FULLTEXT DEL 1 AV 2
Kvartalsrapport Q2 2024
===== SIDA 1 =====
NEWS RELEASE
Lundin Mining Second Quarter 2024 Results
Vancouver, July 30, 2024 (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining” or the
“Company”) today reported its second quarter 2024 financial results. Unless otherwise stated, results are presented in
United States dollars on a 100% basis.
Jack Lundin, President and CEO commented, "During the quarter we generated record quarterly revenue of $1.1 billion
which contributed to a strong financial performance for the Company. Adjusted EBITDA
1
for the quarter was $461 million
and free cash flow from operations
1
was $338 million driven by stronger commodity prices and working capital inflows.
"At Candelaria, while mill throughput in the first half of the year was strong, we expect to achieve a significant step-up in
production in the second half of the year with planned higher grades and higher mining rates from ore in Phase 11. This
production step-up has started to materialize during the month of July from the open pit.
“Our team remains dedicated to enhancing operational performance, prioritizing safety and cost optimization. Cash costs
1
for the quarter were at the lower end of our guidance range. We are well-positioned for a strong second half of the year
and are on track to meet our consolidated production guidance for copper, gold, and zinc. Additionally, we have reduced
our guidance for sustaining capital expenditures by $45 million."
Second Quarter Operational and Financial Highlights
• Copper Production: Consolidated production of 79,708 tonnes of copper in the second quarter.
• Other Production: During the quarter, a total of 47,460 tonnes of zinc, 1,721 tonnes of nickel and approximately
32,000 ounces of gold were produced.
• Revenue: $1,083.6 million in the second quarter with a realized copper price
1
of $4.79 /lb.
• Net Earnings and Adjusted Earnings
1
: Net earnings attributable to shareholders of the Company were $121.6
million or $0.16 per share in the second quarter with adjusted earnings
of
$122.1 million or $0.16 per share.
• Adjusted EBITDA
1
: $460.9 million generated during the quarter.
• Cash Generation: Cash provided by operating activities was $491.8 million and free cash flow from operations
1
was
$337.5 million, which was increased by a working capital release of $121.9 million.
• Growth: On July 2, 2024, the Company exercised its option to increase ownership in Caserones to 70%, which adds
an additional 25,000 tonnes of attributable copper production to Lundin Mining's production profile
2
.
• Sustainability Report: On July 10, 2024 the Company published its annual 2023 Sustainability Report that highlights
the Company's material environmental, health & safety, governance and social performance during the year.
• Outlook: Second quarter 2024 production and cash costs were aligned with expectations, the Company's full year
guidance remains unchanged with the exception of nickel:
◦ Caserones: Annual copper production guidance range for the Caserones mine for 2024 has been increased
to 124,000 - 135,000 tonnes (previously 120,000 - 130,000 tonnes). Cash cost guidance for Caserones
remains unchanged.
◦ Eagle Mine: Annual nickel production guidance range for the Eagle mine for 2024 has been reduced to 7,000
- 9,000 tonnes (previously 10,000 - 13,000 tonnes) and the copper production guidance range has been
reduced to 5,000 - 7,000 tonnes (previously 9,000 - 12,000 tonnes). Cash cost guidance per pound of nickel
for the Eagle mine has increased to $3.20/lb - $3.40/lb (previously $2.80/lb - $3.00/lb)
◦ Sustaining Capital Expenditures: Will be reduced by $45 million and are expected to total $795 million
(previously $840 million) due to reductions in planned spending at Caserones, Neves-Corvo and Zinkgruvan.
Corporate Office
1055 Dunsmuir Street
Suite 2800, Bentall IV
Vancouver, BC V7X 1L2
Phone +1 604 689 7842
lundinmining.com
1
These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion
and Analysis ("MD&A") for the three and six months ended June 30, 2024 and the Reconciliation of Non-GAAP measures section at the end of this news
release.
2
Based on Caserones 2024 production guidance as outlined in the news release 'Lundin Mining Provides 2024 Guidance & Announces 2023 Production
Results' dated January 14, 2024.
===== SIDA 2 =====
Summary Financial Results
Three months ended
June 30,
Six months ended
June 30,
US$ Millions (except per share amounts) 2024 2023 2024 2023
Revenue 1,083.6 588.5 2,020.6 1,339.9
Gross profit 279.5 52.8 464.9 266.2
Attributable net earnings
a
121.6 59.1 135.5 205.7
Net earnings 156.7 61.3 215.3 226.6
Adjusted earnings
a,b
122.1 45.6 167.3 171.3
Adjusted EBITDA
b
460.9 191.8 823.7 528.7
Basic earnings per share ("EPS")
a
0.16 0.08 0.18 0.27
Diluted EPS
a
0.16 0.08 0.17 0.27 0.27
Adjusted EPS
a,b
0.16 0.06 0.22 0.22
Cash provided by operating activities 491.8 194.8 759.3 406.7
Adjusted operating cash flow
b
369.9 110.6 683.5 345.7
Adjusted operating cash flow per share
b
0.48 0.14 0.88 0.45
Free cash flow from operations
b
337.5 20.7 405.2 91.8
Free cash flow
b
236.8 (84.6) 235.1 (118.8)
Cash and cash equivalents 452.8 190.2 452.8 190.2
Net debt excluding lease liabilities
b
893.8 201.3 893.8 201.3
Net debt
b
1,152.9 229.8 1,152.9 229.8
a
Attributable to shareholders of Lundin Mining Corporation.
b
These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion
and Analysis for the three and six months ended June 30, 2024 and the Reconciliation of Non-GAAP Measures section at the end of this news release.
• For the three months ended June 30, 2024 , the Company generated revenue of $1,083.6 million, driven by 78,662
tonnes of copper sold at a realized price of $4.79 /lb . Revenue benefited from higher realized copper and zinc
prices, including $94.5 million positive provisional pricing adjustments on prior period concentrate sales.
• Gross profit of $279.5 million and Adjusted EBITDA of $460.9 million in the three months ended June 30, 2024
reflect higher realized copper and zinc prices despite the impacts of planned lower grades and maintenance
activities on copper concentrate sales from Candelaria and Caserones, respectively.
• Net earnings attributable to shareholders of the Company were $121.6 million or $0.16 per share in the three
months ended June 30, 2024, and included higher tax expense due to higher taxable earnings and the utilization of
prior period tax losses.
• Adjusted earnings attributable to shareholders of the Company for the three months ended June 30, 2024 were
$122.1 million or $0.16 per share after removing a loss on foreign exchange due to the translation of deferred tax
balances and expenses relating to the partial suspension of underground operations at Eagle, among other things.
• Cash and cash equivalents as at June 30, 2024 were $452.8 million. Cash provided by operating activities amounted
to $491.8 million and cash used to fund investing activities amounted to $252.2 million. The Company had a net
debt excluding lease liabilities
1
balance of $893.8 million as at June 30, 2024 (December 31, 2023 - $946.2 million).
• Free cash flow
1
for the three months ended June 30, 2024 of $236.8 million reflected higher copper and zinc realized
prices, positive working capital changes and reduced capital expenditure at Candelaria.
• During the three months ended June 30, 2024 , the Company entered into zero cost collar contracts in the total
amount of $222 million (equivalent to BRL 1.1 billion) with collar ranges of BRL 5.00 to BRL 6.11.
• As at July 30, 2024, the Company had a cash balance of approximately $288.0 million and a net debt excluding lease
liabilities balance of approximately $1,338.0 million.
1
These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion
and Analysis ("MD&A") for the three and six months ended June 30, 2024 and the Reconciliation of Non-GAAP measures section at the end of this news
release.
===== SIDA 3 =====
Operational Performance
Total Production
(Contained metal)
a
2024 2023
YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Copper (t)
b
167,721 79,708 88,013 314,798 103,337 89,942 60,057 61,462
Zinc (t) 93,148 47,460 45,688 185,161 50,719 49,774 36,115 48,553
Nickel (t) 4,976 1,721 3,255 16,429 3,729 4,290 4,686 3,724
Gold (koz)
b
65 32 33 149 44 35 34 36
Molybdenum (t)
b
1,578 714 864 2,024 928 1,096 — —
a. Tonnes (t) and thousands of ounces (koz)
b. Candelaria and Caserones production is on a 100% basis.
Candelaria (80% owned): Candelaria produced 31,170 tonnes of copper and approximately 17,000 ounces of gold in
concentrate on a 100% basis in the three months ended June 30, 2024. Production in the quarter was impacted by lower
grades and recoveries, partially offset by higher throughput. During the three months ended June 30, 2024 , mining rates
were impacted by the interface of the open pit and historic underground mining stopes, requiring more stockpiled ore to
be processed which reduced grades and recoveries. Access to higher grade ore is anticipated in the second half of 2024 as
per the mine sequence. Three of four stopes have now been filled and blasted, with work on the fourth expected to begin
in Q3, and not expected to impact production in the second half of 2024. Production costs were reduced by lower sales
volumes and favourable foreign exchange as a result of the CLP weakening against the US dollar; however, cash cost of
$2.18/lb was negatively impacted by lower sales volumes.
Caserones (51% owned): Caserones produced 29,775 tonnes of total copper and 714 tonnes of molybdenum on a 100%
basis in the three months ended June 30, 2024 . Copper and molybdenum concentrate production was impacted in the
quarter by extended mill maintenance and weather events which reduced mining activities and limited tailings deposition.
Recoveries were also temporarily reduced by changes in the mining sequence and flotation circuit disruptions. Production
costs in the quarter were lower than planned primarily due to lower copper concentrate and molybdenum sales volume,
as well as favourable foreign exchange. Cash cost also benefitted from favourable foreign exchange.
Chapada (100% owned): Chapada produced 9,106 tonnes of copper and approximately 15,000 ounces of gold in
concentrate in the three months ended June 30, 2024 and was impacted by lower grades and recoveries combined with
lower mill availability due to unplanned conveyor maintenance and vibration screen failure. Lower grades were a result of
a shift to processing increased amounts of stockpiled ore and an optimized mine plan that significantly reduces waste
movement. Production costs were reduced by lower sales volumes and favourable foreign exchange. Cash cost of $2.05/lb
benefited from higher gold by-product credits combined with favourable foreign exchange and mining cost decreases due
to operational improvements.
Eagle (100% owned): Eagle produced 1,721 tonnes of nickel and 1,563 tonnes of copper in the three months ended June
30, 2024. A fall of ground in the lower ramp restricted access to Eagle East, limiting production. Mining rates are expected
to be reduced until late 2024 while ramp rehabilitation is completed, deferring the extraction of ore from Eagle East into
future years. Production costs were reduced by lower sales volumes and royalty expense, partially offset by higher
maintenance costs . Nickel cash cost
1
of $3.23/lb was impacted by lower sales volumes, partially offset by higher by-
product credits.
Neves-Corvo (100% owned): Neves-Corvo produced 7,347 tonnes of copper and 25,696 tonnes of zinc in the three months
ended June 30, 2024 , both of which were impacted by lower grades due to changes in mine sequencing as a result of
Lombador south requiring additional development work. Production costs increased due to an increase in sales volumes
and cash cost of $1.70/lb benefited from increased sales volumes and higher by-product credits.
Zinkgruvan (100% owned): Zinkgruvan produced 21,764 tonnes of zinc and 8,966 tonnes of lead in the three months
ended June 30, 2024 reflecting higher throughput and grades. Copper production of 747 tonnes was impacted by reduced
availability of copper ore. Production costs increased due to higher sales volumes and zinc cash cost of $0.39/lb reflected
lower copper by-product credits.
===== SIDA 4 =====
Outlook
Production and cash cost guidance for 2024 has been updated from that disclosed in the Company's Management's
Discussion and Analysis for the year ended December 31, 2023.
The Company remains on track to meet annual production and cash cost guidance for all metals with the exception of
nickel, and has reduced sustaining capital expenditure guidance from $840 million to $795 million with reductions at
Caserones, Neves-Corvo, and Zinkgruvan. Expenditure guidance related to the Josemaria Project of $225 million and
exploration of $48 million each remain on target for 2024.
Metal production continues to be weighted to the second half of the year at Candelaria, Chapada and Neves-Corvo due to
mine sequencing and resultant forecasted grade profiles. Grade is expected to increase significantly at Candelaria in the
second half of 2024 once access is opened to higher-grade ore. As a result of production challenges at Neves-Corvo in the
first half of 2024, copper production at that operation continues to track to the lower end of its annual production
guidance range. In the first half of 2024, cash cost per pound at most operations benefited from increased realized prices
on by-product sales.
Guidance at Caserones has been increased to reflect production from the first half of the year and expected throughput
and grades for the remainder of the year. At the Eagle mine, a fall of ground in the lower ramp restricted access to Eagle
East, limiting production. Mining rates are expected to be reduced until late 2024 while ramp rehabilitation is completed,
deferring the extraction of ore from Eagle East into future years. As a result, the annual nickel and copper production
guidance ranges for the Eagle mine for 2024 have been reduced.
2024 Production and Cash Cost Guidance
Guidance
a
Revised Guidance
(contained metal) Production Cash Cost ($/lb)
b
Production Cash Cost ($/lb)
b
Copper (t) Candelaria (100%) 160,000 – 170,000 1.60 – 1.80
c 160,000 – 170,000 1.60 – 1.80
c
Caserones (100%) 120,000 – 130,000 2.60 – 2.80 124,000 – 135,000 2.60 – 2.80
Chapada 43,000 – 48,000 1.95 – 2.15
d 43,000 – 48,000 1.95 – 2.15
d
Eagle 9,000 – 12,000 5,000 – 7,000
Neves-Corvo 30,000 – 35,000 1.95 – 2.15
c 30,000 – 35,000 1.95 – 2.15
c
Zinkgruvan 4,000 – 5,000 4,000 – 5,000
Total 366,000 – 400,000 366,000 – 400,000
Zinc (t) Neves-Corvo 120,000 – 130,000 120,000 – 130,000
Zinkgruvan 75,000 – 85,000 0.45 – 0.50
c 75,000 – 85,000 0.45 – 0.50
c
Total 195,000 – 215,000 195,000 – 215,000
Nickel (t) Eagle 10,000 – 13,000 2.80 – 3.00 7,000 – 9,000 3.20 – 3.40
Gold (koz) Candelaria (100%) 100 – 110 100 – 110
Chapada 55 – 60 55 – 60
Total 155 – 170 155 – 170
Molybdenum (t) Caserones (100%) 2,500 - 3,000 2,500 – 3,000
a. Guidance as outlined in the Company's Management Discussion and Analysis ("MD&A") for the year ended December 31, 2023.
b. Cash costs are based on various assumptions and estimates, including but not limited to: production volumes, commodity prices (Cu: $3.75/lb, Zn: $1.10/
lb, Pb: $0.90/lb, Au: $1,800/oz, Mo: $20.00/lb, Ag: $23.00/oz), foreign exchange rates (€/USD:1.05, USD/SEK:10.50, USD/CLP:850, USD/BRL:5.00) and
production costs. Cash cost is a non-GAAP measure - see the Company's Management Discussion and Analysis for the three and six months ended June 30,
2024 and the Reconciliation of Non-GAAP Measures at the end of this news release.
c. 68% of Candelaria's total gold and silver production are subject to a streaming agreement, and silver production at Zinkgruvan and Neves-Corvo are also
subject to streaming agreements. Cash costs are calculated based on receipt of approximately $429/oz gold and $4.28/oz to $4.68/oz silver.
d. Chapada's cash cost is calculated on a by-product basis and does not include the effects of its copper stream agreements. Effects of the copper stream
agreements are reflected in copper revenue and will impact realized price per pound.
===== SIDA 5 =====
2024 Capital Expenditure Guidanceb
($ millions) Guidance
a
Revisions Revised Guidance
Candelaria (100% basis) 300 — 300
Caserones (100% basis) 205 (30) 175
Chapada 110 — 110
Eagle 25 — 25
Neves-Corvo 125 (10) 115
Zinkgruvan 75 (5) 70
Other — — —
Total Sustaining 840 (45) 795
Josemaria 225 — 225
Total Capital Expenditures 1,065 (45) 1,020
a. Guidance as outlined in the Company's Management Discussion and Analysis ("MD&A") for the year ended December 31, 2023.
b. Sustaining capital expenditure is a supplementary financial measure and expansionary capital expenditure is a non-GAAP measure - see the
Company's Management Discussion and Analysis for the three and six months ended June 30, 2024 and the Reconciliation of Non-GAAP Measures at
the end of this news release.
Exploration
During the quarter ended June 30, 2024, exploration activity focused on in-mine and near-mine targets at the Company's
operations. Exploration drilling at Zinkgruvan was focused on resource expansion and drilling at Candelaria was focused
on Candelaria Norte and La Espanola. Drilling at Chapada concentrated on delineating the high-grade, near-mine trend at
Corpo Sul, adding high grade resources to Sauva and testing geochemical anomalies in the Sauva area Curicaca and Curio.
At Caserones, exploration activity remains lower during the winter season. Exploration drilling continues in the lower
portion of the mineral resource in search of higher-grade copper breccia bodies that could improve the average grade of
the resource, and potentially expand it. Near-mine drilling at Angelica has been paused for winter since April.
At Josemaria, seasonal exploration drilling ended in early April at the Cumbre Verde Target, located west of the Josemaria
ore body. Six holes were drilled targeting the same mineralized system and structures that hosted high grade
mineralization on the neighbouring property that may potentially run towards the Cumbre Verde Target. Initial results
highlight favorable levels of copper/gold/silver mineralization in veins and porphyry. The data obtained will help further
refine and target this mineralization. Work will continue throughout the remainder of 2024 with drilling to recommence
after the winter season.
There was no exploration drilling at Neves-Corvo and Eagle in the quarter.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining company with projects and operations in Argentina, Brazil,
Chile, Portugal, Sweden and the United States of America, primarily producing copper, zinc, nickel and gold.
The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse
Regulation. The information was submitted for publication, through the agency of the contact persons set out below on
July 30, 2024 at 14:30 Vancouver Time.
For further information, please contact: .
Stephen Williams, Vice President, Investor Relations +1 604 806 3074
Robert Eriksson, Investor Relations Sweden: +46 8 440 54 40
Technical Information
The scientific and technical information in this press release has been prepared in accordance with the disclosure
standards of National Instrument 43-101 (“NI 43-101”) and has been reviewed by Arman Barha, P.Eng., Vice President,
Technical Services, a "Qualified Person" under NI 43-101. Mr. Barha has verified the data disclosed in this release and no
limitations were imposed on his verification process.
===== SIDA 6 =====
Reconciliation of Non-GAAP Measures
The Company uses certain performance measures in its analysis. These performance measures have no standardized
meaning within generally accepted accounting principles under International Financial Reporting Standards and,
therefore, amounts presented may not be comparable to similar data presented by other mining companies. For
additional details please refer to the Company’s discussion of non-GAAP and other performance measures in its
Management’s Discussion and Analysis for the three and six months ended June 30, 2024 which is available on SEDAR+ at
www.sedarplus.com.
===== SIDA 7 =====
Cash Cost per Pound and All-in Sustaining Costs per pound can be reconciled to Production Costs on the Company's
Condensed Interim Consolidated Statement of Earnings as follows:
Three months ended June 30, 2024
Operations Candelaria Caserones Chapada Eagle Neves-
Corvo
Zinkgruvan
($000s, unless otherwise
noted)
(Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes (Contained
metal):
Tonnes 29,999 29,862 8,293 2,018 7,898 18,510
Pounds (000s) 66,137 65,834 18,283 4,449 17,412 40,808
Production costs
606,426
Less: Royalties and other (22,324)
584,102
Deduct: By-product credits (210,112)
Add: Treatment and refining 38,577
Cash cost 143,935 171,255 37,570 14,381 29,682 15,744 412,567
Cash cost per pound ($/lb) 2.18 2.60 2.05 3.23 1.70 0.39
Add: Sustaining capital 60,544 35,328 25,241 3,980 27,921 13,301
Royalties 3,551 9,275 1,631 3,906 1,207 —
Reclamation and other
closure accretion and
depreciation
1,858 1,094 2,727 1,592 1,320 951
Leases & other 3,026 18,619 775 1,533 194 78
All-in sustaining cost 212,914 235,571 67,944 25,392 60,324 30,074
AISC per pound ($/lb) 3.22 3.58 3.72 5.71 3.46 0.74
Three months ended June 30, 2023
Operations Candelaria Caserones Chapada Eagle Neves-
Corvo
Zinkgruvan
($000s, unless otherwise
noted)
(Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes (Contained
metal):
Tonnes 36,347 — 10,164 3,859 6,170 9,374
Pounds (000s) 80,132 — 22,408 8,507 13,603 20,666
Production costs
405,198
Less: Royalties and other (7,969)
397,229
Deduct: By-product credits (122,636)
Add: Treatment and refining 32,514
Cash cost 171,520 — 60,351 15,990 54,271 4,975 307,107
Cash cost per pound ($/lb) 2.14 — 2.69 1.88 3.99 0.24
Add: Sustaining capital 123,417 — 19,690 3,562 22,133 15,994
Royalties — — 2,029 4,920 83 —
Reclamation and other
closure accretion and
depreciation
2,444 — 1,847 3,011 1,296 739
Leases & other 3,654 — 1,171 897 148 100
All-in sustaining cost 301,035 — 85,088 28,380 77,931 21,808
AISC per pound ($/lb) 3.76 — 3.80 3.34 5.73 1.06
===== SIDA 8 =====
Six months ended June 30, 2024
Operations Candelaria Caserones Chapada Eagle Neves-
Corvo
Zinkgruvan
($000s, unless otherwise
noted)
(Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes (Contained
metal):
Tonnes 63,535 65,073 17,035 4,181 13,784 34,335
Pounds (000s) 140,071 143,461 37,556 9,218 30,388 75,696
Production costs
1,173,560
Less: Royalties and other (42,294)
1,131,266
Deduct: By-product credits (375,420)
Add: Treatment and refining 85,528
Cash cost 283,425 337,694 76,305 33,630 71,739 38,581 841,374
Cash cost per pound ($/lb) 2.02 2.35 2.03 3.65 2.36 0.51
Add: Sustaining capital 160,076 78,082 54,440 8,058 50,334 27,642
Royalties 6,519 18,089 3,248 6,584 1,942 —
Reclamation and other
closure accretion and
depreciation
4,025 2,134 5,406 3,560 2,655 2,137
Leases & other 6,059 34,000 1,540 2,769 258 156
All-in sustaining cost 460,104 469,999 140,939 54,601 126,928 68,516
AISC per pound ($/lb) 3.28 3.28 3.75 5.92 4.18 0.91
Six months ended June 30, 2023
Operations Candelaria Caserones Chapada Eagle Neves-
Corvo
Zinkgruvan
($000s, unless otherwise
noted)
(Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes (Contained
metal):
Tonnes 71,917 — 19,236 6,594 14,201 25,986
Pounds (000s) 158,550 — 42,408 14,537 31,308 57,289
Production costs
822,962
Less: Royalties and other (20,055)
802,907
Deduct: By-product credits (279,601)
Add: Treatment and refining 69,129
Cash cost 345,212 — 107,669 30,630 84,163 24,761 592,435
Cash cost per pound ($/lb) 2.18 — 2.54 2.11 2.69 0.43
Add: Sustaining capital 214,103 — 35,717 10,664 47,194 30,462
Royalties — — 4,252 10,606 1,813 —
Reclamation and other
closure accretion and
depreciation
4,751 — 3,648 5,969 2,620 1,800
Leases & other 6,797 — 2,137 1,644 306 202
All-in sustaining cost 570,863 — 153,423 59,513 136,096 57,225
AISC per pound ($/lb) 3.60 — 3.62 4.09 4.35 1.00
===== SIDA 9 =====
Adjusted EBITDA can be reconciled to Net Earnings (Loss) on the Company's Condensed Interim Consolidated Statement
of Earnings as follows:
Three months ended
June 30,
Six months ended
June 30,
($thousands) 2024 2023 2024 2023
Net earnings 156,733 61,302 215,288 226,613
Add back:
Depreciation, depletion and amortization 197,658 130,505 382,150 250,752
Finance income and costs 36,307 15,897 72,001 31,596
Income taxes 56,162 (19,601) 106,728 29,092
446,860 188,103 776,167 538,053
Unrealized foreign exchange loss (gain) 3,173 (19,285) (12,327) (10,641)
Unrealized losses (gains) on derivative contracts (3,974) 14,403 48,858 (6,263)
Ojos del Salado sinkhole (recoveries) expenses 710 11,900 (321) 16,482
Revaluation loss (gain) on marketable securities (85) (3,464) (2,515) (3,902)
Partial suspension of underground operations at Eagle 9,824 — 9,824 —
Revaluation gain on Caserones purchase option (12,431) — (11,728) —
Write-down of capital works in progress 17,188 — 17,188 —
Gain on disposal of subsidiary — — — (5,718)
Other (407) 97 (1,432) 686
Total adjustments - EBITDA 13,998 3,651 47,547 (9,356)
Adjusted EBITDA 460,858 191,754 823,714 528,697
Adjusted Earnings and Adjusted EPS can be reconciled to Net Earnings (Loss) Attributable to Lundin Mining Shareholders
on the Company's Condensed Interim Consolidated Statement of Earnings as follows:
Three months ended
June 30,
Six months ended
June 30,
($thousands, except share and per share amounts) 2024 2023 2024 2023
Net earnings attributable to Lundin Mining shareholders 121,589 59,109 135,472 205,729
Add back:
Total adjustments - EBITDA 13,998 3,651 47,547 (9,356)
Tax effect on adjustments 1,981 (54) 214 (3,180)
Deferred tax arising from foreign exchange translation (13,666) (20,175) (19,966) (28,289)
Non-controlling interest on adjustments (1,821) (1,134) 4,031 69
Other — 4,186 — 6,293
Total adjustments 492 (13,526) 31,826 (34,463)
Adjusted earnings 122,081 45,583 167,298 171,266
Basic weighted average number of shares outstanding 776,173,888 772,255,656 774,033,611 771,739,532
Net earnings attributable to shareholders 0.16 0.08 0.18 0.27
Total adjustments — (0.02) 0.04 (0.05)
Adjusted earnings per share 0.16 0.06 0.22 0.22
===== SIDA 10 =====
Free Cash Flow from Operations and Free Cash Flow can be reconciled to Cash provided by Operating Activities on the
Company's Condensed Interim Consolidated Statement of Cash Flows as follows:
Three months ended
June 30,
Six months ended
June 30,
($thousands) 2024 2023 2024 2023
Cash provided by operating activities 491,770 194,844 759,301 406,719
Sustaining capital expenditures (167,803) (187,820) (381,063) (343,384)
General exploration and business development 13,536 13,693 26,987 28,458
Free cash flow from operations 337,503 20,717 405,225 91,793
General exploration and business development (13,536) (13,693) (26,987) (28,458)
Expansionary capital expenditures (87,120) (91,650) (143,101) (182,169)
Free cash flow 236,847 (84,626) 235,137 (118,834)
Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share can be reconciled to Cash Provided by
Operating Activities on the Company's Condensed Interim Consolidated Statement of Cash Flows as follows:
Three months ended
June 30,
Six months ended
June 30,
($thousands, except share and per share amounts) 2024 2023 2024 2023
Cash provided by operating activities 491,770 194,844 759,301 406,719
Changes in non-cash working capital items (121,896) (84,207) (75,761) (61,015)
Adjusted operating cash flow 369,874 110,637 683,540 345,704
Basic weighted average number of shares outstanding 776,173,888 772,255,656 774,033,611 771,739,532
Adjusted operating cash flow per share $ 0.48 0.14 0.88 0.45
Net debt and net debt excluding lease liabilities can be reconciled to Debt and Lease Liabilities, Current Portion of Debt
and Lease Liabilities and Cash and Cash Equivalents on the Company's condensed interim consolidated balance sheet as
follows:
($thousands) June 30, 2024 December 31, 2023
Debt and lease liabilities (1,282,492) (1,273,162)
Current portion of total debt and lease liabilities (315,695) (212,646)
Less deferred financing fees (netted in above) (7,547) (6,374)
(1,605,734) (1,492,182)
Cash and cash equivalents 452,809 268,793
Net debt (1,152,925) (1,223,389)
Lease liabilities 259,164 277,208
Net debt excluding lease liabilities (893,761) (946,181)
===== SIDA 11 =====
Cautionary Statement on Forward-Looking Information
Certain of the statements made and information contained herein are “forward-looking information” within the meaning of applicable Canadian securities laws. All
statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements
regarding the Company’s plans, prospects and business strategies; the Company’s guidance on the timing and amount of future production and its expectations
regarding the results of operations; expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any
Preliminary Economic Assessment, Pre-Feasibility Study, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimates, and mine and
mine closure plans; anticipated market prices of metals, currency exchange rates, and interest rates; the development and implementation of the Company’s
Responsible Mining Management System; the Company’s ability to comply with contractual and permitting or other regulatory requirements; anticipated exploration
and development activities at the Company’s projects; expansion projects and the realization of additional value; expectations regarding, and ability to complete, the
acquisition of Filo Corp. and the 50/50 joint venture with BHP; the anticipated development and other plans with respect to the acquisition and joint venture ; the
Company’s integration of acquisitions and expansions and any anticipated benefits thereof; and expectations for other economic, business, and/or competitive factors.
Words such as “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “goal”, “aim”, “intend”, “continue”, “budget”, “estimate”, “may”, “will”, “can”, “could”,
“should”, “schedule” and similar expressions identify forward-looking information.
Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management,
including that the Company can access financing, appropriate equipment and sufficient labour; assumed and future price of copper, zinc, gold, nickel and other
metals; anticipated costs; ability to achieve goals; the prompt and effective integration of acquisitions; that the political environment in which the Company operates
will continue to support the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and
assumptions are considered reasonable by Lundin Mining as at the date of this document in light of management’s experience and perception of current conditions
and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and
unknown factors could cause actual results to differ materially from those projected in the forward-looking information and undue reliance should not be placed on
such information. Such factors include, but are not limited to: global financial conditions, market volatility and inflation, including pricing and availability of key
supplies and services; risks inherent in mining including but not limited to risks to the environment, industrial accidents, catastrophic equipment failures, unusual or
unexpected geological formations or unstable ground conditions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable
risks; volatility and fluctuations in metal and commodity demand and prices; significant reliance on assets in Chile; reputation risks related to negative publicity with
respect to the Company or the mining industry in general; delays or the inability to obtain, retain or comply with permits; risks relating to the development of the
Josemaria Project; health and safety laws and regulations; risks associated with climate change; risks relating to indebtedness; economic, political and social instability
and mining regime changes in the Company’s operating jurisdictions, including but not limited to those related to permitting and approvals, nationalization or
expropriation without fair compensation, environmental and tailings management, labour, trade relations, and transportation; inability to attract and retain highly
skilled employees; risks inherent in and/or associated with operating in foreign countries and emerging markets, including with respect to foreign exchange and capital
controls; project financing risks, liquidity risks and limited financial resources; health and safety risks; compliance with environmental, unavailable or inaccessible
infrastructure, infrastructure failures, and risks related to ageing infrastructure; changing taxation regimes; the inability to effectively compete in the industry; the
inability to currently control Filo Corp. and the ability to satisfy the conditions and consummate the acquisition of Filo Corp. and the joint venture transaction with BHP
on the proposed terms and expected schedule; risks associated with acquisitions, expansions and related integration efforts, including the ability to achieve anticipated
benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration; risks related to mine closure activities,
reclamation obligations, environmental liabilities and closed and historical sites; reliance on key personnel and reporting and oversight systems, as well as third parties
and consultants in foreign jurisdictions; information technology and cybersecurity risks; risks associated with the estimation of Mineral Resources and Mineral Reserves
and the geology, grade and continuity of mineral deposits including but not limited to models relating thereto; actual ore mined and/or metal recoveries varying from
Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing
efficiency; community and stakeholder opposition; regulatory investigations, enforcement, sanctions and/or related or other litigation; financial projections, including
estimates of future expenditures and cash costs, and estimates of future production may not be reliable; enforcing legal rights in foreign jurisdictions; risks associated
with the use of derivatives; risks relating to joint ventures and operations; environmental and regulatory risks associated with the structural stability of waste rock
dumps or tailings storage facilities; exchange rate fluctuations; compliance with foreign laws; potential for the allegation of fraud and corruption involving the
Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights violations; risks relating to
dilution; risks relating to payment of dividends; counterparty and customer concentration risks; activist shareholders and proxy solicitation matters; estimation of
asset carrying values; relationships with employees and contractors, and the potential for and effects of labour disputes or other unanticipated difficulties with or
shortages of labour or interruptions in production; conflicts of interest; existence of significant shareholders; challenges or defects in title; internal controls; risks
relating to minor elements contained in concentrate products; the threat associated with outbreaks of viruses and infectious diseases; mining rates and rehabilitation
projects; mill shut downs; and other risks and uncertainties, including but not limited to those described in the "Risks and Uncertainties” section of the Company’s
MD&A for the three and six months ended June 30, 2024 and the “Risks and Uncertainties” section of the Company’s Annual Information Form for the year ended
December 31, 2023, which are available on SEDAR+ at www.sedarplus.com under the Company’s profile.
All of the forward-looking information in this document are qualified by these cautionary statements. Although the Company has attempted to identify important
factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be
as anticipated, estimated, forecasted or intended and readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have
been used. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from
those described in forward-looking information. Accordingly, there can be no assurance that forward-looking information will prove to be accurate and forward-
looking information is not a guarantee of future performance. Readers are advised not to place undue reliance on forward-looking information. The forward-looking
i n f o r m a t i o n c o n t a i n e d h e r e i n s p e a k s o n l y a s o f t h e d a t e o f t h i s d o c u m e n t . T h e C o m p a n y d i s c l a i m s a n y i n t e n t i o n o r o b l i g a t i o n t o u p d a t e o r r e v i s e f o r w a r d - l o o k i n g
information or to explain any material difference between such and subsequent actual events, except as required by applicable law.
===== SIDA 12 =====
Management’s Discussion and Analysis
For the three and six months ended June 30, 2024
This management’s discussion and analysis (“MD&A”) has been prepared as of July 30, 2024 and should be read in
conjunction with the Company’s condensed interim consolidated financial statements for the three and six months ended
June 30, 2024 . Those financial statements are prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board (“IFRS Accounting Standards”) and which the Canadian Accounting
Standards Board has approved for incorporation into Part 1 of the CPA Canada Handbook - Accounting including IAS 34
Interim Financial Reporting. The Company’s presentation currency is United States (“US”) dollars. Reference herein of $ or
USD is to United States dollars, ARS is to Argentine pesos, BRL is to Brazilian reais, C$ is to Canadian dollars, CLP is to Chilean
pesos, € refers to euros, and SEK is to Swedish kronor. "This quarter" or "The quarter" means the second quarter ("Q2") of
2024. "Year-to-date" or "Year-to-date period" means the six months ended June 30, 2024.
About Lundin Mining
Lundin Mining Corporation (“Lundin Mining” or the “Company”) is a diversified Canadian base metals mining company with
projects and operations in Argentina, Brazil, Chile, Portugal, Sweden, and the United States of America, primarily producing
copper, zinc, nickel and gold.
Table of Contents
Highlights ................................................................................................................................................................................ 1
Outlook ................................................................................................................................................................................... 4
Selected Quarterly Financial Information .............................................................................................................................. 6
Summary of Quarterly Results ............................................................................................................................................... 7
Revenue Overview .................................................................................................................................................................. 8
Financial Results ..................................................................................................................................................................... 12
Mining Operations .................................................................................................................................................................. 15
Production Overview ........................................................................................................................................................ 15
Production Cost and Cash Cost Overview ........................................................................................................................ 16
Capital Expenditures ......................................................................................................................................................... 17
Candelaria ......................................................................................................................................................................... 18
Caserones .......................................................................................................................................................................... 19
Chapada ............................................................................................................................................................................ 20
Eagle .................................................................................................................................................................................. 21
Neves-Corvo ...................................................................................................................................................................... 22
Zinkgruvan ......................................................................................................................................................................... 23
Josemaria Project ................................................................................................................................................................... 24
Exploration Update ................................................................................................................................................................. 24
Liquidity and Capital Resources .............................................................................................................................................. 25
Non-GAAP and Other Performance Measures ....................................................................................................................... 28
Other Information and Advisories .......................................................................................................................................... 35
Outstanding Share Data ......................................................................................................................................................... 36
===== SIDA 13 =====
Cautionary Statement on Forward-Looking Information
Certain of the statements made and information contained herein are “forward-looking information” within the meaning of applicable Canadian securities laws. All statements
other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements regarding the Company’s
plans, prospects and business strategies; the Company’s guidance on the timing and amount of future production and its expectations regarding the results of operations;
expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any Preliminary Economic Assessment, Pre-Feasibility
Study, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimates, and mine and mine closure plans; anticipated market prices of metals,
currency exchange rates, and interest rates; the development and implementation of the Company’s Responsible Mining Management System; the Company’s ability to comply
with contractual and permitting or other regulatory requirements; anticipated exploration and development activities at the Company’s projects; expansion projects and the
realization of additional value; expectations regarding, and ability to complete, the acquisition of Filo Corp. and the 50/50 joint venture with BHP; the anticipated development
and other plans with respect to the acquisition and joint venture; the Company’s integration of acquisitions and expansions and any anticipated benefits thereof; and
expectations for other economic, business, and/or competitive factors. Words such as “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “goal”, “aim”, “intend”,
“continue”, “budget”, “estimate”, “may”, “will”, “can”, “could”, “should”, “schedule” and similar expressions identify forward-looking information.
Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management, including
that the Company can access financing, appropriate equipment and sufficient labour; assumed and future price of copper, zinc, gold, nickel and other metals; anticipated costs;
ability to achieve goals; the prompt and effective integration of acquisitions; that the political environment in which the Company operates will continue to support the
development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and assumptions are considered reasonable by
Lundin Mining as at the date of this document in light of management’s experience and perception of current conditions and expected developments, these statements are
inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially
from those projected in the forward-looking information and undue reliance should not be placed on such information. Such factors include, but are not limited to: global
financial conditions, market volatility and inflation, including pricing and availability of key supplies and services; risks inherent in mining including but not limited to risks to the
environment, industrial accidents, catastrophic equipment failures, unusual or unexpected geological formations or unstable ground conditions, and natural phenomena such as
earthquakes, flooding or unusually severe weather; uninsurable risks; volatility and fluctuations in metal and commodity demand and prices; significant reliance on assets in
Chile; reputation risks related to negative publicity with respect to the Company or the mining industry in general; delays or the inability to obtain, retain or comply with permits;
risks relating to the development of the Josemaria Project; health and safety laws and regulations; risks associated with climate change; risks relating to indebtedness; economic,
political and social instability and mining regime changes in the Company’s operating jurisdictions, including but not limited to those related to permitting and approvals,
nationalization or expropriation without fair compensation, environmental and tailings management, labour, trade relations, and transportation; inability to attract and retain
highly skilled employees; risks inherent in and/or associated with operating in foreign countries and emerging markets, including with respect to foreign exchange and capital
controls; project financing risks, liquidity risks and limited financial resources; health and safety risks; compliance with environmental, unavailable or inaccessible infrastructure,
infrastructure failures, and risks related to ageing infrastructure; changing taxation regimes; the inability to effectively compete in the industry; the inability to currently control
Filo Corp. and the ability to satisfy the conditions and consummate the acquisition of Filo Corp. and the joint venture transaction with BHP on the proposed terms and expected
schedule; risks associated with acquisitions, expansions and related integration efforts, including the ability to achieve anticipated benefits, unanticipated difficulties or
expenditures relating to integration and diversion of management time on integration; risks related to mine closure activities, reclamation obligations, environmental liabilities
and closed and historical sites; reliance on key personnel and reporting and oversight systems, as well as third parties and consultants in foreign jurisdictions; information
technology and cybersecurity risks; risks associated with the estimation of Mineral Resources and Mineral Reserves and the geology, grade and continuity of mineral deposits
including but not limited to models relating thereto; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve estimates, estimates of
grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing efficiency; community and stakeholder opposition; regulatory investigations,
enforcement, sanctions and/or related or other litigation; financial projections, including estimates of future expenditures and cash costs, and estimates of future production
may not be reliable; enforcing legal rights in foreign jurisdictions; risks associated with the use of derivatives; risks relating to joint ventures and operations; environmental and
regulatory risks associated with the structural stability of waste rock dumps or tailings storage facilities; exchange rate fluctuations; compliance with foreign laws; potential for
the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or
human rights violations; risks relating to dilution; risks relating to payment of dividends; counterparty and customer concentration risks; activist shareholders and proxy
solicitation matters; estimation of asset carrying values; relationships with employees and contractors, and the potential for and effects of labour disputes or other unanticipated
difficulties with or shortages of labour or interruptions in production; conflicts of interest; existence of significant shareholders; challenges or defects in title; internal controls;
risks relating to minor elements contained in concentrate products; the threat associated with outbreaks of viruses and infectious diseases; mining rates and rehabilitation
projects; mill shut downs; and other risks and uncertainties, including but not limited to those described in the "Risk and Uncertainties” section of this MD&A and the “Risks and
Uncertainties” section of the Company’s Annual Information Form for the year ended December 31, 2023, which are available on SEDAR+ at www.sedarplus.com under the
Company’s profile.
All of the forward-looking information in this document is qualified by these cautionary statements. Although the Company has attempted to identify important factors that
could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated,
estimated, forecasted or intended and readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Should one or
more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking
information. Accordingly, there can be no assurance that forward-looking information will prove to be accurate and forward-looking information is not a guarantee of future
performance. Readers are advised not to place undue reliance on forward-looking information. The forward-looking information contained herein speaks only as of the date of
this document. The Company disclaims any intention or obligation to update or revise forward-looking information or to explain any material difference between such and
subsequent actual events, except as required by applicable law.
===== SIDA 14 =====
Highlights
For the quarter ended June 30, 2024 the Company produced 79,708 tonnes of copper, 47,460 tonnes of zinc, and 32
thousand ounces ("koz") of gold. This production coupled with other metals produced and sold during the quarter,
generated record quarterly revenue of $1,083.6 million (Q2 2023 - $588.5 million), gross profit of $279.5 million (Q2 2023 -
$52.8 million) and adjusted EBITDA1 of $460.9 million (Q2 2023 - $191.8 million).
Metal prices during the quarter remained robust and resulted in the Company realizing a copper price of $4.79 /lb, zinc
price of $1.49 /lb, nickel price of $8.59 /lb and a gold price of $2,476 /oz with all of these realized prices 1 being positively
impacted from adjustments on provisional pricing from prior period sales.
The Company delivered solid cash flow during the quarter, with c ash provided by operating activities amounting to $491.8
million (Q2 2023 - $194.8 million) and free cash flow from operations1 amounting to $337.5 million (Q2 2023 - $20.7
million).
The Company had a net debt excluding lease liabilities1 balance of $893.8 million as at June 30, 2024 (December 31, 2023 -
$946.2 million).
The Company remains on track to achieve annual production guidance for copper, zinc and gold while tightening the annual
production guidance for nickel to 7,000 - 9,000 tonnes.
Operational Performance
Candelaria (80% owned): Candelaria produced 31,170 tonnes of copper and approximately 17,000 ounces of gold in
concentrate on a 100% basis in the quarter ended June 30, 2024. Production in the quarter was impacted by lower grades
and recoveries, partially offset by higher throughput. During the quarter, mining rates were impacted by the interface of the
open pit and historic underground mining stopes, requiring more stockpiled ore to be processed which reduced grades and
recoveries. Access to higher grade ore is anticipated in the second half of 2024 as per the mine sequence. Three of four
stopes have now been filled and blasted, with work on the fourth expected to begin in Q3, and not expected to impact
production in the second half of 2024. Production costs were reduced by lower sales volumes and favourable foreign
exchange as a result of the CLP weakening against the US dollar; however, cash cost 1 of $2.18/lb was negatively impacted
by lower sales volumes.
Caserones (51% owned): Caserones produced 29,775 tonnes of total copper and 714 tonnes of molybdenum on a 100%
basis in the quarter ended June 30, 2024. Copper and molybdenum concentrate production was impacted in the quarter by
extended mill maintenance and weather events which reduced mining activities and limited tailings deposition. Recoveries
were also temporarily reduced by changes in the mining sequence and flotation circuit disruptions. Production costs in the
quarter were lower than planned primarily due to lower copper concentrate and molybdenum sales volume, as well as
favourable foreign exchange. Cash cost also benefitted from favourable foreign exchange.
Chapada (100% owned): Chapada produced 9,106 tonnes of copper and approximately 15,000 ounces of gold in
concentrate in the quarter ended June 30, 2024 and was impacted by lower grades and recoveries combined with lower mill
availability due to unplanned conveyor maintenance and vibration screen failure. Lower grades were a result of a shift to
processing increased amounts of stockpiled ore and an optimized mine plan that significantly reduces waste movement.
Production costs were reduced by lower sales volumes and favourable foreign exchange. Cash cost of $2.05/lb benefitted
from higher gold by-product credits combined with favourable foreign exchange and mining cost decreases due to
operational improvements.
Eagle (100% owned): Eagle produced 1,721 tonnes of nickel and 1,563 tonnes of copper in the quarter ended June 30,
2024. During the quarter a fall of ground in the lower ramp restricted access to Eagle East, limiting production. Mining rates
are expected to be reduced until late 2024 while ramp rehabilitation is completed, deferring the extraction of ore from
Eagle East into future years. Production costs were reduced by lower sales volumes and royalty expense, partially offset by
higher maintenance costs. Nickel cash cost1 of $3.23/lb was impacted by lower sales volumes, partially offset by higher by-
product credits.
1
1 This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of this MD&A for discussion.
===== SIDA 15 =====
Neves-Corvo (100% owned): Neves-Corvo produced 7,347 tonnes of copper and 25,696 tonnes of zinc in the quarter ended
June 30, 2024 , both of which were impacted by lower grades due to changes in mine sequencing as a result of Lombador
south requiring additional development work. Production costs increased due to an increase in sales volumes. Cash cost
during the quarter of $1.70/lb improved from the prior year comparable period due to increased sales volumes and higher
by-product credits.
Zinkgruvan (100% owned): Zinkgruvan produced 21,764 tonnes of zinc and 8,966 tonnes of lead in the quarter ended June
30, 2024 reflecting higher throughput and grades. Copper production of 747 tonnes was impacted by reduced availability of
copper ore. Production costs increased due to higher sales volumes. Zinc cash cost 1of $0.39/lb reflected lower copper by-
product credits.
Total Productiona
2024 2023
YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Copper (t)b 167,721 79,708 88,013 314,798 103,337 89,942 60,057 61,462
Zinc (t) 93,148 47,460 45,688 185,161 50,719 49,774 36,115 48,553
Nickel (t) 4,976 1,721 3,255 16,429 3,729 4,290 4,686 3,724
Gold (koz)b 65 32 33 149 44 35 34 36
Molybdenum (t)b 1,578 714 864 2,024 928 1,096 — —
a - Tonnes(t) and thousands of ounces (koz).
b - Candelaria and Caserones production are on a 100% basis. Caserones results in 2023 are from July 13, 2023.
Corporate Updates
• On July 29, 2024, the Company entered into an agreement with BHP and Filo Corp (“Filo”) to jointly acquire all the
issued and outstanding shares of Filo (the “Arrangement”) not already owned by Lundin Mining and BHP. Under the
terms of the Arrangement, Filo shareholders may choose to receive in exchange for each Filo share C$33.00 in cash,
2.3578 Lundin Mining shares or any combination thereof, subject to aggregate caps. Lundin Mining’s share of the
consideration for the Arrangement is approximately C$2,148 million ($1,550 million), consisting of up to C$859 million
in cash and C$1,289 million in Lundin Mining shares. Closing is expected to occur in the first quarter of 2025.
Concurrently with the completion of the Arrangement, Lundin Mining and BHP will form a 50/50 joint venture (the
“Joint Venture”) to hold the Filo del Sol project and Lundin Mining’s Josemaria project. BHP will pay Lundin Mining cash
consideration of $690 million, subject to certain adjustments, as consideration for Lundin Mining contributing the
Josemaria project to the Joint Venture.
• On July 2, 2024, the Company completed the exercise of its option to acquire an additional 19% interest in the issued
and outstanding equity of SCM Minera Lumina Copper Chile ("Lumina Copper"), bringing the Company's ownership in
Caserones to 70%. The acquisition was financed by a $350.0 million draw down from the Company's revolving credit
facility ("RCF") with the intention to re-finance this amount into a 3-year term loan on the same terms as the
Company's existing $800 million term loan (the "Term loan").
• On May 23, 2024, the Company amended the terms of the RCF and $800 million term loan to establish sustainability
performance targets whereby the interest rate margin in the facilities will be adjusted based on the Company's
performance relative to the targets. In July 2024, the Company published its 2023 Sustainability Report which highlights
the Company's material environment, health & safety, governance and social performance during the year.
• On February 12, 2024, the Company reported an employee fatality at the Neves-Corvo Mine in Portugal. Operations
were voluntarily suspended and restarted on February 15, 2024.
• On February 8, 2024, the Company reported its Mineral Resource and Mineral Reserve estimates as at December 31,
2023 (or as otherwise specified) and on January 14, 2024, the Company provided its 2024 production and cost guidance
and reaffirmed the three year production outlook.
2
1 This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of this MD&A for discussion.
===== SIDA 16 =====
Financial Performance
• Gross profit for the quarter ended June 30, 2024 was $279.5 million which was $226.7 million higher than in the prior
year comparable period of $52.8 million. On a year-to-date basis, gross profit was $464.9 million, an increase of $198.7
million from the prior year comparable period of $266.2 million. The increases were primarily a result of the acquisition
of Caserones in July 2023 and higher realized copper and zinc prices 1, which benefited from provisional pricing
adjustments on prior period concentrate sales.
• For the quarter and year-to-date periods ended June 30, 2024, net earnings of $156.7 million and $215.3 million,
respectively, were higher than in the prior year comparable periods primarily due to higher gross profit.
• Adjusted earnings 1 for the quarter ended June 30, 2024 of $122.1 million were $76.5 million higher than in the prior
year comparable period of $45.6 million primarily due to higher net attributable earnings. Adjusted earnings for the six
months ended June 30, 2024 amounted to $167.3 million, a decrease of $4.0 million from the prior year comparable
period of $171.3 million, due to lower net attributable earnings.
• Cash provided by operating activities for the quarter ended June 30, 2024 of $491.8 million was $296.9 million higher
than in the prior year comparable period of $194.8 million. On a year-to-date basis, cash provided by operating
activities of $759.3 million represented an increase of $352.6 million from the prior year comparable period of $406.7
million. Increases in both periods were primarily due to higher realized copper and zinc prices, inclusion of Caserones
operating cash flows, and larger inflows of working capital.
• During the quarter ended June 30, 2024 , the Company entered into zero cost collar contracts in the total amount of
$222 million (equivalent to BRL 1.1 billion) with collar ranges of BRL 5.00 to BRL 6.11.
• For the quarter ended June 30, 2024 , sustaining capital expenditures 1 of $167.8 million were $20.0 million lower than
in the prior year comparable period of $187.8 million primarily as a result of lower sustaining capital expenditure at
Candelaria due to timing, and only being partially offset by the inclusion of Caserones sustaining capital. On a year-to-
date basis, sustaining capital expenditures of $381.1 million were higher than in the prior year comparable period of
$343.4 million primarily due to the addition of Caserones sustaining capital expenditures. Expansionary capital
expenditures1 of $87.1 million for the quarter and $143.1 million for the six months ended June 30, 2024 were lower
than in the prior year comparable periods of $91.7 million and $182.2 million, respectively, as a result of reduced
spending on the Josemaria Project.
• Free cash flow from operations 1 for this quarter of $337.5 million and year-to-date of $405.2 million were higher than
in the prior year comparable periods of $20.7 million and $91.8 million, respectively, primarily as a result of higher
realized copper and zinc prices , the inclusion of Caserones operating cash flows, and larger inflows of working capital.
Free cash flow from operations for the current quarter also benefitted from lower sustaining capital expenditures.
Financial Position and Financing
• Cash and cash equivalents as at June 30, 2024 were $452.8 million, an increase during the quarter of $87.4 million.
Cash provided by operating activities amounted to $491.8 million and cash used to fund investing activities amounted
to $252.2 million. Cash used in financing activities was comprised primarily of repayments of debt and shareholder
dividend payments.
• As at June 30, 2024, the Company had a net debt 1 balance of $1,152.9 million and a net debt excluding lease liabilities 1
balance of $893.8 million.
• On April 26, 2024, the Company's RCF, originally expiring in April 2028, was amended and extended to April 2029. On
the same date, the Company's Term Loan was also amended and extended by one year to July 2027.
• As at July 30, 2024 , the Company had a cash balance of approximately $288.0 million and a net debt excluding lease
liabilities balance of approximately $1,338.0 million. On July 4, 2024, the Company drew down an additional
$350.0 million from the RCF to finance the exercise of its option to acquire an additional 19% interest in Caserones.
3
1 This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of this MD&A for discussion.
===== SIDA 17 =====
Outlook
Production and cash cost guidance for 2024 has been updated from that disclosed in the Company's Management's
Discussion and Analysis for the year ended December 31, 2023.
The Company remains on track to meet annual production and cash cost guidance for all metals with the exception of
nickel, and has reduced sustaining capital expenditure guidance from $840 million to $795 million with reductions at
Caserones, Neves-Corvo, and Zinkgruvan. Expenditure guidance related to the Josemaria Project of $225 million and
exploration of $48 million each remain on target for 2024.
Metal production continues to be weighted to the second half of the year at Candelaria, Chapada and Neves-Corvo due to
mine sequencing and resultant forecasted grade profiles. Grade is expected to increase significantly at Candelaria in the
second half of 2024 once access is opened to higher-grade ore. As a result of production challenges at Neves-Corvo in the
first half of 2024, copper production at that operation continues to track to the lower end of its annual production guidance
range. In the first half of 2024, cash cost per pound at most operations benefited from increased realized prices on by-
product sales.
Guidance at Caserones has been increased to reflect production from the first half of the year and expected throughput and
grades for the remainder of the year. At the Eagle mine, a fall of ground in the lower ramp restricted access to Eagle East,
limiting production. Mining rates are expected to be reduced until late 2024 while ramp rehabilitation is completed,
deferring the extraction of ore from Eagle East into future years. As a result, the annual nickel and copper production
guidance ranges for the Eagle mine for 2024 have been reduced.
2024 Production and Cash Cost Guidance
Guidancea Revised Guidance
(contained metal) Production Cash Cost ($/lb)b Production Cash Cost ($/lb)b
Copper (t) Candelaria (100%) 160,000 – 170,000 1.60 – 1.80c 160,000 – 170,000 1.60 – 1.80c
Caserones (100%) 120,000 – 130,000 2.60 – 2.80 124,000 – 135,000 2.60 – 2.80
Chapada 43,000 – 48,000 1.95 – 2.15d 43,000 – 48,000 1.95 – 2.15d
Eagle 9,000 – 12,000 5,000 – 7,000
Neves-Corvo 30,000 – 35,000 1.95 – 2.15c 30,000 – 35,000 1.95 – 2.15c
Zinkgruvan 4,000 – 5,000 4,000 – 5,000
Total 366,000 – 400,000 366,000 – 400,000
Zinc (t) Neves-Corvo 120,000 – 130,000 120,000 – 130,000
Zinkgruvan 75,000 – 85,000 0.45 – 0.50c 75,000 – 85,000 0.45 – 0.50c
Total 195,000 – 215,000 195,000 – 215,000
Nickel (t) Eagle 10,000 – 13,000 2.80 – 3.00 7,000 – 9,000 3.20 – 3.40
Gold (koz) Candelaria (100%) 100 – 110 100 – 110
Chapada 55 – 60 55 – 60
Total 155 – 170 155 – 170
Molybdenum (t) Caserones (100%) 2,500 - 3,000 2,500 – 3,000
a. Guidance as outlined in the MD&A for the year ended December 31, 2023.
b. Cash costs are based on various assumptions and estimates, including but not limited to: production volumes, commodity prices (Cu: $3.75/lb, Zn:
$1.10/lb, Pb: $0.90/lb, Au: $1,800/oz, Mo: $20.00/lb, Ag: $23.00/oz), foreign exchange rates (€/USD:1.05, USD/SEK:10.50, USD/CLP:850, USD/BRL:5.00)
and production costs. Cash cost is a non-GAAP measure - see section 'Non-GAAP and Other Performance Measures' of this MD&A for discussion.
c. 68% of Candelaria's total gold and silver production are subject to a streaming agreement, and silver production at Zinkgruvan and Neves-Corvo are also
subject to streaming agreements. Cash costs are calculated based on receipt of approximately $429/oz gold and $4.28/oz to $4.68/oz silver.
d. Chapada's cash cost is calculated on a by-product basis and does not include the effects of its copper stream agreements. Effects of the copper stream
agreements are reflected in copper revenue and will impact realized price per pound.
4
===== SIDA 18 =====
2024 Capital Expenditure Guidanceb
($ millions) Guidancea Revisions Revised Guidance
Candelaria (100% basis) 300 — 300
Caserones (100% basis) 205 (30) 175
Chapada 110 — 110
Eagle 25 — 25
Neves-Corvo 125 (10) 115
Zinkgruvan 75 (5) 70
Other — — —
Total Sustaining 840 (45) 795
Expansionary - Josemaria 225 — 225
Total Capital Expenditures 1,065 (45) 1,020
a. Guidance as outlined in the MD&A for the year ended December 31, 2023.
b. Sustaining capital expenditure is a supplementary financial measure, and expansionary capital expenditure is a non-GAAP measure – see Section "Non-
GAAP and Other Performance Measures" of this MD&A for discussion.
2024 Exploration Investment Guidance
Total exploration expenditure guidance for 2024 is $48.0 million, unchanged from previous guidance.
5
===== SIDA 19 =====
Selected Quarterly Financial Information
Three months ended
June 30,
Six months ended
June 30,
($ millions, except share and per share amounts) 2024 2023 2024 2023
Revenue 1,083.6 588.5 2,020.6 1,339.9
Costs of goods sold:
Production costs (606.4) (405.2) (1,173.6) (823.0)
Depreciation, depletion and amortization (197.7) (130.5) (382.2) (250.8)
Gross profit 279.5 52.8 464.9 266.2
Net earnings attributable to:
Lundin Mining shareholders 121.6 59.1 135.5 205.7
Non-controlling interests 35.1 2.2 79.8 20.9
Net earnings 156.7 61.3 215.3 226.6
Adjusted earnings1 122.1 45.6 167.3 171.3
Adjusted EBITDA1 460.9 191.8 823.7 528.7
Cash provided by operating activities 491.8 194.8 759.3 406.7
Adjusted operating cash flow1 369.9 110.6 683.5 345.7
Free cash flow from operations1 337.5 20.7 405.2 91.8
Free cash flow1 236.8 (84.6) 235.1 (118.8)
Capital expenditures2 258.5 279.9 530.4 526.0
Per share amounts:
Basic earnings (loss) per share ("EPS") attributable to
shareholders 0.16 0.08 0.18 0.27
Diluted earnings (loss) per share ("EPS") attributable to
shareholders 0.16 0.08 0.17 0.27
Adjusted EPS1 0.16 0.06 0.22 0.22
Adjusted operating cash flow per share1 0.48 0.14 0.88 0.45
Dividends declared (C$/share) 0.09 0.09 0.18 0.18
June 30, 2024
December 31,
2023
Total assets 10,879.8 10,861.2
Total debt and lease liabilities 1,598.2 1,485.8
Net debt excluding lease liabilities1
893.8 946.2
1 This is a non-GAAP measure - see the "Non-GAAP and Other Performance Measures" section of this MD&A for discussion.
2 Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows.
6
===== SIDA 20 =====
Summary of Quarterly Results1
($ millions, except per share data) Q2-24 Q1-24 Q4-23 Q3-23 Q2-23 Q1-23 Q4-22 Q3-22
Revenue 1,083.6 937.0 1,060.0 992.2 588.5 751.3 811.4 648.5
Gross profit 279.5 185.4 188.9 197.3 52.8 213.3 155.2 82.5
Net earnings (loss) 156.7 58.6 66.8 21.9 61.3 165.3 145.3 (11.2)
- attributable to shareholders 121.6 13.9 38.8 (3.0) 59.1 146.6 145.6 (11.2)
Adjusted (loss) earnings2 122.1 45.2 79.7 85.3 45.6 125.7 191.5 30.9
Adjusted EBITDA2 460.9 362.9 419.7 415.1 191.8 336.9 353.7 202.4
EPS - Basic and Diluted 0.16 0.02 0.05 — 0.08 0.19 0.19 (0.01)
Adjusted EPS2 0.16 0.06 0.10 0.11 0.06 0.16 0.25 0.04
Cash flow from operations 491.8 267.5 306.1 303.8 194.8 211.9 156.9 36.3
Adjusted operating cash flow per share2 0.48 0.41 0.47 0.41 0.14 0.30 0.38 0.23
Capital expenditure3
258.5 271.9 243.9 243.2 279.9 246.1 281.2 199.5
1 The sum of quarterly amounts may differ from year-to-date results due to rounding.
2 This is a non-GAAP measure - see the "Non-GAAP and Other Performance Measures" section of this MD&A for discussion.
3 Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows.
On a quarterly basis the Company's revenue, gross profit and net earnings can be impacted by metal prices, sales volumes
as a result of the timing of concentrate shipments, and provisional pricing adjustments on current and prior period
shipments.
The Company's results have also been impacted by the acquisition of the Josemaria Project in April 2022 and the acquisition
of the Caserones mine in July 2023. Project development costs for the Josemaria Project were initially included in general
exploration expenses following the acquisition of the project in April 2022, but began to be capitalized from the fourth
quarter of 2022. This reduced net earnings in Q3 2022 and contributed to higher capital expenditure starting in Q4 2022.
The acquisition of the Caserones mine in July 2023 contributed to an increase in gross profit and cash flow from operations
in Q3 2023 and in subsequent quarters. Additionally, fair value adjustments of $32.2 million and $7.8 million were recorded
in production costs in Q3 2023 and Q4 2023, respectively, as in-process and concentrate inventory measured at fair value
at the acquisition date was sold. The $800 million three-year term loan entered into in conjunction with the acquisition has
increased the Company's interest expense in Q3 2023 through Q2 2024, reducing net earnings.
During 2022, inflationary price increases were experienced for electricity, diesel and consumables. In 2023 and continuing
into Q2 2024, input prices stabilized, and in some cases lowered. These trends impacted gross profit and net earnings in the
quarters presented above.
A non-cash write-down, including depreciation, of long-term ore stockpile inventory at Chapada of $66.8 million was
recognized in Q4 2022, reducing net earnings.
From Q3 2022, the Company has entered into derivative contracts for foreign currency, diesel, and copper prices as part of
its risk management strategy. Realized and unrealized gains and losses on derivative contracts and foreign exchange and
trading gains on debt and equity investments are recorded in other income and impact the Company's net earnings.
7
===== SIDA 21 =====
Revenue Overview
Sales Volumes by Payable Metal
2024 2023
YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Copper (t)
Candelaria (100%) 63,535 29,999 33,536 144,473 38,888 33,668 36,347 35,570
Caserones (100%)1 65,073 29,862 35,211 66,075 35,690 30,385 — —
Chapada 17,035 8,293 8,742 43,761 13,080 11,445 10,164 9,072
Eagle 3,847 1,789 2,058 11,968 3,055 3,177 2,951 2,785
Neves-Corvo 13,784 7,898 5,886 32,054 9,054 8,799 6,170 8,031
Zinkgruvan 1,577 821 756 4,473 845 1,758 1,001 869
164,851 78,662 86,189 302,804 100,612 89,232 56,633 56,327
Zinc (t)
Neves-Corvo 41,644 20,440 21,204 91,115 25,491 21,957 20,125 23,542
Zinkgruvan 34,335 18,510 15,825 65,344 17,316 22,042 9,374 16,612
75,979 38,950 37,029 156,459 42,807 43,999 29,499 40,154
Nickel (t)
Eagle 4,181 2,018 2,163 13,339 3,105 3,640 3,859 2,735
Gold (koz)
Candelaria (100%) 36 17 19 87 23 19 23 22
Chapada 24 12 12 53 18 13 11 11
60 29 31 140 41 32 34 33
Molybdenum (t)
Caserones (100%)1 1,531 695 836 2,019 978 1,041 — —
Lead (t)
Neves-Corvo 2,566 1,242 1,324 4,970 1,830 1,220 881 1,039
Zinkgruvan 13,904 9,069 4,835 25,527 5,714 9,391 4,944 5,478
16,470 10,311 6,159 30,497 7,544 10,611 5,825 6,517
Silver (koz)
Candelaria (100%) 731 331 400 1,322 415 279 333 295
Chapada 51 30 21 129 37 32 29 31
Eagle 8 7 1 24 8 6 4 6
Neves-Corvo 439 215 224 821 265 227 158 171
Zinkgruvan 894 597 297 1,892 449 713 331 399
2,123 1,180 943 4,188 1,174 1,257 855 902
1 Caserones 2023 results are from July 13, 2023.
8
===== SIDA 22 =====
Revenue Analysis
Three months ended June 30, Six months ended June 30,
by Mine 2024 2023 Change 2024 2023 Change
($ thousands) $ % $ % $ $ % $ % $
Candelaria (100%) 366,363 34 290,426 49 75,937 696,772 34 670,831 50 25,941
Caserones (100%)1 336,547 31 — — 336,547 662,758 33 — — 662,758
Chapada 117,969 11 94,721 16 23,248 216,404 11 205,839 15 10,565
Eagle 57,444 5 105,250 18 (47,806) 114,667 6 174,670 13 (60,003)
Neves-Corvo 128,675 12 68,614 12 60,061 209,305 10 198,017 15 11,288
Zinkgruvan 76,587 7 29,520 5 47,067 120,660 6 90,518 7 30,142
1,083,585 588,531 495,054 2,020,566 1,339,875 680,691
1 Caserones 2023 results are from July 13, 2023.
Three months ended June 30, Six months ended June 30,
by Metal 2024 2023 Change 2024 2023 Change
($ thousands) $ % $ % $ $ % $ % $
Copper1 801,863 74 390,953 66 410,910 1,517,412 75 920,634 69 596,778
Zinc 101,598 9 34,801 6 66,797 158,965 8 133,952 10 25,013
Molybdenum1 35,476 3 — — 35,476 67,614 3 — — 67,614
Gold 58,360 5 51,007 9 7,353 116,068 6 108,075 8 7,993
Nickel 37,575 3 80,302 14 (42,727) 76,368 4 122,261 9 (45,893)
Lead 21,267 2 11,049 2 10,218 32,979 2 22,508 2 10,471
Silver 16,854 2 9,652 2 7,202 30,660 2 18,888 1 11,772
Other 10,592 1 10,767 2 (175) 20,500 1 13,557 1 6,943
1,083,585 588,531 495,054 2,020,566 1,339,875 680,691
1 Caserones 2023 results are from July 13, 2023.
Revenue for the quarter ended June 30, 2024 of $1,083.6 million was higher than the prior year comparable period due to
the inclusion of $336.5 million revenue from Caserones and higher realized copper and zinc prices, including $94.5 million
positive provisional pricing adjustments on prior period concentrate sales. On a year-to-date basis, revenue of $2,020.6
million was an increase of $680.7 million over the prior year comparable period. Revenue increases were primarily due to
the inclusion of Caserones copper and molybdenum revenue and increases in realized copper and zinc prices, partially
offset by lower copper, nickel and gold sales volumes.
Revenue from gold and silver for the quarter and six months ended June 30, 2024 includes the partial recognition of an
upfront purchase price on the sale of precious metals streams for Candelaria, Neves-Corvo, and Zinkgruvan as well as the
cash proceeds which amount to approximately $429/oz for gold and between $4.28/oz and $4.68/oz for silver. Chapada’s
copper revenue includes the recognition of deferred revenue from copper streams acquired with the Chapada mine, as well
as the cash proceeds of 30% of the market price of the copper sold under the streams.
Revenue is recorded using the metal price received for sales that settle during the reporting period. For sales that have not
been settled, an estimate is used based on the expected month of settlement and the forward price of the metal at the end
of the reporting period. The difference between the estimate and the final price received is recognized by adjusting revenue
in the period in which the sale is settled. Settlement dates can range from one to six months after shipment.
Provisionally Valued Revenue as of June 30, 2024
Metal Payable metal Valued at
Copper 78,807 t $4.34 /lb
Zinc 17,907 t $1.31 /lb
Nickel 255 t $7.75 /lb
Gold 21 koz $2,335 /oz
Molybdenum 746 t $20.98 /lb
9
===== SIDA 23 =====
Quarterly Reconciliation of Realized Prices
Three months ended June 30, 2024
($ thousands) Copper Zinc Nickel Gold Molybdenum Other Total
Revenue from contracts with
customers1 774,435 111,243 39,365 71,426 31,396 46,372 1,074,237
Provisional pricing adjustments on
current period concentrate sales (18,683) 7,468 (2,524) (1,637) 1,406 486 (13,484)
Provisional pricing adjustments on prior
period concentrate sales 74,665 9,387 1,374 2,260 2,674 4,169 94,529
830,417 128,098 38,215 72,049 35,476 51,027 1,155,282
Recognition of deferred revenue 11,981
Copper stream cash effect (4,677)
Gold stream cash effect (21,089)
Less: Treatment and refining charges (57,912)
Total Revenue 1,083,585
Payable Metal 78,662 t 38,950 t 2,018 t 29 koz 695 t
Current period sales ($/lb)2 $4.36 $1.38 $8.28 $2,399 $21.41
Provisional pricing adjustments on prior
period concentrate sales ($/lb) $0.43 $0.11 $0.31 $77.00 $1.74
Realized prices3,4 $4.79 /lb $1.49 /lb $8.59 /lb $2,476 /oz $23.15 /lb
Three months ended June 30, 2023
Copper Zinc Nickel Gold Other Total
Revenue from contracts with
customers1 487,746 75,322 81,595 65,548 22,187 732,398
Provisional pricing adjustments on
current period concentrate sales (14,204) (1,103) (3,109) (148) 11,041 (7,522)
Provisional pricing adjustments on prior
period concentrate sales (53,338) (20,341) 2,039 (2,949) (1) (74,589)
420,205 53,878 80,525 62,452 33,227 650,287
Recognition of deferred revenue 12,897
Copper stream cash effect (4,253)
Gold stream cash effect (20,923)
Less: Treatment & refining charges (49,477)
Total Revenue 588,531
Payable Metal 56,633 t 29,499 t 3,859 t 34 koz
Current period sales ($/lb)2 $3.79 $1.14 $9.23 $1,929.00
Provisional pricing adjustments on prior
period concentrate sales ($/lb) $ (0.42) $ (0.31) $ 0.24 $ (87.00)
Realized prices3,4 $3.37 /lb $0.83 /lb $9.47 /lb $1,842 /oz
1. Revenue from contracts with customers before recognition of deferred revenue, gold and copper stream cash effects and treatment and refining
charges, each of which is presented separately in the table.
2. Includes revenue from contracts with customers and provisional pricing adjustments on current period concentrate sales.
3. This is a non-GAAP measure - see the "Non-GAAP and Other Performance Measures" section of this MD&A for discussion.
4. The realized price for copper inclusive of the impact of streaming agreements for the three months ended June 30, 2024 is $4.76/lb (2023: $3.34/
lb). The realized price for gold inclusive of the impact of streaming agreements for the three months ended June 30, 2024 is $1,751/oz (2023: $1,225/
oz).
Due to volatility in commodity prices, significant variances may arise between average market prices and realized prices due
to the timing of sales in the period.
10
===== SIDA 24 =====
Year-to-Date Reconciliation of Realized Prices
Six months ended June 30, 2024
($ thousands) Copper Zinc Nickel Gold Molybdenum Other Total
Revenue from contracts with
customers1 1,512,806 202,253 74,490 136,659 70,321 84,924 2,081,453
Provisional pricing adjustments on
current year concentrate sales 27,034 12,396 (2,500) 4,390 1,457 3,835 46,612
Provisional pricing adjustments on prior
year concentrate sales 46,068 (3,670) 4,998 545 (4,164) (230) 43,547
1,585,908 210,979 76,988 141,594 67,614 88,529 2,171,612
Recognition of deferred revenue 26,076
Copper stream cash effect (10,775)
Gold stream cash effect (42,027)
Less: Treatment and refining charges (124,320)
Total Net Sales 2,020,566
Payable Metal 164,851 t 75,979 t 4,181 t 60 koz 1,531 t
Current period sales 2 $4.24 $1.28 $7.81 $2,349 $21.27
Provisional pricing adjustments on prior
year concentrate sales 0.12 (0.02) 0.54 9 (1.24)
Realized prices 3,4 $4.36 /lb $1.26 /lb $8.35 /lb $2,358 /oz $20.03 /lb
Six months ended June 30, 2023
Copper Zinc Nickel Gold Other Total
Revenue from contracts with
customers1 987,746 200,251 156,402 128,322 50,528 1,523,249
Provisional pricing adjustments on
current year concentrate sales (37,827) (24,161) (13,158) 638 8,587 (65,921)
Provisional pricing adjustments on prior
year concentrate sales 28,168 1,160 (18,322) 1,145 — 12,151
978,087 177,250 124,922 130,105 59,115 1,469,479
Recognition of deferred revenue 28,062
Copper stream cash effect (10,763)
Gold stream cash effect (41,519)
Less: Treatment & refining charges (105,384)
Total Revenue 1,339,875
Payable Metal 112,960 t 69,653 t 6,594 t 66 koz
Current period sales2 $3.81 $1.15 $9.85 $1,939
Provisional pricing adjustments on prior
year concentrate sales 0.12 0.00 (1.26) 17
Realized prices3,4 $3.93 /lb $1.15 /lb $8.59 /lb $1,956 /oz
1. Revenue from contracts with customers before recognition of deferred revenue, gold and copper stream cash effects and treatment and refining
charges, each of which is presented separately in the table.
2. Includes revenue from contracts with customers and provisional pricing adjustments on current year concentrate sales.
3. This is a non-GAAP measure - see the "Non-GAAP and Other Performance Measures" section of this MD&A for discussion.
4. The realized price for copper inclusive of the impact of streaming agreements for 2024 is $4.33/lb (2023: $3.89/lb). The realized price for gold
inclusive of the impact of streaming agreements for 2024 is $1,658/oz (2023: $1,332/oz).
11
===== SIDA 25 =====
Financial Results
Production Costs
Production costs for the quarter ended June 30, 2024 were $606.4 million, an increase from $405.2 million in the prior year
comparable period. On a year-to-date basis, production costs were $1,173.6 million, an increase from $823.0 million in the
prior year comparable period. Production cost increases in both periods were primarily as a result of the acquisition of
Caserones and higher maintenance costs at Eagle. These increases were partially offset by favourable foreign exchange,
including a weaker CLP which reduced production costs at Candelaria and Caserones.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization expense for the quarter and year-to-date periods ended June 30, 2024 increased
compared to the prior year comparative periods. The increases were primarily attributable to the acquisition of Caserones
in addition to increased amortization of mineral properties at Candelaria due to higher stripping costs capitalized in 2023.
Depreciation, depletion & amortization Three months ended June 30, Six months ended June 30,
($ thousands) 2024 2023 Change 2024 2023 Change
Candelaria 76,058 69,696 6,362 149,484 128,071 21,413
Caserones1 54,501 — 54,501 106,230 — 106,230
Chapada 18,368 14,989 3,379 33,448 27,070 6,378
Eagle 9,993 12,670 (2,677) 19,144 23,821 (4,677)
Josemaria — — — — 38 (38)
Neves-Corvo 29,672 27,719 1,953 56,718 57,799 (1,081)
Zinkgruvan 8,813 4,913 3,900 16,796 13,000 3,796
Other 253 518 (265) 330 953 (623)
197,658 130,505 67,153 382,150 250,752 131,398
1 Caserones 2023 results are from July 13, 2023.
Finance Income and Costs
Total finance costs, net, of $36.3 million and $72.0 million for the quarter and year-to-date periods ended June 30, 2024 ,
respectively, increased from $15.9 million and $31.6 million in the prior year comparable periods primarily due to higher
interest expense related to higher outstanding debt through the quarter, combined with increased lease liability interest
following the acquisition of Caserones.
Other Income and Expense
Net other expense for the quarter ended June 30, 2024 amounted to $3.6 million, a reduction from $33.4 million in other
income in the prior year comparable period primarily related to reduced realized gains on expired foreign exchange and
diesel derivative contracts and reduced foreign exchange and trading gains on debt and equity instruments supporting
capital funding for the Josemaria Project following the devaluation of the ARS in December 2023. Net other income and
expense in the quarter also included a $17.2 million non-cash write-down of capital works in progress at the Josemaria
Project that are no longer expected to be required and $9.8 million of overhead costs incurred at the Eagle mine due to a
partial suspension of underground operations. These losses are partially offset by a $12.4 million quarter-to-date gain
recorded on the Caserones purchase option as a result of revised discounted cash flow projections due to higher metal
prices.
Net other expense for the year-to-date period ended June 30, 2024 amounted to $14.0 million, a reduction from net other
income of $79.6 million in the prior year comparable period. The decrease is primarily due to $48.9 million of non-cash
unrealized losses related to the mark-to-market valuation of unexpired foreign exchange contracts, particularly for BRL and
SEK. Additionally, the year-to-date period ended June 30, 2024 had lower foreign exchange and trading gains on debt and
equity instruments. These losses were partially offset by the year-to-date gain recorded on the Caserones purchase option
which amounted to $11.7 million and positively impacted other income.
12
===== SIDA 26 =====
Foreign exchange losses and gains recorded in the quarter and year-to-date periods ended June 30, 2024 , respectively, in
other income and expense resulted from foreign exchange revaluation of working capital and leases denominated in foreign
currencies. Foreign exchange losses in the quarter ended June 30, 2024 are primarily due to slight strengthening of the CLP
against the USD. Foreign exchange gains in the year-to-date period ended June 30, 2024 are primarily due to the weakening
of the CLP against the USD. Foreign exchange gains also included changes in fair value of debt and equity instruments
supporting capital funding for the Josemaria Project. Period end exchange rates having a meaningful impact on foreign
exchange recorded at June 30, 2024 were:
June 30, 2024 March 31, 2024 December 31, 2023
Brazilian Real (USD:BRL) 5.56 5.00 4.84
Chilean Peso (USD:CLP) 951 982 877
Euro (USD:€) 0.93 0.93 0.91
Swedish Kronor (USD:SEK) 10.65 10.69 9.98
Argentine Peso (USD:ARS) 912 857 808
The average exchange rates for each quarter were:
Three months ended
June 30, 2024 March 31, 2024 December 31, 2023
Brazilian Real (USD:BRL) 5.22 4.95 4.95
Chilean Peso (USD:CLP) 935 946 896
Euro (USD:€) 0.93 0.92 0.93
Swedish Kronor (USD:SEK) 10.68 10.39 10.67
Argentine Peso (USD:ARS) 887 835 449
Income Taxes
Income tax expense (recovery) Three months ended June 30, Six months ended June 30,
($ thousands) 2024 2023 Change 2024 2023 Change
Candelaria 43,188 3,732 39,456 82,581 46,279 36,302
Caserones1 18,356 — 18,356 40,592 — 40,592
Chapada 30,874 (15,864) 46,738 28,614 (21,213) 49,827
Eagle (598) 3,539 (4,137) (1,876) 3,546 (5,422)
Josemaria (50,588) 678 (51,266) (50,588) 678 (51,266)
Neves-Corvo 1,919 (10,617) 12,536 (2,918) (9,345) 6,427
Zinkgruvan 6,925 2,286 4,639 5,647 6,265 (618)
Other 6,086 (3,355) 9,441 4,676 2,882 1,794
56,162 (19,601) 75,763 106,728 29,092 77,636
1 Caserones 2023 results are from July 13, 2023.
Income taxes by classification Three months ended June 30, Six months ended June 30,
($ thousands) 2024 2023 Change 2024 2023 Change
Current income tax expense 58,117 27,213 30,904 105,380 86,714 18,666
Deferred income tax expense (recovery) (1,955) (46,814) 44,859 1,348 (57,622) 58,970
56,162 (19,601) 75,763 106,728 29,092 77,636
Current income tax expense in the quarter and year-to-date periods ended June 30, 2024 was higher than in the prior year
comparable periods primarily due to higher taxable earnings, the introduction of the mining royalty tax for Candelaria
effective January 1, 2024 and the inclusion of Caserones following its acquisition.
13
===== SIDA 27 =====
Deferred income tax expense in the quarter and year-to-date periods ended June 30, 2024 was higher than in the prior
comparable periods due to the utilization of tax losses at Caserones and the effect of foreign exchange revaluation of non-
monetary assets at Chapada due to weakening of the BRL against the USD. The effect of the increase in deferred income tax
expense in the quarter was offset by the reversal of the deferred tax liability in Josemaria due to tax inflation adjustments in
Argentina.
14
===== SIDA 28 =====
Mining Operations
Production Overview
2024 2023
YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Copper (t)
Candelaria (100%) 63,697 31,170 32,527 152,012 41,618 34,275 36,952 39,167
Caserones (100%)1 63,991 29,775 34,216 65,210 35,389 29,821 — —
Chapada 19,244 9,106 10,138 45,719 12,872 12,286 10,697 9,864
Eagle 4,077 1,563 2,514 13,600 3,334 3,245 3,881 3,140
Neves-Corvo 14,391 7,347 7,044 33,823 9,623 9,016 7,610 7,574
Zinkgruvan 2,321 747 1,574 4,434 501 1,299 917 1,717
167,721 79,708 88,013 314,798 103,337 89,942 60,057 61,462
Zinc (t)
Neves-Corvo 52,183 25,696 26,487 108,812 31,035 25,807 24,177 27,793
Zinkgruvan 40,965 21,764 19,201 76,349 19,684 23,967 11,938 20,760
93,148 47,460 45,688 185,161 50,719 49,774 36,115 48,553
Nickel (t)
Eagle 4,976 1,721 3,255 16,429 3,729 4,290 4,686 3,724
Gold (koz)
Candelaria (100%) 36 17 19 90 25 20 21 24
Chapada 29 15 14 59 19 15 13 12
65 32 33 149 44 35 34 36
Molybdenum (t)
Caserones (100%)1 1,578 714 864 2,024 928 1,096 — —
Lead (t)
Neves-Corvo 2,991 1,387 1,604 5,600 2,030 1,447 951 1,172
Zinkgruvan 15,714 8,966 6,748 26,284 6,418 8,643 3,816 7,407
18,705 10,353 8,352 31,884 8,448 10,090 4,767 8,579
Silver (koz)
Candelaria (100%) 782 367 415 1,487 468 306 366 347
Chapada 113 55 58 258 73 67 62 56
Eagle 25 17 8 64 17 19 11 17
Neves-Corvo 957 433 524 1,902 573 486 407 436
Zinkgruvan 1,339 699 640 2,300 509 785 374 632
3,216 1,571 1,645 6,011 1,640 1,663 1,220 1,488
15
1 Caserones 2023 results are from July 13, 2023.
===== SIDA 29 =====
Production Cost and Cash Cost Overview ($ thousand, $/lb)
Three months ended
June 30,
Six months ended
June 30,
($ thousands) 2024 2023 2024 2023
Candelaria
Production costs $175,359 $184,958 $336,609 $372,937
Gross cost 2.72 2.51 2.53 2.54
By-product1 (0.54) (0.37) (0.51) (0.36)
Cash Cost (Cu, $/lb)2 2.18 2.14 2.02 2.18
AISC (Cu, $/lb)2 3.22 3.76 3.28 3.60
Caserones3
Production costs $208,897 — $406,552 —
Gross cost 3.17 — 2.86 —
By-product1 (0.57) — (0.51) —
Cash Cost (Cu, $/lb)2 2.60 — 2.35 —
AISC (Cu, $/lb)2 3.58 — 3.28 —
Chapada
Production costs $69,246 $80,113 $133,831 $148,747
Gross cost 3.76 3.72 3.59 3.63
By-product1 (1.71) (1.03) (1.56) (1.09)
Cash Cost (Cu, $/lb)2 2.05 2.69 2.03 2.54
AISC (Cu, $/lb)2 3.72 3.80 3.75 3.62
Eagle
Production cost $37,657 $45,735 $78,193 $91,184
Gross cost 7.70 4.81 7.80 5.71
By-product1 (4.47) (2.93) (4.15) (3.60)
Cash Cost (Ni, $/lb)2 3.23 1.88 3.65 2.11
AISC (Ni, $/lb)2 5.71 3.34 5.92 4.09
Neves-Corvo
Production costs $83,129 $76,080 $154,841 $161,806
Gross cost 5.04 5.96 5.39 5.45
By-product1 (3.34) (1.97) (3.03) (2.76)
Cash Cost (Cu, $/lb)2 1.70 3.99 2.36 2.69
AISC (Cu, $/lb)2 3.46 5.73 4.18 4.35
Zinkgruvan
Production costs $32,734 $17,786 $62,809 $46,691
Gross cost 1.07 1.13 1.09 1.07
By-product1 (0.68) (0.89) (0.58) (0.64)
Cash Cost (Zn, $/lb)2 0.39 0.24 0.51 0.43
AISC (Zn, $/lb)2 0.74 1.06 0.91 1.00
1 By-product is after related treatment and refining charges.
2 Cash Cost per pound sold and All-in Sustaining Cost per pound sold ("AISC") are non-GAAP measures, see the
"Non-GAAP and Other Performance Measures" section of this MD&A for discussion.
3 Caserones 2023 results are from July 13, 2023.
16
===== SIDA 30 =====
Capital Expenditures1
Three months ended June 30,
2024 2023
($ thousands) Sustaining Expansionary
Capitalized
Interest Total Sustaining Expansionary
Capitalized
Interest Total
Candelaria 60,544 — — 60,544 123,417 — — 123,417
Caserones2 35,328 — — 35,328 — — — —
Chapada 25,241 — — 25,241 19,690 — — 19,690
Eagle 3,980 — — 3,980 3,562 — — 3,562
Josemaria — 87,120 3,544 90,664 — 91,650 443 92,093
Neves-Corvo 27,921 — — 27,921 22,133 — — 22,133
Zinkgruvan 13,301 — — 13,301 15,994 — — 15,994
Other 1,488 — — 1,488 3,024 — — 3,024
167,803 87,120 3,544 258,467 187,820 91,650 443 279,913
Six months ended June 30,
2024 2023
($ thousands) Sustaining Expansionary
Capitalized
Interest Total Sustaining Expansionary
Capitalized
Interest Total
Candelaria 160,076 — — 160,076 214,103 — — 214,103
Caserones2 78,082 — — 78,082 — — — —
Chapada 54,440 — — 54,440 35,717 — — 35,717
Eagle 8,058 — — 8,058 10,664 — — 10,664
Josemaria — 143,101 6,209 149,310 — 182,169 479 182,648
Neves-Corvo 50,334 — — 50,334 47,194 — — 47,194
Zinkgruvan 27,642 — — 27,642 30,462 — — 30,462
Other 2,431 — — 2,431 5,244 — — 5,244
381,063 143,101 6,209 530,373 343,384 182,169 479 526,032
1 Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows. Sustaining capital expenditures is a
supplementary financial measure and expansionary capital expenditures is a non-GAAP measure – see the "Non-GAAP and Other Performance
Measures" section of this MD&A for discussion.
2 Caserones 2023 results are from July 13, 2023.
17
===== SIDA 31 =====
Candelaria (Chile)
Operating Statistics
2024 2023
(100% Basis) YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Ore mined (000s tonnes) 13,271 8,155 5,116 25,939 7,793 5,350 6,194 6,602
Ore milled (000s tonnes) 14,403 7,094 7,309 28,903 7,609 7,168 6,924 7,202
Grade
Copper (%) 0.49 0.49 0.48 0.58 0.60 0.52 0.59 0.59
Gold (g/t) 0.12 0.12 0.11 0.14 0.15 0.12 0.14 0.15
Recovery
Copper (%) 90.7 89.5 91.9 91.3 90.3 91.0 91.1 92.6
Gold (%) 65.8 62.1 69.8 69.5 68.6 70.6 68.8 70.3
Production (contained metal)
Copper (tonnes) 63,697 31,170 32,527 152,012 41,618 34,275 36,952 39,167
Gold (000 oz) 36 17 19 90 25 20 21 24
Silver (000 oz) 782 367 415 1,487 468 306 366 347
Revenue ($000s) 696,772 366,363 330,409 1,329,599 359,023 299,745 290,426 380,405
Production costs ($000s) 336,609 175,359 161,250 726,493 178,088 175,468 184,958 187,979
Gross profit ($000s) 210,679 114,946 95,733 330,729 106,997 53,909 35,772 134,051
Cash cost ($ per pound copper)1 2.02 2.18 1.89 2.07 1.78 2.19 2.14 2.21
AISC ($ per pound copper)1 3.28 3.22 3.34 3.34 2.76 3.43 3.76 3.44
1All-in Sustaining Cost per pound sold ("AISC") and Cash cost per pound sold are non-GAAP measures, see the "Non-GAAP and Other Performance
Measures" section of this MD&A for discussion.
Production
Copper and gold production in the quarter and year-to-date periods ended June 30, 2024 was lower than in the prior year
comparable periods primarily due to lower grades and recoveries, partially offset by higher throughput. During the quarter,
mining rates were impacted by the interface of the open pit and historic underground mining stopes, requiring more
stockpiled ore to be processed which reduced grades and recoveries. Access to higher grade ore is anticipated in the second
half of 2024 as per the mine sequence. Three of four stopes have now been filled and blasted, with work on the fourth
expected to begin in Q3, and not expected to impact production in the second half of 2024.
Production Costs and Cash Cost
Production costs in the quarter and year-to-date periods ended June 30, 2024 were lower than in the prior year comparable
periods as a result of lower copper and gold sales volumes and favourable foreign exchange due to a weaker Chilean peso.
Cash cost per pound in the quarter ended June 30, 2024 was slightly higher than in the prior year comparable period due to
lower production and sales volumes, part ially offset by higher by-product credits and favourable foreign exchange. In the
year-to-date period ended June 30, 2024 , cash cost per pound improved from the prior year comparable period primarily
due to favourable foreign exchange and higher by-product credits . All-in sustaining cost per pound ("AISC") in the quarter
and year-to-date periods ended June 30, 2024 was lower than in the prior year comparable periods primarily due to lower
sustaining capital expenditure.
In the quarter ended June 30, 2024 , approximately 23,700 oz of gold and 496,800 oz of silver were subject to terms of a
streaming agreement from which approximately $429/oz of gold and $4.28/oz of silver will be received.
Gross Profit
Gross profit in the quarter and year-to-date periods ended June 30, 2024 was higher than in the prior year comparable
periods, primarily due to favourable foreign exchange and higher realized copper and gold prices, including the impacts of
provisional pricing adjustments on prior period concentrate sales.
18
===== SIDA 32 =====
Caserones (Chile)
Operating Statistics
2024 2023
(100% Basis) YTD Q2 Q1 Total2 Q4 Q32
Ore mined (000s tonnes) 14,647 7,840 6,807 15,583 7,484 8,099
Ore milled (000s tonnes) 15,246 7,556 7,690 15,424 8,262 7,162
Ore placed on leach 4,782 2,868 1,914 5,541 3,234 2,307
Grade
Copper (%) 0.43 0.42 0.44 0.42 0.41 0.44
Molybdenum (%) 0.015 0.015 0.016 0.020 0.019 0.022
Recovery
Copper (%) 77.9 75.9 79.7 86.1 88.2 83.9
Molybdenum (%) 67.4 64.4 70.0 72.4 73.9 70.9
Production (tonnes)
Copper in concentrate 51,412 24,246 27,166 55,191 29,496 25,695
Copper cathode 12,579 5,529 7,050 10,019 5,893 4,126
Total copper 63,991 29,775 34,216 65,210 35,389 29,821
Molybdenum 1,578 714 864 2,024 928 1,096
Revenue ($000s) 662,758 336,547 326,211 601,775 317,219 284,556
Production costs ($000s) 406,552 208,897 197,655 404,837 215,855 188,982
Gross profit ($000s) 149,976 73,149 76,827 88,449 31,182 57,267
Cash cost ($ per pound copper)1 2.35 2.60 2.14 1.99 2.33 1.60
AISC ($ per pound copper)1 3.28 3.58 3.02 3.03 3.48 2.49
1 All-in Sustaining Cost per pound sold ("AISC") and Cash cost per pound sold are non-GAAP measures, see the "Non-GAAP and Other Performance
Measures" section of this MD&A for discussion.
2 Caserones 2023 results are from July 13, 2023.
Production
Copper and molybdenum concentrate production was impacted in the quarter ended June 30, 2024 by extended mill
maintenance and weather events which reduced mining activities and limited tailings deposition. Recoveries were also
temporarily reduced by changes in the mining sequence and flotation circuit disruptions. Copper cathode production in the
quarter ended June 30, 2024 continued to benefit from changes to the irrigation pattern on the dump leach pad.
Production Costs and Cash Cost
Production costs in the quarter and year-to-date periods ended June 30, 2024 reflected reduced copper and molybdenum
concentrate production volumes, which increased cash cost per pound. This increase was partly offset by favourable foreign
exchange as a result of the Chilean peso weakening against the US dollar.
Gross Profit
Gross profit in the quarter and year-to-date periods ended June 30, 2024 benefited from higher realized copper and
molybdenum prices, favourable foreign exchange and higher copper cathode sales volumes.
19
===== SIDA 33 =====
Chapada (Brazil)
Operating Statistics
2024 2023
(100% Basis) YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Ore mined (000s tonnes) 10,976 5,851 5,125 29,508 7,803 8,062 7,522 6,121
Ore milled (000s tonnes) 10,903 5,407 5,496 22,233 5,218 5,832 5,207 5,976
Grade
Copper (%) 0.23 0.23 0.23 0.26 0.29 0.26 0.26 0.23
Gold (g/t) 0.16 0.18 0.14 0.15 0.18 0.15 0.14 0.13
Recovery
Copper (%) 77.7 74.2 81.1 80.2 85.9 80.8 80.3 73.3
Gold (%) 52.0 49.3 55.3 55.0 61.1 55.3 54.1 48.0
Production (contained metal)
Copper (tonnes) 19,244 9,106 10,138 45,719 12,872 12,286 10,697 9,864
Gold (000 oz) 29 15 14 59 19 15 13 12
Silver (000 oz) 113 55 58 258 73 67 62 56
Revenue ($000s) 216,404 117,969 98,435 461,175 143,439 111,897 94,721 111,118
Production costs ($000s) 133,831 69,246 64,585 317,317 89,716 78,854 80,113 68,634
Gross profit (loss) ($000s) 49,125 30,355 18,770 80,378 30,126 20,230 (381) 30,403
Cash cost ($ per pound copper)1 2.03 2.05 2.01 2.27 1.88 2.28 2.69 2.37
AISC ($ per pound copper)1 3.75 3.72 3.79 3.24 2.75 3.15 3.80 3.42
1All-in Sustaining Cost per pound sold ("AISC") and Cash cost per pound sold are non-GAAP measures, see the "Non-GAAP and Other Performance
Measures" section of this MD&A for discussion.
Production
Copper production in the quarter and year-to-date periods ended June 30, 2024 was lower than in the prior year
comparable periods due to lower grades and recoveries and was impacted by lower mill availability due to unplanned
conveyor maintenance and vibration screen failure. The lower grades and lower amount of ore mined is a result of a shift to
processing increased amounts of stockpiled ore and an optimized mine plan that significantly reduces waste movement.
Gold production in the quarter and year-to-date periods ended June 30, 2024 was higher than in the prior year comparable
periods primarily due to higher grades.
Production Costs and Cash Cost
Production costs in the quarter and year-to date periods ended June 30, 2024 were lower than in the prior year comparable
periods as a result of lower sales volume and favourable foreign exchange.
Cash cost per pound in the quarter and year-to date periods ended June 30, 2024 improved from the prior year comparable
periods primarily due to increased realized prices for gold sales, which reduce cash cost as by-product credits. This
reduction was combined with favourable foreign exchange and lower mining costs as a result of a planned reduction in
waste movement, and other cost reduction initiatives as a result of the Full Potential program. AISC per pound in the
quarter ended June 30, 2024 was lower than in the prior year comparable period due to lower cash cost per pound. AISC
per pound in the year-to-date period was higher than in the prior year comparable period due to higher sustaining capital
expenditure.
Gross Profit
Gross profit in the quarter and year-to date period ended June 30, 2024 was higher than in the prior year comparable
periods primarily due to higher realized copper and gold prices and favourable foreign exchange.
20
===== SIDA 34 =====
Eagle (USA)
Operating Statistics
2024 2023
(100% Basis) YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Ore mined (000s tonnes) 272 107 165 725 188 192 189 156
Ore milled (000s tonnes) 276 97 179 718 186 190 181 161
Grade
Nickel (%) 2.1 2.1 2.1 2.6 2.3 2.6 2.9 2.6
Copper (%) 1.5 1.7 1.5 2.0 1.9 1.8 2.2 2.0
Recovery
Nickel (%) 85.1 85.0 85.2 87.4 86.1 86.2 88.8 88.5
Copper (%) 95.6 95.9 95.3 96.8 96.5 96.4 97.0 97.2
Production (contained metal)
Nickel (tonnes) 4,976 1,721 3,255 16,429 3,729 4,290 4,686 3,724
Copper (tonnes) 4,077 1,563 2,514 13,600 3,334 3,245 3,881 3,140
Revenue ($000s) 114,667 57,444 57,223 350,895 73,720 102,505 105,250 69,420
Production costs ($000s) 78,193 37,657 40,536 191,704 48,023 52,497 45,735 45,449
Gross profit ($000s) 17,330 9,794 7,536 107,141 11,794 35,682 46,845 12,820
Cash cost ($ per pound nickel)1 3.65 3.23 4.04 2.16 2.37 2.07 1.88 2.43
AISC ($ per pound nickel)1 5.92 5.71 6.12 4.22 4.60 4.05 3.34 5.16
1All-in Sustaining Cost per pound sold ("AISC") and Cash cost per pound sold are non-GAAP measures, see the "Non-GAAP and Other Performance
Measures" section of this MD&A for discussion.
Production
Nickel and copper production in the quarter and year-to date periods ended June 30, 2024 was lower than in the prior year
comparable periods due to lower throughput, grades and recoveries. During the quarter, a fall of ground in the lower ramp
restricted access to Eagle East, limiting production. The event did not affect people's safety or critical infrastructure. Mining
rates are expected to be reduced until late 2024 while ramp rehabilitation is completed, deferring the extraction of ore
from Eagle East into future years. An extended mill shutdown in June to complete planned maintenance, combined with
low ore availability, is expected to impact sales volumes in Q3 2024.
Production Costs and Cash Cost
Production costs in the quarter and year-to date periods ended June 30, 2024 were lower than in the prior year comparable
periods primarily due to lower sales volumes and royalty expense, partially offset by higher maintenance costs . Production
costs in the quarter exclude approximately $9.8 million of overhead costs that have been recorded in Other Income and
Expense as a result of the partial suspension of underground mining operations.
Cash cost per pound in the quarter and year-to date periods ended June 30, 2024 was higher than in the prior year
comparable periods due to production challenges and planned lower grades, resulting in lower production and sales
volumes, partially offset by higher by-product credits. AISC in the quarter and year-to date periods ended June 30, 2024 was
higher than in the prior year comparable periods primarily due to higher cash cost per pound and increased lease
payments. AISC in the quarter was also impacted by slightly higher sustaining capital expenditures.
Gross Profit
Gross profit in the quarter and year-to date periods ended June 30, 2024 was lower than in the prior year comparable
periods primarily due to lower sales volumes and higher maintenance costs.
21
===== SIDA 35 =====
Neves-Corvo (Portugal)
Operating Statistics
2024 2023
(100% Basis) YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Ore mined, copper (000s tonnes) 1,190 602 588 2,591 677 689 622 603
Ore mined, zinc (000s tonnes) 1,017 499 518 1,989 549 459 470 511
Ore milled, copper (000s tonnes) 1,200 601 599 2,588 682 674 628 604
Ore milled, zinc (000s tonnes) 1,019 507 512 1,989 573 441 465 510
Grade
Copper (%) 1.6 1.6 1.5 1.7 1.9 1.8 1.6 1.6
Zinc (%) 6.4 6.3 6.5 6.8 6.6 7.4 6.6 6.7
Lead (%) 1.2 1.3 1.2 1.5 1.4 1.5 1.5 1.5
Recovery
Copper (%) 77.3 77.2 77.3 76.5 75.6 76.1 77.0 77.7
Zinc (%) 78.3 78.2 78.4 78.0 79.9 76.1 76.8 78.7
Lead (%) 24.0 21.7 26.5 19.2 25.2 21.3 14.0 15.7
Production (contained metal)
Copper (tonnes) 14,391 7,347 7,044 33,823 9,623 9,016 7,610 7,574
Zinc (tonnes) 52,183 25,696 26,487 108,812 31,035 25,807 24,177 27,793
Lead (tonnes) 2,991 1,387 1,604 5,600 2,030 1,447 951 1,172
Silver (000 oz) 957 433 524 1,902 573 486 407 436
Revenue ($000s) 209,305 128,675 80,630 425,042 115,823 111,202 68,614 129,403
Production costs ($000s) 154,841 83,129 71,712 326,677 82,734 82,137 76,080 85,726
Gross (loss) profit ($000s) (2,254) 15,874 (18,128) (23,234) 642 (2,288) (35,185) 13,597
Cash cost ($ per pound copper)1 2.36 1.70 3.24 2.37 1.96 2.27 3.99 1.69
AISC ($ per pound copper)1 4.18 3.46 5.13 3.96 3.50 3.82 5.73 3.29
1All-in Sustaining Cost per pound sold ("AISC") and Cash cost per pound sold are non-GAAP measures, see the "Non-GAAP and Other Performance
Measures" section of this MD&A for discussion.
Production
Copper and zinc production during the quarter were impacted by lower grades due to changes in mine sequencing as a
result of Lombador south requiring additional development work. Copper production in the quarter and year-to-date
periods ended June 30, 2024 was slightly lower than in the prior year comparable periods primarily due to lower
throughput. Lower grades and recoveries also impacted the year-to-date production. Zinc production in the quarter and
year-to-date periods ended June 30, 2024 was higher than in the prior year comparable periods due to higher throughput
and recoveries as a result of the zinc expansion project, partially offset by lower grades.
Production Costs and Cash Cost
Production costs in the quarter ended June 30, 2024 were higher than in the prior year comparable period primarily due to
increases in sales volumes and planned maintenance costs. Production costs in the year-to-date period ended June 30, 2024
were lower than in the prior year comparable period due to lower sales volumes and lower unit production costs driven by
lower electricity, labour, and contractor costs.
Cash cost per pound in the quarter ended June 30, 2024 improved from the prior year comparable period due to increased
sales volumes and higher by-product credits. Cash cost per pound in the year-to-date period ended June 30, 2024 was lower
than in the prior year comparable period due to lower operational costs and higher lead and silver by-product credits. AISC
per pound in the quarter and year-to-date periods ended June 30, 2024 was lower than in the prior year comparable
periods primarily due to lower cash cost per pound.
Gross (Loss) Profit
Gross profit in the quarter ended June 30, 2024 improved compared to a gross loss in the prior year comparable period,
primarily driven by higher realized copper and zinc prices, and lower operating costs. For the year-to-date period ended
June 30, 2024 , gross loss was $ 2.3 million, a reduction from the prior year comparable period gross loss of $ 21.6 million.
This decrease was mainly due to higher realized copper and zinc prices, and lower operating costs partially offset by
unfavorable foreign exchange.
22
===== SIDA 36 =====
Zinkgruvan (Sweden)
Operating Statistics
2024 2023
(100% Basis) YTD Q2 Q1 Total Q4 Q3 Q2 Q1
Ore mined, zinc (000s tonnes) 614 308 306 1,178 313 287 268 310
Ore mined, copper (000s tonnes) 92 45 47 207 36 65 51 55
Ore milled, zinc (000s tonnes) 626 313 313 1,179 327 326 211 315
Ore milled, copper (000s tonnes) 117 42 75 198 28 58 34 78
Grade
Zinc (%) 7.2 7.7 6.7 7.3 6.7 8.2 6.6 7.4
Lead (%) 3.2 3.7 2.7 2.9 2.5 3.5 2.4 2.9
Copper (%) 2.2 2.0 2.4 2.5 2.0 2.5 3.1 2.4
Recovery
Zinc (%) 90.8 90.6 91.1 89.0 89.8 90.0 86.3 88.7
Lead (%) 78.8 78.2 79.4 77.8 77.1 75.7 76.2 82.1
Copper (%) 88.7 88.0 89.0 88.5 86.3 88.7 86.1 90.5
Production (contained metal)
Zinc (tonnes) 40,965 21,764 19,201 76,349 19,684 23,967 11,938 20,760
Lead (tonnes) 15,714 8,966 6,748 26,284 6,418 8,643 3,816 7,407
Copper (tonnes) 2,321 747 1,574 4,434 501 1,299 917 1,717
Silver (000 oz) 1,339 699 640 2,300 509 785 374 632
Revenue ($000s) 120,660 76,587 44,073 223,591 50,783 82,290 29,520 60,998
Production costs ($000s) 62,809 32,734 30,075 115,394 31,520 37,183 17,786 28,905
Gross profit ($000s) 41,055 35,040 6,015 74,073 10,519 32,727 6,821 24,006
Cash cost ($ per pound)1 0.51 0.39 0.65 0.43 0.63 0.28 0.24 0.54
AISC ($ per pound)1 0.91 0.74 1.10 0.83 0.93 0.56 1.06 0.97
1All-in Sustaining Cost per pound sold ("AISC") and Cash cost per pound sold are non-GAAP measures, see the "Non-GAAP and Other Performance
Measures" section of this MD&A for discussion.
Production
Zinc production in the quarter and year-to-date periods ended June 30, 2024 was higher than in the prior year comparable
periods due to higher throughput, grades and recoveries. Lead production in the quarter and year-to-date periods ended
June 30, 2024 was higher than in the prior year comparable periods primarily due to higher throughput and grades.
Throughput was reduced in the prior year comparable periods by a mill shut-down during the implementation of the
sequential flotation system. Copper production in the quarter and year-to date periods ended June 30, 2024 was lower than
in the prior year comparable periods due to reduced availability of copper ore.
Production Costs and Cash Cost
Production costs in the quarter and year-to date periods ended June 30, 2024 were higher than in the prior year
comparable periods primarily due to higher zinc and lead sales volumes.
Cash cost per pound in the quarter and year-to date periods ended June 30, 2024 was higher than in the prior year
comparable periods, primarily due to lower by-product credits as a result of lower copper production. AISC per pound in the
quarter and year-to date periods ended June 30, 2024 were lower than in the prior year comparable periods due to lower
sustaining capital expenditure.
Gross Profit
Gross profit in the quarter and year-to date periods ended June 30, 2024 was higher than in the prior year comparable
periods primarily due to higher realized zinc, copper and lead prices, and higher zinc and lead sales volume.
23
===== SIDA 37 =====
Josemaria Project (Argentina)
Project Development
The Company continues to optimize and de-risk the Josemaria Project, with efforts during the quarter focused on the
progression of the capital cost estimate report and completion of the drill programs before the onset of the winter season.
Field activities were mainly associated with the water, geotechnical and exploration programs. Work on the water program
continues advancing with drilling on the water sources, testing, and obtaining data from well tests to update water supply
and usage models. Work on the next phase of the geotechnical drill program, mainly concentrated on the tailings dam
footprint continues to progress. Exploration continued drilling on the Cumbre Verde target until the shutdown that
occurred in the winter.
The final major components for the gearless mill drivers ("GMDs") were received in May at the San Juan warehouse facility,
and this order is substantially complete with only some minor parts remaining. The final pieces of the grinding mills , apart
from the liners, have been shipped.
Work continues on environmental and permitting, with the technical review of the tailings dam design, and the offsite
power line EIAs which were submitted in 202 3. The Josemaria biennial EIA update was submitted in April. The permits for
the most northern sections of the Northern Access Road were received, whilst the EIA for other sections, submitted in 2023,
continues to be under government evaluation.
Government relations continue to be maintained with both the national and provincial governments. At the national level,
the Company is closely monitoring the government's implementation of the Basis Law - RIGI (Incentive Regime for Large
Investments) as it was officially published on July 9, 2024 providing a positive impact on the Josemaria project financial and
economic analysis. RIGI regulations are expected to be available in August. In conjunction, discussions on provincial
royalties, infrastructure offset, and trust fund agreements continue.
Capital cost estimates for the project continue to be revised by incorporating throughput optimization results,
infrastructure layout improvements, concentrate shipping recommendations, major commodities price adjustments, and
currency exchange rate and inflation.
In the quarter ended June 30, 2024 , the Company spent $87.1 million in capital expenditure compared to $91.7 million in
the prior year comparable period. On a year-to-date basis, the Company spent $143.1 million compared to $182.2 million in
the prior year comparable period. The project is expected to incur capital spend within the annual guidance amount.
Exploration Update
During the quarter ended June 30, 2024 , exploration activity focused on in-mine and near-mine targets at the Company's
operations. Exploration drilling at Zinkgruvan was focused on resource expansion and drilling at Candelaria was focused on
Candelaria Norte and La Espanola. Drilling at Chapada concentrated on delineating the high-grade, near-mine trend at
Corpo Sul, adding high grade resources to Sauva and testing geochemical anomalies in the Sauva area Curicaca and Curio.
At Caserones, exploration activity remains lower during the winter season. Exploration drilling continues in the lower
portion of the mineral resource in search of higher-grade copper breccia bodies that could improve the average grade of
the resource, and potentially expand it. Near-mine drilling at Angelica has been paused for winter since April.
At Josemaria, seasonal exploration drilling ended in early April at the Cumbre Verde Target, located west of the Josemaria
ore body. Six holes were drilled targeting the same mineralized system and structures that hosted high grade mineralization
on the neighbouring property that may potentially run towards the Cumbre Verde Target. Initial results highlight favorable
levels of copper/gold/silver mineralization in veins and porphyry. The data obtained will help further refine and target this
mineralization. Work will continue throughout the remainder of 2024 with drilling to recommence after the winter season.
There was no exploration drilling at Neves-Corvo and Eagle in the quarter.
24
===== SIDA 38 =====
Liquidity and Capital Resources
Consolidated Cash Flow
Three months ended June 30,
($ thousands) 2024 2023 Change
Cash provided by operating activities 491,770 194,844 296,926
Cash used in investing activities (252,206) (283,468) 31,262
Cash (used in) provided by financing activities (155,916) 99,922 (255,838)
Effect of foreign exchange on cash balances 3,710 (5,355) 9,065
Increase (decrease) in cash and cash equivalents 87,358 5,943 81,415
Opening cash and cash equivalents 365,451 184,239 181,212
Closing cash and cash equivalents 452,809 190,182 262,627
Adjusted operating cash flow1 369,874 110,637 259,237
Free cash flow from operations1 337,503 20,717 316,786
Free cash flow1 236,847 (84,626) 321,473
Six months ended June 30,
($ thousands) 2024 2023 Change
Cash provided by operating activities 759,301 406,719 352,582
Cash used in investing activities (521,870) (523,534) 1,664
Cash from financing activities (53,658) 119,428 (173,086)
Effect of foreign exchange on cash balances 243 (3,818) 4,061
Increase (decrease) in cash and cash equivalents 184,016 (1,205) 185,221
Opening cash and cash equivalents 268,793 191,387 77,406
Closing cash and cash equivalents 452,809 190,182 262,627
Adjusted operating cash flow1 683,540 345,704 337,836
Free cash flow from operations1 405,225 91,793 313,432
Free cash flow1 235,137 (118,834) 353,971
1This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of this MD&A for discussion.
Cash provided by operating activities in the quarter ended June 30, 2024 was $296.9 million higher than in the prior year
comparable period. This was primarily due to higher copper and zinc realized prices contributing to higher operating
earnings, including the impacts of favourable provisional pricing adjustments on prior period concentrate sales. Cash
provided by operating activities also benefited from the inclusion of Caserones operating cash flows and $121.9 million
positive working capital changes in the quarter. For the year-to-date period ended June 30, 2024 the cash provided by
operating activities was $352.6 million higher than the comparable prior year period due to the same factors that impacted
the quarter ended June 30, 2024 with the added benefit of favourable provisional pricing adjustments on current period
concentrate sales, and positive working capital changes of $75.8 million.
Cash used in investing activities in the quarter ended June 30, 2024 was $31.3 million lower than in the prior year
comparable period. This was primarily due to lower sustaining capital expenditures at Candelaria in the quarter, due to
timing of spending and reduced planned capitalized stripping. This decrease was partly offset by the inclusion of sustaining
capital expenditures at Caserones. For the year-to-date period ended June 30, 2024 the cash used in investing activities was
consistent with the comparable prior year period despite Caserones investing cash flows being included.
Cash used in financing activities in the quarter ended June 30, 2024 was $255.8 million higher than in the prior year
comparable period. The increase was primarily due to higher interest and lease payments, combined with distributions to
non-controlling interests in the quarter. In the prior year comparable quarter, net proceeds from debt were realized
through draw downs on the RCF. For the year-to-date period ended June 30, 2024 the cash used in financing activities was
$173.1 million higher as a result of the same factors that impacted the quarter ended June 30, 2024.
Free cash flow from operations in the quarter and year-to-date period ended June 30, 2024 was higher than in the prior
year comparable periods as a result of higher cash provided by operations and decreased sustaining capital expenditure.
25
===== SIDA 39 =====
Free cash flow in the quarter was $321.5 million higher than in the prior year comparable period as a result of reduced
spending relating to the Josemaria Project. For the year-to-date period ended June 30, 2024 free cash flow was
$354.0 million higher than prior year driven by the same factors influencing this quarter.
Liquidity and Financial Position
($ thousands) June 30, 2024 December 31, 2023 Change
Cash and cash equivalents 452,809 268,793 184,016
Total assets 10,879,796 10,861,199 18,597
Debt1 1,339,023 1,208,600 130,423
Lease liabilities 259,164 277,208 (18,044)
Net debt2 (1,152,925) (1,223,389) 70,464
Net debt excluding lease liabilities2 (893,761) (946,181) 52,420
1Debt includes both current and non-current portions.
2This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of this MD&A for discussion.
The Company continues to expect to be able to fund all its contractual commitments with its operating cash flow, cash on
hand and available capital resources.
Net debt excluding lease liabilities at June 30, 2024 decreased from December 31, 2023 due to increased cash balances
resulting from improved free cash flow from operations in the quarter. On July 4, 2024, the Company drew down an
additional $350.0 million from the RCF to finance the exercise of its option to acquire an additional 19% interest in
Caserones.
During the quarter ended June 30, 2024, no shares were purchased under the Company's Normal Course Issuer Bid (“NCIB”)
(quarter ended June 30, 2023 - nil shares).
Contractual Obligations, Commitments and Contingencies
The Company has contractual obligations and capital commitments as described in Note 22 “Commitments and
Contingencies” in the Company’s condensed interim consolidated financial statements for the three and six months ended
June 30, 2024. From time to time, the Company may also be involved in legal proceedings that arise in the ordinary course
of its business.
Capital Resources
As at June 30, 2024, the Company has a RCF of $1,750.0 million with $280.0 million outstanding (December 31, 2023 -
$250.0 million). The RCF bears interest on drawn funds at rates of Term Secured Overnight Financing Rate ("Term SOFR") +
Credit Spread Adjustment ("CSA") of 0.10%+ 1.45% to Term SOFR + 0.10% + 2.50% depending on the Company’s net
leverage ratio. The RCF is unsecured, save and except for a charge over certain assets in the United States of America, and is
subject to customary covenants. On April 26, 2024, the facility, which originally expired in April 2028, was amended and
extended to April 2029. On July 4, 2024, the Company drew down an additional $350.0 million from the RCF to finance the
exercise of its option to acquire an additional 19% interest in Caserones.
As at June 30, 2024 , the Company's Term Loan has a principal amount of $800.0 million with an additional $400.0 million
accordion option maturing in July 2026. The Team Loan bears interest at an annual rate equal to Term SOFR + CSA + an
applicable margin of 1.60% to 2.65%, depending on the Company’s net leverage ratio. Principal is payable at maturity. On
April 26, 2024, the Term Loan, originally maturing in July 2026, was extended to July 2027.
On May 23, 2024, both the RCF and the Term Loan were amended to establish sustainability performance targets whereby
the interest rate margin in the facilities will be adjusted based on the Company's performance relative to the targets.
As at June 30, 2024, the Company also has unsecured commercial paper programs maturing in 2025 through 2028 of which
$107.1 million (December 31, 2023 - $116.0 million) were drawn. As at June 30, 2024, certain subsidiaries of the Company
had outstanding unsecured term loans totalling $159.5 million (December 31, 2023 - $48.9 million) and accruing interest at
rates ranging from 5.67% to 6.80% per annum with interest payable upon maturity. The maturity dates range from July to
November 2024.
The development of the Josemaria Project requires significant capital commitments from the Company, and additional
funding, beyond debt, may be required to advance the project to completion.
26
===== SIDA 40 =====
Financial Instruments
Revenue, cost of goods sold and capital expenditures are affected by certain external factors including fluctuations in metal
prices, energy prices, and changes in exchange rates between the €, the SEK, the CLP, the BRL, the ARS and the $.
During the quarter ended June 30, 2024, the Company entered into additional derivative contracts as part of its risk
management strategy to mitigate exposure to foreign currency and commodities. These included zero cost collar contracts
in the total amount of $222 million (equivalent to BRL 1.1 billion) with collar ranges of BRL 5.00 to BRL 6.11 expiring through
the remainder of 2024 to 2026. In April 2024, the Company also entered into commodity collar contracts in the amount of
21,500 metric tonnes of copper with collar ranges of $4.10/lb to $4.52/lb, which expired in May. At June 30, 2024,
derivative contracts consist of foreign currency forward and option contracts as well as diesel swap forward contracts. The
foreign currency option contracts consist of put and call contracts in a collar structure.
The derivative contracts have not been designated as hedges for purposes of hedge accounting and are measured at fair
value as assessed by pricing models based on active market prices. Changes in fair value are recognized in other income and
expense in the consolidated statement of earnings.
The Company’s trade receivables also contain provisional pricing sales arrangements that are valued using quoted forward
market prices. The following table illustrates the sensitivity of the Company’s risk on final settlement of its provisionally
priced revenues as at June 30, 2024.
Metal Payable Metal
Provisional price on
June 30, 2024 Change
Effect on Revenue
($millions)
Copper 78,807 t $4.34/lb +/- 10 % +/- $75.4
Zinc 17,907 t $1.31/lb +/- 10 % +/- $5.2
Nickel 255 t $7.75/lb +/- 10 % +/- $0.4
Gold 21 koz $2,335/oz +/- 10 % +/- $4.9
Molybdenum 746 t $20.98/lb +/- 10 % +/- $3.5
For a detailed discussion of the Company’s financial instruments, refer to Note 21 "Financial Instruments" in the Company’s
condensed interim consolidated financial statements for the three and six months months ended June 30, 2024.
27
===== SIDA 41 =====
Non-GAAP and Other Performance Measures
The Company uses certain performance measures in its analysis. These performance measures have no meaning within
generally accepted accounting principles under IFRS and, therefore, amounts presented may not be comparable to similar
data presented by other mining companies. This data is intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following are
non-GAAP measures that the Company uses as key performance indicators.
Non-GAAP financial
measure or ratio Definition
Most directly
comparable IFRS
measure
Why management uses the
measure and why it may be
useful to investors
Cash cost Includes costs directly attributable to mining operations
(including mining, processing and administration),
treatment, refining and transportation charges, but
excludes royalty expenses, expenses associated with non-
cash fair value adjustments to inventory, depreciation and
amortization and capital expenditures for deferred
stripping. Revenue from sales of by-products, inclusive of
adjustments for the terms of streaming agreements but
excluding the recognition of any deferred revenue from the
allocation of upfront streaming proceeds, reduce cash
costs.
Production costs Copper, zinc and nickel cash
cost per pound sold are useful
measures to assess the
operating performance of the
Company's mines, and their
ability to generate cash. The
inclusion of by-product credits
incorporates the benefit of
other metals extracted in the
production of the primary
metal.
Cash cost per pound
sold
This ratio is calculated by dividing cash cost by the sales
volume of the primary metal (copper, zinc, or nickel).
All-in sustaining cost
("AISC")
Includes cash cost (as defined above), royalties, sustaining
capital expenditure (including deferred stripping and
underground mine development), reclamation and other
closure cost accretion and amortization and lease
payments (cash basis). As this measure seeks to reflect the
full cost of production from current operations,
expansionary capital and certain exploration costs are
excluded as these are costs typically incurred to extend
mine life or materially increase the productive capacity of
existing assets, or for new operations. Corporate general
and administrative expenses have also been excluded as
any attribution of these costs to an operating site would
not necessarily be reflective of costs directly attributable to
the administration of the site. Certain other cash
expenditures, including tax payments, financing charges
(including capitalized interest) and costs related to
business combinations, asset acquisitions and asset
disposals are also excluded.
Production costs Copper, zinc and nickel AISC
and ASIC per pound sold are
useful measures to understand
the full cost of producing and
selling metal at the Company's
mines, and each mine's ability
to generate cash while
sustaining production at current
levels.
AlSC per pound sold This ratio is calculated by dividing AISC by the sales volume
of the primary metal (copper, zinc, or nickel).
Sustaining capital
expenditures
This supplementary financial measure is defined as cash-
basis expenditures which maintain existing operations and
sustain production levels.
Investment in
mineral properties,
plant and
equipment
Sustaining capital expenditures
provide an understanding of
costs required to maintain
existing production levels.
Expansionary capital
expenditures provide
information on costs required
for future growth of existing or
new assets.
Expansionary capital
expenditures
This non-GAAP measure is defined as cash-basis
expenditures which increase current or future production
capacity, cash flow or earnings potential and are reported
excluding capitalized interest. Where an expenditure both
maintains and expands current operations, classification
would be based on the primary decision for which the
expenditure is being made.
28
===== SIDA 42 =====
Non-GAAP financial
measure or ratio Definition
Most directly
comparable IFRS
measure
Why management uses the
measure and why it is useful to
investors
Realized price per
pound and realized
price per ounce1
Defined as revenue from metal sales (copper, zinc, gold,
nickel and molybdenum) adding back treatment and
refining charges, cash effects of gold and copper streams,
recognition of deferred revenue from the allocation of
upfront streaming proceeds and sales of silver and other
metals, divided by the volume of metal sold in the period.
Revenue These measures provide an
understanding of the price
realized in each reporting
period for metal sales.
Earnings before
interest, taxes,
depreciation and
amortization
(EBITDA) and
Adjusted EBITDA
EBITDA represents net earnings or loss for the period
before income tax expense or recovery, depreciation and
amortization, interest income and finance costs. Adjusted
EBITDA removes the effects of items that do not reflect the
Company's underlying operating performance and are not
necessarily indicative of future operating results. These
may include: unrealized foreign exchange, unrealized gains
or losses from derivative contracts, revaluation gains or
losses on marketable securities, derivative liabilities and
purchase options, expenses for acquisition-related fair
value adjustments to inventory, non-cash impairment
charges and reversals, non-cash stockpile inventory or
fixed asset write-downs, costs relating to the sinkhole near
Ojos del Salado operations, income from investments in
associates, gains or losses on disposals of subsidiaries,
insurance proceeds and litigation and settlements.
Net earnings (loss) EBITDA and Adjusted EBITDA
are used to evaluate the
Company's operational
performance and its ability to
generate cash from core
operations.
Adjusted earnings
(loss)
Defined as net earnings or loss attributable to shareholders
of the Company excluding the effects (net of tax) of
significant items that do not reflect the Company's
underlying operating performance. In addition to the items
listed for Adjusted EBITDA, these may also include:
deferred tax recovery or expense arising from foreign
exchange translation and deferred tax recovery or expense
arising from changes in tax rates. Adjustments exclude
amounts attributable to non-controlling interests.
Net earnings (loss)
attributable to
Lundin Mining
Corporation
shareholders
In addition to conventional
measures prepared in
accordance with IFRS, adjusted
earnings and adjusted earnings
per share measure the
underlying operating
performance of the Company.
Adjusted earnings
(loss) per share
This ratio is calculated by dividing adjusted net earnings or
loss by the weighted average number of shares
outstanding.
Free cash flow from
operations
Defined as cash flow provided by operating activities,
excluding general exploration and business development
costs and deducting sustaining capital expenditures (as
defined above).
Cash provided by
operating activities
Free cash flow from operations
is indicative of the Company's
ability to generate cash from its
operations after consideration
of required sustaining capital
expenditure necessary to
maintain existing production
levels.
Free cash flow Defined as cash flow provided by operating activities,
deducting sustaining capital expenditures and
expansionary capital expenditures (both as defined above).
Adjusted operating
cash flow
Defined as cash provided by operating activities, excluding
changes in non-cash working capital items.
Cash provided by
operating activities
These measures are indicative
of the Company's ability to
generate cash from its
operations and remove the
impact of working capital,
which can experience volatility
from period-to-period.
Adjusted operating
cash flow per share
This ratio is calculated by dividing adjusted operating cash
flow by the weighted average number of shares
outstanding.
Net debt Net debt is defined as total debt and lease liabilities
excluding deferred financing fees, less cash and cash
equivalents. Net debt excluding lease liabilities is defined
as total debt excluding lease liabilities, deferred financing
fees, less cash and cash equivalents.
Debt and lease
liabilities, current
portion of debt and
lease liabilities,
cash and cash
equivalents
These measures are indicative
of the Company's financial
position.
Net debt excluding
lease liabilities
1See the 'Revenue Overview' section of this MD&A for reconciliations to revenue, the most directly comparable IFRS measure.
29
===== SIDA 43 =====
Cash Cost per Pound and All-in Sustaining Cost (“AISC”) per Pound
Cash Cost per Pound and All-in Sustaining Costs per pound can be reconciled to Production Costs on the Company's
Condensed Interim Consolidated Statement of Earnings as follows:
Three months ended June 30, 2024
Operations Candelaria Caserones Chapada Eagle
Neves-
Corvo Zinkgruvan
($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes:
Tonnes 29,999 29,862 8,293 2,018 7,898 18,510
Pounds (000s) 66,137 65,834 18,283 4,449 17,412 40,808
Production costs 606,426
Less: Royalties and other (22,324)
584,102
Deduct: By-product credits (210,112)
Add: Treatment and refining charges 38,577
Cash cost 143,935 171,255 37,570 14,381 29,682 15,744 412,567
Cash cost per pound ($/lb) 2.18 2.60 2.05 3.23 1.70 0.39
Add: Sustaining capital expenditure 60,544 35,328 25,241 3,980 27,921 13,301
Royalties 3,551 9,275 1,631 3,906 1,207 —
Reclamation and other closure
accretion and depreciation 1,858 1,094 2,727 1,592 1,320 951
Leases and other 3,026 18,619 775 1,533 194 78
All-in sustaining cost 212,914 235,571 67,944 25,392 60,324 30,074
AISC per pound ($/lb) 3.22 3.58 3.72 5.71 3.46 0.74
Three months ended June 30, 2023
Operations Candelaria Chapada Eagle
Neves-
Corvo Zinkgruvan
($000s, unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes:
Tonnes 36,347 10,164 3,859 6,170 9,374
Pounds (000s) 80,132 22,408 8,507 13,603 20,666
Production costs 405,198
Less: Royalties and other (7,969)
397,229
Deduct: By-product credits (122,636)
Add: Treatment and refining charges 32,514
Cash cost 171,520 60,351 15,990 54,271 4,975 307,107
Cash cost per pound ($/lb) 2.14 2.69 1.88 3.99 0.24
Add: Sustaining capital expenditure 123,417 19,690 3,562 22,133 15,994
Royalties — 2,029 4,920 83 —
Reclamation and other closure
accretion and depreciation 2,444 1,847 3,011 1,296 739
Leases and other 3,654 1,171 897 148 100
All-in sustaining cost 301,035 85,088 28,380 77,931 21,808
AISC per pound ($/lb) 3.76 3.80 3.34 5.73 1.06
30
===== SIDA 44 =====
Six months ended June 30, 2024
Operations Candelaria Caserones Chapada Eagle
Neves-
Corvo Zinkgruvan
($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes:
Tonnes 63,535 65,073 17,035 4,181 13,784 34,335
Pounds (000s) 140,071 143,461 37,556 9,218 30,388 75,696
Production costs 1,173,560
Less: Royalties and other (42,294)
1,131,266
Deduct: By-product credits (375,420)
Add: Treatment and refining charges 85,528
Cash cost 283,425 337,694 76,305 33,630 71,739 38,581 841,374
Cash cost per pound ($/lb) 2.02 2.35 2.03 3.65 2.36 0.51
Add: Sustaining capital expenditure 160,076 78,082 54,440 8,058 50,334 27,642
Royalties 6,519 18,089 3,248 6,584 1,942 —
Reclamation and other closure
accretion and depreciation 4,025 2,134 5,406 3,560 2,655 2,137
Leases and other 6,059 34,000 1,540 2,769 258 156
All-in sustaining cost 460,104 469,999 140,939 54,601 126,928 68,516
AISC per pound ($/lb) 3.28 3.28 3.75 5.92 4.18 0.91
Six months ended June 30, 2023
Operations Candelaria Chapada Eagle
Neves-
Corvo Zinkgruvan
($000s, unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes:
Tonnes 71,917 19,236 6,594 14,201 25,986
Pounds (000s) 158,550 42,408 14,537 31,308 57,289
Production costs 822,962
Less: Royalties and other (20,055)
802,907
Deduct: By-product credits (279,601)
Add: Treatment and refining charges 69,129
Cash cost 345,212 107,669 30,630 84,163 24,761 592,435
Cash cost per pound ($/lb) 2.18 2.54 2.11 2.69 0.43
Add: Sustaining capital expenditure 214,103 35,717 10,664 47,194 30,462
Royalties — 4,252 10,606 1,813 —
Reclamation and other closure
accretion and depreciation 4,751 3,648 5,969 2,620 1,800
Leases and other 6,797 2,137 1,644 306 202
All-in sustaining cost 570,863 153,423 59,513 136,096 57,225
AISC per pound ($/lb) 3.60 3.62 4.09 4.35 1.00
31
===== SIDA 45 =====
Adjusted EBITDA
Adjusted EBITDA can be reconciled to Net Earnings (Loss) on the Company's Condensed Interim Consolidated Statement of
Earnings as follows:
Three months ended
June 30,
Six months ended
June 30,
($thousands) 2024 2023 2024 2023
Net earnings 156,733 61,302 215,288 226,613
Add back:
Depreciation, depletion and amortization 197,658 130,505 382,150 250,752
Finance income and costs 36,307 15,897 72,001 31,596
Income taxes expense (recovery) 56,162 (19,601) 106,728 29,092
446,860 188,103 776,167 538,053
Unrealized foreign exchange loss (gain) 3,173 (19,285) (12,327) (10,641)
Unrealized losses (gains) on derivative contracts (3,974) 14,403 48,858 (6,263)
Ojos del Salado sinkhole (recoveries) expenses 710 11,900 (321) 16,482
Revaluation loss (gain) on marketable securities (85) (3,464) (2,515) (3,902)
Partial suspension of underground operations at Eagle 9,824 — 9,824 —
Gain on disposal of subsidiary — — — (5,718)
Write-down of capital works in progress 17,188 — 17,188 —
Revaluation gain on Caserones purchase option (12,431) — (11,728) —
Other (407) 97 (1,432) 686
Total adjustments - EBITDA 13,998 3,651 47,547 (9,356)
Adjusted EBITDA 460,858 191,754 823,714 528,697
32
===== SIDA 46 =====
Adjusted Earnings and Adjusted EPS
Adjusted Earnings and Adjusted EPS can be reconciled to Net Earnings (Loss) Attributable to Lundin Mining Shareholders on
the Company's Condensed Interim Consolidated Statement of Earnings as follows:
Three months ended
June 30,
Six months ended
June 30,
($thousands, except share and per share amounts) 2024 2023 2024 2023
Net earnings attributable to Lundin Mining shareholders 121,589 59,109 135,472 205,729
Add back:
Total adjustments - EBITDA 13,998 3,651 47,547 (9,356)
Tax effect on adjustments 1,981 (54) 214 (3,180)
Deferred tax arising from foreign exchange translation (13,666) (20,175) (19,966) (28,289)
Non-controlling interest on adjustments (1,821) (1,134) 4,031 69
Other — 4,186 — 6,293
Total adjustments 492 (13,526) 31,826 (34,463)
Adjusted earnings 122,081 45,583 167,298 171,266
Basic weighted average number of shares outstanding 776,173,888 772,255,656 774,033,611 771,739,532
Net (loss) earnings attributable to Lundin Mining
shareholders 0.16 0.08 0.18 0.27
Total adjustments — (0.02) 0.04 (0.05)
Adjusted EPS 0.16 0.06 0.22 0.22
Free Cash Flow from Operations and Free Cash Flow
Free Cash Flow from Operations and Free Cash Flow can be reconciled to Cash provided by Operating Activities on the
Company's Condensed Interim Consolidated Statement of Cash Flows as follows:
Three months ended
June 30,
Six months ended
June 30,
($thousands) 2024 2023 2024 2023
Cash provided by operating activities 491,770 194,844 759,301 406,719
General exploration and business development 13,536 13,693 26,987 28,458
Sustaining capital expenditures (167,803) (187,820) (381,063) (343,384)
Free cash flow from operations 337,503 20,717 405,225 91,793
General exploration and business development (13,536) (13,693) (26,987) (28,458)
Expansionary capital expenditures (87,120) (91,650) (143,101) (182,169)
Free cash flow 236,847 (84,626) 235,137 (118,834)
33
===== SIDA 47 =====
Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share
Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share can be reconciled to Cash Provided by
Operating Activities on the Company's Condensed Interim Consolidated Statement of Cash Flows as follows:
Three months ended
June 30,
Six months ended
June 30,
($thousands, except share and per share amounts) 2024 2023 2024 2023
Cash provided by operating activities 491,770 194,844 759,301 406,719
Changes in non-cash working capital items (121,896) (84,207) (75,761) (61,015)
Adjusted operating cash flow 369,874 110,637 683,540 345,704
Basic weighted average number of shares outstanding 776,173,888 772,255,656 774,033,611 771,739,532
Adjusted operating cash flow per share 0.48 0.14 0.88 0.45
Net Debt and Net Debt Excluding Lease Liabilities
Net debt and net debt excluding lease liabilities can be reconciled to Debt and Lease Liabilities, Current Portion of Debt and
Lease Liabilities and Cash and Cash Equivalents on the Company's condensed interim consolidated balance sheet as follows:
($thousands) June 30, 2024 December 31, 2023
Debt and lease liabilities (1,282,492) (1,273,162)
Current portion of debt and lease liabilities (315,695) (212,646)
Less deferred financing fees (netted in above) (7,547) (6,374)
(1,605,734) (1,492,182)
Cash and cash equivalents 452,809 268,793
Net debt (1,152,925) (1,223,389)
Lease liabilities 259,164 277,208
Net debt excluding lease liabilities (893,761) (946,181)
34
===== SIDA 48 =====
Other Information and Advisories
Related Party Transactions
The Company enters into related party transactions that are in the normal course of business and on an arm’s length basis.
Related party disclosures can be found in Note 24 of the Company’s condensed interim consolidated financial statements
for the three and six months months ended June 30, 2024.
Changes in Accounting Policies
The accounting policies applied in the Company’s condensed interim consolidated financial statements for the three and six
months ended June 30, 2024 are the same as those applied in the Company’s consolidated financial statements for the year
ended December 31, 2023.
Certain amendments to standards were effective for annual periods beginning on or after January 1, 2024, including
amendments to IAS 1 – Presentation of Financial Statements and IAS 12 – Income Taxes. There was no material impact on
the Company’s condensed interim consolidated financial statements from the adoption of these amendments.
Critical Accounting Estimates and Judgments
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed
at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in
any future periods affected.
For further information on the Company’s significant accounting estimates and judgements, refer to Note 2 of the
Company’s consolidated financial statements for the year ended December 31, 2023. There have been no subsequent
material changes to these significant accounting estimates and judgements.
Disclosure Controls and Procedures
Disclosure controls and procedures have been designed to provide reasonable assurance that all material information
related to the Company is identified and communicated on a timely basis. Management of the Company, under the
supervision of the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, is
responsible for the design and operation of disclosure controls and procedures. Management has evaluated the
effectiveness of the Company’s disclosure controls and procedures and has concluded that they were effective as at
December 31, 2023.
There have been no changes in the Company’s disclosure controls and procedures during the three months ended June 30,
2024 that have materially affected, or are reasonably likely to materially affect, the Company’s financial reporting.
Internal Control over Financial Reporting (“ICFR”)
Management of the Company, under the supervision of the President and Chief Executive Officer and Executive Vice
President and Chief Financial Officer, is responsible for establishing and maintaining adequate ICFR. The Company’s ICFR is
designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial
statements for external purposes in accordance with IFRS. However, due to inherent limitations ICFR may not prevent or
detect all misstatements and fraud. Management will continue to monitor the effectiveness of its ICFR and may make
modifications from time to time as considered necessary.
Management assesses the effectiveness of the Company’s ICFR using the Internal Control – Integrated Framework (2013
Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Management
conducted an evaluation of the effectiveness of ICFR and concluded that it was effective as at December 31, 2023.
There have been no changes in the Company’s ICFR during the three months ended June 30, 2024 that have materially
affected, or are reasonably likely to materially affect, the Company’s financial reporting.
35
===== SIDA 49 =====
Risks and Uncertainties
The Company’s business activities are subject to a variety and wide range of inherent risks and uncertainties. Any of these
risks could have an adverse effect on the Company, its business and prospects, and could cause actual outcomes and results
to differ materially from those described in forward-looking statements relating to the Company.
For additional discussion on Lundin Mining’s risks, refer to the “Risks and Uncertainties” section of the Company’s Annual
Information Form (“AIF”) for the year ended December 31, 2023 and the “Cautionary Statement on Forward-Looking
Information” of this MD&A.
National Instrument 43-101 Compliance
The scientific and technical information in this document has been reviewed and approved in accordance with the
disclosure standards of National Instrument 43-101 ("NI 43-101") by Arman Barha, P.Eng., Vice President, Technical
Services, a "Qualified Person" under NI 43-101. Mr. Barha has verified the data disclosed in this document and no
limitations were imposed on his verification process.
Other Information
Additional information regarding the Company is included in the Company’s AIF which is filed with the Canadian securities
regulators. A copy of the Company’s AIF can be obtained on SEDAR+ ( www.sedarplus.com) or on the Company’s website
(www.lundinmining.com).
Outstanding Share Data
The table below summarizes the Company’s common shares and securities convertible into common shares as at July 30,
2024.
July 30, 2024
Common shares issued and outstanding 776,782,118
Stock options outstanding
(weighted average exercise price of C$10.11) 4,099,694
Time vesting share units1 1,478,595
Performance vesting share units2 1,035,825
1 Time vesting share units represent the right to receive one common share (subject to adjustments) issued from treasury.
2 Performance vesting share units (“PSU”) represent the right to receive a variable number of common shares (subject to adjustments) issued from
treasury contingent upon achieving applicable performance vesting conditions. The number of common shares listed above in respect of PSU
assumes that 100% of PSU granted (without change) will vest and be paid out in common shares on a one for one basis. However, as noted, the final
number of PSU that may be earned and redeemed may be higher or lower than the PSU initially granted.
36
===== SIDA 50 =====
Condensed Interim Consolidated Financial Statements of
Lundin Mining Corporation
June 30, 2024
(Unaudited)
===== SIDA 51 =====
LUNDIN MINING CORPORATION
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS As at
(Unaudited - in thousands of US dollars) June 30,
2024
December 31,
2023
ASSETS
Cash and cash equivalents (Note 3) $ 452,809 $ 268,793
Trade and other receivables (Note 4) 638,994 828,871
Income taxes receivable 34,596 34,542
Inventories (Note 5) 593,153 599,407
Current portion of derivative assets (Note 21) 10,111 38,114
Other current assets (Note 6) 81,066 21,421
Total current assets 1,810,729 1,791,148
Restricted funds 60,013 59,979
Long-term inventory (Note 5) 795,809 797,597
Derivative assets (Note 21) 5,476 9,397
Other non-current assets (Note 6) 23,803 67,090
Mineral properties, plant and equipment (Note 7) 7,805,853 7,725,169
Deferred tax assets 140,482 170,203
Goodwill 237,631 240,616
9,069,067 9,070,051
Total assets $ 10,879,796 $ 10,861,199
LIABILITIES
Trade and other payables (Note 8) $ 699,510 $ 805,763
Income taxes payable 64,162 62,926
Current portion of derivative liabilities (Note 21) 31,829 26,389
Current portion of debt and lease liabilities (Note 9) 315,695 212,646
Current portion of deferred revenue (Note 10) 84,124 87,867
Current portion of reclamation and other closure provisions (Note 11) 18,255 14,442
Total current liabilities 1,213,575 1,210,033
Derivative liabilities (Note 21) 15,676 3,148
Debt and lease liabilities (Note 9) 1,282,492 1,273,162
Deferred revenue (Note 10) 517,307 535,363
Reclamation and other closure provisions (Note 11) 494,573 529,734
Deferred consideration and other long-term liabilities (Note 12) 140,771 133,199
Provision for pension obligations 5,627 6,752
Deferred tax liabilities 722,207 751,688
3,178,653 3,233,046
Total liabilities 4,392,228 4,443,079
SHAREHOLDERS' EQUITY
Share capital (Note 13) 4,604,632 4,574,830
Contributed surplus 48,687 55,201
Accumulated other comprehensive loss (343,325) (296,617)
Retained earnings 660,951 627,903
Equity attributable to Lundin Mining Corporation shareholders 4,970,945 4,961,317
Non-controlling interests (Note 14) 1,516,623 1,456,803
Total shareholders' equity 6,487,568 6,418,120
Total liabilities and shareholders' equity $ 10,879,796 $ 10,861,199
Commitments and contingencies (Note 22)
Subsequent events (Notes 6, 9, 14, and 26)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
- 1 -
===== SIDA 52 =====
LUNDIN MINING CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited - in thousands of US dollars, except for shares and per share amounts)
Three months ended
June 30,
Six months ended
June 30,
2024 2023 2024 2023
Revenue (Note 15) $ 1,083,585 $ 588,531 $ 2,020,566 $ 1,339,875
Cost of goods sold
Production costs (Note 16) (606,426) (405,198) (1,173,560) (822,962)
Depreciation, depletion and amortization (197,658) (130,505) (382,150) (250,752)
Gross profit 279,501 52,828 464,856 266,161
General and administrative expenses (13,140) (14,898) (29,900) (30,008)
General exploration and business development (Note 18) (13,536) (13,693) (26,987) (28,458)
Finance income (Note 19) 5,315 1,572 9,148 3,336
Finance costs (Note 19) (41,622) (17,469) (81,149) (34,932)
Other (expense) income (Note 20) (3,623) 33,361 (13,952) 79,606
Earnings before income taxes 212,895 41,701 322,016 255,705
Current tax expense (58,117) (27,213) (105,380) (86,714)
Deferred tax recovery (expense) 1,955 46,814 (1,348) 57,622
Net earnings $ 156,733 $ 61,302 $ 215,288 $ 226,613
Net earnings attributable to:
Lundin Mining Corporation shareholders $ 121,589 $ 59,109 $ 135,472 $ 205,729
Non-controlling interests 35,144 2,193 79,816 20,884
Net earnings $ 156,733 $ 61,302 $ 215,288 $ 226,613
Basic earnings per share attributable to Lundin Mining Corporation
shareholders: $ 0.16 $ 0.08 $ 0.18 $ 0.27
Diluted earnings per share attributable to Lundin Mining Corporation
shareholders: $ 0.16 $ 0.08 $ 0.17 $ 0.27
Weighted average number of shares outstanding (Note 13)
Basic 776,173,888 772,255,656 774,033,611 771,739,532
Diluted 779,088,142 773,189,884 776,430,838 772,427,392
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
- 2 -
===== SIDA 53 =====
LUNDIN MINING CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited - in thousands of US dollars)
Three months ended
June 30,
Six months ended
June 30,
2024 2023 2024 2023
Net earnings $ 156,733 $ 61,302 $ 215,288 $ 226,613
Other comprehensive (loss) income, net of taxes
Item that will not be reclassified to net earnings:
Remeasurements for post-employment benefit plans (137) (308) (378) (566)
Item that may be reclassified subsequently to net earnings:
Effects of foreign exchange (6,873) (15,756) (46,326) 3,697
Other comprehensive (loss) income (7,010) (16,064) (46,704) 3,131
Total comprehensive income $ 149,723 $ 45,238 $ 168,584 $ 229,744
Comprehensive income attributable to:
Lundin Mining Corporation shareholders $ 114,531 $ 43,097 $ 88,764 $ 208,969
Non-controlling interests 35,192 2,141 79,820 20,775
Total comprehensive income $ 149,723 $ 45,238 $ 168,584 $ 229,744
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
- 3 -
===== SIDA 54 =====
LUNDIN MINING CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited - in thousands of US dollars, except for shares)
Number of
shares
Share
capital
Contributed
surplus
Accumulated
other
comprehensive
(loss) income
Retained
earnings
Non-
controlling
interests Total
Balance, December 31, 2023 773,667,789 $ 4,574,830 $ 55,201 $ (296,617) $ 627,903 $ 1,456,803 $ 6,418,120
Distributions — — — — — (20,000) (20,000)
Exercise of share-based awards 3,057,740 29,802 (9,812) — — — 19,990
Share-based compensation — — 3,298 — — — 3,298
Dividends declared (Note 13(d)) — — — — (102,424) — (102,424)
Net earnings — — — — 135,472 79,816 215,288
Other comprehensive (loss) income — — — (46,708) — 4 (46,704)
Total comprehensive (loss) income — — — (46,708) 135,472 79,820 168,584
Balance, June 30, 2024 776,725,529 $ 4,604,632 $ 48,687 $ (343,325) $ 660,951 $ 1,516,623 $ 6,487,568
Balance, December 31, 2022 770,746,531 $ 4,555,125 $ 55,769 $ (342,287) $ 592,425 $ 564,089 $ 5,425,121
Exercise of share-based awards 2,091,707 13,818 (6,260) — — — 7,558
Share-based compensation — — 4,205 — — — 4,205
Dividends declared — — — — (102,351) — (102,351)
Net earnings — — — — 205,729 20,884 226,613
Other comprehensive income (loss) — — — 3,240 — (109) 3,131
Total comprehensive income — — — 3,240 205,729 20,775 229,744
Balance, June 30, 2023 772,838,238 $ 4,568,943 $ 53,714 $ (339,047) $ 695,803 $ 584,864 $ 5,564,277
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
- 4 -
===== SIDA 55 =====
LUNDIN MINING CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands of US dollars)
Three months ended
June 30,
Six months ended
June 30,
Cash provided by (used in) 2024 2023 2024 2023
Operating activities
Net earnings $ 156,733 $ 61,302 $ 215,288 $ 226,613
Items not involving cash and other adjustments
Depreciation, depletion and amortization 197,658 130,505 382,150 250,752
Share-based compensation 1,736 1,755 3,377 4,021
Unrealized foreign exchange loss (gain) 3,173 (19,285) (12,327) (10,641)
Finance costs, net (Note 19) 36,307 15,897 72,001 31,596
Recognition of deferred revenue (Note 10) (16,766) (16,919) (35,604) (36,019)
Deferred tax (recovery) expense (1,955) (46,814) 1,348 (57,622)
Revaluation of Caserones purchase option (Note 20) (12,431) — (11,728) —
Revaluation of marketable securities (Note 20) (85) (3,464) (2,515) (3,902)
Write-down of assets (Note 20) 17,188 — 17,188 —
Revaluation of foreign currency and diesel derivatives (Note 21) (2,609) 128 46,508 (34,115)
Other 8,309 5,382 9,840 13,445
Reclamation payments (Note 11) (3,426) (2,548) (8,410) (5,129)
Pension payments (754) (411) (1,597) (989)
Changes in long-term inventory (13,204) (14,891) 8,021 (32,306)
Changes in non-cash working capital items (Note 25) 121,896 84,207 75,761 61,015
491,770 194,844 759,301 406,719
Investing activities
Investment in mineral properties, plant and equipment (258,467) (279,913) (530,373) (526,032)
Cash received from disposal of subsidiary (Note 20) — — — 5,718
Interest received 6,680 1,290 8,595 2,168
Other (419) (4,845) (92) (5,388)
(252,206) (283,468) (521,870) (523,534)
Financing activities
Proceeds from debt (Note 9) 224,537 282,119 492,339 430,949
Principal repayments of debt (Note 9) (223,809) (84,022) (357,206) (214,502)
Principal payments of lease liabilities (18,602) (6,062) (33,507) (11,280)
Interest paid (30,073) (5,972) (58,208) (10,667)
Dividends paid to shareholders (102,232) (104,021) (102,232) (104,021)
Proceeds from common shares issued 12,437 5,473 19,990 7,558
Distributions paid to non-controlling interests (20,000) — (20,000) —
Net (payment) proceeds from settlement of foreign currency and
commodity derivatives (782) 13,331 3,160 24,400
Other 2,608 (924) 2,006 (3,009)
(155,916) 99,922 (53,658) 119,428
Effect of foreign exchange on cash balances 3,710 (5,355) 243 (3,818)
Increase (decrease) in cash and cash equivalents during the period 87,358 5,943 184,016 (1,205)
Cash and cash equivalents, beginning of period 365,451 184,239 268,793 191,387
Cash and cash equivalents, end of period $ 452,809 $ 190,182 $ 452,809 $ 190,182
Supplemental cash flow information (Note 25)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
- 5 -
===== SIDA 56 =====