FULLTEXT DEL 3 AV 3
Kvartalsrapport Q4 2023
(b) Liquidity risk The Company has in place a planning and forecasting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there is sufficient available capital to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents. The Company has a revolving credit facility in place to assist with meeting its cash flow needs as required (Note 11). The maturities of the Company’s non-current liabilities are disclosed in Note 11 and Note 24. All current liabilities are due to be settled within one year. (c) Foreign exchange risk The Company operates internationally and is exposed to foreign exchange risk arising from various currencies, primarily with respect to CLP, €, BRL, SEK and ARS. The Company’s risk management strategy is to manage cash flow risk related to foreign denominated cash flows. The Company is exposed to currency risk related to changes in rates of exchange between foreign denominated balances and the functional currencies of the Company’s principal operating subsidiaries. The Company’s revenues are denominated in US dollars, while most of the Company’s operating and capital expenditures are denominated in the local currencies. The Company may, at its discretion, use forward or derivative contracts to manage its exposure to foreign currencies, the use of which is subject to appropriate approval procedures. A significant change in the currency exchange rates between the US dollar and foreign currencies could have a material effect on the Company’s net earnings and other comprehensive income. The following table illustrates the estimated impact a 10% US dollar change against the €, CLP, SEK, and BRL would have on pre-tax earnings as a result of translating the Company's foreign denominated financial instruments as at December 31, 2023 before the impact of derivative contracts: Currency Change Effect on Pre-Tax Earnings Change Effect on Pre-Tax Earnings € +10% $8,126 -10% $(8,126) CLP +10% $(18,322) -10% $18,322 SEK +10% $3,423 -10% $(3,423) BRL +10% $(3,225) -10% $3,225 The impact of a US dollar change against the € and SEK by 10% at December 31, 2023 would have a $37.5 million (2022 - $124.4 million) impact on OCI. (d) Commodity price risk The Company is subject to price risk associated with fluctuations in the market prices for metals. A significant change in metal prices could have a material effect on the Company’s revenues. The Company may, at its discretion, use forward or derivative contracts to manage its exposure to changes in commodity prices, the use of which is subject to appropriate approval procedures. The Company is also subject to price risk on the final settlement of its provisionally priced trade receivables. LUNDIN MINING CORPORATION Notes to consolidated financial statements For the years ended December 31, 2023 and 2022 (Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 52 - ===== SIDA 117 ===== The following table illustrates the sensitivity of the Company’s risk on final settlement of its provisionally priced trade receivables: Metal Payable metal Provisional price on December 31, 2023 Change Effect on Revenue ($millions) Copper 117,594 t $3.85/lb +/-10% +/-99.8 Zinc 34,047 t $1.21/lb +/-10% +/-9.1 Gold 30 koz $2,074/oz +/-10% +/-6.2 Nickel 1,263 t $7.46/lb +/-10% +/-2.1 (e) Interest rate risk The Company’s exposure to interest rate risk arises from the interest rate impact on its cash and cash equivalents, restricted funds, and debt facilities. Certain of the Company's debt facilities include a variable rate component such as references to Term SOFR on various term loans and credit facilities, as well as applicable credit spreads depending on the Company's net leverage ratio. The interest rates on the Company’s revolving credit facility and non-revolving term loan reference Term SOFR, and the Somincor commercial paper programs and equipment line of credit reference EURIBOR. As at December 31, 2023, holding all other variables constant, a 1% change in the interest rate would result in an approximate $4.2 million change in interest expense on an annualized basis (2022 - $0.4 million). 28. MANAGEMENT OF CAPITAL RISK The Company’s objectives when managing its capital include ensuring a sufficient combination of positive operating cash flows and debt and equity financing in order to meet its ongoing capital development and exploration programs in a way that maximizes the shareholder return given the assumed risks of its operations while, at the same time, safeguarding the Company’s ability to continue as a going concern. The Company considers the following items as capital: excess cash balances, share capital reserve and debt and lease liabilities. Through the ongoing management of its capital, the Company will modify the structure of its capital based on changing economic conditions in the jurisdictions in which it operates. In doing so, the Company may issue new shares or debt, buy back issued shares, or pay off any outstanding debt. The Company continuously monitors its capital structure to determine the appropriateness of paying dividends. Planning, including life-of-mine plans, annual budgeting and controls over major investment decisions are the primary tools used to manage the Company’s capital. Updates are made as necessary to both capital expenditure and operational budgets in order to adapt to changes in risk factors of proposed expenditure programs and market conditions within the mining industry. 29. SUPPLEMENTARY CASH FLOW INFORMATION 2023 2022 Changes in non-cash working capital items consist of: Trade and income taxes receivable, inventories, and other current assets $ 4,033 $ (52,520) Trade and income taxes payable, and other current liabilities (11,638) (63,536) $ (7,605) $ (116,056) Operating activities included the following cash payments: Income taxes paid $ 106,018 $ 304,232 LUNDIN MINING CORPORATION Notes to consolidated financial statements For the years ended December 31, 2023 and 2022 (Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 53 - ===== SIDA 118 ===== Registered Office 40 Temperance Street, Suite 3200, Toronto ON M5H 0B4 Canada Mailing Address 885 West Georgia Street, Suite 2000, Vancouver, BC V6C 3E8 Tel: +1.604.806.3081 lundinmining.com