===== SIDA 1 ===== NEWS RELEASE Vancouver, August 9, 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 SECOND QUARTER 2023 RESULTS AND UPDATES 2023 GUIDANCE Fruta del Norte achieves record gold production of 269,752 oz and AISC¹ of $765 per oz sold in the first half of 2023 Lundin Gold Inc. (TSX: LUG; Nasdaq Stockholm: LUG; OTCQX: LUGDF) ("Lundin Gold" or the "Company") today reports results for the second quarter and first half of 2023, highlighted by Q2 production of 1 29,731 ounces (“oz”) of gold and sale s of 128,958 oz, at a cash operating cost 1 of $644 per oz sold and all -in sustaining cost (“AISC”)1 of $802 per oz sold. For the first half of 202 3, Lundin Gold produced 2 69,752 oz and sold 2 63,649 of gold at an AISC of $ 765 per oz. Lundin Gold generate d $132 million in free cash flow 1 over the three -month period, the highest quarterly free cash flow 1 achieved to date. All amounts are in U.S. dollars unless otherwise indicated. Based on very strong performance during the first half of 2023, the Company has increased its 2023 production guidance to 450,000 to 485,000 oz. In addition, the Company has reduced its 2023 cash operating cost1 guidance to $650 to $700 per oz sold and AISC 1 to $820 to $870 per oz sold. This is compared to previous produc tion guidance of 425,000 to 475,000 oz, cash operating cost1 guidance of $700 to $760 per oz sold and AISC1 guidance of $870 to $940 per oz sold. Ron Hochstein, President and CEO commented, “ As a result of strong operating results in the first half of 2023 and confiden ce that our team can continue to deliver excellent performance , we are increasing production guidance and reducing cash operating cost1 and AISC1 guidance. Specifically, we are pleased that the bottom of our original cost guidance range is now the top of our revised cost guidance range. We’ve said that Lundin Gold is a cash flow story for some time now, and our free cash flow generated during the second quarter highlights that. This free cash flow enables us to fund future highly prospective exploration programs, pay down our debt, pay dividends, and look at potential expansion opportunities. The Company is in a strong position, and I am excited to take this momentum into the second half of the year.” 1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 13 to 16 of the Company's MD&A for the three and six months ended June 30, 2023 available on SEDAR ===== SIDA 2 ===== 2 OPERATING AND FINANCIAL RESULTS SUMMARY The following two tables provide an overview of key operating and financial results. Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Tonnes ore mined 404,408 369,430 832,143 749,059 Tonnes ore milled 418,373 385,675 810,705 759,082 Average head grade (g/t) 11.0 10.3 11.6 10.8 Average recovery 88.0% 87.6% 89.3% 88.9% Average mill throughput (tpd) 4,598 4,238 4,479 4,194 Gold ounces produced 129,731 111,890 269,752 233,555 Gold ounces sold 128,958 96,291 263,649 215,573 Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Net revenues ($’000) 243,930 177,808 500,658 394,280 Income from mining operations ($’000) 124,801 82,522 257,509 193,729 Earnings before interest, taxes, depreciation, and amortization ($’000)1 149,900 144,704 293,532 243,526 Adjusted earnings before interest, taxes, depreciation, and amortization ($’000)1 149,579 104,718 308,645 238,264 Net income ($’000) 63,148 55,962 114,613 79,144 Basic income per share ($) 0.27 0.24 0.48 0.34 Cash provided by operating activities ($’000) 162,352 60,686 306,791 188,016 Free cash flow ($’000)1 131,859 21,248 120,206 113,054 Free cash flow per share ($)1 0.56 0.09 0.51 0.48 Average realized gold price ($/oz sold)1 1,942 1,907 1,947 1,882 Cash operating cost ($/oz sold)1 644 702 644 656 All-in sustaining costs ($/oz sold)1 802 864 765 771 Adjusted net earnings ($‘000)1 59,387 13,490 126,401 71,040 Adjusted net earnings per share ($)1 0.25 0.06 0.53 0.30 Dividends paid per share ($) 0.10 - 0.20 - SECOND QUARTER HIGHLIGHTS Financial Results – Highest Ever Quarterly Free Cash Flow Generation • The Company sold a total of 128,958 oz of gold, consisting of 8 4,679 oz of concentrate and 44,279 oz of doré at an average realized gold price 1 of $1,942 per oz for total gross revenues from gold sales of $ 250 million. Net of treatment and refining charges, revenues were $244 million. • Cash operating costs1 and AISC1 were $644 and $802 per oz of gold sold, respectively. While cash operating costs1 per oz sold remained consistent with the previous quarter, the ramp up of sustaining capital activities resulted in a higher AISC1 albeit still below expected levels for the quarter. • The Company generated cash flow of $162 million from operations and rec ord free cash flow 1 of $132 million or $0.56 per share resulting in a cash balance of $275 million at June 30, 2023. 1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 13 to 16 of the Company's MD&A for the three and six months ended June 30, 2023 available on SEDAR ===== SIDA 3 ===== 3 • Earnings before interest, taxes, depreciation, and amortization 1 (“EBITDA”) and adjusted EBITDA 1 were $149.9 million and $149.6 million, r espectively with the difference resulting from derivative gains recognized in the quarter. • Net income was $63.1 million including a derivative gain of $0.3 million, and net of corporate, exploration, finance costs, and associated taxes on earnings. Adjusted earnings1, which exclude the derivative gain and related taxes, were $59.4 million, or $0.25 per share. Production Results – Strong Grades and Throughput Offset Weaker Recoveries • Mine production of 404,408 tonnes of ore at an average grade of 9.0 grams per tonne. • The mill processed 418,373 tonnes of ore at an average throughput rate of 4,598 tpd . Inclusive of the relining of the SAG and ball mills during the first quarter, the mill has averaged a throughput rate of 4,479 tpd during the first half of 2023. • The average grade of ore milled was 11.0 grams per tonne with average recovery at 88.0%. Recoveries were affected by processing of ore from sectors that contain higher levels of finely disseminated sulphide minerals which are impacting both gravity and flotation recovery. • Gold production was 129,731 oz which was comprised of 85,395 oz in concentrate and 44,336 oz as doré. Liquidity and Capital Resources At the end of the second quarter of 2023, the Company is in a strong financial position. (in thousands of U.S. dollars) As at June 30, 2023 As at December 31, 2022 Financial Position: Cash 274,968 363,400 Working capital 268,095 194,804 Total assets 1,508,831 1,668,865 Long-term debt Senior debt facility 91,676 172,854 Fair value of stream credit facility and offtake 304,912 287,666 Fair value of gold prepay credit facility - 207,446 Total long-term debt 396,588 667,966 The change in cash during the 2023 Period 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 totaling $39.0 m illion; interest and principal repayments under the senior debt of $91.1 million; dividends of $47.4 million; and cash outflows of $20.4 million relating to sustaining capital expenditures. This is offset by cash generated from operating activities of $307 million and proceeds from the exercise of stock options and anti-dilution rights totaling $9.8 million. Capital Expenditures • Sustaining Capital: o Construction of the fourth raise of the tailings dam advanced during the second quarter with progress to date consistent with plan. Completion during the fourth quarter of 2023 remains as expected. o The new warehouse was completed during the second quarter and is now operational. ===== SIDA 4 ===== 4 o The underground mine maintenance facility is expected to be completed during the third quarter which will provide additional efficiencies. o Other sustaining capital projects such as sewage treatment plant upgrades, purchase of mobile equipment, and other efficiency improvement projects continue to ramp up during the remainder of the year. o The 2023 conversion drilling program continues to advance in distinct sectors of the FDN resource. During the quarter, the program focused on the southern extension with approximately 3,211 metres across 20 drill holes completed. Most drill holes confirmed the continuity of mineralization in the drilled areas. Results have pointed to a vein type mineralization in this part of the deposit, with narrower higher-grade intervals. Some of the conversion drilling results for the southern extension remain pending. A complete table of results received to date can be found in Lundin Gold’s press release dated August 3, 2023. Health and Safety During the second quarter there were no Lost Time Incidents (“LTIs”) and no Medical Aid Incident (“MAIs”). The Total Recordable Incident Rate across exploration and operations was 0. 00 per 200,000 hours worked for the quarter and 0.07 for the first six months of 2023. In early July 2023, FDN operations surpassed 365 days without an LTI or MAI with over 5.1 million hours worked. Community Various community projects supported by the Company continued to progress in the second quarter including support for micro businesses established by local entrepreneurs in conjunction with the Lundin Foundation. The local textile manufacturer, fire extinguisher maintenance company, and pest control / fumigation company continue to work with the mine. Feasibility studies of potential new areas for local businesses continue. 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 remain on track. The Company continues to engage with local indigenous people, especially the Shuar Federation of Zamora Chinchipe, to jointly implement projects that promote economic opportunities and the Shuar culture. In the second quarter, the Shuar tourism company continued in its efforts to diversify its lines of business and to create additional employment opportunities. Corporate The Company paid a quarterly dividend of $0.10 per share on June 27, 2023 (June 30 for shares trading on Nasdaq Stockholm) based on a record date of June 13, 2023, for a total of $23.7 million. With the release of its second quarter 2023 results, the Company has declared a cash dividend of $0.10 per share, which is payable on September 26, 2023 (Sept ember 29 for shares trading on Nasdaq Stockholm) to shareholders of record on September 11, 2023. At the Company’s annual shareholders’ meeting on May 15, 2023, Ms. Angelina Mehta was elected as a director, replacing Ms. Chantal Gosselin who did not stand for re-election. ===== SIDA 5 ===== 5 The Company’s second TCFD-aligned climate change report and seventh annual sustainability report were published in May. Based on publicly available data from 152 gold mines that reported their Sco pes 1 and 2 greenhouse gas emissions in 2021 and on Lundin Gold's 2022 emissions performance, the emissions intensity of Fruta del Norte is among the lowest in the industry. The Company has set a target to be carbon neutral by 2030 with respect to its Scopes 1 and 2 emissions based on its current life of mine plan. EXPLORATION – CONTINUING TO MAKE PROGRESS Near-Mine Exploration Program The near mine drilling program continues to explore extensions of major controlling structures surrounding the FDN deposit. In the second quarter, a total of 8,609 metres across sixteen drill holes, from surface and underground, were completed at several targets near FDN. • The surface drilling program continues along the south extension of the East Fault, where the FDN South (“FDNS”) and Bonza Sur targets were identified in the previous quarter. During the quarter, twelve surface drill holes were completed and indicated continuity of mineralization at Bonza Sur and FDNS. An exploratory hole was also completed along the north extension of the Fruta del Norte deposit. Four surface rigs are currently drilling with two rigs at Bonza Sur, one at FDNS, and the fourth testing new near mine sectors. o At FDNS, six surface drill holes were completed, confirming continuity of mineralization and defining a new geometry for the vein system in this sector. Drilling results indicate a series of subparallel epithermal veins in a northeast ern-southwestern direction that remain open for expansion along strike and at depth. o At Bonza Sur, located one kilometre from FDN, five surface drill holes were completed and continue to confirm mineralization. Drilling results recorded multiple positive intersections and demonstrated the occurrence of three distinct mineralized zones represented by veins/veinlets of quartz and minor chalcedony and manganoan -carbonate associated to the occurrences of sulfides. Mineralization currently extends 500 metres along strike to the north -south and 300 metres along the downdip and remains open in all directions. o Drilling testing new near mine sectors was recently initiated. This drilling aims to explore the extensions of major structures at FDN with the first dr ill hole completed along the northern extension of FDN. Results are pending. • The underground drill program continues to explore the continuity of the FDN deposit at depth and beyond the major faults. Four drill holes were completed and intercepted structures and hydrothermal alteration beyond the FDN limits. In the central part of FDN, two drill holes confirmed the hydrothermal alteration zones at depth with low -grade gold values. Two other drill holes intercepted zones of hydrothermal alteration with vein/veinlets hosted on volcanic rocks or intrusive rocks to the east of the FDN East Fault. Results are pending. A complete table of results received to date can be found in Lundin Gold’s press release dated August 3, 2023. ===== SIDA 6 ===== 6 Regional Exploration Program The regional drilling program continues to advance in distinct sectors along the southwestern border of the Suarez basin and a total of 2,264 metres across three drill holes were completed in the second quarter. The program focused on the Quebrada La Negra and the newly defined Crisbel targets, where detailed geological interpretation of exploration data and ad ditional surface works identified major structures and zones of hydrothermal alteration. • At Quebrada La Negra, two drill holes were completed which intercepted wide zones of hydrothermal alteration with breccias and/or veins and disseminated sulfides. Drill results returned low values of gold associated with epithermal pathfinder elements, such as zinc and lead, and a recent interpretation point to new areas for further detailing farther north. • At Crisbel, one drill hole was completed testing an unexplor ed geochemical soil anomaly (gold and epithermal pathfinder elements such as antimony and arsenic) disposed along the contact between the Suarez Border and the volcanic sequence. The drill hole intercepted hydrothermal alteration zones with important quantities of sulfides hosted in brecciated volcanic rocks. Results are pending. 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 Newcre st can earn up to a 50% interest in eight exploration concessions located to the north and south of Fruta del Norte. A second phase of scout drilling was completed in the quarter at the Gamora Project, which was focused on testing priority copper-gold targets in the Mirador copper porphyry district. OUTLOOK – GUIDANCE INCREASED FOLLOWING STRONG FIRST HALF Achievements during the first half of 2023 provide the Company with a positive outlook for the remainder of the year and as a result, production guidance is increased to 450,000 to 485,000 oz while cost guidance is decreased for both cash operating cost and AISC to $650 to $700 per oz sold and $820 to $870 per oz sold, respectively. Production for the second half of 2023 is expected to decrease relative to the first half of the year driven by a combination of lower grades and lower recoveries due to processing of ore from certain sectors of the mine with less favourable geology. In addition, AISC 1 is expected to increase with continued ramp up of susta ining capital activities and lower expected gold production levels. Sustaining capital is expected to increase substantially during the second half driven by construction of the fourth raise of the tailings dam 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 with results expected to be incorporated into the geological model and in the new resource estimate in the first quarter of 2024. The near mine drilling program plans to continue to delineate the FDNS and Bonza Sur targets, where systems of epithermal veins/veinlets have been identified and remain open. Three rigs are dedicated to the detailing and expansion of the mineralized zones at depth and along strike. Another surface rig and underground rig continue to explore for major discoveries in the near mine district targeting the extension of major controlling structures at FDN in new sectors. The near mine program is expected to comprise a total of 23,000 metres of drilling for 2023. 1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 13 to 16 of the Company's MD&A for the three and six months ended June 30, 2023 available on SEDAR ===== SIDA 7 ===== 7 The regional drilling program continues to focus on the southern Suarez Basin, advancing along the eastern and western borders of the Basin. A second rig is expected to be added to advance numerous target areas identified during the previous quarters. The regional drilling program continues to be expected to comprise a total of 12,500 metres for the year, with two rigs currently operating. The combined near mine and regional exploration budget for 2023 remains at $24.6 million. The Company anticipates declaring quarterly dividends of $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 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 di scuss its results on Thursday, August 10 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 / 61558460 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 August 24, 2023. Toll Free North America Replay Number: +1 888-390-0541 International Replay Number: +1 416-764-8677 Replay passcode: 558460 # 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 committed to delivering value to its share holders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe ===== SIDA 8 ===== 8 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 measures 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 these specified financial measures have been incorporated by reference and can be found on page 13 of the Company's MD&A for the three and six months ended June 30, 2023 available on SEDAR. 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 August 9, 2023 at 5:00 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", "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 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 flow forecasts and financing obligations; its estimated capital costs; benefits of the Company’s community programs; the Company’s declarati on 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. 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. ===== SIDA 9 ===== 9 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 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 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 ch anges 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 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 10 ===== Q2 2023 ===== SIDA 11 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 and six months ended June 30, 2023 with those of the same period from the previous year. This MD&A is dated as of August 9, 2023 and should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements and related notes thereto for the three and six months ended June 30, 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. References to the “2023 Period” and “2022 Period” relate to the six months ended June 30, 2023 and June 30, 2022, respectively. 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 authorities 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. SECOND QUARTER 2023 HIGHLIGHTS AND ACTIVITIES Lundin Gold generate d $132 million in free cash flow 1 or $0.56 per share over the three-month period, the highest quarterly free cash flow 1 achieved to date. This was achieved by excellent o perating performance at FDN with gold production of 129,731 ounces (“oz”) and sales of 128,958 oz at a cash operating cost1 of $644 per oz sold and all -in sustaining cost (“AISC”) 1 of $802 per oz sold . Revenues and adjusted earnings 1 of $244 million and $ 59.4 million, respectively, were realized. Gold production during the second quarter was higher than plan due to higher mill throughput and higher head grade, at an average of 11.0 grams per tonne (“g/t”), offset by lower recoveries compared to recent periods due to a change in ore type, which contained finely disseminated sulphide minerals. Construction of the fourth tailings dam raise advanced in the second quarter resulting in increased sustaining capital expenditures, a figure included in the AISC 1 calculation. Construction activities are expected to peak during the third quarter with completion on track during the fourth quarter of 2023. Based on very strong performance during the first half of 2023, the Company has increased its 2023 production guidance to 450,000 to 485,000 oz, as compared to 425,000 to 475,000 oz. In addition, the Company has reduced its 2023 cost operating cost1 guidance to $650 to $700 per oz sold from $700 to $760 per oz sold , and AISC1 to $820 to $870 per oz sold from $870 to $940 per oz sold. The following two tables provide an overview of key operating and financial results achieved during the second quarter of 2023 compared to the same period in 2022. 1 Refer to “Non-IFRS Measures” section in this MD&A. 1 ===== SIDA 12 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 2023 (All dollar amounts are stated in U.S. dollars unless otherwise indicated. Tables are expressed in thousands of U.S. dollars, except share and per share amounts) Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Tonnes ore mined 404,408 369,430 832,143 749,059 Tonnes ore milled 418,373 385,675 810,705 759,082 Average mill head grade (g/t) 11.0 10.3 11.6 10.8 Average recovery 88.0% 87.6% 89.3% 88.9% Average mill throughput (tpd) 4,598 4,238 4,479 4,194 Gold ounces produced 129,731 111,890 269,752 233,555 Gold ounces sold 128,958 96,291 263,649 215,573 Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Revenues ($’000) 243,930 177,808 500,658 394,280 Income from mining operations ($’000) 124,801 82,522 257,509 193,729 Earnings before interest, taxes, depreciation, and amortization ($’000)1 149,900 144,704 293,532 243,526 Adjusted earnings before interest, taxes, depreciation, and amortization ($’000)1 149,579 104,718 308,645 238,264 Net income ($’000) 63,148 55,962 114,613 79,144 Basic income per share ($) 0.27 0.24 0.48 0.34 Cash provided by operating activities ($’000) 162,352 60,686 306,791 188,016 Free cash flow ($’000)1 131,859 21,248 120,206 113,054 Free cash flow per share ($)1 0.56 0.09 0.51 0.48 Average realized gold price ($/oz sold)1 1,942 1,907 1,947 1,882 Cash operating cost ($/oz sold)1 644 702 644 656 All-in sustaining costs ($/oz sold)1 802 864 765 771 Adjusted earnings ($‘000)1 59,387 13,490 126,401 71,040 Adjusted earnings per share ($)1 0.25 0.06 0.53 0.30 Dividends paid per share ($) 0.10 - 0.20 - 1 Refer to “Non-IFRS Measures” section. 2 ===== SIDA 13 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 earnings 1 during the second quarter of 2023 is due to non -cash derivative gains of $0.3 million (six months ended June 30, 2023: loss of $15.1 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 in 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 Second Quarter of 2023 • Mine production of 404,408 tonnes of ore at an average grade of 9.0 grams per tonne. • The mill processed 418,373 tonnes of ore at an average throughput rate of 4,598 tpd. Inclusive of the relining of the SAG and ball mills during the first quarter, the mill has averaged a throughput rate of 4,479 tpd during the first half of 2023. • The average grade of ore milled was 11.0 grams per tonne with average recovery at 88.0%. Recoveries were affected by processing of ore from sectors that contain higher levels of finely disseminated sulphide minerals which are impacting both gravity and flotation recovery. • Gold production was 129,731 oz which was comprised of 85,395 oz in concentrate and 44,336 oz as doré. Gold sales of 128 ,958 oz of gold, consisting of 84,679 oz in concentrate and 44,279 oz as doré, resulted in gross revenues of $250 million at an average realized gold price 1 of $1,942 per oz. Net of treatment and refining charges, revenues were $244 million. • Cash operating costs1 and AISC1 were $644 and $802 per oz of gold sold, respectively. While cash operating costs1 per oz sold remained consistent with the previous quarter, the ramp up of sustaining capital activities resulted in a higher AISC1 albeit still below expected levels for the quarter. • The Company generated cash flow of $162 million from operations and record free cash flow¹ of $132 million or $0.56 per share resulting in a cash balance of $275 million at June 30, 2023. • Earnings before interest, taxes, depreciation, and amortization 1 (“EBITDA”) and adjusted EBITDA 1 were $149.9 million and $149.6 million, respectively with the difference resulting from derivative gains recognized in the quarter. • Net income was $63.1 million including a derivative gain of $0.3 million, and net of corporate, exploration, finance costs, and associated taxes on earnings. Adjusted earnings¹, which exclude the derivative gain and related taxes, were $59.4 million, or $0.25 per share. Capital Expenditures Sustaining Capital • Construction of the fourth raise of the tailings dam advanced during the second quarter with progress to date consistent with plan. Completion during the fourth quarter of 2023 remains as expected. • The new warehouse was completed during the second quarter and is now operational. • The underground mine maintenance facility is expected to be completed during the third quarter which will provide additional efficiencies. • Other sustaining capital projects such as sewage treatment plant upgrades, purchase of mobile equipment, and other efficiency improvement projects continue to ramp up during the remainder of the year. 1 Refer to “Non-IFRS Measures” section. 3 ===== SIDA 14 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 continues to advance in distinct sectors of the FDN resource. During the quarter, the program focused on the southern extension with approximately 3,211 metres across 20 drill holes completed. Most drill holes confirmed the continuity of mineralization in the drilled areas. Results have pointed to a vein type mineralization in this part of the deposit, with narrower higher-grade intervals. Some of the conversion drilling results for the southern extension remain pending. A complete table of results received to date can be found in Lundin Gold’s press release dated August 3, 2023. Health and Safety and Community Health and Safety • During the quarter there were no Lost Time Incidents ("LTI”) and no Medical Aid Incidents (“MAI”). • The Total Recordable Incident Rate across exploration and operations was 0.00 per 200,000 hours worked for the quarter and 0.07 for the first six months of 2023. • In early July, FDN operations surpassed 365 days without an LTI or MAI with over 5.1 million hours worked. Community Various community projects supported by the Company continued to progress in the second quarter including support for micro businesses established by local entrepreneu rs in conjunction with the Lundin Foundation. The local textile manufacturer, fire extinguisher maintenance company, and pest control / fumigation company continue to work with the mine. Feasibility studies of potential new areas for local businesses con tinue. 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 remain on track. The Company continues to engage with local indigenous people, especially the Shuar Federation of Zamora Chinchipe, to jointly implement projects that promote economic opportunities and the Shuar culture. In the second quarter, the Shuar tourism company co ntinued in its efforts to diversify its lines of business and to create additional employment opportunities. Exploration Near Mine Exploration Program The near mine drilling program continues to explore extensions of major controlling structures surrounding the FDN deposit. In the second quarter, a total of 8,609 metres across sixteen drill holes, from surface and underground, were completed at several targets near FDN. • The surface drilling program continues along the south extension of the East Fault, where the FDN South (“FDNS”) and Bonza Sur targets were identified in the previous quarter. During the quarter, twelve surface drill holes were completed and indicated continuity of mineralization at Bonza Sur and FDNS. An exploratory hole was also completed along the north extension of the Fruta del Norte deposit. Four surface rigs are currently drilling with two rigs at Bonza Sur, one at FDNS, and the fourth testing new near mine sectors. o At FDNS, six surface drill holes were completed, confirming continuity of mineralization and defining a new geometry for the vein system in this sector. Drilling results indicate a series of subparallel epithermal veins in a northeastern-southwestern direction that remain open for expansion along strike and at depth. o At Bonza Sur, located one kilometre from FDN, five surface drill holes were completed and continue to confirm mineralization. Drilling results recorded multiple positive intersections and demonstrated the occurrence of three distinct mineralized zones represented by veins/veinlets of quartz and minor chalcedony and manganoan-carbonate associated to the occurrences of sulfides. Mineralization currently extends 500 metres along strike to the north-south and 300 metres along the downdip and remains open in all directions. o Drilling testing new near mine sectors was recently initiated. This drilling aims to explore the extensions of major structures at FDN with the first drill hole completed along the northern extension of FDN. Results are pending. 4 ===== SIDA 15 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 underground drill program continues to explore the continuity of the FDN deposit at depth and beyond the major faults. Four drill holes were completed and intercepted structures and hydrothermal alteration beyond the FDN limits. In the central part of FDN, two drill holes confirmed the hydrothermal alteration zones at depth with low-grade gold values. Two other drill holes intercepted zones of hydrothermal alteration with vein/veinlets hosted on volcanic rocks or intrusive rocks to the east of the FDN East Fault. Results are pending. A complete table of results received to date can be found in Lundin Gold’s press release dated August 3, 2023. Regional Exploration Program The regional drilling program continues to advance in distinct sectors along the southwestern border of the Suarez basin and a total of 2,264 metres across three drill holes were completed in the second quarter. The program focused on the Quebrada La Negra and the newly defined Crisbel targets, where detailed geological interpretation of exploration data and additional surface works identified major structures and zones of hydrothermal alteration. • At Quebrada La Negra, two drill holes were completed which intercepted wide zones of hydrothermal alteration with breccias and/or veins and disseminated sulfides. Drill results returned low values of gold associated with epithermal pathfinder elements, such as zinc and lead, and a recent interpretation point to new areas for further detailing farther north. • At Crisbel, one drill hole was completed testing an unexplored geochemical soil anomaly (gold and epithermal pathfinder elements such as antimony and arsenic) disposed along the contact between the Suarez Border and the volcanic sequence. The drill hole intercepted hydrothermal alteration zones with important quantities of sulfides hosted in brecciated volcanic rocks. Results are pending. 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 . A second phase of scout drilling was completed in the quarter at the Gamora Project, which was focused on testing priority copper -gold targets in the Mirador copper porphyry district. Corporate • The Company paid a quarterly dividend of $0.10 per share on June 27, 2023 (June 30 for shares trading on Nasdaq Stockholm) based on a record date of June 13, 2023, for a total of $23.7 million. • With the release of its second quarter 2023 results, the Company has declared a cash dividend of $0.10 per share, which is payable on September 26, 2023 (September 29 for shares trading on Nasdaq Stockholm) to shareholders of record on September 11, 2023. • The Company announced the appointment of Christopher Kololian as Chief Financial Officer during the quarter. Mr. Kololian assumed the role effective July 1, 2023 , and the Company’s Interim Chief Financial Officer, Mr. Chester See, has continued with Lundin Gold in the role of Senior Vice-President, Finance. • At the Company’s annual shareholders’ meeting on May 15, 2023, Ms. Angelina Mehta was elected as a director, replacing Ms. Chantal Gosselin who did not stand for re-election. • The Company’s second TCFD-aligned climate change report and seventh annual sustainability report were published in May. Based on publicly available data from 152 gold mines that r eported their Scopes 1 and 2 greenhouse gas emissions in 2021 and on Lundin Gold's 2022 emissions performance, the emissions intensity of Fruta del Norte is among the lowest in the industry. The Company has set a target to be carbon neutral by 2030 with respect to its Scopes 1 and 2 emissions based on its current life of mine plan. 5 ===== SIDA 16 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 2023 2022 2022 Q2 Q1 Q4 Q3 Revenues $ 243,930 $ 256,728 $ 210,961 $ 210,425 Income from mining operations $ 124,801 $ 132,708 $ 92,095 $ 83,930 Derivative gain (loss) for the period $ 321 $ (15,434) $ 29,217 $ 41,838 Net income (loss) for the period $ 63,148 $ 51,465 $ (68,259) $ 62,673 Basic income (loss) per share $ 0.27 $ 0.22 $ (0.29) $ 0.27 Diluted income (loss) per share $ 0.26 $ 0.22 $ (0.29) $ 0.26 Weighted-average number of common shares outstanding Basic 236,943,432 236,062,529 235,332,039 235,165,784 Diluted 239,190,085 238,123,015 235,332,039 236,882,976 Additions to property, plant and equipment $ 13,245 $ 4,384 $ 15,253 $ 15,178 Total assets $ 1,508,831 $ 1,467,040 $ 1,668,865 $ 1,634,590 Long-term debt $ 396,588 $ 434,175 $ 667,966 $ 589,919 Working capital $ 268,095 $ 256,853 $ 194,804 $ 253,673 2022 2022 2021 2021 Q2 Q1 Q4 Q3 Revenues $ 177,808 $ 216,472 $ 186,440 $ 190,753 Income from mining operations $ 82,522 $ 111,207 $ 91,646 $ 89,431 Derivative loss for the period $ 39,986 $ (34,724) $ (36,001) $ (636) Net income for the period $ 55,962 $ 23,182 $ 28,789 $ 56,673 Basic income per share $ 0.24 $ 0.10 $ 0.12 $ 0.24 Diluted income per share $ 0.24 $ 0.10 $ 0.12 $ 0.24 Weighted-average number of common shares outstanding Basic 234,933,975 233,809,773 233,211,843 232,723,880 Diluted 236,847,992 235,774,444 235,376,672 235,017,999 Additions to property, plant and equipment $ 14,532 $ 9,184 $ 5,266 $ 20,101 Total assets $ 1,664,030 $ 1,735,223 $ 1,685,113 $ 1,630,830 Long-term debt $ 645,724 $ 752,482 $ 739,977 $ 748,856 Working capital $ 253,921 $ 273,680 $ 217,221 $ 136,139 6 ===== SIDA 17 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 June 30, 2023 compared to the three months ended June 30, 2022 The Company generated net income of $ 63.1 million during the second quarter of 202 3 compared to $ 56.0 million during the second quarter of 2022. Net income was generated from the recognition of revenues of $ 244 million and income from mining operations of $ 125 million as well as a derivative gain of $0.3 million. This is offset by finance expense of $16.4 million, income tax expense of $34.3 million, and other expenses totalling $11.3 million. During the second quarter of 2022, net income was generated from the recognition of revenues of $ 178 million and income from mining operations of $82.5 million as well as a derivative gain of $40.0 million offset by finance expense of $28.5 million, income tax expense of $32.6 million, and other expenses totalling $5.4 million. Income from mining operations Net income from mining operations increased to $125 million compared to $82.5 million during the same quarter in 2022. Cost of goods sold of $ 119 million was comprised of operating expenses of $ 68.3 million; royalties of $ 14.7 million; and depletion and depreciation of $36.0 million. During the same period in 2022, cost of goods sold was $95.3 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 $5.2 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 $3.7 million during the second quarter of 2022 to $4.5 million during the second quarter of 2023. This difference is mainly attributable to an increase in professional fees on account of corporate matters. Finance expense Finance expense decreased to $ 16.4 million during the quarter compared to $ 28.5 million during the same period in 2022 as, in addition to lower interest expense resulting from a declining balance under the senior debt facility, savings of interest and finance charges were realized after the full repayment of the gold prepay facility in January 2023. Other expense (income) Other expense of $1.6 million was recognized during the quarter compared to other income of $1.1 million in the second 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 A derivative gain of $ 0.3 million was recorded on the statement of operations during the second quarter of 2023 compared to a derivative gain of $40.0 million in the second quarter of 202 2. This is largely the result of variations in forward gold prices at the end of the relevant quarter compared to the beginning of the same quarter, which in turn causes the change in estimated fair values of the gold prepay, stream, and offtake facilities which are accounted for as financial liabilities measured at fair value and is more fully explained below. 7 ===== SIDA 18 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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) Income taxes Income taxes of $ 34.3 million were accrued during the second quarter of 2023 (three months ended June 30, 2022: $32.6 million) which is comprised of current and deferred income tax expenses of $ 28.1 million and $6.2 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 in come 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. Six months ended June 30, 2023 compared to the six months ended June 30, 2022 The Company generated net income of $115 million during the 2023 Period compared to $79.1 million during the 2022 Period. During the 2023 Period, revenues of $ 501 million were recognized which generated inc ome from mining operations of $ 258 million. This was offset by derivative losses of $15.1 millio n, finance expense of $ 37.5 million, income tax expense of $68.1 million, and other expenses totalling $22.2 million. Revenues and income from mining operations were lower for the 2022 Period at $394 million and $194 million, respectively, due mainly to fewer ounces of gold sold and lower realized gold prices. During the 2022 Period, derivative gains of $5.3 million were recorded , offset by finance expense of $ 55.8 million, income tax expense of $ 49.5 million and other expenses totalling $14.6 million. Income from mining operations During the 2023 Period, the Company recognized revenues of $501 million from the sale of 263,649 oz of gold. This is offset by cost of goods sold of $243 million which is comprised of operating expenses of $141 million; royalties of $29.0 million; and depletion and depreciation of $ 73.3 million resulting in income from mining operations of $ 258 million. During the same period in 2022, revenues of $394 million were recognized from the sale of 215,573 oz of gold resulting in income from mining operations of $194 million. Corporate administration Corporate administration costs of $12.1 million were incurred during the 2023 Period compared to $9.6 million during the 2022 Period. This increase is mainly driven by payments made to certain long-serving employees upon the end of their employment with the Company. Exploration Exploration costs were $9.0 million during the 2023 Period compared to $5.6 million during the 2022 Period with the increase being driven by activities under the near -mine program which was only launched during the second half of 2022. Finance expense Finance expense of $ 37.5 million was incurred during the 202 3 Period compared to $ 55.8 million during the 202 2 Period. The full repayment of the gold prepay facility in January 2023 has resulted in a reduction in interest and finance charges combined with lower interest expense from the declining balance under the senior debt facility. 8 ===== SIDA 19 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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) 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 2023 Period, the Company made scheduled principal, interest , and finance charge repayments totaling $ 39.0 million (six months ended June 30, 2022: $25.9 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 $ 15.1 million due to a change in its estimated fair value between December 31, 202 2 and June 30, 2023 (2022: a decrease of $ 14.3 million between December 31, 2021 and June 30, 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. 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 June 30, 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 de rivative losses in the statement of operations during the 2023 Period. The opposite occurred during the 2022 Period. Fair values at a point in time do not necessarily reflect the amounts that will actually be repaid when the obligation becomes due in the future. While significant derivative 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 forec asts to be generated during the 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. LIQUIDITY AND CAPITAL RESOURCES As at June 30, 2023, the Company had cash of $ 275 million and a working capital balance of $ 268 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 2023 Period 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 $39.0 million; interest and principal repayments under the senior debt of $91.1 million; dividends of $47.4 million; and cash outflows of $20.4 million relating to sustaining capital expenditures. This is offset by cash generated from operating activities of $ 307 million and proceeds from the exercise of stock options and anti-dilution rights totaling $9.8 million. 9 ===== SIDA 20 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 estimate of the adjustment to the trade receivable is calculated based on t he 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 June 30, 2023, this resulted in an estimated increase of $4.1 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 five 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 being 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 o r 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 decreased primarily due to lower grade stockpiled 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 2023 Period are comprised principally of sustaining capital expenditures for the fourth raise of the tailings dam and other capital projects. Liquidity and capital resources The Company generated strong operating cash flow during the 2023 Period and expects to continue to do so for the remainder of the year based on its production and AISC guidance . At current gold prices, t his strong operating cash flow will continue to support accelerated debt repayments, near mine and regional exploration , planned capital expenditures, growth initiatives and regular dividend payments under the approved dividend policy. The senior debt is repayable in variable quarterly instalments as well as accelerated quarterly principal repayments based on 30% of Fruta del Norte’s excess cash flow (the “Cash Sweep”). Based on scheduled principal payments and an estimate of the Cash Sweep, the senior debt f acility is expected to be fully repaid on or before June 30, 2 024, approximately two years earlier than the maturity date. 10 ===== SIDA 21 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 February of each year. The Company has the option to repay (i) 50% of the stream facility outstanding on June 30, 2024 for $150 million (the “First Reduction Option”) 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 $ 96.4 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, the Company is subject to risk due to flu ctuations 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 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. 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 SOFR 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 22 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 Compa ny’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 June 30, 2023 but not recognized as liabilities are as follows: Capital expenditures 12 months ending June 30, 2024 $ 16,012 July 1, 2024 onward - Total $ 16,012 OFF-BALANCE SHEET ARRANGEMENTS During the 2023 Period 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 237,303,775 common shares issued and outstanding. There were also stock options outstanding to purchase a total of 3,898,571 common shares, 553,620 restricted share units with a performance criteria, 193,844 restricted share units, and 11,866 deferred share units. OUTLOOK Achievements during the first half of 2023 provide the Company with a positive outlook for the remainder of the year and as a result, production guidance is increased to 450,000 to 485,000 oz while cost guidance is decreased for both cash operating cost and AISC to $650 to $700 per oz sold and $820 to $870 per oz sold, respectively. Production for the second half of 2023 is expected to decrease relative to the first half of the year driven by a combination of lower grades and lower recoveries due to processing of ore from certain sectors of the mine with less favourable geology. In addition, AISC 1 is expected to increase with continued ramp up of sustaining capital activities and lower expected gold production levels . Sustaining capital is expected to increase substantially during the second half driven by construction of the fourth raise of the tailings dam 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 with results expected to be incorporated into the geological model and in the new resource estimate in the first quarter of 2024. The near mine drilling program plans to continue to delineate the FDNS and Bonza Sur targets, where systems of epithermal veins/veinlets have been identified and remain op en. Three rigs are dedicated to the detailing and expansion of the mineralized zones at depth and along strike. Another surface rig and underground rig continue to explore for major discoveries in the near mine district targeting the extension of major c ontrolling structures at FDN in new sectors. The near mine program is expected to comprise a total of 23,000 metres of drilling for 2023. 12 ===== SIDA 23 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 regional drilling program continues to focus on the southern Suarez Basin, advancing along the eastern and western borders of the Basin. A second rig is expected to be added to advance numerous target areas identified during the previous quarters. The regional drilling program continues to be expected to comprise a total of 12,500 metres for the year, with two rigs currently operating. The combined near mine and regional exploration budget for 2023 remains at $24.6 million. The Company anticipates declaring quarterly dividends of $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, 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 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 measures 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 June 30, Six months ended June 30, 2023 2022 2023 2022 Revenues $ 243,930 $ 177,808 $ 500,658 $ 394,280 Treatment and refining charges 10,118 8,186 19,528 16,432 Less: silver revenues (3,659) (2,348) (6,891) (4,925) Gold sales $ 250,389 $ 183,646 $ 513,295 $ 405,787 Gold oz sold 128,958 96,291 263,649 215,573 Average realized gold price $ 1,942 $ 1,907 $ 1,947 $ 1,882 13 ===== SIDA 24 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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) 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 June 30, Six months ended June 30, 2023 2022 2023 2022 Net income for the period $ 63,148 $ 55,962 $ 114,613 $ 79,144 Adjusted for: Finance expense 16,435 28,483 37,492 55,759 Income tax expense 34,258 32,569 68,106 49,480 Depletion and depreciation 36,059 27,690 73,321 59,143 EBITDA $ 149,900 $ 144,704 $ 293,532 $ 243,526 Derivative loss (gain) (321) (39,986) 15,113 (5,262) Adjusted EBITDA $ 149,579 $ 104,718 $ 308,645 $ 238,264 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 u nderlying operating 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 u sing the weighted average number of shares outstanding under the basic method of earnings per share as determined under IFRS. Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Net income for the period $ 63,148 $ 55,962 $ 114,613 $ 79,144 Adjusted for: Derivative loss (gain) (321) (39,986) 15,113 (5,262) Deferred income tax expense (3,440) (2,486) (3,325) (2,842) Adjusted earnings $ 59,387 $ 13,490 $ 126,401 $ 71,040 Basic weighted average shares outstanding 236,943,432 234,933,975 236,505,417 234,374,977 Adjusted basic earnings per share 0.25 0.06 $ 0.53 $ 0.30 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. 14 ===== SIDA 25 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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 June 30, Six months ended June 30, 2023 2022 2023 2022 Operating expenses $ 68,339 $ 57,462 $ 140,810 $ 118,757 Royalty expenses 14,742 10,141 29,041 22,667 Cash operating costs $ 83,081 $ 67,603 $ 169,851 $ 141,424 Gold oz sold 128,958 96,291 263,649 215,573 Cash operating cost per oz sold $ 644 $ 702 $ 644 $ 656 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. Other companies may calculate this measure differently as a result of differences in underlying principles a nd policies applied. Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Cash operating costs $ 83,081 $ 67,603 $ 169,851 $ 141,424 Corporate social responsibility 534 384 1,146 811 Treatment and refining charges 10,118 8,186 19,528 16,432 Accretion of restoration provision 168 153 335 306 Sustaining capital 13,245 9,233 17,629 12,173 Less: silver revenues (3,659) (2,348) (6,891) (4,925) All-in sustaining cost $ 103,487 $ 83,211 $ 201,598 $ 166,221 Gold oz sold 128,958 96,291 263,649 215,573 All-in sustaining cost per oz sold $ 802 $ 864 $ 765 $ 771 15 ===== SIDA 26 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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) 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 June 30, Six months ended June 30, 2023 2022 2023 2022 Net cash provided by operating activities $ 162,352 $ 60,686 $ 306,791 $ 188,016 Net cash used for investing activities (13,266) (13,043) (20,438) (25,281) Interest paid (5,357) (7,324) (11,725) (13,301) Finance charge paid (11,870) (19,071) (154,422) (36,380) Free cash flow $ 131,859 $ 21,248 $ 120,206 $ 113,054 Basic weighted average shares outstanding 236,943,432 234,933,975 236,505,417 234,374,977 Free cash flow per share $ 0.56 $ 0.09 $ 0.51 $ 0.48 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. 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 nine months ended September 30, 2023 is expected to be published on or about November 8, 2023. 16 ===== SIDA 27 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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) 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 June 30, 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 “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”, “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 assu mptions, 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 different from those expressed by these forward -looking statements and inf ormation. 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 MD&A, and the Company will not necessarily update this information, unless required to do so by securities laws. This MD&A contains forward -looking information in a number of places, such as in state ments 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 17 ===== SIDA 28 ===== LUNDIN GOLD INC. Management’s Discussion and Analysis Six Months Ended June 30, 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) 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. 18 ===== SIDA 29 ===== 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. June 30, December 31, Note 2023 2022 ASSETS Current assets Cash and cash equivalents 7, 14 $ 274,968 $ 363,400 Trade receivables and other current assets 3 163,967 169,134 Inventories 4 88,147 89,787 Advance royalty 13,000 13,000 540,082 635,321 Non-current assets VAT recoverable 49,794 52,244 Advance royalty 9,994 16,494 Property, plant and equipment 5 738,893 781,299 Mineral properties 6 170,068 183,507 $ 1,508,831 $ 1,668,865 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 67,708 $ 71,434 Income taxes payable 53,424 21,445 Other current liabilities 9 - 2,264 Current portion of long-term debt 7 150,855 345,374 271,987 440,517 Non-current liabilities Long-term debt 7 245,733 322,592 Reclamation provisions 7,384 7,049 Deferred income tax liabilities 58,145 46,626 583,249 816,784 EQUITY Share capital 8 1,003,692 989,772 Equity-settled share-based payment reserve 9 13,053 13,856 Accumulated other comprehensive income (loss) (4,244) 2,612 Deficit (86,919) (154,159) 925,582 852,081 $ 1,508,831 $ 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 19 ===== SIDA 30 ===== 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 June 30, Six months ended June 30, Note 2023 2022 2023 2022 Revenues $ 243,930 $ 177,808 $ 500,658 $ 394,280 Cost of goods sold Operating expenses 68,339 57,462 140,810 118,757 Royalty expenses 14,742 10,141 29,041 22,667 Depletion and depreciation 36,048 27,683 73,298 59,127 119,129 95,286 243,149 200,551 Income from mining operations 124,801 82,522 257,509 193,729 Other expenses (income) Corporate administration 10 4,482 3,734 12,087 9,595 Exploration 5,196 2,820 9,039 5,626 Finance expense 11 16,435 28,483 37,492 55,759 Other expense (income) 1,603 (1,060) 1,059 (613) Derivative loss (gain) 7 (321) (39,986) 15,113 (5,262) 27,395 (6,009) 74,790 65,105 Net income before tax 97,406 88,531 182,719 128,624 Income tax expense Current income tax expense 13 28,055 17,162 54,215 37,143 Deferred income tax expense 13 6,203 15,407 13,891 12,337 34,258 32,569 68,106 49,480 Net income for the period $ 63,148 $ 55,962 $ 114,613 $ 79,144 OTHER COMPREHENSIVE INCOME (LOSS) Items that may be reclassified to net income Currency translation adjustment 1,756 (1,857) 1,559 (1,036) Items that will not be reclassified to net income Derivative gain (loss) related to the Company’s own credit risk (10,420) 7,929 (10,788) 9,064 Deferred income tax on accumulated other comprehensive income 2,258 (2,486) 2,373 (2,842) Comprehensive income $ 56,742 $ 59,548 $ 107,757 $ 84,330 Income per common share Basic $ 0.27 $ 0.24 $ 0.48 $ 0.34 Diluted 0.26 0.24 0.48 0.33 Weighted-average number of common shares outstanding Basic 236,943,432 234,933,975 236,505,417 234,374,977 Diluted 239,190,085 236,847,992 238,654,967 236,317,102 20 ===== SIDA 31 ===== 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 8 477,260 3,918 - - - 3,918 Exercise of warrants 9 411,441 2,445 (511) - - 1,934 Stock-based compensation 9 - - 1,982 - - 1,982 Other comprehensive income - - - 5,186 - 5,186 Net income for the period - - - - 79,144 79,144 Balance, June 30, 2022 235,165,784 $ 986,851 $ 12,848 $ 12,037 $ (101,540) $ 910,196 Balance, January 1, 2023 235,646,977 $ 989,772 $ 13,856 $ 2,612 $ (154,159) $ 852,081 Exercise of stock options 823,952 4,931 (1,714) - - 3,217 Vesting of share units 9 237,514 2,382 (1,175) - - 1,207 Exercise of anti-dilution rights 8 549,332 6,607 - - - 6,607 Stock-based compensation 9 - - 2,086 - - 2,086 Other comprehensive income - - - (6,856) - (6,856) Net income for the period - - - - 114,613 114,613 Dividends paid - - - - (47,373) (47,373) Balance, June 30, 2023 237,257,775 $ 1,003,692 $ 13,053 $ (4,244) $ (86,919) $ 925,582 21 ===== SIDA 32 ===== 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 June 30, Six months ended June 30, Note 2023 2022 2023 2022 OPERATING ACTIVITIES Net income for the period $ 63,148 $ 55,962 $ 114,613 $ 79,144 Items not affecting cash: Depletion and depreciation 36,059 27,690 73,321 59,143 Stock-based compensation 9 1,148 841 2,075 1,833 Derivative loss (gain) 16(b) (321) (39,986) 15,113 (5,262) Other expense (income) 1,126 (986) 910 (561) Finance expense 16,152 27,930 36,827 54,610 Deferred income tax expense 6,203 15,407 13,891 12,337 123,515 86,858 256,750 201,244 Changes in non-cash working capital items: Trade receivables and other current assets 731 12,712 8,218 15,174 Inventories 623 (7,524) 2,328 (10,216) Advance royalty 498 1,244 6,500 6,500 Accounts payable and accrued liabilities 5,361 7,602 (2,891) (4,625) Income taxes payable 28,486 (40,792) 31,979 (20,811) Other non-current liabilities - - (1,045) - Interest received 3,138 586 4,952 750 Net cash provided by operating activities 162,352 60,686 306,791 188,016 FINANCING ACTIVITIES Repayments of long-term debt 7 (49,108) (60,058) (171,558) (83,704) Interest paid 7 (5,357) (7,324) (11,725) (13,301) Finance charge paid 7 (11,870) (19,071) (154,422) (36,380) Proceeds from exercise of stock options 1,358 - 3,217 3,555 Proceeds from exercise of anti-dilution rights 4,417 3,502 6,607 3,918 Proceeds from exercise of warrants - - - 1,934 Dividends paid (23,725) - (47,373) - Net cash used for financing activities (84,285) (82,951) (375,254) (123,978) INVESTING ACTIVITIES Acquisition and development of property, plant and equipment (11,798) (11,389) (18,495) (22,596) VAT paid on investing activities (1,468) (1,654) (1,943) (2,685) Net cash used for investing activities (13,266) (13,043) (20,438) (25,281) Effect of foreign exchange rate differences on cash 453 (599) 469 (333) Net increase (decrease) in cash and cash equivalents 65,254 (35,907) (88,432) 38,424 Cash and cash equivalents, beginning of period 209,714 336,939 363,400 262,608 Cash and cash equivalents, end of period $ 274,968 $ 301,032 $ 274,968 $ 301,032 Supplemental cash flow information (Note 14) 22 ===== SIDA 33 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 preparation 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 shou ld 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 August 9, 2023. 3. Trade receivables and other current assets June 30, December 31, 2023 2022 Trade receivables (a) $ 96,366 $ 86,431 VAT recoverable (b) 35,700 61,883 Prepaid expenses and other (c) 31,901 20,820 $ 163,967 $ 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 June 30, 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 $ 4.1 million in trade receivables as of June 30, 2023 (December 31, 2022 - $6.1 million increase). 23 ===== SIDA 34 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 are being refunded or applied as a credit against other taxes payable, based on the level of export sal es 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 June 30, December 31, 2023 2022 Ore stockpile $ 9,516 $ 11,545 Gold in circuit 6,055 5,833 Doré and concentrate 14,782 16,709 Materials and supplies 57,794 55,700 $ 88,147 $ 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 - 17,405 182 42 - 17,629 Cumulative translation adjustment - 284 - - 2 286 Balance, June 30, 2023 $ - $ 964,813 $ 55,095 $ 24,636 $ 3,420 $ 1,047,964 24 ===== SIDA 35 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 - 54,564 3,241 2,144 291 60,240 Cumulative translation adjustment - 79 - - 2 81 Balance, June 30, 2023 $ - $ 261,222 $ 26,861 $ 19,011 $ 1,977 $ 309,071 Net book value As at December 31, 2022 $ - $ 740,545 $ 31,293 $ 7,727 $ 1,734 $ 781,299 As at June 30, 2023 $ - $ 703,591 $ 28,234 $ 5,625 $ 1,443 $ 738,893 6. Mineral properties Cost Fruta del Norte Balance, January 1, 2022 $ 207,146 Depletion (23,639) Balance, December 31, 2022 183,507 Depletion (13,439) Balance, June 30, 2023 $ 170,068 25 ===== SIDA 36 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 June 30, December 31, 2023 2022 Gold prepay credit facility (a) $ - $ 207,446 Stream loan credit facility (b) 276,428 259,226 Offtake derivative liability (c) 28,484 28,440 Senior debt facility (d) 91,676 172,854 $ 396,588 $ 667,966 Less: current portion Gold prepay credit facility - 207,446 Stream loan credit facility 55,325 49,223 Offtake derivative liability 3,854 4,112 Senior debt facility 91,676 84,593 Long-term portion $ 245,733 $ 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 June 30, 2023. Stream loan credit facility Offtake derivative liability Total Principal $ 109,885 $ - $ 109,885 Transaction costs (1,965) - (1,965) Derivative fair value adjustments 168,508 28,484 196,992 Total $ 276,428 $ 28,484 $ 304,912 Derivative fair value adjustments reflect the revaluation of the financial instruments at fair value as at June 30, 2023. The derivative gain or loss related to the Company’s own credit risk recorded in other comprehensive income 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 at that time. (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. 26 ===== SIDA 37 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 six months ended June 30, 2023, the Company made payments under the Stream Loan totaling $39.0 million (six months ended June 30, 2022 – $25.9 million) of which $8.8 million (six months ended June 30, 2022 – $6.5 million) was paid on account of principal; $4.3 million (six months ended June 30, 2022 – $4.9 million) for accrued interest; and $25.9 million (six months ended June 30, 2022 – $14.5 million) for the Finance Charge (see Note 1 6). As at June 30 , 202 3, based on the projected life of mine production and other significant assumptions (see Note 16), the estimated fair value equivalent to 256,398 oz. of gold and 4,431,176 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 (“First Reduction Option”) 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 pur chase 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 June 30, 2023 Tranche A Tranche B Total Principal $ 69,780 $ 27,912 $ 97,692 Accrued interest 914 280 1,194 Transaction costs, net of amortization (5,370) (1,840) (7,210) Total $ 65,324 $ 26,352 $ 91,676 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 SOFR 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 as well as accelerated quarterly principal repayments based on 30% of Fruta del Norte’s excess cash flow (the “Cash Sweep”). Based on scheduled principal payments and an estimate of the Cash Sweep, the Facility is expected to be fully repaid on or before June 30, 2024 and has been classified as part of the current portion of long-term debt. 27 ===== SIDA 38 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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) During the six months ended June 30, 2023, the Company paid $83.8 million of principal (six months ended June 30, 2022 – $61.4 million) and $7.3 million (six months ended June 30, 2022 – $4.4 million) of interest relating to the Facility. The principal repaid during the six months ended June 30, 2023 includes $43.6 million (six months ended June 30, 2022 – $35.2 million) paid on account of the Cash Sweep. 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 six months ended June 30, 2023, the Company issued 549,332 common shares to Newcrest Mining Limited (“Newcrest”) at a weighted average price of CAD$16.44 per share for total proceeds of $6.6 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 d eferred 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 commo n 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. 28 ===== SIDA 39 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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) During the six months ended June 30, 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. Stock options are exercisable into one common share of the Company at the price specified in the t erms of the option agreement. A continuity summary of the stock options granted and outstanding under the Omnibus Plan and Option Plan is presented below: Six months ended Year ended June 30, 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) (823,952) 5.26 (1,355,393) 5.23 Balance outstanding, end of period 3,864,471 $ 9.64 4,237,923 $ 8.35 Balance exercisable, end of period 2,598,721 $ 8.77 2,693,070 $ 7.10 (1) The weighted average share price on the exercise date for the stock options exercised during the six months ended June 30, 2023 and year ended December 31, 2022 were CAD$15.87 and CAD$11.62, respectively. The following table summarizes information concerning outstanding and exercisable options at June 30, 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 1,133,900 0.65 $ 5.35 1,133,900 0.65 $ 5.35 $ 5.41 to 11.00 1,450,071 3.17 10.13 714,417 3.00 10.23 $ 11.01 to 13.88 1,280,500 2.87 12.89 750,404 1.74 12.53 3,864,471 2.33 $ 9.64 2,598,721 1.61 $ 8.77 29 ===== SIDA 40 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 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: June 30, 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 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 six months ended June 30, 2023, the Company recorded stock-based compensation expense of $0.9 million (six months ended June 30, 2022 – $1.1 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 - 96,200 7,609 Granted - Dividend Equivalent - 9,068 - 2,734 404 Cancelled - - (5,752) (21,164) - Settled (152,052) - (19,518) (83,481) (30,825) Balance at June 30, 2023 - 525,520 - 155,160 11,866 30 ===== SIDA 41 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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) Restricted share units with performance criteria (“PSUs”) During the six months ended June 30, 2023, the Company granted 139,200 PSUs that are settled in shares (“Share PSUs”). In addition, in connection with dividends paid during the six months ended June 30, 2023 , 9,068 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 six months ended June 30, 2023. Share PSUs are granted to eligible employees and vest three years from date of grant subject to continued employment and certain performance conditio ns 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. 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 foll owing weighted -average assumptions: June 30, 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 six months ended June 30, 2023, the Company recorded stock-based compensation expense of $0.6 million (six months ended June 30, 2022 – $0.3 million) relating to Share PSUs. Restricted share units without performance criteria (“RSUs”) During the six months ended June 30, 2023, the Company granted 96,200 RSUs that are settled in shares (“Share RSUs”). In addition, in connection with dividend s paid during the six months ended June 30 , 2023, 2,734 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 six months ended June 30, 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. 31 ===== SIDA 42 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 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: June 30, 2023 December 31, 2022 Share RSUs Share RSUs Cash RSUs Risk-free interest rate 3.74% 1.22% 3.86% Expected stock price volatility 40.93% 44.54% 39.27% Expected life 1.55 years 1.99 years 0.15 years Expected dividends (CAD) $0.26 - $0.26 Weighted-average fair value per unit (CAD) $16.44 $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 six months ended June 30, 2023, the Company recorded stock-based compensation expense of $0.4 million (six months ended June 30, 2022 – $0.4 million) relating to Share RSUs. Deferred share units (“DSUs”) During the six months ended June 30, 2023 and year ended December 31, 2022, the Company granted 7,609 DSUs and 10,509 DSUs, respectively, to non -employee directors. In addition, in connection with dividends paid by the Company during the six months ended June 30, 2023 and year ended December 31 2022 , 404 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 six months ended June 30, 2023, the Company recorded stock -based compensation expense of $0.2 million (six months ended June 30, 2022 – $0.1 million) relating to DSUs. 10. Administration Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Corporate social responsibility $ 534 $ 384 $ 1,146 $ 811 Investor relations 111 68 189 170 Office and general 810 737 1,515 1,474 Professional fees 811 371 1,218 979 Regulatory and transfer agent 95 174 340 334 Salaries and benefits 820 1,014 5,347 3,805 Stock-based compensation 1,148 841 2,075 1,833 Travel 153 145 257 189 $ 4,482 $ 3,734 $ 12,087 $ 9,595 32 ===== SIDA 43 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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) 11. Finance expense Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Interest expense $ 4,928 $ 7,434 $ 10,821 $ 14,879 Finance charge 11,870 19,071 25,923 36,380 Other finance costs 924 1,459 2,019 3,050 Accretion of transaction costs 1,851 1,105 3,681 2,200 Interest income (3,138) (586) (4,952) (750) $ 16,435 $ 28,483 $ 37,492 $ 55,759 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 six months ended June 30 is shown below. June 30, June 30, 2023 2022 Salaries, bonuses and benefits $ 4,850 $ 3,305 Stock-based compensation 1,669 1,296 $ 6,519 $ 4,601 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 ant icipated 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 considered an employment benefit and included in operating costs. 33 ===== SIDA 44 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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) 13. Income taxes (continued) 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 June 30, Six months ended June 30, 2023 2022 2023 2022 Net income before tax $ 97,406 $ 88,531 $ 182,719 $ 128,624 Canadian federal and provincial income tax rates 27.00% 27.00% 27.00% 27.00% Income tax expense based on the above rates 26,299 23,903 49,334 34,728 Increase due to: Differences in foreign tax rates 4,587 7,995 10,215 12,485 Non-deductible costs 600 973 2,716 1,906 Withholding taxes (current and deferred) 1,500 - 3,791 - Losses and temporary differences for which an income tax asset has not been recognized 1,272 (302) 2,050 361 Income tax expense $ 34,258 $ 32,569 $ 68,106 $ 49,480 14. Supplemental cash flow information Cash and cash equivalents are comprised of the following: June 30, December 31, 2023 2022 Cash $ 131,132 $ 283,596 Short-term investments 143,836 79,804 $ 274,968 $ 363,400 Other supplemental cash information: Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Income taxes paid $ 21,017 $ 54,376 $ 21,017 $ 54,376 Change in accounts payable and accrued liabilities related to: Acquisition of property, plant and equipment $ 1,447 $ 3,143 $ (866) $ 1,120 34 ===== SIDA 45 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 June 30, 2023 Current assets $ 483,967 $ 11,367 $ 44,748 $ 540,082 Non-current assets 968,749 - - 968,749 Total assets 1,452,716 11,367 44,748 1,508,831 Current liabilities 269,528 741 1,718 271,987 Non-current liabilities 302,262 - 9,000 311,262 Total liabilities 571,790 741 10,718 583,249 For the three months ended June 30, 2023 Revenues 243,930 - - 243,930 Income from mining operations 124,801 - - 124,801 Corporate administration (1,429) (71) (2,982) (4,482) Exploration expenditures - (5,196) - (5,196) Finance income (expense) (17,739) - 1,304 (16,435) Other income - 2 (1,605) (1,603) Derivative gain 321 - - 321 Income tax expense (33,768) - (1,500) (35,268) Net income (loss) for the period 72,186 (5,265) (4,783) 62,138 For the six months ended June 30, 2023 Revenues 500,658 - - 500,658 Income from mining operations 257,509 - - 257,509 Corporate administration (2,661) (87) (9,339) (12,087) Exploration expenditures - (9,039) - (9,039) Finance income (expense) (39,534) - 2,042 (37,492) Other income (expense) 24 2 (1,085) (1,059) Derivative loss (15,113) - - (15,113) Income tax expense (65,325) - (3,791) (69,116) Net income (loss) for the period 134,900 (9,124) (12,173) 113,603 35 ===== SIDA 46 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 June 30, 2022 Current assets $ 462,776 $ 7,407 $ 99,153 $ 569,336 Non-current assets 1,093,044 - - 1,093,044 Total assets 1,555,820 7,407 99,153 1,662,380 Current liabilities 309,478 730 5,207 315,415 Non-current liabilities 435,119 - 1,650 436,769 Total liabilities 744,597 730 6,857 752,184 For the three months ended June 30, 2022 Revenues 177,808 - - 177,808 Income from mining operations 82,522 - - 82,522 Corporate administration (973) (48) (2,713) (3,734) Exploration expenditures - (2,820) - (2,820) Finance income (expense) (28,645) - 162 (28,483) Other income 22 - 1,038 1,060 Derivative gain 39,986 - - 39,986 Income tax expense (27,757) - (4,812) (32,569) Net income (loss) for the period 65,155 (2,868) (6,325) 55,962 For the six months ended June 30, 2022 Revenues 394,280 - - 394,280 Income from mining operations 193,729 - - 193,729 Corporate administration (2,227) (49) (7,319) (9,595) Exploration expenditures - (5,626) - (5,626) Finance income (expense) (55,958) - 199 (55,759) Other income 2 - 611 613 Derivative gain 5,262 - - 5,262 Income tax expense (44,668) - (4,812) (49,480) Net income (loss) for the period 96,140 (5,675) (11,321) 79,144 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 amortiz ed 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 liabilities measured at fai r value and the senior debt facility as a financial liability at amortized cost. Further, provisionally priced trade receivables of $96.4 million (December 31, 2022 - $86.4 million) are measured at fair value using quoted forward market prices (level 2). 36 ===== SIDA 47 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 six months ended June 30, 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 (8,761) - (8,761) Interest paid (4,282) - (4,282) Interest accrued at stated rate of 7.5% 4,282 - 4,282 Accretion of transaction costs 107 - 107 Derivative fair value adjustments recognized in: Net income 15,069 44 15,113 Other comprehensive income 10,787 - 10,787 Change in derivative fair values 25,856 44 25,900 Balance, June 30, 2023 $ 276,428 $ 28,484 $ 304,912 37 ===== SIDA 48 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 within 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 June 30, 2023 Unobservable inputs Range of inputs Relationship of unobservable inputs to fair value Stream Loan and Offtake $ 304,912 Expected volatility 11% to 31% An increase or decrease in expected volatility of 5% would increase or decrease fair value by $6.4 million or $7.3 million, respectively Risk-adjusted discount rate 11% to 13% An increase or decrease in risk- adjusted discount rate of 1% would decrease or increase fair value by $9.5 million or $9.9 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 Senior Vice President, Finance 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 s 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. 38 ===== SIDA 49 ===== LUNDIN GOLD INC. Notes to the condensed consolidated interim financial statements as at June 30, 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 June 30, 2023 but not recognized as liabilities are as follows: Capital Expenditures 12 months ending June 30, 2024 $ 16,012 July 1, 2024 onward - Total $ 16,012 39 ===== SIDA 50 ===== Corporate Information BOARD OF DIRECTORS Jack Lundin, Chairman Vancouver, Canada Carmel Daniele London, United Kingdom Gillian Davidson Edinburgh, United Kingdom Ian Gibbs Vancouver, Canada Ashley Heppenstall London, United Kingdom Ron F. Hochstein Vancouver, Canada Craig Jones Queensland, Australia Angelina Mehta Toronto, Canada Jill Terry Victoria, Australia OFFICERS Ron F. Hochstein President & Chief Executive Officer Christopher Kololian Chief Financial Officer Terry Smith Chief Operating Officer Chester See Senior Vice President, Finance 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 51 ===== 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