===== SIDA 1 ===== NEWS RELEASE Vancouver, May 10, 2023 Lundin Gold Inc. 885 West Georgia Street, Suite 2000 Phone: +1 604 689 7842 lundingold.com Vancouver, BC, V6C 3E8 Fax: +1 604 689 4250 Email: info@lundingold.com LUNDIN GOLD REPORTS FIRST QUARTER OF 2023 RESULTS Momentum From 2022 Continues with Strong Production and Cost Performance Lundin Gold Inc. (TSX: LUG) (Nasdaq Stockholm: LUG) (OTCQX: LUGDF) ("Lundin Gold" or the "Company") is pleased to report results for the first quarter of 2023, highlighted by all-time high gold production of 140,021 ounces (“oz”) and gold sales of 134,691 oz at a cash operating cost1 of $644 per oz sold and all-in sustaining cost (“AISC”)1 of $728 per oz sold . Although the robust performance provides a strong start for the ye ar, the Company’s production guidance for 2023 remains unchanged as grade and gold production are expected to vary over the coming quarters. Due to the ramp up of sustaining capital activities starting in the second quarter, the most significant being the construction of the fourth tailings dam raise, the Company also maintains its AISC 1 guidance. All amounts are in U.S. dollars unless otherwise indicated. As at March 31, 2023, the Company maintained a strong cash balance of $210 million compared to $363 million as at December 31, 2022 with the decrease being driven by the use of cash for debt reduction initiatives and dividends to shareholders . During the three months ended March 31, 2023, the Company utilized cash to optimize its balance sheet through the full repayment of the gold prepay facility (“GPP”) of $208 million which provides the Company with greater exposure to the positive outlook on gold price . This one-time transaction resulted in additional interest and finance charges of $129 million with a resultant first quarter free cash flow of $(11.7). Ron Hochstein, President and CEO commented, “Our strong operating and financial results were achieved while maintaining our outstanding safety record. On the heels of an excellent quarter, the operations team at FDN recently reached the milestone of four million hours worked without a Lost Time Incident or Medical Aid Incident. We continue to realize increased cash flows from Fruta del Norte a s a result of our commitment to operational excellence and the full repayment of the gold prepay at the start of the year . The team at FDN is doing a great job, and I expect this positive momentum to continue.” 1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on page 13 of the Company's MD&A for the first quarter ended March 31, 2023 available on SEDAR. ===== SIDA 2 ===== 2 OPERATING AND FINANCIAL RESULTS SUMMARY The following two tables provide an overview of key operating and financial results. Three months ended March 31 2023 2022 Tonnes ore mined 427,735 379,629 Tonnes ore milled 392,332 373,407 Average mill head grade (g/t) 12.3 11.2 Average recovery 90.6% 90.2% Average mill throughput (tpd) 4,359 4,149 Gold ounces produced 140,021 121,665 Gold ounces sold 134,691 119,282 Three months ended March 31 2023 2022 Revenues ($’000) 256,728 216,472 Income from mining operations ($’000) 132,708 111,207 Earnings before interest, taxes, depreciation, and amortization ($’000)1 143,632 98,822 Adjusted earnings before interest, taxes, depreciation, and amortization ($’000)1 159,066 133,546 Net income ($’000) 51,465 23,182 Cash flow from operations ($’000) 144,439 127,330 Free cash flow ($’000)1 (11,653) 91,806 Average realized gold price ($/oz sold)1 1,952 1,862 Cash operating cost ($/oz sold)1 644 619 All-in sustaining costs ($/oz sold)1 728 696 Free cash flow per share ($)1 (0.05) 0.39 Adjusted net earnings ($‘000)1 67,014 57,550 Adjusted net earnings per share ($)1 0.28 0.25 Dividends paid per share ($) 0.10 - FIRST QUARTER HIGHLIGHTS Financial Results – Strong Cash Flow From Operations Underlines Inherent Strength of FDN • First quarter sales of 134,691 oz gold, consisting of 85,122 oz in concentrate and 49,569 oz as doré, at an average realized gold price1 of $1,952 per oz for total gross revenues from gold sales of $263 million. • Net of treatment and refining charges, revenues in the first quarter were $257 million. • Cash operating costs 1 and AISC 1 for the quarter were $ 644 and $ 728 per oz of gold sold, respectively. Sustaining capital is expected to increase significantly in future periods with the start of the fourth tailings dam raise and ramp up of other site infrastructure and improvement projects which is expected to result in higher AISC1 for the remainder of the year. 1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on page 13 of the Company's MD&A for the first quarter ended March 31, 2023 available on SEDAR. ===== SIDA 3 ===== 3 • The Company generated cash flow of $144 million from operations and negative free cash flow 1 of $(11.7) million or $(0.05) per share. Free cash flow1 was impacted by the full repayment of the GPP which resulted in additional interest and finance charge paid during the period of $129 million. • Notwithstanding the payment of $208 million to extinguish the GPP, the Company ended the quarter with a cash balance of $210 million. • Earnings before interest, taxes, depreciation, and amortization1 (“EBITDA”) and adjusted EBITDA1 were $144 million and $159 million, respectively. The difference is the derivative loss of $15.4 million in the quarter. • Net income was $51.5 million including a derivative loss of $15.4 million, and net of corporate, exploration, finance costs, and associated taxes on earnings. Adjusted earnings1, which exclude the derivative loss, were $67.0 million, or $0.28 per share. Production Results – All Time Highs Across the Board • Gold production during the f irst quarter totalled 140,021 oz, comprised of 88,236 oz of concentrate and 51,785 oz of doré. • Mine production ramped up to 427,735 tonnes of ore at an average grade of 11.7 grams per tonne. • The mill processed 392,332 tonnes of ore at an average throughput rate of 4,359 tonnes per day (“ tpd”). The throughput rate was below the guided average for the year of 4,400 tpd due to the completion of the relining of the SAG and ball mills late in the quarter. • The average grade of ore milled was 12.3 grams per tonne with average recovery at 90.6%. Recoveries were positively impacted by processing high -grade ore and an ore blending strategy that improved flotation recoveries. Liquidity and Capital Resources At the end of the first quarter of 2023, the Company is in a strong financial position: (in thousands of U.S. dollars) As at March 31, 2023 As at December 31, 2022 Financial Position: Cash 209,714 363,400 Working capital 256,853 194,804 Total assets 1,467,040 1,668,865 Long-term debt 434,175 667,966 The change in cash during the first quarter of 2023 was primarily due to the full repayment of the GPP of $208 million; principal repayments, interest and finance charges, including associated taxes, under the stream credit facility totalling $21.0 million; interest and principal repayments under the senior debt of $42.8 million; dividends of $23.6 million; and cash outflows of $7.2 million for sustaini ng capital expenditures. This is offset by cash generated from operating activities of $144 million and proceeds from the exercise of stock options and anti - dilution rights of $4.0 million. ===== SIDA 4 ===== 4 Capital Expenditures • Sustaining Capital: o Preparations were underway for the fourth raise of the tailings dam late in the first quarter with work starting in the second quarter and completion expected in the fourth quarter. o Construction of the new warehouse progressed as planned during the quarter with completion expected late in the second quarter. o Other sustaining capital projects such as a new sewage treatment plant, underground mine maintenance facility, and other efficiency improvement projects are expected to ramp up during the remainder of the year. o The 2023 conversion drilling program completed eight drill holes of approximately 1,400 metres during the quarter in distinct sectors of the FDN deposit. In the north -central sector, four drill holes were completed with positive assay results associated with hydrothermal breccias that confirmed mineralization continuity along the downdip extension. In the southern sec tor, four drill holes were completed and intercepted veins and veinlets hosted in volcanic rocks, generally associated to the gold mineralization at FDN. A complete table of results received to date can be found in Lundin Gold’s press release dated May 4, 2023. Health and Safety During the f irst quarter there were no Lost Time Incidents (“LTIs”) and one Medical Aid Incident (“MAIs”) on exploration activities. The Total Recordable Incident Rate across exploration and operations was 0.15 per 200,000 hours worked. In April 2023, the FDN operations reached a significant milestone of 4.0 million hours worked with neither an LTI nor a MAI. Community Various community projects supported by the Company continued to progress in the first quarter. Micro businesses established by local entrepreneurs and supported by the Company and Lundin Foundation have successfully become suppliers to FDN. The local text ile manufacturer, fire extinguisher maintenance company, and pest control / fumigation company continue to work with the mine. Also in the first quarter, the evaluation of potential new areas for local businesses has commenced. Efforts have continued to ensure that local farmers retain access to local, national, and international markets. Longstanding projects such as road maintenance, educational support to promote access to higher education, efficiency improvements in the agricultural sector and addressing infrastructure challenges continue to progress. The Company continues to engage with local indigenous peoples, especially the Shuar Federation of Zamora Chinchipe, to jointly implement projects that promote economic opportunities and the Shuar culture. In the first quarter, the Shuar Cultural Centre, which was constructed and is managed in partnership with the Lundin Foundation, hosted multiple events and received an increased number of visitors. Corporate The Company paid its quarte rly dividend of $0.10 per share on March 31, 2023 (April 4 for shares trading on Nasdaq Stockholm) based on a record date of March 13, 2023, for a total of $23.6 million. With the release of its first quarter 2023 results, the Company has declared a cash dividend of $0.10 per share, which is payable on June 27, 2023 (June 30 for shares trading on Nasdaq Stockholm) to shareholders of record on June 13, 2023. ===== SIDA 5 ===== 5 Several Board and Management changes were also made in the first quarter. At the end of the quarter, one of Newcrest’s representatives, Mr. Robert Thiele , resigned from the board of directors, and Ms. Jill Terry was appointed as his replacement. The Company also appointed Mr. Terry Smith as Chief Operating Officer and Mr. Chester See as Interim C hief Financial Officer during the quarter, concurrent with the retirement of Mr. Alessandro Bitelli, Executive Vice President and Chief Financial Officer . In April 2023, the Company announced that Mr. Christopher Kololian was hired as the Company’s Chief Financial Officer and is expected to commence in the role on July 1, 2023. Chester See will continue in the role of Senior Vice President, Finance. EXPLORATION – EXCITING DEVELOPMENTS BEING MADE IN HIGHLY PROSPECTIVE LAND PACKAGE Near-Mine Exploration Program The near mine drilling program restarted in February, following a change in drilling contractors at year end, and continues to explore extensions of major controlling structures of the FDN deposit targeting distinct sectors near FDN. In the first quarter, the program completed a total of 3,660 metres across eight holes, from surface and underground. • The surface drilling program is focused along the south extension of the East Fault. A total of six drill holes were completed with most intercepting significant hydrothermal alteration from epithermal systems. Initial positive intercepts indicate a new mineralized zone, FDN Sur (“FDNS”), and identified targets for further evaluation, Bonza Sur and Castillo. Three surface rigs are currently drilling, two of them exploring the extensions of FDNS and another at Bonza Sur. o At FDNS, three surface drill holes were completed, and all successfully intercepted hydrothermal alteration zones of similar composition to that found at FDN. The most recent results from hole FDNS-2023-19 point to significant exploration potential to be developed along the north strike and at depth, parallel to the operating mine. Remaining results from drill holes completed in the first quarter are pending. o At Bonza Sur, three surface drill holes were completed, and initial results suggest a new mineralized zone located only one kilometre so uth from FDN. The intercepted gold mineralization is hosted in a wide hydrothermal alteration zone along the north -south strike direction. This is coincident with a large soil gold anomaly that extends continuously for more than 1.2 kilometres. o At Castillo, drill results indicate a new mineralized zone to the south of FDN. This sector is located underneath the Suarez Basin and to the west of the East Fault, in a similar geological setting to FDN and FDNS. • The underground drilling program focused on the continuity of FDN at depth and explored new areas across the West Fault. Two drill holes were completed in the north central part of FDN, and drill hole UGE-W-23-018 intercepted narrow gold mineralization located west from the West Fault, which will be followed up with further drilling during the year. A complete table of results received to date can be found in Lundin Gold’s press release dated May 4, 2023. Regional Exploration Program The regional drilling program restarted late in the first quarter with one drill hole in progress at Quebrada La Negra located along the southwestern basin border. The drill hole is investigating the northern continuity of a major fault where wide hydrothermal alteration zones with breccias and/or veins and disseminated sulfides were intercepted during the 2022 drilling program. ===== SIDA 6 ===== 6 The regional program will continue to advance in the identification of important indicators that point toward the presence of buried epithermal deposits in the southern basin. New targets of interest have been identified and will be tested targeting new potentially mineralized structures. Newcrest Earn-In Agreement On the concessions held by the Company’s subsidiary, Surnorte S.A., a second phase of scout drilling commenced at the Gamora Project, located in southeast Ecuador. This work is being conducted by Newcrest Mining Limited (“Newcrest”) as the operator under an earn-in agreement with Lundin Gold pursuant to which Newcrest can earn up to a 50% interest in eight exploration concessions located to the north and south of Fruta del Norte. The current phase of diamond core drilling at Gamora is focused on testing priority copper-gold targets in the Mirador copper porphyry district. The program is planned to finish in June 2023. OUTLOOK – POSITIONED TO GENERATE STRONG SHAREHOLDER VALUE FOR YEARS TO COME Consistent with previously announced guidance, gold production at FDN for 2023 is estimated to be between 425,000 to 475,000 oz based on an average throughput rate of 4,400 tpd, an increase from the average throughput of 4,274 tpd achieved in 2022. The head grade is estimated to average 9.67 g/t, with fluctuations expected during the year as different sections of the ore body are mined. Average mill recovery for the year is estimated at 90%. Lundin Gold’s performance in the first quarter of 2023 provides a strong foundation for the rest of the year, and the Company’s produc tion guidance of 425,000 to 475,000 oz and AISC1 1 of $870 to $940 for 2023 remain unchanged. Sustaining capital is expected to increase over the remaining quarters of 2023 with construction of the fourth raise of the tailings dam starting in the second quarter as well as several other capital projects. In addition, the conversion drilling program, aiming to convert Inferred to Indicated Mineral Resources is planned to continue. Exploration drilling, on the near mine program, is planned to incre ase from 15,500 metres to 23,000 metres of drilling for 2023 as a result of positive results recently received. The near mine drilling program will continue to advance exploration of the recently identified FDNS , Bonza Sur, and Castillo targets near FDN. Another rig is planned to be incorporated in the second quarter, bringing the total number of surface rigs to four. The regional drilling program is planned to focus on the southern Suarez Basin, advancing along the eastern and western borders of the Basi n. Its objective is to follow up on the numerous target areas identified during the 2022 program and test new and unexplored targets. The regional drilling program is planned to comprise a total of 12,500 metres for the year, with one rig currently opera ting. The estimated exploration budget for 2023 is anticipated to increase from $21.1 million to $24.6 million. The Company anticipates declaring quarterly dividends of at least $0.10 per share, equivalent to approximately $100 million annually, based on currently issued and outstanding shares. Qualified Persons The technical information relating to FDN contained in this News Release has been reviewed and approved by Ron Hochstein P. Eng, Lundin Gold's President and CEO who is a Qualified Person under NI 43-101. The disclosure 1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on page 13 of the Company's MD&A for the first quarter ended March 31, 2023 available on SEDAR. ===== SIDA 7 ===== 7 of exploration information contained in this press release was prepared by Andre Oliveira, P.Geo, Lundin Gold’s V.P. Exploration, who is a Qualified Person in accordance with the requirements of NI 43-101. Webcast and Conference Call The Company will host a conference call and webcast to discuss its results on Thursday, May 11 at 7:00 a.m. PT, 10:00 a.m. ET, 4:00 p.m. CET. Conference Call Dial-In Numbers: Participant Dial-In North America: +1 416-764-8659 Toll-Free Participant Dial-In North America: +1 888-664-6392 Participant Dial-In Sweden: 0200899189 Conference ID: Lundin Gold / 42623507 A link to the webcast will be available on the Company’s website, www.lundingold.com. A replay of the conference call will be available two hours after the completion of the call until Thursday, May 25, 2023. Toll Free North America Replay Number: +1 888-390-0541 International Replay Number: +1 416-764-8677 Replay passcode: 623507 # About Lundin Gold Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador and a large exploration land package that hosts the Fruta del Norte deposit at its northern edge. Fruta del Norte is among the highest-grade operating gold mines in the world. The Company's board and management team have extensive expertise in mine operations and are dedicated to operating Fruta del Norte responsibly. The Company operates with transparency and in accordance with international best practices. Lundin Gold is commi tted to delivering value to its shareholders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact. The Company believes that the value created through the development of Fruta del Norte will benefit its shareholders, the Government and the citizens of Ecuador. Non-IFRS Measures This news release refers to certain financial measures, such as average realized gold price per oz sold, EBITDA, adjusted EBITDA, cash operating cost per oz sold, all-in sustaining cost, free cash flow, free cash flow per share, and adjusted earnings, which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies. These me asures have been derived from the Company's financial statements because the Company believes that, with the achievement of commercial production, they are of assistance in the understanding of the results of operations and its financial position. Certain additional disclosures for t hese specified financial measures have been incorporated by reference and can be found on page 13 of the Company's MD&A for the three months ended March 31, 2023 available on SEDAR. ===== SIDA 8 ===== 8 Additional Information The information in this release is subject to the disclosure requirements of Lundin Gold under the EU Market Abuse Regulation. This information was publicly communicated on May 10, 2023 at 4:30 p.m. Pacific Time through the contact persons set out below. For more information, please contact Ron F. Hochstein Finlay Heppenstall President and CEO Director, Investor Relations and Corporate Development Tel (Ecuador): +593 2-299-6400 Tel: +1 604 806 3089 Tel (Canada): +1-604-806-3589 finlay.heppenstall@lundingold.com ron.hochstein@lundingold.com Caution Regarding Forward-Looking Information and Statements Certain of the information and statements in this press release are considered "forward -looking information" or "forward -looking statements" as those terms are defined under Canadian securities laws (collectively referred to as "forward -looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as "believes", "anticipates", "expects", "is expected", "scheduled", "estimates", "pending", "intends", "plans", "forecasts", "targets", or "hopes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "w ill", "should" "might", "will be taken", or "occur" and similar expressions) are not statements of historical fact and may be forward -looking statements. By their nature, forward -looking statements and information involve assumptions, inherent risks and un certainties, many of which are difficult to predict, and are usually beyond the control of management, that could cause actual results to be materially different from those expressed by these fo rward- looking statements and information. Lundin Gold believes that the expectations reflected in this forward -looking information are reasonable, but no assurance can be given that these expectations will prove to be correct. Forward -looking information should not be unduly relied upon. This information speaks only as of the date of this press release, and the Company will not necessarily update this information, unless required to do so by securities laws. This press release contains forward-looking information in several places, such as in statements relating to the Company’s 2023 production outlook, including estimates of gold production, grades recoveries and AISC; operating plans; expected sales receipts, cash f low forecasts and financing obligations; its estimated capital costs; expected management changes; be nefits of the Company’s community programs; the Company’s declaration and payment of dividends pursuant to its dividend policy; the timing and the success of its drill program at Fruta del Norte and its other exploration activities; and estimates of Minera l Resources and Reserves at Fruta del Norte. There can be no assurance that such statements will prove to be accurate, as Lundin Gold's actual results and future events could differ materially from those anticipated in this forward-looking information as a result of the factors discussed in the "Risk Factors" section in Lundin Gold's Annual Information Form dated March 31, 2023, which is available at www.lundingold.com or on SEDAR. Lundin Gold's actual results could differ materially from those anticipated. Factors that could cause actual results to differ materially from any forward-looking statement or that could have a material impact on the Company or the trading price of its shares include: risks related to political and economic instability in Ecuador; risks associated with the Company's community relationships; risks related to estimates of production, cash flows and costs; risks inherent to mining operations; shortages of crit ical supplies; the cost of non -compliance and compliance costs; control of the Company's largest shareholders; volatility in the price of gold; failure of the Company to maintain its obligations under its debt facilities; risks related to Lundin Gold’s compliance with environmental laws and liability for environmental contamination; the lack of availability of infrastructure; the Company's reliance on one mine; security risks to the Company, its assets and its personnel; risks related to illegal mining; exploration and development risks; the impacts of a pandemic virus outbreak; risks related to the Company’s ability to obtain, maintain or renew regulatory approvals, permits and licenses; uncertainty with and changes t o the tax regime in Ecuador; the reliance of the Company on its information systems and the risk of cyber-attacks on those systems; the imprecision of Mineral Reserve and Resource estimates; deficient or vulnerable title to concessions, easements and surface rights; inherent s afety hazards and risk to the health and safety of the Company’s employees and contractors; risks related to the Company’s workforce and its labour relations; key talent recruitment and retention of key personnel; volatility in the market price of the Company’s shares; measures to protect endangered species and critical habitats; social media and reputation; the adequacy of the Company’s insurance; risks relating to the declaration of dividends; uncertainty as to reclamation and decommissioning; the ability of Lundin Gold to ensure compliance with anti- bribery and anti -corruption laws; the uncertainty regarding risks posed by climate change; limits of disclosure and internal controls; the potential for litigation; and risks due to conflicts of interest. ===== SIDA 9 ===== Q1 2023 ===== SIDA 10 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) INTRODUCTION This Management’s Discussion and Analysis (“MD&A”) of Lundin Gold Inc. and its subsidiaries (collectively, “Lundin Gold” or the “Company”) provides a detailed analysis of the Company’s business and compares its financial results for the three months ended March 31, 2023 with those of the same period from the previous year. This MD&A is dated as of May 10, 2023 and should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements and related notes thereto for the three months ended March 31, 2023, which are prepared in accordance with IAS 34: Interim Financial Statements, and the Company’s audited annual consolidated financial statements and related notes thereto, which are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), and the MD&A for the fiscal year ended December 31, 2022. Other continuous disclosure documents, including the Company’s press releases , quarterly and annual reports and annual information form , are available through its filings with the securities regulatory auth orities in Canada at www.sedar.com. Lundin Gold, headquartered in Vancouver, Canada, owns 28 metallic mineral concessions and three construction material concessions covering an area of approximately 64,454 hectares in southeast Ecuador, including the Fruta del Norte gold mine (“Fruta del Norte” or “FDN”). Fruta del Norte is comprised of seven concessions covering an area of approximately 5,566 hectares and is located approximately 140 km east-northeast of the City of Loja. Fruta del Norte is one of the highest-grade gold mines in production in the world today. The Company's board and management team have extensive expertise and are dedicated to operating Fruta del Norte responsibly and pursuing growth. The Company operates with transparency and in accordance with international best practices. Lundin Gold is committed to delivering value to its shareholders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact. The Company believes that the value created through the operations of Fruta del Norte will benefit its shareholders, the Government and the citizens of Ecuador. FIRST QUARTER 2023 HIGHLIGHTS AND ACTIVITIES Lundin Gold’s momentum from 2022 continued in the first quarter of 2023 with an all -time high in gold production of 140,021 ounces (“oz”) and gold sales of 134,691 oz at a cash operating cost1 of $644 per oz sold and all-in sustaining cost (“AISC”) 1 of $728 per oz sold . From this, revenues and adjusted earnings 1 of $257 million and $ 67.0 million, respectively, were realized during the quarter. As at March 31, 2023, the Company maintained a strong cash balance of $210 million compared to $363 million as at December 31, 2022 with the decrease being driven by the use of cash for debt reduction initiatives and dividends to shareholders. During the three months ended March 31, 2023, the Company utilized cash to optimize its balance sheet through the full repayment of the gold prepay facility (“GPP”) of $208 million which provides the Company with greater exposure to the positive outlook on gold price. This one -time transaction resulted in additional int erest and finance charges of $129 million with a resultant first quarter free cash flow of $(11.7). Production during the first quarter of 2023 was driven by processing ore with an average grade of 12.3 grams per tonne (“g/t”), the highest quarterly average grade achieved to date. The mine deferred certain lower grade stopes to later this year in order to complete additional geotechnical work to maximize mining recovery , which factored in the average grade processed during the period. Although the robust performance during the first quarter of 2023 provides a strong start for the year, the Company’s production guidance of 425,000 to 475,000 oz for 2023 remains unchanged as grade and gold production are expected to vary over the coming quarters. Notwithstanding the reported AISC1 for the quarter, due to the ramp up of sustaining capital activities starting in the second quarter, the most significant being the construction of the fourth tailings dam raise, the Company also maintains its AISC1 guidance. The following two tables provide an overview of key operating and financial results achieved during the first quarter of 2023 compared to the same period in 2022. 1 Refer to “Non-IFRS Measures” section in this MD&A. 1 ===== SIDA 11 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Three months ended March 31, 2023 2022 Tonnes ore mined 427,735 379,629 Tonnes ore milled 392,332 373,407 Average mill head grade (g/t) 12.3 11.2 Average recovery 90.6% 90.2% Average mill throughput (tpd) 4,359 4,149 Gold ounces produced 140,021 121,665 Gold ounces sold 134,691 119,282 Three months ended March 31, 2023 2022 Revenues ($’000) 256,728 216,472 Income from mining operations ($’000) 132,708 111,207 Earnings before interest, taxes, depreciation, and amortization ($’000)1 143,632 98,822 Adjusted earnings before interest, taxes, depreciation, and amortization ($’000)1 159,066 133,546 Net income ($’000) 51,465 23,182 Basic income per share ($) 0.22 0.10 Cash provided by operating activities ($’000) 144,439 127,330 Free cash flow ($’000)1 (11,653) 91,806 Average realized gold price ($/oz sold)1 1,952 1,862 Cash operating cost ($/oz sold)1 644 619 All-in sustaining costs ($/oz sold)1 728 696 Free cash flow per share ($)1 (0.05) 0.39 Adjusted earnings ($‘000)1 67,014 57,550 Adjusted earnings per share ($)1 0.28 0.25 Dividends paid per share ($) 0.10 - 1 Refer to “Non-IFRS Measures” section. 2 ===== SIDA 12 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) The difference between net income and adjusted earnings1 during the first quarter of 2023 is due to non-cash derivative losses of $15.4 million associated with fair value accounting of the stream facility. This non-cash item is driven by numerous factors including expected production profile, anticipated forward gold and silver prices, and yields. Non - cash derivative gains (or losses) associated with decreased (or increased) short -term production and anticipated decreasing (or increasing) forward gold and silver prices are recorded in the statement of operations, while non -cash derivative gains (or losses) associated with increasing (or decreasing) yields are recorded in the statement of other comprehensive income. These non-cash gains or losses are derived from complex valuation modelling and accounting treatment which are explained in more detail later in this MD&A. Revaluation of these obligations has and will continue to result in considerable period-to-period volatility i n the Company’s net income, comprehensive income, current and long-term liabilities and do not necessarily reflect the amounts that will actually be repaid when the obligations become due. Operating and Financial Results During the First Quarter of 2023 • Mine production ramped up to 427,735 tonnes of ore at an average grade of 11.7 grams per tonne. • The mill processed 392,332 tonnes of ore at an average throughput rate of 4,359 tpd. The throughput rate was below the guided average for the year of 4,400 tpd due to the completion of the relining of the SAG and ball mills late in the quarter. • The average grade of ore milled was 12.3 grams per tonne with average recovery at 90.6%. Recoveries were positively impacted by processing high -grade ore and an ore blending strategy that improve d flotation recoveries. • Gold production was 140,021 oz, comprised of 88,236 oz in concentrate and 51,785 oz as doré. The Company sold a total of 134,691 oz of gold, consisting of 85,122 oz in concentrate and 49,569 oz as doré at an average realized gold price1 of $1,952 per oz for total gross revenues from gold sales of $263 million. Net of treatment and refining charges, revenues were $257 million. • Cash operating costs1 and AISC1 were $644 and $728 per oz of gold sold, respectively. Sustaining capital is expected to increase significantly in future periods with the start of the fourth tailings dam raise and ramp up of other site infrastructure and improvement projects which is expected to result in higher AISC 1 for the remainder of the year. • The Company generated cash flow of $ 144 million from operations and negative f ree cash flow ¹ of $(11.7) million or $(0.05) per share. Free cash flow 1 was impacted by the full repayment of the gold prepay facility which resulted in additional interest and finance charge paid during the period of $129 million. • Notwithstanding the payment of $20 8 million to extinguish the gold prepay facility, the Company ended the quarter with a cash balance of $210 million. • Earnings before interest, taxes, depreciation, and amortization1 (“EBITDA”) and adjusted EBITDA1 were $144 million and $159 million, respectively. The difference is the derivative loss of $15.4 million in the quarter. • Net income was $51.5 million including a derivative loss of $15.4 million, and net of corporate, exploration, finance costs, and associated taxes on earnings. Adjusted earnings¹, which exclude the derivative loss, were $67.0 million, or $0.28 per share. Update to Mineral Reserve and Mineral Resource Estimates On March 31, 2023, the Company filed a new technical report prepared in accordance with NI 43-101 for the Fruta del Norte mine. This report entitled “Amended NI 43 -101 Technical Report Fruta del Norte Mine Ecuador” (the “FDN Technical Report”)2, replaces the Company’s previous technical report entitled “Fruta del Norte Project Ecuador NI 43- 101 Technical Report on Feasibility Study”, dated June 2016 with an effective date of April 30, 2016, filed on SEDAR under the Company’s profile at www.sedar.com (the “2016 Technical Report”). The conversion drilling program at Fruta del Norte successfully resulted in the replacement of all mined Mineral Reserves since the beginning of operations and added additional Mineral Reserves. 1 Refer to “Non-IFRS Measures” section. 2 This report supersedes the report dated March 29, 2023, titled “NI 43-101 Technical Report Fruta del Norte Mine Ecuador” in its entirety. 3 ===== SIDA 13 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Comparison of Reserve Estimates(3)(4)(5)(6)(7) Tonnage (M t) Grade (g/t Au) Contained Metal (M oz Au) Grade (g/t Ag) Contained Metal (M oz Ag) 2016 Reserve(1) Proven 0 0 0 0 0 Probable 15.49 9.67 4.82 12.7 6.34 Total 15.49 9.67 4.82 12.7 6.34 2022 Reserve(2) Proven 10.75 9.95 3.44 11.6 4.00 Probable 7.23 6.81 1.58 11.2 2.60 Total 17.98 8.68 5.02 11.4 6.60 Notes: 1. For details of the 2016 estimate, see the 2016 Technical Report. 2. For details of the 2022 estimate, see the FDN Technical Report. The Qualified Person for the estimate is Jason Cox, P.Eng., an employee of SLR Consulting. The estimate has an effective date of December 31, 2022. 3. Mineral Reserves were estimated using key inputs listed in the table below: Key Input 2016 Technical Report FDN Technical Report Unit Gold Price 1,400 1,400 $/oz Transverse Stoping Mining Cost 61 51 $/t Drift & Fill Mining Cost 80 77 $/t Process, Surface Ops, G&A Cost 75.8 64 $/t Dilution Factor 8 8 Percent Concentrate Transport & Treatment 65.9 80 $/oz Royalty 77 76 $/oz Gold Metallurgical Recovery 93.9 88.5 Percent 4. Gold cut-off grades for the different mining methods are listed in the table below: Gold Cut-off Grade 2016 Technical Report FDN Technical Report Unit Transverse Stope 4.7 4.2 g/t Drift and Fill 5.3 5.0 g/t 5. Silver was not considered in the calculation of the cut-off grade. 6. Tonnages are rounded to the nearest 1,000 t, gold grades are rounded to two decimal places, and silver grades are rounded to one decimal place. Tonnage and grade measurements are in metric units; contained gold and silver are reported as thousands of troy ounces. 7. Rounding as required by reporting guidelines may result in summation differences. Capital Expenditures Sustaining Capital • Preparations were underway for the fourth raise of the tailings dam late in the first quarter with work starting in the second quarter and completion expected in the fourth quarter. • Construction of the new warehouse progressed as planned during the quarter with completion e xpected late in the second quarter. • Other sustaining capital projects such as a new sewage treatment plant , underground mine maintenance facility, and other efficiency improvement projects are expected to ramp up during the remainder of the year. 4 ===== SIDA 14 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) • The 2023 conversion drilling program completed eight drill holes of approximately 1,400 metres during the quarter in distinct sectors of the FDN deposit. In the north-central sector, four drill holes were completed with positive assay results associated with hydrothermal breccias that confirmed mineralization continuity along the downdip extension. In the southern sector, four drill holes were completed and intercepted veins and veinlets hosted in volcanic rocks, generally associated to the gold mineralization at FDN. A complete table of results received to date can be found in Lundin Gold’s press release dated May 4, 2023. Health and Safety and Community Health and Safety • During the quarter there were no Lost Time Incidents ("LTI”) and one Medical Aid Incident (“MAI”) on exploration activities. • The Total Recordable Incident Rate across exploration and operations was 0.15 per 200,000 hours worked. • In April 2023, the FDN operations reached a significant milestone of 4.0 million hours worked with neither an LTI nor a MAI. Community Various community projects supported by the Company continued to progress in the first quarter. Micro businesses established by local entrepreneurs and supported by the Company and Lundin Foundation have successfully become suppliers to FDN. The local textile manufacturer, fire extinguisher maintenance company, and pest control / fumigation company continue to work with the mine. Also in the first quarter, the evaluation of po tential new areas for local businesses has commenced. Efforts have continued to ensure that local farmers retain access to local, national , and international markets. Longstanding projects such as road maintenance, educational support to promote access t o higher education, efficiency improvements in the agricultural sector and addressing infrastructure challenges continue to progress. The Company continues to engage with local indigenous peoples, especially the Shuar Federation of Zamora Chinchipe, to jointly implement projects that promote economic opportunities and the Shuar culture. In the first quarter, the Shuar Cultural Center, which was constructed and is managed in partnership with the Lundin Foundation, hosted multiple events and received an increased number of visitors. Exploration Near Mine Exploration Program The near mine drilling program restarted in February, following a change in drilling contractors at year end, and continues to explore extensions of major controlling structures of the FDN deposit targeting distinct sectors near FDN. In the first quarter, the program completed a total of 3,660 metres across eight holes, from surface and underground. • The surface drilling program is focused along the south extension of the East Fault. A total of six drill holes were completed with most intercepting significant hydrothermal alteration from epithermal systems. Initial positive intercepts indicate a new mineralized zone, FDN Sur (“FDNS”), and identified targets for further evaluation, Bonza Sur and Castillo. Three surface rigs are currently drilling, two of them exploring the extensions of FDNS and another at Bonza Sur. o At FDNS, three surface drill holes were completed, and all successfully intercepted hydrothermal alteration zones of similar composition to that found at FDN. The most recent results from hole FDNS-2023-19 point to significant exploration potential to be developed along the north strike and at depth, parallel to the operating mine. Remaining results from drill holes completed in the first quarter are pending. o At Bonza Sur, three surface drill holes were completed, and initial results suggest a new mineralized zone located only one kilometre south from FDN. The intercepted gold mineralization is hosted in a wide hydrothermal alteration zone along the north-south strike direction. This is coincident with a large soil gold anomaly that extends continuously for more than 1.2 kilometres. 5 ===== SIDA 15 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) o At Castillo, drill results indicate a new mineralized zone to the south of FDN. This sector is located underneath the Suarez Basin and to the west of the East Fault, in a similar geological setting to FDN and FDNS. • The underground drilling program focused on the continuity of FDN at depth and explored new areas across the West Fault. Two drill holes were completed in the north central part of FDN, and drill hole UGE-W-23-018 intercepted narrow gold mineralization located west from the West Fault, which will be followed up with further drilling during the year. A complete table of results received to date can be found in Lundin Gold’s press release dated May 4, 2023. Regional Exploration Program The regional drilling program restarted late in the first quarter with one drill hole in progress at Quebrada La Negra located along the southwestern basin border . The drill hole is investigating the north ern continuity of a major fault where wide hydrothermal alteration zones with breccias and/or veins and disseminated sulfides were intercepted during the 2022 drilling program. The regional program will continue to advance in the identification of important indicators that point toward the presence of buried epithermal deposits in the southern basin. New targets of interest have been identified and will be tested targeting new potentially mineralized structures. Newcrest Earn-In Agreement On the concessions held by the Company’s subsidiary, Surnorte S.A., a second phase of scout drilling commenced at the Gamora Project, located in southeast Ecuador. This work is being conducted by Newcrest Mining Limited (“Newcrest”) as the operator under an earn-in agreement with Lundin Gold pursuant to which Newcrest can earn up to a 50% interest in eight exploration concessions located to the north and south of Fruta del Norte . The current phase of diamond core drilling at Gamora is focused on testing priority copper -gold targets in the Mirador copper porphyry district. The program is planned to finish in June 2023. Corporate • The Company paid its quarterly dividend of $0.10 per share on March 31, 2023 (April 4 for shares trading on Nasdaq Stockholm) based on a record date of March 13, 2023, for a total of $23.6 million. • With the release of its first quarter 2023 results, the Company has declared a cash dividend of $0.10 per share, which is payable on June 27, 2023 (June 30 for shares trading on Nasdaq Stockholm) to shareholders of record on June 13, 2023. • One of Newcrest’s representatives, Mr. Robert Thiele resigned from the board of directors at the end of the quarter, and Ms. Jill Terry was appointed to the board as his replacement. • During the quarter, the Company appointed Mr. Terry Smith as Chief Operating Officer and Mr. Chester See as Interim Chief Financial Officer concurrent with the retirement of Mr. Alessandro Bitelli, Executive Vice President and Chief Financial Officer. • In April 2023 , the Company announced that Mr. Chris topher Kololian was hired as the Company’s Chief Financial Officer and is expected to commence in the role on July 1, 2023. Chester See will continue in the role of Senior Vice President, Finance. 6 ===== SIDA 16 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) SUMMARY OF QUARTERLY FINANCIAL RESULTS The Company’s quarterly financial statements are reported under IFRS as applicable to interim financial reporting. The following table provides highlights from the Company’s financial statements for the past eight quarters (unaudited). 2023 2022 2022 2022 Q1 Q4 Q3 Q2 Revenues $ 256,728 $ 210,961 $ 210,425 $ 177,808 Income from mining operations $ 132,708 $ 92,095 $ 83,930 $ 82,522 Derivative gain (loss) for the period $ (15,434) $ 29,217 $ 41,838 $ 39,986 Net income (loss) for the period $ 51,465 $ (68,259) $ 62,673 $ 55,962 Basic income (loss) per share $ 0.22 $ (0.29) $ 0.27 $ 0.24 Diluted income (loss) per share $ 0.22 $ (0.29) $ 0.26 $ 0.24 Weighted-average number of common shares outstanding Basic 236,062,529 235,332,039 235,165,784 234,933,975 Diluted 238,123,015 235,332,039 236,882,976 236,847,992 Additions to property, plant and equipment $ 4,384 $ 15,253 $ 15,178 $ 14,532 Total assets $ 1,467,040 $ 1,668,865 $ 1,634,590 $ 1,664,030 Long-term debt $ 434,175 $ 667,966 $ 589,919 $ 645,724 Working capital $ 256,853 $ 194,804 $ 253,673 $ 253,921 2022 2021 2021 2021 Q1 Q4 Q3 Q2 Revenues $ 216,472 $ 186,440 $ 190,753 $ 216,145 Income from mining operations $ 111,207 $ 91,646 $ 89,431 $ 110,604 Derivative loss for the period $ (34,724) $ (36,001) $ (636) $ (25,599) Net income for the period $ 23,182 $ 28,789 $ 56,673 $ 49,984 Basic income per share $ 0.10 $ 0.12 $ 0.24 $ 0.22 Diluted income per share $ 0.10 $ 0.12 $ 0.24 $ 0.21 Weighted-average number of common shares outstanding Basic 233,809,773 233,211,843 232,723,880 231,998,447 Diluted 235,774,444 235,376,672 235,017,999 234,508,000 Additions to property, plant and equipment $ 9,184 $ 5,266 $ 20,101 $ 16,157 Total assets $ 1,735,223 $ 1,685,113 $ 1,630,830 $ 1,590,849 Long-term debt $ 752,482 $ 739,977 $ 748,856 $ 772,361 Working capital $ 273,680 $ 217,221 $ 136,139 $ 109,010 7 ===== SIDA 17 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Three months ended March 31, 2023 compared to the three months ended March 31, 2022 The Company generated net income of $51.5 million during the first quarter of 2023 compared to $23.2 million during the first quarter of 2022. Net income was generated from the recognition of revenues of $257 million and income from mining operations of $ 133 million as well as other income of $0.5 million. This is offset by a derivative loss of $15.4 million, finance expense of $ 21.1 million, income tax expense of $ 33.8 million, and other expenses totalling $ 11.4 million. During the first quarter of 2022, net income was generated from the recognition of revenues of $216 mill ion and income from mining operations of $111 million offset by a derivative loss of $34.7 million, finance expense of $27.3 million, income tax expense of $16.9 million, and other expenses totalling $9.1 million. Income from mining operations Net income from mining operations increased to $133 million compared to $111 million during the same quarter in 2022. Cost of goods sold of $ 124 million was comprised of operating expenses of $ 72.5 million; royalties of $ 14.3 million; and depletion and depreciation of $37.3 million. During the same period in 2022, cost of goods sold was $105 million. The increase in both cost of goods sold and net income from mining operations was primarily driven by the increase in oz sold and higher gold prices. Exploration Exploration costs were $3.8 million in the quarter compared to $2.8 million during the same period in 2022 . Activities during the quarter consisted of drilling on two programs, the regional program and the near-mine program, the latter of which only commenced during the second half of 2022. Corporate administration Corporate administration costs increased from $5.9 million during the first quarter of 2022 to $7.6 million during the first quarter of 2023. This increase is mainly driven by payments made to certain long-serving employees upon the end of their employment with the Company. Finance expense Finance expense decreased to $21.1 million during the quarter compared to $27.3 million during the same period in 2022 as savings of interest and finance charges were realized after the full repayment of the gold prepay facility in January 2023. Other expense (income) Other income of $0.5 million was recognized during the quarter compared to other expense of $0.4 million in the first quarter of 2022. This is mainly driven by foreign exchange gains which are derived from the quantum of U.S. dollar cash held by Canadian group entities and movements in the foreign exchange rate. As the functional currency of the Canadian entities is the Canadian dollar, a strengthening of the U.S. dollar against the Canadian dollar during the period generates an unrealized gain in terms of Canadian dollars. Derivative gain or loss Derivative gains and losses in the statement of operations and other comprehensive income are driven by the Company’s debt obligations under the stream facility which are classified as financial liabilities at fair value. In 2022, derivative gains and losses were also impacted by the fair value accounting of the gold prepay facility. During the first quarter of 2023, the Company made scheduled principal, interest, and finance charge repayments totaling $21.0 million (three months ended March 31, 2022: $11.3 million) under the stream facility, based on gold and silver prices at the time of repayment. This was offset by a non-cash increase of this debt obligation of $15.8 million due to a change in its estimated fair value between December 31, 2022 and March 31, 2023 (2022: an increase of $33.6 million between December 31, 2021 and March 31, 2022). This variation is recorded as derivative losses, in the statement of operations and other comprehensive income in the applicable period. The fair value calculated under the Company’s accounting policies is based on numerous estimates noted below as of the balance sheet date and are, therefore, subject to further future variations until the debt obligation is repaid by the Company. 8 ===== SIDA 18 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Fair value is determined using Monte Carlo simulation models. The key inputs used by the Monte Carlo simulation include gold and silver forward prices, the Company’s expectation about long-term gold yields, gold and silver volatility, risk-free rate of return, risk-adjusted discount rate, and production expectations. Relatively small variations in some of these inputs can give rise to significant variations in the fair value of financial liabilities; hence, the large derivative gains and losses recorded to date. Key drivers of current fair value are forward gold and silver prices and the Company’s risk adjusted discount rate. The combined net impact of these factors is a net increase in the fair value of the stream credit facility as described more fully below, offset by the decrease from scheduled repayments during the period: • The value of future repayments under the stream credit facilit y is based on forward gold and silver price estimates at time of repayment. Spot gold prices at March 31, 2023 were higher compared to December 31, 2022 and as a result, forward prices have followed suit. This has resulted in an increase in the estimated fair value of the debt obligation at the current balance sheet date and the recognition of derivative losses in the statement of operations during the first quarter of 2023. The same occurred during the first quarter of 2022. Fair values at a point in time do not necessarily reflect the amounts that will actually be repaid when the obligation become s due in the future. While significant d erivative gains or losses will continue to be recognized at each reporting period, the potentially more significant impact of the same change in forward gold and silver prices on the value of future production and revenue forecasts to be generated during t he same periods when the debt obligation will be repaid cannot be recognized because of the inherent uncertainty and risks associated with actually realizing such production and sales. • The discount rate used to determine the current fair value of future payments under the stream credit facility is dependent not only on the Company’s own weighted average cost of capital, but also on market conditions. These include inflation, interest rates, economic conditions, both local and industry specific, and other factors outside of the Company’s control. The change in fair value due to a variation in credit risk must be recorded as a loss or gain in other comprehensive income (“OCI”) rather than in the statement of operations. Income taxes Income taxes of $33.8 million were accrued during the first quarter of 2023 (three months ended March 31, 2022: $16.9 million) which is comprised of current and deferred income tax expenses of $26.2 million and $7.7 million, respectively. In addition to corporate income taxes in Ecuador which are levied at a rate of 22%, income tax expense includes a 5% Ecuadorean withholding tax on the anticipated portion of net income generated from FDN to be paid in the form of dividends, and an accrual for the portion of profit sharing payable to the Government of Ecuador which is calculated at the rate of 12% of the estimated net income for tax purposes for the quarter. The employee portion of profit sharing payable, calculated at the rate of 3% of net income for tax purposes is considered an employee benefit and is included in operating expenses. LIQUIDITY AND CAPITAL RESOURCES As at March 31, 2023, the Company had cash of $210 million and a working capital balance of $257 million compared to cash of $363 million and a working capital balance of $195 million at December 31, 2022. The change in cash during the first quarter of 2023 was primarily due to the full repayment of the gold prepay facility of $208 million; principal repayments, interest and finance charges, including associated taxes, under the stream credit facility totalling $21.0 million; interest and principal repayments under the senior deb t of $42.8 million; dividends of $23.6 million; and cash outflows of $7.2 million for sustaining capital expenditures. This is offset by cash generated from operating activities of $144 million and proceeds from the exercise of stock options and anti-dilution rights of $4.0 million. 9 ===== SIDA 19 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Trade receivables The majority of trade receivables represent the value of concentrate and doré sold as at period end for which the funds are not yet received. Revenues and related trade receivables for concentrate sales are initially recorded at provisional gold prices. Subsequent determination of final gold prices can range from one to four months after shipment depending on the customer. For sales that are provisionally priced at period end, an estim ate of the adjustment to the trade receivable is calculated based on the expected month when the final gold price is forecast to be determined and the related forward price of gold at the end of the reporting period. At March 31, 2023, this resulted in an estimated increase of $15.8 million ($6.1 million at December 31, 2022) to trade receivables. Consistent with industry standards, concentrate sales have relatively long payment terms and are not fully settled until concentrate is received by the customer and related final assays confirmed, generally two to four months after the export sale occurs. VAT receivables Subject to the submission of monthly claims and their acceptance by the applicable authorities, VAT paid in Ecuador by the Company after January 1, 2018 are expected to be refunded or applied , based on the level of export sales in any given month, as a credit against other taxes payable. A portion of the VAT recoverable has been reclassified as current assets based on the Company’s assessment of the estimated time for processing VAT claims during the next twelve months. Advanced royalties Advance royalties are deductible against future royalties on sales payable to the Government of Ecuador at a rate equal to the lesser of 50% of the actual future royalties payable in a six -month period or 10% of the total advance royalty payment. A portion of the advance royalty payment is classified as current assets based on expected utilization over the next twelve months. Inventories Gold inventory is recognized in the ore stockpiles and in production inventory, comprised principally of concentrate and doré at site or in transit to port or to the refinery, with a component of gold -in-circuit. Ore stockpile inventory has increased primarily due to a higher volume of material compared to December 31, 202 2. The variations in doré and concentrate are mainly the result of timing of shipments around period end. The high value of material and supplies, comprised of consumables and spare parts, reflects the Company’s assessment of the procurement cycles due to the remoteness of FDN and higher costs of materials and supplies on hand. Investment activities Investment activities during the first quarter of 2023 are comprised principally of sustaining capital expenditures for the construction of a new warehouse and other capital projects. Liquidity and capital resources The Company generated strong operating cash flow during the first quarter of 2023 and expects to continue to do so for the remainder of the year based on its production and AISC guidance. At current gold prices, this strong operating cash flow will continue to support aggressive debt repayments, regional and near mine exploration, planned capital expenditures, growth initiatives and regular dividend payments under the approved dividend policy. The senior debt is repayable in variable quarterly instalments and matures in June 2026. Additional quarterly principal repayments based on 30% of Fruta del Norte’s excess cash flow (the “Cash Sweep”) started in 2022 with the achievement of completion in the fourth quarter of 2021 and are expected to accelerate the full repayment of this debt to some time in 2024. An estimate of the Cash Sweep for the next twelve months is included in the current portion of long-term debt. 10 ===== SIDA 20 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Monthly payments under the stream facility are based on 7.75% and 100% of gold and silver ounces sold, respectively, calculated at the current gold and silver prices at the end of each month, less $404 and $4.04 per oz (the “Base Prices”), respectively. The Base Prices increase by 1% annually in Febr uary of each year. The Company has the option to repay (i) 50% of the stream facility outstanding on June 30, 2024 for $150 million and / or (ii) the other 50% outstanding on June 30, 2026 for $225 million. FINANCIAL INSTRUMENTS The Company’s financial instruments include cash, cash equivalents and certain receivables, which are categorized as financial assets at amortized cost, and accounts payable and accrued liabilities, which are categorized as financial liabilities at amortized cost. The fair value of these financial instruments approximates their carrying values due to the short-term nature of these instruments. In addition, the stream loan credit facility and offtake commitment have been classified as financial liabilities at fair value and the senior debt facility as a financial liability at amortized cost. Further, provisionally priced trade receivables of $105 million (December 31, 2022 - $86.4 million) are measured at fair value using quoted forward market prices. The Company’s financial instruments are exposed to a variety of financial risks by virtue of its activities. Currency risk Lundin Gold is a Canadian company, with foreign operations in Ecuador. Revenues generated and expenditures incurred in Ecuador are primarily denominated in U.S. dollars , as are its loan facilities . However, equity capital, if needed, is typically raised in Canadian dollars. As such, th e Company is subject to risk due to fluctuations in the exchange rates of foreign currencies. Although the Company does not enter into derivative financial instruments to manage its exposure, the Company tries to manage this risk by maintaining most of its cash in U.S. dollars. Credit risk Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The majority of the Company’s cash is held in large financial institutions with a high investment grade rating. The Company is also subject to credit risk associated with its trade receivables. The Company manages this risk by only selling to a small group of reputable customers with strong financial statements. Concentration of credit risk Cash and cash equivalents are held with high quality financial institutions. Substantially all of the Company’s cash and cash equivalents held with financial institutions exceed government -insured limits. The Co mpany has established a treasury policy that seek to minimize its credit risk by entering into transactions with investment grade credit worthy and reputable financial institutions and by monitoring the credit standing of those financial institutions. The Company seeks to limit the amount of exposure with any one counterparty in accordance with its established treasury policy. Interest rate risk The Company is subject to interest rate risk with respect to the fair value of long -term debt which are accounted for at fair value through profit or loss and on the senior debt facilities for which interest payments are affected by movements to the LIBOR rate. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. Cash flow forecasting is performed regularly to monitor the Company’s liquidity requirements to ensure it has sufficient cash to always meet its operational needs. In addition, management is actively involved in the review, planning and approval of significant expenditures and commitments. 11 ===== SIDA 21 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Commodity price risk The Company is subject to commodity price risk from fluctuations in the market prices of gold and silver. Commodity price risks are affected by many factors that are outside the Company’s control including global or regional consumption patterns, the supply of and demand for metals, speculative activities, the availability and costs of substitutes, inflation, and political and economic conditions. The Company has not hedged the price of any commodity at this time. The fair value of a portion of the Company’s trade receivables as well as the stream credit facility are i mpacted by fluctuations of commodity prices. COMMITMENTS Significant capital expenditures contracted as at March 31, 2023 but not recognized as liabilities are as follows: Capital expenditures 12 months ending March 31, 2024 $ 11,718 April 1, 2024 onward - Total $ 11,718 OFF-BALANCE SHEET ARRANGEMENTS During the three months ended March 31, 2023 and the year ended December 31, 2022, there were no off -balance sheet transactions. The Company has not entered into any specialized financial arrangements to minimize its currency risk. OUTSTANDING SHARE DATA As at the date of this MD&A, there were 236,846,505 common shares issued and outstanding. There were also stock options outstanding to purchase a total of 3,914,471 common shares, 521,026 restricted share units with a performance criteria, 162,601 restricted share units, and 35,789 deferred share units. OUTLOOK Lundin Gold’s performance in the first quarter of 2023 provides a strong foundation for the rest of the year, and the Company’s production guidance of 425,000 to 475,000 oz and AISC1 of $870 to $940 for 2023 remain unchanged. Sustaining capital is expected to increase over the remaining quarters of 2023 with construction of the fourth raise of the tailings dam starting in the second quarter as well as several other capital projects . In addition, the conversion drilling program, aiming to convert Inferred to Indicated Mineral Resources is planned to continue. Exploration drilling, on the near mine program, is planned to increase from 15,500 metres to 23,000 metres of drilling for 2023 as a result of positive results recently received . The near mine drilling program will continue to advance exploration of the recently identified FDNS, Bonza Sur, and Castillo targets near FDN. Another rig is planned to be incorporated in the second quarter , bringing the total number of surface rigs to four. The regional drilling program is planned to focus on the southern Suarez Basin, advancing along the eastern and western borders of the Basin. Its objective is to follow up on the numerous target areas identified during the 2022 program and test new and unexplored targets. The regional drilling program continues to be expected to comprise a total of 12,500 metres for the year, with one rig currently operating. The estimated exploration budget for 2023 is anticipated to increase from $21.1 million to $24.6 million. 12 ===== SIDA 22 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) The Company anticipates declaring quarterly dividends of at least $0.10 per share, equivalent to approximately $100 million annually, based on currently issued and outstanding shares. NON-IFRS MEASURES This MD&A refers to certain financial measures, suc h as average realized gold price per oz sold , EBITDA, adjusted EBITDA, cash operating cost per oz. sold, all-in sustaining cost, free cash flow, free cash flow per share, and adjusted earnings, which are not recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies. These measu res have been derived from the Company’s financial statements because the Company believes that they are of assistance in the understanding of the results of operations and its financial position. Average realized gold price per oz sold Average realized gold price is a metric used to better understand the gold price realized during a period. This is calculated as sales for the period plus treatment and refining charges less silver sales divided by gold oz sold. Three months ended March 31, 2023 2022 Revenues $ 256,728 $ 216,472 Treatment and refining charges 9,410 8,246 Less: silver revenues (3,232) (2,577) Gold sales $ 262,906 $ 222,141 Gold oz sold 134,691 119,282 Average realized gold price $ 1,952 $ 1,862 EBITDA and Adjusted EBITDA Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is a metric used to better understand the financial performance of the Company by computing earnings from business operations without including the effects of capital structure, tax rates and depreciation. Adjusted EBITDA is EBITDA excluding i tems which are considered not indicative of underlying business operations. Three months ended March 31, 2023 2022 Net income for the period $ 51,465 $ 23,182 Adjusted for: Finance expense 21,057 27,276 Income tax expense 33,848 16,911 Depletion and depreciation 37,262 31,453 EBITDA $ 143,632 $ 98,822 Derivative loss 15,434 34,724 Adjusted EBITDA $ 159,066 $ 133,546 13 ===== SIDA 23 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Adjusted earnings and adjusted basic earnings per share Adjusted earnings and adjusted basic earnings per share can be used to measure and may assist in evaluating operating earning trends in comparison with results from prior periods by excluding specific items that are significant, but not reflective of the underlying operati ng activities of the Company . Presently, these include derivative gains or losses, and related income tax effects, from accounting for the gold prepay and stream facilities at fair value. Adjusted basic earnings per share is calculated using the weighted average number of shares outstanding under the basic method of earnings per share as determined under IFRS. Three months ended March 31, 2023 2022 Net income for the period $ 51,465 $ 23,182 Adjusted for: Derivative loss (gain) 15,434 34,724 Deferred income tax expense 115 (356) Adjusted earnings $ 67,014 $ 57,550 Basic weighted average shares outstanding 236,062,529 233,809,773 Adjusted basic earnings per share $ 0.28 $ 0.25 Cash operating cost per oz Cash operating cost per oz sold, combined with revenues, can be used to evaluate the Company’s performance and ability to generate operating income and cash flow from operating activities. Cash operating costs include operating expenses and royalty expenses. Three months ended March 31, 2023 2022 Operating expenses $ 72,471 $ 61,295 Royalty expenses 14,299 12,526 Cash operating costs $ 86,770 $ 73,821 Gold oz sold 134,691 119,282 Cash operating cost per oz sold $ 644 $ 619 All-in sustaining cost AISC provides information on the total cost associated with producing gold and has been calculated on a basis consistent with historic news releases by the Company. The Company calculates AISC as the sum of total cash operating costs (as described above), corporate social responsibility costs, treatment and refining charges, accretion of restoration provision, and sustaining capital, less silver revenue, all divided by the gold ounces sold to arrive at a per oz amount. 14 ===== SIDA 24 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Other companies may calculate this measure differently as a result of differences in underlying principles and policies applied. Three months ended March 31, 2023 2022 Cash operating costs $ 86,770 $ 73,821 Corporate social responsibility 612 427 Treatment and refining charges 9,410 8,246 Accretion of restoration provision 167 153 Sustaining capital 4,384 2,940 Less: silver revenues (3,232) (2,577) All-in sustaining cost $ 98,111 $ 83,010 Gold oz sold 134,691 119,282 All-in sustaining cost per oz sold $ 728 $ 696 Free cash flow and free cash flow per share Free cash flow is indicative of the Company’s ability to generate cash from operations after consideration for required capital expenditures, including related VAT impact, necessary to maintain operations and interest and finance charge paid on its debt obligations. Free cash flow is defined as cash flow provided by operating activities, less cash used for investing activities and interest and finance charge paid. Three months ended March 31, 2023 2022 Net cash provided by operating activities $ 144,439 $ 127,330 Net cash used for investing activities (7,172) (12,238) Interest paid (6,368) (5,977) Finance charge paid (142,552) (17,309) Free cash flow $ (11,653) $ 91,806 Basic weighted average shares outstanding 236,062,529 233,809,773 Free cash flow per share $ (0.05) $ 0.39 CRITICAL ACCOUNTING ESTIMATES The adoption of certain accounting policies requires the Company to make estimates that affect both the amount and timing of the recording of assets, liabilities, revenues and expenses. Some of these estimates require judgments about matters that are inherently uncertain. For a complete discussion of accounting estimates deemed most crucial by the Company, refer to the Company’s annual 2022 Management’s Discussion and Analysis. 15 ===== SIDA 25 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) RISKS AND UNCERTAINTIES Natural resources exploration, development and operation involves a number of risks and uncertainties, many of which are beyond the Company’s control . These risks and uncertainties include, without limitation, the risks discussed elsewhere in this MD&A and those set out in the Company’s Annual Information Form dated March 31, 2023 (the “AIF”), which is available on SEDAR at www.sedar.com. QUALIFIED PERSON The technical information relating to Fruta del Norte contained in this MD&A has been reviewed and approved by Ron Hochstein P. Eng, Lundin Gold’s President & CEO who is a Qualified Person under NI 4 3-101. The disclosure of exploration information contained in this MD&A was prepared by Andre Oliveira P.Geo, Vice President, Exploration of the Company, who is a Qualified Person in accordance with the requirements of NI 43-101. FINANCIAL INFORMATION The report for the six months ended June 30, 2023 is expected to be published on or about August 9, 2023. DISCLOSURE CONTROLS AND INTERNAL CONTROLS OVER FINANCIAL REPORTING Disclosure controls and procedures Management, including the Chief Executive Officer and the Chief Financial Officer, are responsible for the design of the Company’s disclosure controls and procedures in order to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in the securities legislation. Internal controls over financial reporting Management is also responsible for the design of the Company’s internal control over financial reporting in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Because of their inherent limitations, internal controls over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As required under Multilateral Instrument 52 -109, management advises that there have been no changes in the Company’s internal control over financial reporting that occurred du ring the most recent interim period, beginning January 1, 2023 and ending March 31, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. FORWARD LOOKING STATEMENTS Certain of the information and statements in this MD&A are considered “forward-looking information” or “forward-looking statements” as those terms are defined under Canadian securities laws (collectively referred to as “forward -looking statements”). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as “belie ves”, “anticipates”, “expects”, “is expected”, “scheduled”, “estimates”, “pending”, “intends”, “plans”, “forecasts”, “targets”, or “hopes”, or variations of such words and phrases or statements that certain actions, 16 ===== SIDA 26 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Three Months Ended March 31, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) events or results “may”, “could”, “would”, “will”, “should” “might”, “will be taken”, or “occur” and similar expressions) are not statements of historical fact and may be forward-looking statements. By their nature, forward -looking statements and information involve assumptions, inherent risks and uncertainties, many of which are difficult to predict, and are usually beyond the control of management, that could cause actual results to be materially di fferent from those expressed by these forward -looking statements and information. Lundin Gold believes that the expectations reflected in this forward -looking information are reasonable, but no assurance can be given that these expectations will prove to b e correct. Forward-looking information should not be unduly relied upon. This information speaks only as of the date of this MD&A, and the Company will not necessarily update this information, unless required to do so by securities laws. This MD&A cont ains forward -looking information in a number of places, such as in statements pertaining to the Company’s 2023 production outlook, including estimates of gold production, grades recoveries and AISC; operating plans; expected sales receipts, cash flow forecasts and financing obligations; its estimated capital costs ; expected management changes ; the recovery of VAT; benefits of the Company’s community programs; the Company’s declaration and payment of dividends pursuant to its dividend policy; the timing and the success of its drill program at Fruta del Norte and its other exploration activities; and estimates of Mineral Resources and Reserves at Fruta del Norte. Lundin Gold’s actual results could differ materially from those anticipated. Management has identified the following risk factors which could have a material impact on the Company or the trading price of its shares : risks related to political and economic instability in Ecuador; risks associated with the Company's community relationships; risks related to estimates of production, cash flows and costs; risks inherent to mining operations; shortages of critical supplies; the cost of non-compliance and compliance costs; control of the Company's largest shareholders; volatility in the price of gold; failure of the Company to maintain its obligations under its debt facilities; risks related to Lundin Gold’s compliance with environmental laws and liability for en vironmental contamination; the lack of availability of infrastructure; the Company's reliance on one mine; security risks to the Company, its assets and its personnel; risks related to illegal mining; exploration and development risks; the impacts of a pan demic virus outbreak; risks related to the Company’s ability to obtain, maintain or renew regulatory approvals, permits and licenses; uncertainty with and changes to the tax regime in Ecuador; the reliance of the Company on its information systems and the risk of cyber -attacks on those systems; the imprecision of Mineral Reserve and Resource estimates; deficient or vulnerable title to concessions, easements and surface rights; inherent safety hazards and risk to the health and safety of the Company’s employ ees and contractors; risks related to the Company’s workforce and its labour relations; key talent recruitment and retention of key personnel; volatility in the market price of the Company’s shares; measures to protect endangered species and critical habitats; social media and reputation; the adequacy of the Company’s insurance; risks relating to the declaration of dividends; uncertainty as to reclamation and decommissioning; the ability of Lundin Gold to ensure compliance with anti-bribery and anti-corruption laws; the uncertainty regarding risks posed by climate change; limits of disclosure and internal controls; the potential for litigation; and risks due to conflicts of interest. There can be no assurance that such statements will prove to be accurate, as Lundin Gold's actual results and future events could differ materially from those anticipated in this forward -looking information as a result of the factors discussed under the heading “Risk Factors” in the AIF available at www.sedar.com. 17 ===== SIDA 27 ===== LUNDIN GOLD INC. Condensed Consolidated Interim Statements of Financial Position (Unaudited – Prepared by Management) (Expressed in thousands of U.S. Dollars) The accompanying notes are an integral part of these condensed consolidated interim financial statements. March 31, December 31, Note 2023 2022 ASSETS Current assets Cash and cash equivalents 7, 14 $ 209,714 $ 363,400 Trade receivables and other current assets 3 172,350 169,134 Inventories 4 90,859 89,787 Advance royalty 11,267 13,000 484,190 635,321 Non-current assets VAT recoverable 41,308 52,244 Advance royalty 12,225 16,494 Property, plant and equipment 5 753,589 781,299 Mineral properties 6 175,728 183,507 $ 1,467,040 $ 1,668,865 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 60,869 $ 71,434 Income taxes payable 24,938 21,445 Other current liabilities 9 - 2,264 Current portion of long-term debt 7 141,530 345,374 227,337 440,517 Non-current liabilities Long-term debt 7 292,645 322,592 Reclamation provisions 7,216 7,049 Deferred income tax liabilities 54,199 46,626 581,397 816,784 EQUITY Share capital 8 996,762 989,772 Equity-settled share-based payment reserve 9 13,061 13,856 Accumulated other comprehensive income 2,162 2,612 Deficit (126,342) (154,159) 885,643 852,081 $ 1,467,040 $ 1,668,865 Commitments (Note 17) Approved by the Board of Directors /s/ Ron F. Hochstein /s/ Ian W. Gibbs Ron F. Hochstein Ian W. Gibbs 18 ===== SIDA 28 ===== LUNDIN GOLD INC. Condensed Consolidated Interim Statements of Income and Comprehensive Income (Unaudited – Prepared by Management) (Expressed in thousands of U.S. Dollars, except share and per share amounts) The accompanying notes are an integral part of these condensed consolidated interim financial statements. Three months ended March 31, Note 2023 2022 Revenues $ 256,728 $ 216,472 Cost of goods sold Operating expenses 72,471 61,295 Royalty expenses 14,299 12,526 Depletion and depreciation 37,250 31,444 124,020 105,265 Income from mining operations 132,708 111,207 Other expenses (income) Corporate administration 10 7,605 5,861 Exploration 3,843 2,806 Finance expense 11 21,057 27,276 Other expense (income) (544) 447 Derivative loss 7 15,434 34,724 47,395 71,114 Net income before tax 85,313 40,093 Income tax expense Current income tax expense 13 26,160 19,981 Deferred income tax expense 13 7,688 (3,070) 33,848 16,911 Net income for the period $ 51,465 $ 23,182 OTHER COMPREHENSIVE INCOME (LOSS) Items that may be reclassified to net income Currency translation adjustment (197) 821 Items that will not be reclassified to net income Derivative gain (loss) related to the Company’s own credit risk (368) 1,135 Deferred income tax on accumulated other comprehensive income 115 (356) Comprehensive income $ 51,015 $ 24,782 Income per common share Basic $ 0.22 $ 0.10 Diluted 0.22 0.10 Weighted-average number of common shares outstanding Basic 236,062,529 233,809,773 Diluted 238,123,015 235,774,444 19 ===== SIDA 29 ===== LUNDIN GOLD INC. Condensed Consolidated Interim Statements of Changes in Equity (Unaudited – Prepared by Management) (Expressed in thousands of U.S. Dollars, except number of common shares) The accompanying notes are an integral part of these condensed consolidated interim financial statements. Equity-settled Number of share-based common Share payment Other Note shares capital reserve reserves Deficit Total Balance, January 1, 2022 233,361,883 $ 974,740 $ 13,570 $ 6,851 $ (180,684) $ 814,477 Exercise of stock options 874,200 5,342 (1,787) - - 3,555 Vesting of share units 9 41,000 406 (406) - - - Exercise of anti-dilution rights 8 46,758 416 - - - 416 Exercise of warrants 9 411,441 2,445 (511) - - 1,934 Stock-based compensation 9 - - 968 - - 968 Other comprehensive income - - - 1,600 - 1,600 Net income for the period - - - - 23,182 23,182 Balance, March 31, 2022 234,735,282 $ 983,349 $ 11,834 $ 8,451 $ (157,502) $ 846,132 Balance, January 1, 2023 235,646,977 $ 989,772 $ 13,856 $ 2,612 $ (154,159) $ 852,081 Exercise of stock options 487,400 2,883 (1,024) - - 1,859 Vesting of share units 9 199,227 1,917 (710) - - 1,207 Exercise of anti-dilution rights 8 226,349 2,190 - - - 2,190 Stock-based compensation 9 - - 939 - - 939 Other comprehensive loss - - - (450) - (450) Net income for the period - - - - 51,465 51,465 Dividends paid - - - - (23,648) (23,648) Balance, March 31, 2023 236,559,953 $ 996,762 $ 13,061 $ 2,162 $ (126,342) $ 885,643 20 ===== SIDA 30 ===== LUNDIN GOLD INC. Condensed Consolidated Interim Statements of Cash Flows (Unaudited – Prepared by Management) (Expressed in thousands of U.S. Dollars) The accompanying notes are an integral part of these condensed consolidated interim financial statements. Three months ended March 31, Note 2023 2022 OPERATING ACTIVITIES Net income for the period $ 51,465 $ 23,182 Items not affecting cash: Depletion and depreciation 37,262 31,453 Stock-based compensation 9 927 992 Derivative loss 16(b) 15,434 34,724 Other expense (income) (216) 425 Finance expense 20,675 26,680 Deferred income tax expense 7,688 (3,070) 133,235 114,386 Changes in non-cash working capital items: Trade receivables and other current assets 7,487 2,462 Inventories 1,705 (2,692) Advance royalty 6,002 5,256 Accounts payable and accrued liabilities (8,252) (12,227) Income taxes payable 3,493 19,981 Other non-current liabilities (1,045) - Interest received 1,814 164 Net cash provided by operating activities 144,439 127,330 FINANCING ACTIVITIES Repayments of long-term debt 7 (122,450) (23,646) Interest paid 7 (6,368) (5,977) Finance charge paid 7 (142,552) (17,309) Proceeds from exercise of stock options 1,859 3,555 Proceeds from exercise of anti-dilution rights 2,190 1,934 Proceeds from exercise of warrants - 416 Dividends paid (23,648) - Net cash used for financing activities (290,969) (41,027) INVESTING ACTIVITIES Acquisition and development of property, plant and equipment (6,697) (11,207) VAT paid on investing activities (475) (1,031) Net cash used for investing activities (7,172) (12,238) Effect of foreign exchange rate differences on cash 16 266 Net increase (decrease) in cash and cash equivalents (153,686) 74,331 Cash and cash equivalents, beginning of period 363,400 262,608 Cash and cash equivalents, end of period $ 209,714 $ 336,939 Supplemental cash flow information (Note 14) 21 ===== SIDA 31 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 1. Nature of operations Lundin Gold Inc. together with its subsidiaries (collectively referred to as “Lundin Gold” or the “Company”) is focused on its Fruta del Norte gold operation and developing its portfolio of mineral concessions in Ecuador. The common shares of the Company are listed for trading on the Toronto Stock Exchange (the “TSX”) and Nasdaq Stockholm under the symbol “LUG” and the OTCQX Best Market under the symbol “LUGDF”. The Company was originally incorporated in British Columbia and continued under the Canada Business Corporations Act in 2002. The Company’s head office is located at Suite 2000, 885 W est Georgia Street, Vancouver, BC, and it has a corporate office in Quito, Ecuador. 2. Basis of preparation and consolidation These unaudited condensed consolidated interim financial statements , including comparatives, have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board (“IFRS”), applicable to the pr eparation of interim financial statements, including International Accounting Standard 34, Interim Financial Reporting . As a result, they do not conform in all respects with the disclosure requirements for annual financial statements under IFRS and should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2022. These unaudited condensed consolidated interim financial statements are presented in U.S. dollars. In preparing these unaudited condensed consolidated interim financial statements, the Company applied the same accounting policies and key sources of estimation uncertainty as those that were applied to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2022. These financial statements were approved for issue by the Board of Directors on May 10, 2023. 3. Trade receivables and other current assets March 31, December 31, 2023 2022 Trade receivables (a) $ 104,617 $ 86,431 VAT recoverable (b) 50,577 61,883 Prepaid expenses and other (c) 17,156 20,820 $ 172,350 $ 169,134 (a) Trade receivables represent the value of concentrate sold as at period end for which the funds are not yet received. Consistent with industry standards, these sales generally have relatively long payment terms and are not settled until two to five months after export. There is no recorded allowance for credit losses. In determining the recoverability of trade receivables, the Company considers any change in the credit quality of the counterparty, with the concentration of the credit risk limited due to the nat ure of the counterparties involved and a history of no credit losses. Concentrate sales are first recorded based on provisional prices. F or sales that are provisionally priced as at March 31, 2023, an adjustment is estimated and recorded using the forward gold price at quarter end for the future month when the final gold price for each individual sale is expected to be determined. This adjustment resulted in an increase of $ 15.8 million in trade receivables as of March 31, 2023 (December 31, 2022 - $6.1 million increase). 22 ===== SIDA 32 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 3. Trade receivables and other current assets (continued) (b) Subject to submission of monthly claims and their acceptance by the applicable tax authorities, VAT paid in Ecuador by the Company after January 1, 2018 will be refunded or applied as a credit against other taxes payable, based on the level of export sales in any given month. Therefore, a portion of the VAT recoverable has been reclassified as current assets. (c) Prepaid expenses and other includes credit notes issued by the tax authorities in Ecuador relating to approved VAT claims. These credit notes can be used to offset taxes payable including statutory tax withholdings from payments to vendors. 4. Inventories March 31, December 31, 2023 2022 Ore stockpile $ 14,789 $ 11,545 Gold in circuit 7,562 5,833 Doré and concentrate 12,362 16,709 Materials and supplies 56,146 55,700 $ 90,859 $ 89,787 5. Property, plant and equipment Cost Construction- in-progress Mine and plant facilities Machinery and equipment Vehicles Furniture and office equipment Total Balance, January 1, 2022 $ 27,536 $ 874,098 $ 55,865 $ 23,078 $ 2,685 $ 983,262 Additions 18,569 29,715 2,202 2,311 1,350 54,147 Disposals and other - (1,953) (3,154) (795) (612) (6,514) Reclassifications (46,105) 46,105 - - - - Cumulative translation adjustment - (841) - - (5) (846) Balance, December 31, 2022 - 947,124 54,913 24,594 3,418 1,030,049 Additions - 4,342 - 42 - 4,384 Cumulative translation adjustment - 2 - - - 2 Balance, March 31, 2023 $ - $ 951,468 $ 54,913 $ 24,636 $ 3,418 $ 1,034,435 23 ===== SIDA 33 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 5. Property, plant and equipment (continued) Accumulated depletion and depreciation Construction- in-progress Mine and plant facilities Machinery and equipment Vehicles Furniture and office equipment Total Balance, January 1, 2022 $ - $ 114,469 $ 18,493 $ 13,189 $ 2,037 $ 148,188 Depletion and depreciation - 92,689 6,640 4,426 264 104,019 Disposals and other (410) (1,513) (748) (612) (3,283) Cumulative translation adjustment - (169) - - (5) (174) Balance, December 31, 2022 - 206,579 23,620 16,867 1,684 248,750 Depletion and depreciation - 29,234 1,622 1,093 146 32,095 Cumulative translation adjustment - 1 - - - 1 Balance, March 31, 2023 $ - $ 235,814 $ 25,242 $ 17,960 $ 1,830 $ 280,846 Net book value As at December 31, 2022 $ - $ 740,545 $ 31,293 $ 7,727 $ 1,734 $ 781,299 As at March 31, 2023 $ - $ 715,654 $ 29,671 $ 6,676 $ 1,588 $ 753,589 6. Mineral properties Cost Fruta del Norte Balance, January 1, 2022 $ 207,146 Depletion (23,639) Balance, December 31, 2022 183,507 Depletion (7,779) Balance, March 31, 2023 $ 175,728 24 ===== SIDA 34 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 7. Long-term debt March 31, December 31, 2023 2022 Gold prepay credit facility (a) $ - $ 207,446 Stream loan credit facility (b) 269,090 259,226 Offtake derivative liability (c) 29,605 28,440 Senior debt facility (d) 135,480 172,854 $ 434,175 $ 667,966 Less: current portion Gold prepay credit facility - 207,446 Stream loan credit facility 54,906 49,223 Offtake derivative liability 4,480 4,112 Senior debt facility 82,144 84,593 Long-term portion $ 292,645 $ 322,592 The stream loan credit facility (the “Stream Loan”) and the offtake derivative liability are accounted for as financial liabilities at fair value through profit or loss and are comprised of the following as at March 31, 2023. Stream loan credit facility Offtake derivative liability Total Principal $ 113,820 $ - $ 113,820 Transaction costs (2,018) - (2,018) Derivative fair value adjustments 157,288 29,605 186,893 Total $ 269,090 $ 29,605 $ 298,695 Derivative fair value adjustments reflect the revaluation of the financial instruments at fair value as at March 31, 2023. The derivative gain or loss related to the Company’s own credit risk recorded in other comprehensive income (loss) includes the impact of the difference between the Company’s own credit risk at the time of entering into the long-term debt and the statement of financial position date (see also Note 16). (a) Gold prepay credit facility (the “Prepay Loan”) In late December, as provided under the Prepay Loan, the Company exercised its right to repay in full the Prepay Loan by delivering an irrevocable notice of early repayment of its remaining outstanding obligations effective January 5, 2023. On that day, a payment of $207.5 million was made to extinguish the Prepay Loan, inclusive of interest of $0.1 million accrued between January 1 to January 5, 2023. Repayment was b ased on a gold price fixed near the end of December and a negotiated amount of equivalent ounces per quarter for the last ten remaining quarters. (b) Stream loan credit facility The Stream Loan is a secured loan facility with a stated interest rate of 7.5% per annum with interest accruing based upon the outstanding balance. 25 ===== SIDA 35 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 7. Long-term debt (continued) The Stream Loan is repayable in variable monthly instalments equivalent to the value of 7.75% of gold production less $404 per oz. (the “Gold Base Price”) and 100% of the silver production less $4.04 per oz. (the “Silver Base Price”) up to a maximum of 350,000 oz. of gold and six million oz. of silver. The Gold Base Price and Silver Base Price will increase by 1% in February of each year. The excess of the monthly repayments over the principal due monthly and the balance of interest accrued to that date, if any, is a variable additional charge (the “Finance Charge”). During the three months ended March 31, 2023, the Company made payments under the Stream Loan totaling $21.0 million (three months ended March 31, 2022 – $11.3 million) of which $4.8 million (three months ended March 31, 2022 – $2.8 million) was paid on account of principal; $2.2 million (three months ended March 31, 2022 – $2.5 million) for accrued interest; and $14.0 million (three months ended March 31, 2022 – $6.0 million) for the Finance Charge (see Note 16). As at March 31, 2023, based on the projected life of mine production and other signi ficant assumptions (see Note 16), the estimated fair value equivalent to 265,580 oz. of gold and 4,532,785 oz. of silver remains outstanding under the Stream Loan. The Company has the option to repay (i) 50% of the remaining Stream Loan on June 30, 2024 for $150 million and / or (ii) the other 50% of the remaining Stream Loan on June 30, 2026 for $225 million. The Company has elected to measure the Stream Loan as a financial liability at fair value through profit or loss. (c) Offtake commitment (the “Offtake”) The lender of the Prepay Loan and Stream Loan has been granted the right to purchase 50% of Fruta del Norte gold production, up to a maximum of 2.5 million oz., at a price determined based on monthly delivery dates and a defined quotational period. This obligation is satisfied first through the sale of doré and then, if required, financial settlement. The Company has determined that the Offtake represents a derivative financial liability. Accordingly, the Offtake, which is primarily a function of the gold price option feature, is measured at fair value at each statement of financial position date, with changes in the derivative fair value being recorded in profit or loss. (d) Senior debt facility (the “Facility”) As at March 31, 2023 Tranche A Tranche B Total Principal $ 102,046 $ 40,819 $ 142,865 Accrued interest 1,246 376 1,622 Transaction costs, net of amortization (6,709) (2,298) (9,007) Total $ 96,583 $ 38,897 $ 135,480 The Facility is a senior secured loan comprised of two tranches: a senior commercial facility (“Tranche A”) and a senior covered facility under a raw material guarantee (“Tranche B”). The annual interest rate is the three or six-month LIBOR plus an average margin of approximately 5.05% for Tranche A and 2.50% for Tranche B. Tranche A and Tranche B are subject to risk mitigation and guarantee fees of 2.00% and 3.15%, respectively. The Facility is repayable in variable quarterly instalments and matures in June 2026. In addition, accelerated quarterly principal repayments based on 30% of Fruta del Norte’s excess cash flow (the “Cash Sweep”) apply starting in 2022 for which an estimate is included in the current portion of long-term debt. During the three months ended March 31, 2023, the Company paid $ 38.7 million of principal ( three months ended March 31, 2022 – $12.9 million) and $4.1 million (three months ended March 31, 2022 – $1.5 million) of interest relating to the Facility. The principal repaid during the three months ended March 31, 2023 includes $19.4 million (three months ended March 31, 2022 – $12.9 million) paid on account of the Cash Sweep. No variable quarterly instalments were paid during the three months ended March 31, 2022 as the settlement date had been revised from the end of each quarter to 45 days after a quarter end. 26 ===== SIDA 36 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 7. Long-term debt (continued) Under the long-term debt, the Company, together with its subsidiaries related to Fruta del Norte (collectively, the “FDN Subsidiaries”), are subject to a number of covenants while amounts remain outstanding including maintaining a minimum cash balance of $40 million in its operating subsidiary as its debt service reserve balance. The long - term debt is secured by a charge over the FDN Subsidiaries’ assets, pledges of the shares of the FDN Subsidiaries and guarantees of the Company and the FDN Subsidiaries. 8. Share capital Authorized: • Unlimited number of common shares without par value • Unlimited number of preference shares without par value During the three months ended March 31, 2023, the Company issued 226,349 common shares to Newcrest Mining Limited (“Newcrest”) at a weighted average price of CAD$13.36 per share for total proceeds of $2.2 million. During the year ended December 31, 20 22, 477,260 common shares were issued to Newcrest at a weighted average price of CAD$10.50 per share for total proceeds of $3.9 million. These issuances were completed in accordance with Newcrest’s anti-dilution rights granted as part of its initial investment into the Company. 9. Stock-based compensation Under an omnibus incentive plan (the “Omnibus Plan”) that allows for the reservation of a maximum 6% of the common shares issued and outstanding for issuance at any given time , the Company may grant stock options, restricted share units and deferred share units (collectively, the “Awards”). Subject to specific provisions under the Omnibus Plan, the eligibility, vesting period, term, and number of Awards are granted at the discretion of the Company’s board of directors. Restricted share units entitle the recipient, upon settlement, to receive common shares or, subject to provisions under the Plan, the cash equivalent or a combination thereof. The Company’s board of directors may also grant restricted share units that include performance criteria which vest based on a multiplier. Deferred share units may only be granted to non -employee directors and are payable after termination of the recipient’s service with the Company. Upon settlement, the recipient may receive common shares or, subject to provisions under the Plan, the cash equivalent or a combination thereof. Recipients of share units granted and outstanding on a dividend record date are entitled to receive an award of additional share units equal to the cash dividends declared and paid on the Company’s common shares (“Dividend Equivalent”). Dividend Equivalents are calculated in accordance with the Omnibus Plan based on the number of share units held, the dividend per share and the weighted average trading price of the Company’s shares on the TSX for the five days preceding the date the dividend was paid. These additional share units are subject to the same terms and conditions as the underlying share units. i. Stock options Stock options granted and outstanding under the Omnibus Plan and a pre -existing stock option plan (the “Option Plan”) have an expiry date of five years and vest over a period of three or four years from date of grant. No additional stock options can be granted under the Option Plan. During the three months ended March 31, 2023, 450,500 stock options were granted under the Omnibus Plan which have an expiry date of five years and vest over a period of three or four years from date of grant. 27 ===== SIDA 37 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 9. Stock-based compensation (continued) Stock options are exercisable into one common share of the Company at the price specified in the terms of the option agreement. A continuity summary of the stock options granted and outstanding under the Omnibus Plan and Option Plan is presented below: Three months ended Year ended March 31, 2023 December 31, 2022 Weighted average Weighted average Number of exercise price Number of exercise price stock options (CAD) stock options (CAD) Balance, beginning of period 4,237,923 $ 8.35 4,863,400 $ 7.26 Granted 450,500 13.78 772,800 9.86 Forfeited - - (42,884) 10.23 Exercised(1) (487,400) 5.15 (1,355,393) 5.23 Balance outstanding, end of period 4,201,023 $ 9.31 4,237,923 $ 8.35 Balance exercisable, end of period 2,923,690 $ 8.37 2,693,070 $ 7.10 (1) The weighted average share price on the exercise date for the stock options exercised during the three months ended March 31, 2023 and year ended December 31, 2022 were CAD$14.79 and CAD$11.62, respectively. The following table summarizes information concerning outstanding and exercisable options at March 31, 2023: Outstanding options Exercisable options Range of exercise prices (CAD) Number of options outstanding Weighted average remaining contractual life (years) Weighted average exercise price (CAD) Number of options outstanding Weighted average remaining contractual life (years) Weighted average exercise price (CAD) $ 4.90 to 5.40 1,466,800 0.90 $ 5.35 1,466,800 0.90 $ 5.35 $ 5.41 to 11.00 1,451,523 3.41 10.13 710,490 3.25 10.22 $ 11.01 to 13.88 1,282,700 3.11 12.89 746,400 1.97 12.54 4,201,023 2.44 $ 9.31 2,923,690 1.74 $ 8.37 The fair value based method of accounting was applied to stock options granted to employees, including directors, and non -employees on the date of grant using the Black -Scholes option pricing model with the following weighted-average assumptions: March 31, 2023 December 31, 2022 Risk-free interest rate 3.11% 1.62% Expected stock price volatility 38.37% 36.51% Expected life 5 years 5 years Expected dividends (CAD) $0.26 - Weighted-average fair value per option granted (CAD) $4.42 $3.40 28 ===== SIDA 38 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 9. Stock-based compensation (continued) The equity-settled share-based payment reserve includes the fair value of employee options as measured at grant date and amortized over the period during which the employees become unconditionally entitled to the options. During the three months ended March 31, 2023, the Company recorded stock-based compensation expense of $0.4 million (three months ended March 31, 2022 – $0.5 million). ii. Share units Under the Omnibus Plan, the Company has granted restricted share units and deferred share units to eligible employees and non-employee directors as presented below. Restricted share units with performance criteria Restricted share units Settled in cash or shares Settled in shares Settled in cash Settled in shares Deferred share units Balance at January 1, 2022 148,000 187,300 24,600 110,800 23,308 Granted - 196,500 - 86,800 10,509 Granted – Dividend Equivalent 4,052 10,506 670 4,271 861 Cancelled - (17,054) - - - Settled - - - (41,000) - Balance at December 31, 2022 152,052 377,252 25,270 160,871 34,678 Granted - 139,200 - 90,100 804 Granted - Dividend Equivalent - 4,574 - 1,414 307 Cancelled - - (5,752) (13,765) - Settled (152,052) - (19,518) (76,019) - Balance at March 31, 2023 - 521,026 - 162,601 35,789 Restricted share units with performance criteria (“PSUs”) During the three months ended March 31, 2023, the Company granted 139,200 PSUs that are settled in shares (“Share PSUs”) . In addition, in connection with the dividend paid on March 31, 2023 , 4,574 Share PSUs were granted as Dividend Equivalents . During the year ended December 31, 2022, the Company granted 196,500 Share PSUs. In addition, in connection with the Company’s inaugural dividend paid in 2022, 10,506 Share PSUs and 4,052 PSUs that are settled in cash or common shares, at the recipient’s option, (“Cash PSUs”) were granted as Dividend Equivalents. All Cash PSUs were settled through a combination of payment of cash or issuance of shares during the three months ended March 31, 2023. Share PSUs are granted to eligible employees and vest th ree years from date of grant subject to continued employment and certain performance conditions being met. The number of Share PSUs that vest will be adjusted using a multiplier that is based on total shareholder return by the Company’s shares over the three-year period relative to a peer group as defined by the Company’s board of directors. Each vested Share PSU entitles the recipient to a payment of one common share. 29 ===== SIDA 39 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 9. Stock-based compensation (continued) Using Monte Carlo simulation, the fair value of Share PSUs was measured on the date of grant while the fair value of Cash PSUs was measured as at December 31, 202 2 with the following weighted -average assumptions: March 31, 2023 December 31, 2022 Share PSUs Share PSUs Cash PSUs Risk-free interest rate 4.22% 2.20% N/A Average expected volatility of the Company and its peer group 45.64% 50.54% N/A Expected life 3 years 3 years 0.15 years Expected dividends (CAD) $0.26 - $0.26 Weighted-average fair value per unit (CAD) $12.38 $9.33 $13.23 The fair value of Share PSUs measured at grant date are being amortized over the period during which the employees become unconditionally entitled to the Share PSUs. During the three months ended March 31, 2023, the Company recorded stock-based compensation expense of $0.3 million (three months ended March 31, 2022 – $0.2 million) relating to Share PSUs. Restricted share units without performance criteria (“RSUs”) During the three months ended March 31, 2023, the Company granted 90,100 RSUs that are settled in shares (“Share RSUs”). In addition, in connection with the dividend paid on March 31, 2023, 1,414 Share RSUs were granted as Dividend Equivalents. During the year ended December 31, 2022, the Company granted 86,800 Share RSUs. In addition, in connection with the Company’s inaugural dividend paid in 2022 , 4,271 Share RSUs and 670 RSUs that are settled in cash (“Cash RSUs”) were granted as Dividend Equivalents. All Cash RSUs were settled in cash during the three months ended March 31, 2023. Share RSUs are granted to eligible employees and vest one to three years from date of grant subject to continued employment. Each vested Share RSU entitles the recipient to a payment of one common share. Using the Black-Scholes option pricing model, the fair value of the Share RSUs was measured on the date of grant while the fair value of the Cash RSUs was measured as at December 31, 202 2 with the following weighted-average assumptions: March 31, 2023 December 31, 2022 Share RSUs Share RSUs Cash RSUs Risk-free interest rate 3.74% 1.22% 3.86% Expected stock price volatility 41.12% 44.54% 39.27% Expected life 1.58 years 1.99 years 0.15 years Expected dividends (CAD) $0.26 - $0.26 Weighted-average fair value per unit (CAD) $16.10 $12.42 $13.86 The fair value of Share RSUs measured at grant date are being amortized over the period during which the employees become unconditionally entitled to the Share RSUs. During the three months ended March 31, 2023, the Company recorded stock-based compensation expense of $0.1 million (three months ended March 31, 2022 – $0.2 million) relating to Share RSUs. 30 ===== SIDA 40 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 9. Stock-based compensation (continued) Deferred share units (“DSUs”) During the three months ended March 31, 2023 and year ended December 31, 202 2, the Company granted 804 DSUs and 10,509 DSUs, respectively, to non -employee directors. In addition, in connection with dividends paid by the Company during the three months ended March 31, 2023 and year ended December 31 2022, 307 DSUs and 861 DSUs, respectively, were granted as Dividend Equivalents. The DSUs do not vest until the end of service as a director of the Company. Each vested DSU entitles the recipient to a payment in shares. During the three months ended March 31, 2023, the Company recorded stock-based compensation expense of $0.1 million (three months ended March 31, 2022 – $0.1 million) relating to DSUs. 10. Administration Three months ended March 31, 2023 2022 Corporate social responsibility $ 612 $ 427 Investor relations 78 102 Office and general 705 737 Professional fees 407 608 Regulatory and transfer agent 245 160 Salaries and benefits 4,527 2,791 Stock-based compensation 927 992 Travel 104 44 $ 7,605 $ 5,861 11. Finance expense Three months ended March 31, 2023 2022 Interest expense $ 5,893 $ 7,445 Finance charge 14,053 17,309 Other finance costs 1,095 1,591 Accretion of transaction costs 1,830 1,095 Interest income (1,814) (164) $ 21,057 $ 27,276 31 ===== SIDA 41 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 12. Related party transactions Key management compensation Key management includes executive officers and directors of the Company. The compensation paid or payable to key management for employee services during the three months ended March 31 is shown below. March 31, March 31, 2023 2022 Salaries, bonuses and benefits $ 4,131 $ 2,467 Stock-based compensation 790 743 $ 4,921 $ 3,210 13. Income taxes Current income tax expense is generated from net income for tax purposes in Ecuador relating to operations at Fruta del Norte. In addition to corporate income taxes in Ecuador which are levied at a rate of 22% and dividend withholding taxes levied at a rate of 5% related to the anticipated portion of net income distributed from Ecuador, included in current income tax expense is the portion of profit sharing payable to the Government of Ecuador which is calculated at the rate of 12% of net income for tax purposes. The employee portion of profit sharing, calculated at the rate of 3% of net income for tax purposes, is consider ed an employment benefit and included in operating costs. The rate s used in Ecuador differ from the amount that would result from applying the Canadian federal and provincial income tax rates to net income before tax. These differences result from the following items: Three months ended March 31, 2023 2022 Net income before tax $ 85,313 $ 40,093 Canadian federal and provincial income tax rates 27.00% 27.00% Income tax expense based on the above rates 23,035 10,825 Increase due to: Differences in foreign tax rates 5,628 4,490 Non-deductible costs 2,116 933 Withholding taxes (current and deferred) 2,291 - Losses and temporary differences for which an income tax asset has not been recognized 778 663 Income tax expense $ 33,848 $ 16,911 32 ===== SIDA 42 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 14. Supplemental cash flow information Cash and cash equivalents are comprised of the following: March 31, December 31, 2023 2022 Cash $ 142,184 $ 283,596 Short-term investments 67,530 79,804 $ 209,714 $ 363,400 Other supplemental cash information: Three months ended March 31, 2023 2022 Change in accounts payable and accrued liabilities related to: Acquisition of property, plant and equipment $ (2,313) $ (2,023) 33 ===== SIDA 43 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 15. Segmented information Operating segments are components of an entity that engage in business activities from which they incur expenses and whose operating results are regularly reviewed by a chief operating decision maker to make resource allocation decisions and to assess perf ormance. The Chief Executive Officer is responsible for allocating resources and reviewing operating results of each operating segment on a periodic basis. The Company’s primary business activity is the Fruta del Norte operating mine in Ecuador. Mater ially all of the Company’s non -current assets and non -current liabilities relate to Fruta del Norte. In addition, the Company conducts exploration activities and maintains a number of concessions in Ecuador outside of Fruta del Norte. The following are summaries of the Company’s current and non-current assets, current and non-current liabilities, and net income (loss) by segment: Fruta del Norte Exploration activities Corporate and other Total As at March 31, 2023 Current assets $ 406,892 $ 9,360 $ 67,938 $ 484,190 Non-current assets 982,850 - - 982,850 Total assets 1,389,742 9,360 67,938 1,467,040 Current liabilities 224,786 714 1,837 227,337 Non-current liabilities 346,560 - 7,500 354,060 Total liabilities 571,346 714 9,337 581,397 For the three months ended March 31, 2023 Revenues 256,728 - - 256,728 Income from mining operations 132,708 - - 132,708 Corporate administration (1,232) (16) (6,357) (7,605) Exploration expenditures - (3,843) - (3,843) Finance income (expense) (21,795) - 738 (21,057) Other income 24 - 520 544 Derivative loss (15,434) - - (15,434) Income tax expense (31,557) - (2,291) (33,848) Net income (loss) for the period 62,714 (3,859) (7,390) 51,465 34 ===== SIDA 44 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 15. Segmented information (continued) Fruta del Norte Exploration activities Corporate and other Total As at March 31, 2022 Current assets $ 566,632 $ 4,403 $ 44,645 $ 615,680 Non-current assets 1,119,543 - - 1,119,543 Total assets 1,686,175 4,403 44,645 1,735,223 Current liabilities 338,765 987 2,248 342,000 Non-current liabilities 547,091 - - 547,091 Total liabilities 885,856 987 2,248 889,091 For the three months ended March 31, 2022 Revenues 216,472 - - 216,472 Income from mining operations 111,207 - - 111,207 Corporate administration (1,254) (1) (4,606) (5,861) Exploration expenditures - (2,806) - (2,806) Finance income (expense) (27,313) - 37 (27,276) Other income (expense) (20) - (427) (447) Derivative loss (34,724) - - (34,724) Income tax expense (16,911) - - (16,911) Net income (loss) for the period 30,985 (2,807) (4,996) 23,182 16. Financial instruments The Company’s financial instruments include cash, cash equivalents and certain receivables, which are categorized as financial assets at amortized cost, and accounts payable and accrued liabilities, which are categorized as financial liabilities at amortized cost. The fair value of these financial instruments approximates their carrying values due to the short -term nature of these instruments. In addition, the Stream Loan and offtake commitment have been classified as financial liab ilities measured at fair value and the senior debt facility as a financial liability at amortized cost. Further, provisionally priced trade receivables of $104.6 million (December 31, 2022 - $86.4 million) are measured at fair value using quoted forward market prices (level 2). 35 ===== SIDA 45 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 16. Financial instruments (continued) (a) Fair value measurements and hierarchy IFRS establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lower priority to unobservable inputs. The three levels of the fair value hierarchy are as follows: Level 1: Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: Inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Inputs that are both significant to the fair value measurement and unobservable. (b) Fair value measurements using significant unobservable inputs (Level 3) The following table sets forth the Company’s financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy for the three months ended March 31, 2023 and year ended December 31, 2022. Each of these financial instruments are classified as Level 3 as their valuation includes significant unobservable inputs. Stream loan credit facility Offtake derivative liability Total Balance, December 31, 2021 $ 263,614 $ 27,038 $ 488,432 Principal paid (13,933) - (13,933) Interest paid (9,545) - (9,545) Interest accrued at stated rate of 7.5% 9,545 - 9,545 Accretion of transaction costs 212 - 212 Derivative fair value adjustments recognized in: Net income 20,608 1,402 22,010 Other comprehensive income (11,275) - (11,275) Change in derivative fair values 9,333 1,402 10,735 Balance, December 31, 2022 $ 259,226 $ 28,440 $ 287,666 Principal paid (4,826) - (4,826) Interest paid (2,170) - (2,170) Interest accrued at stated rate of 7.5% 2,170 - 2,170 Accretion of transaction costs 53 - 53 Derivative fair value adjustments recognized in: Net income 14,269 1,165 15,434 Other comprehensive income 368 - 368 Change in derivative fair values 14,637 1,165 15,802 Balance, March 31, 2023 $ 269,090 $ 29,605 $ 298,695 36 ===== SIDA 46 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 16. Financial instruments (continued) (c) Significant assumptions in valuation and relationship to fair value The financial liabilities above were valued using Monte Carlo simulation valuation models. The significant assumptions used in the Monte Carlo valuation models include: the gold and silver forward prices, gold and silver price volatility, the risk -free rate of return, risk -adjusted discount rates, and the projected life of mine production schedule. As the gold price and silver price volatilities and risk -adjusted discount rates are unobservable inputs, the financial liabilities above are classified with in Level 3 of the fair value hierarchy. The following table summarizes the quantitative information about the significant unobservable inputs used in Level 3 fair value measurements. Fair value at March 31, 2023 Unobservable inputs Range of inputs Relationship of unobservable inputs to fair value Stream Loan and Offtake $ 298,695 Expected volatility 15% to 34% An increase or decrease in expected volatility of 5% would increase or decrease fair value by $5.4 million or $6.0 million, respectively Risk-adjusted discount rate 14% to 16% An increase or decrease in risk- adjusted discount rate of 1% would decrease or increase fair value by $8.5 million or $8.8 million, respectively (d) Valuation processes The valuation of financial instruments classified as Level 3 of the fair value hierarchy were prepared by an independent valuation specialist under the direct oversight of the Interim Chief Financial Officer of the Company. Discussions of valuation processes and results are reported to the audit committee at least once every three months, in line with the Company’s quarterly reporting periods. (e) Financial risk management Concentration of credit risk Cash and cash equivalents are held with high quality financial institutions. Substantially all of the Company’s cash and cash equivalents held with financial institutions exceed government -insured limits. The Company has established a treasury policy that seek to minimize its credit risk by entering into transactions with investment grade credit worthy and reputable financial institutions and by monitoring the credit standing of those financial institutions. The Company seeks to limit the amount of exposure with any one counterparty in accordance with its established treasury policy. 37 ===== SIDA 47 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at March 31, 2023 (Unaudited – Prepared by Management) (Expressed in U.S. Dollars unless otherwise noted. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) 17. Commitments Significant capital expenditures contracted as at March 31, 2023 but not recognized as liabilities are as follows: Capital Expenditures 12 months ending March 31, 2024 $ 11,718 April 1, 2024 onward - Total $ 11,718 38 ===== SIDA 48 ===== Corporate Information BOARD OF DIRECTORS Jack Lundin, Chairman Vancouver, Canada Carmel Daniele London, United Kingdom Gillian Davidson Edinburgh, United Kingdom Ian Gibbs Vancouver, Canada Chantal Gosselin Vancouver, Canada Ashley Heppenstall London, United Kingdom Ron F. Hochstein Vancouver, Canada Craig Jones Queensland, Australia Jill Terry Victoria, Australia OFFICERS Ron F. Hochstein President & Chief Executive Offi cer Chester See Interim Chief Financial Officer Terry Smith Chief Operating Officer Sheila Colman Vice President, Legal & Corporate Secretary Nathan Monash Vice President, Business Sustainability Andre Oliveira Vice President, Exploration OFFICES CORPORATE HEAD OFFICE Lundin Gold Inc. 885 West Georgia Street, Suite 2000 Vancouver, BC V6C 3E8 Telephone: 604-689-7842 Toll Free: 1-888-689-7842 Facsimile: 604-689-4250 REGIONAL HEAD OFFICE Aurelian Ecuador S.A., a subsidiary of Lundin Gold Inc. Av. Amazonas N37-29 y UNP Edificio Eurocenter, Piso 5 Quito, Pichincha Ecuador Telephone: 593-2-299-6400 COMMUNITY OFFICE Calle 1ro de Mayo y 12 de Febrero, esquina Los Encuentros, Zamora-Chinchipe, Ecuador STOCK EXCHANGE LISTINGS The Toronto Stock Exchange Trading Symbol: LUG Nasdaq Stockholm Trading Symbol: LUG SHARE REGISTRAR AND TRANSFER AGENT Computershare Investor Services Inc. 510 Burrard Street, 3rd Floor Vancouver, BC V6C 3B9 Telephone: 1-800-564-6253 AUDITOR PricewaterhouseCoopers LLP 250 Howe St, Suite700 Vancouver, BC V6C 3S7 Telephone: 604-806-7000 ADDITIONAL INFORMATION Further information about Lundin Gold is available by contacting: Finlay Heppenstall Director, Investor Relations Telephone: 604-689-7842 Toll Free: 1-888-689-7842 info@lundingold.com Lundin Gold Ecuador ===== SIDA 49 ===== 885 West Georgia Street, Suite 2000 Vancouver, British Columbia, V6C 3E8 Canada Av. Amazonas N37-29 y UNP Edificio Eurocenter, Piso 5 Quito, Pichincha, Ecuador Telephone: 604-689-7842 Toll Free: 1-888-689-7842 Telephone: 593-2-299-6400 info@lundingold.com www.lundingold.com @LundinGold @LundinGoldEC Lundin Gold Lundin Gold Lundin Gold Ecuador