreed to a stay (i.e.,
indefinite cessation) of that proceeding in light of the Ontario action. On August 30, 2018, the Québec Superior
Court, on consent of the parties, stayed the Québec action indefinitely. On September 2, 2020, the plaintiff in the
Ontario action served motion materials for leave and certification with the Ontario Superior Court of Justice. On
January 6, 2022, the Ontario Superior Court of Justice denied the leave application and declined the motion for
certification. On May 24, 2023, the Ontario Court of Appeal granted the plaintiff’s appeal of this decision. In
August 2023, the defendants filed an application for leave to appeal the Ontario Court of Appeal decision to the
Supreme Court of Canada , which leave to appeal was granted on March 25, 2024. The Supreme Court of Canada
heard the appeal on January 15, 2025. Its decision is under reserve and is expected to be released in 2025.
28. SEGMENTED INFORMATION
The Company is engaged in mining, exploration and development of mineral properties at four operating sites located
in Chile, Brazil, and USA, and at the Josemaria Project located in Argentina. Operating segments are reported in a
manner consistent with the internal reporting provided to the executive leadership team who act as the operating
decision-makers. The chief operating decision makers consider the business from a site and project-level perspective.
Executive management are responsible for allocating resources and assessing performance of the operating segments.
The Company has identified five reportable segments which include four operating sites, and the Josemaria Project.
Discontinued operations includes results from the Neves-Corvo and Zinkgruvan segments (Note 3).
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 112 =====
For the year ended December 31, 2024
Candelaria Caserones Chapada Eagle Josemaria Other Total
Continuing
Operations
Discontinued
Operations Total
Chile Chile Brazil USA Argentina
Revenue $ 1,618,936 $ 1,153,625 $ 497,576 $ 152,467 $ — $ — $ 3,422,604 $ 694,801 $ 4,117,405
Cost of goods sold
Direct mine and mill costs (679,906) (709,383) (248,500) (90,969) — (1,198) (1,729,956) (410,093) (2,140,049)
Transportation (31,049) (34,703) (25,553) (13,508) — — (104,813) (31,173) (135,986)
Royalties (15,730) (32,106) (8,580) (7,442) — — (63,858) (3,961) (67,819)
Depreciation, depletion and amortization (313,058) (184,054) (76,524) (33,569) — (539) (607,744) (155,344) (763,088)
Reversal of inventory write-down — — 26,626 — — — 26,626 — 26,626
Gross profit (loss) 579,193 193,379 165,045 6,979 — (1,737) 942,859 94,230 1,037,089
General and administrative expenses — — — — — (58,349) (58,349) — (58,349)
Exploration and business development (10,124) (14,846) (5,636) (3,208) (8,307) (3,231) (45,352) (12,843) (58,195)
Finance (costs) income (26,922) (17,318) (25,673) (3,678) 21,510 (89,374) (141,455) (9,793) (151,248)
Other income (expense) 14,860 37,575 3,768 (2,265) 7,319 (85,342) (24,085) (8,798) (32,883)
Goodwill and asset impairment (55,918) — (93,443) (104,857) — — (254,218) (291,178) (545,396)
Partial suspension of underground operations cost — — — (36,073) — — (36,073) — (36,073)
Income tax (expense) recovery (237,879) (877) (62,211) 28,839 50,086 (7,931) (229,973) 13,711 (216,262)
Net earnings (loss) $ 263,210 $ 197,913 $ (18,150) $ (114,263) $ 70,608 $ (245,964) $ 153,354 $ (214,671) $ (61,317)
Capital expenditures $ 275,720 $ 143,965 $ 107,843 $ 21,222 $ 258,207 $ 350 $ 807,307 $ 154,960 $ 962,267
Total non-current assets1 $ 3,063,812 $ 1,374,683 $ 1,289,965 $ 107,516 $ 1,408,246 $ 6,581 $ 7,250,803 $ — $ 7,250,803
1 Non-current assets include long-term inventory, mineral properties, plant and equipment, and goodwill.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 113 =====
For the year ended December 31, 2023
Candelaria Caserones Chapada Eagle Josemaria Other Total
Continuing
Operations
Discontinued
Operations Total
Chile Chile Brazil USA Argentina
Revenue $ 1,329,599 $ 601,775 $ 461,175 $ 350,895 $ — $ — $ 2,743,444 $ 648,633 $ 3,392,077
Cost of goods sold
Direct mine and mill costs (695,734) (367,467) (278,692) (146,299) — (3,675) (1,491,867) (405,917) (1,897,784)
Transportation (30,759) (21,550) (30,057) (22,411) — (11) (104,788) (32,205) (136,993)
Royalties — (15,820) (8,568) (22,994) — — (47,382) (3,949) (51,331)
Depreciation, depletion and amortization (272,377) (108,489) (63,480) (52,050) (38) (1,439) (497,873) (155,723) (653,596)
Gross profit (loss) 330,729 88,449 80,378 107,141 (38) (5,125) 601,534 50,839 652,373
General and administrative expenses — — — — — (66,723) (66,723) — (66,723)
Exploration and business development (14,589) (622) (10,460) (5,691) (2,751) (9,897) (44,010) (11,682) (55,692)
Finance (costs) income (32,214) (7,901) (22,996) (4,336) 18,726 (42,708) (91,429) (11,270) (102,699)
Other (expense) income (402) 6,391 6,229 (597) 84,316 (4,093) 91,844 12,745 104,589
Income tax (expense) recovery (135,078) (19,265) 1,888 (2,899) (51,266) (7,746) (214,366) (2,233) (216,599)
Net earnings (loss) $ 148,446 $ 67,052 $ 55,039 $ 93,618 $ 48,987 $ (136,292) $ 276,850 $ 38,399 $ 315,249
Capital expenditures $ 380,112 $ 83,880 $ 72,291 $ 22,201 $ 285,893 $ 12,761 $ 857,138 $ 155,979 $ 1,013,117
Total non-current assets1 $ 3,134,028 $ 1,405,852 $ 1,391,417 $ 204,776 $ 1,161,771 $ 5,097 $ 7,302,941 $ 1,460,441 $ 8,763,382
1 Non-current assets include long-term inventory, mineral properties, plant and equipment, and goodwill.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 114 =====