FULLTEXT DEL 2 AV 2
Kvartalsrapport Q1 2024
Fair values of financial instruments The Company’s financial assets and financial liabilities have been classified into categories that determine their basis of measurement. The following table shows the carrying values, fair values and fair value hierarchy of the Company’s financial instruments as at March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Level Carrying value Fair value Carrying value Fair value Financial assets Fair value through profit or loss Restricted funds 1 $ 60,840 $ 60,840 $ 59,979 $ 59,979 Trade receivables (provisional) 2 534,688 534,688 605,644 605,644 Marketable securities, and debt & equity investments 1 16,319 16,319 14,268 14,268 Foreign currency contracts 2 14,417 14,417 47,511 47,511 Diesel forward swap contracts 2 811 811 — — Caserones purchase option 3 43,735 43,735 44,438 44,438 $ 670,810 $ 670,810 $ 771,840 $ 771,840 Financial liabilities Amortized cost Debt 3 $ 1,341,131 $ 1,341,131 $ 1,208,600 $ 1,208,600 Fair value through profit or loss Pricing provisions on concentrate sales 2 $ 1,401 $ 1,401 $ 1,840 $ 1,840 Chapada derivative liability 2 24,676 24,676 24,369 24,369 Caserones deferred consideration 2 117,940 117,940 116,210 116,210 Foreign currency contracts 2 26,630 26,630 4,272 4,272 Diesel forward swap contracts 2 — — 896 896 $ 170,647 $ 170,647 $ 147,587 $ 147,587 Fair values of financial instruments are determined by valuation methods depending on hierarchy levels as defined below: Level 1 – Quoted market price in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted market prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. observed prices) or indirectly (i.e. derived from prices). Level 3 – Inputs for the assets or liabilities are not based on observable market data. The Company calculates fair values based on the following methods of valuation and assumptions: Marketable securities/debt and equity investments/restricted funds – The fair value of investments in shares and bonds is determined based on the quoted market price. Trade receivables/pricing provisions on concentrate sales – The fair value of trade receivables that contain provisional pricing sales arrangements are valued using quoted forward market prices. The Company recognized positive pricing adjustments of $9.1 million in revenue during the three months ended March 31, 2024 (March 31, 2023 - $28.3 million positive pricing adjustments). LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2024 and 2023 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 24 - ===== SIDA 67 ===== Foreign currency and diesel forward swap contracts – The fair value of these derivatives are determined by the counterparties to the contracts and are assessed by Management using pricing models based on active market prices. Caserones purchase option – The fair value of the Caserones purchase option is determined using a valuation model that incorporates such factors as the mine's discounted cash flow projections, metal price volatility, expiry date, and risk-free interest rate. Chapada derivative liability – The fair value of this derivative is determined using a valuation model that incorporates such factors as metal prices, metal price volatility, expiry date, and risk-free interest rate. Caserones deferred consideration – The fair value of the Caserones deferred consideration has been discounted at the estimated credit adjusted risk free rate applicable to future payments. Debt – The fair values approximate carrying values as the interest rates are comparable to current market rates. The carrying values of certain financial instruments maturing in the short-term approximate their fair values. These financial instruments include cash and cash equivalents, trade and other receivables other than those provisionally priced, and trade and other payables other than those provisionally priced, which are classified as amortized cost. 21. COMMITMENTS AND CONTINGENCIES a) The Company has capital commitments of $436.7 million on various initiatives, of which $249.8 million is expected to be paid during 2024. b) The Company may be involved in legal proce edings arising in the ordinary course of business, including the action described below. The potential amount of the liabilities with respect to such legal proceedings is not expected to materially affect the Company's financial position. c) Significant changes to commitments and contingencies, since those reported at December 31, 2023, are described below: i. With respect to the Ontario class action, the Supreme Court of Canada granted the Company's leave application on March 28, 2024. The appeal will likely be heard in Q4 2024 or the first half of 2025. 22. SEGMENTED INFORMATION The Company is engaged in mining, exploration and development of mineral properties at six operating sites located in Chile, Brazil, USA, Portugal, and Sweden, and at the Josemaria Project located in Argentina. Operating segments are reported in a manner consistent with the internal reporting provided to executive management who act as the chief operating decision-makers. The chief operating decision makers consider the business from a site and project-level perspective. Executive management are responsible for allocating resources and assessing performance of the operating segments. The Company has identified eight reportable segments which include six operating sites, the Josemaria Project, and other corporate office operations. LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2024 and 2023 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 25 - ===== SIDA 68 ===== For the three months ended March 31, 2024 Candelaria Caserones Chapada Eagle Josemaria Neves-Corvo Zinkgruvan Other Total Chile Chile Brazil USA Argentina Portugal Sweden Revenue $ 330,409 $ 326,211 $ 98,435 $ 57,223 $ — $ 80,630 $ 44,073 $ — $ 936,981 Cost of goods sold Production costs (161,250) (197,655) (64,585) (40,536) — (71,712) (30,075) (1,321) (567,134) Depreciation, depletion and amortization (73,426) (51,729) (15,080) (9,151) — (27,046) (7,983) (77) (184,492) Gross profit (loss) 95,733 76,827 18,770 7,536 — (18,128) 6,015 (1,398) 185,355 General and administrative expenses — — — — — — — (16,760) (16,760) General exploration and business development (1,880) (3,600) (683) (101) (3,785) (199) (2,388) (815) (13,451) Finance (costs) income (7,466) (4,376) (5,554) (899) 7,145 (1,183) (1,226) (22,135) (35,694) Other income (expense) 6,847 18,663 2,362 (306) 8,789 (4,186) (9,215) (33,283) (10,329) Income tax (expense) recovery (39,393) (22,236) 2,260 1,278 — 4,837 1,278 1,410 (50,566) Net earnings (loss) $ 53,841 $ 65,278 $ 17,155 $ 7,508 $ 12,149 $ (18,859) $ (5,536) $ (72,981) $ 58,555 Capital expenditures $ 99,532 $ 42,754 $ 29,199 $ 4,078 $ 58,646 $ 22,413 $ 14,341 $ 943 $ 271,906 Total non-current assets1 $ 3,137,025 $ 1,404,367 $ 1,386,468 $ 195,220 $ 1,259,110 $ 1,146,910 $ 266,052 $ 7,690 $ 8,802,842 For the three months ended March 31, 2023 Candelaria Chapada Eagle Josemaria Neves-Corvo Zinkgruvan Other Total Chile Brazil USA Argentina Portugal Sweden Revenue $ 380,405 $ 111,118 $ 69,420 $ — $ 129,403 $ 60,998 $ — $ 751,344 Cost of goods sold Production costs (187,979) (68,634) (45,449) — (85,726) (28,905) (1,071) (417,764) Depreciation, depletion and amortization (58,375) (12,081) (11,151) (38) (30,080) (8,087) (435) (120,247) Gross profit (loss) 134,051 30,403 12,820 (38) 13,597 24,006 (1,506) 213,333 General and administrative expenses — — — — — — (15,110) (15,110) General exploration and business development (3,840) (1,504) (586) — (1,136) (1,620) (6,079) (14,765) Finance (costs) income (8,001) (6,034) (1,084) 2,810 (565) (1,103) (1,722) (15,699) Other income (expense) 13,311 6,368 (182) 15,313 2,569 (248) 9,114 46,245 Income tax (expense) recovery (42,547) 5,349 (7) — (1,272) (3,979) (6,237) (48,693) Net earnings (loss) $ 92,974 $ 34,582 $ 10,961 $ 18,085 $ 13,193 $ 17,056 $ (21,540) $ 165,311 Capital expenditures $ 90,686 $ 16,027 $ 7,102 $ 90,555 $ 25,061 $ 14,468 $ 2,220 $ 246,119 Total non-current assets1 $ 3,015,585 $ 1,345,566 $ 236,873 $ 958,687 $ 1,170,597 $ 253,002 $ 30,305 $ 7,010,615 1 Non-current assets include long-term inventory, mineral properties, plant and equipment, and goodwill. LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2024 and 2023 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 26 - ===== SIDA 69 ===== 23. RELATED PARTY TRANSACTIONS a) Transactions with associates - The Company may enter into transactions related to its investment in associate. These transactions are entered into in the normal course of business and on an arm’s length basis. b) Key management personnel - The Company has identified its directors and senior officers as its key management personnel. Employee benefits for key management personnel are as follows: Three months ended March 31, 2024 2023 Wages and salaries $ 1,869 $ 1,294 Pension benefits 28 44 Share-based compensation 475 743 Termination benefits — 1,406 $ 2,372 $ 3,487 c) Other related parties - For the three months ended March 31, 2024 , the Company incurred $4.6 million (March 31, 2023 – $0.3 million), for services provided by companies owned by members of key management personnel primarily relating to office rental, renovation costs, and related services. 24. SUPPLEMENTARY CASH FLOW INFORMATION Three months ended March 31, 2024 2023 Changes in non-cash working capital items consist of: Trade and income taxes receivable, inventories, and other current assets $ 45,490 $ (14,169) Trade and income taxes payable, and other current liabilities (91,625) (9,023) $ (46,135) $ (23,192) Operating activities included the following cash payments: Income taxes paid $ 49,001 $ 39,857 LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2024 and 2023 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 27 - ===== SIDA 70 ===== Registered Office 40 Temperance Street, Suite 3200, Toronto ON M5H 0B4 Canada Mailing Address 1055 Dunsmuir Street, Suite 2800, Bentall IV, Vancouver, BC V7X 1L2 Tel: +1.604.806.3081 lundinmining.com