FULLTEXT DEL 2 AV 3
Kvartalsrapport Q4 2024
Contractual Obligations, Commitments and Contingencies
The Company has contractual obligations and capital commitments as described in Note 27 “Commitments and
Contingencies” in the Company’s Consolidated Financial Statements. From time to time, the Company may also be involved
in legal proceedings that arise in the ordinary course of its business.
The Company has the following contractual obligations and capital commitments as at December 31, 2024:
Payments due by period1
($ thousands) <1 year 1-5 years Thereafter Total
Continuing operations
Reclamation and closure provisions 20,876 87,930 587,017 695,823
Long-term debt and lease liabilities 409,811 1,571,993 130,866 2,112,670
Capital commitments 127,729 176,399 — 304,128
Defined pension obligations — — 3,546 3,546
Deferred consideration 10,000 130,000 — 140,000
568,416 1,966,322 721,429 3,256,167
Discontinued operations
Reclamation and closure provisions 910 19,303 108,868 129,081
Long-term debt and lease liabilities 3,466 12,316 2,976 18,758
Capital commitments 29,821 — — 29,821
Defined pension obligations 537 2,053 781 3,372
34,734 33,672 112,625 181,032
Total 603,150 1,999,994 834,054 3,437,199
1Reported on an undiscounted basis, before inflation.
Capital Resources
As at December 31, 2024, the Company has a RCF of $1,750.0 million with $270.0 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”)
plus Credit Spread Adjustment (“CSA”) of 0.10% plus an applicable margin of 1.45% to 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.
As at December 31, 2024, the Company's Term Loan has a principal amount of $1,150.0 million which includes the exercise
of $350.0 million of the accordion option in the year. 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 December 31, 2024, the Company is in compliance with its debt covenants.
As at December 31, 2024, certain subsidiaries of the Company had outstanding unsecured term loans totalling $245.9
million (December 31, 2023 - $48.9 million) and accruing interest at rates ranging from 5.07% to 6.32% per annum with
interest payable upon maturity. The maturity dates range from January to May 2025.
The development of the Vicuña Projects requires significant capital commitments from the Company, and additional
funding, beyond debt, may be required to advance the projects to completion.
Financial Instruments
Revenue, cost of goods sold and capital expenditures are affected by certain external factors including fluctuations in metal
prices and changes in exchange rates between the CLP, BRL, ARS and the $.
During the year ended December 31, 2024, the Company continued to enter into derivative contracts as part of its risk
management strategy to mitigate exposure to foreign currency and commodities. At December 31, 2024, derivative
contracts consist of foreign currency forward and option contracts, and diesel and gold option contracts. The option
contracts consist of put and call contracts in a collar structure and all contracts have maturities ranging through 2025 and
2026.
37
===== SIDA 54 =====
The derivative contracts have not been designated as hedges for purposes of hedge accounting and are measured at fair
value as assessed by pricing models based on active market prices. Changes in fair value are recognized in other income and
expense in the consolidated statement of earnings.
The Company’s trade receivables also contain provisional pricing sales arrangements that are valued using quoted forward
market prices. The following table illustrates the sensitivity of the Company’s risk on final settlement of its provisionally
priced revenues as at December 31, 2024.
Metal Payable Metal
Provisional price on
December 31, 2024 Change
Effect on Revenue
($millions)
Copper 78,322 t $3.96/lb +/- 10 % +/- $68.4
Gold 35 koz $2,638/oz +/- 10 % +/- $9.2
Nickel 709 t $6.87/lb +/- 10 % +/- $1.1
Molybdenum 1,089 t $21.07/lb +/- 10 % +/- $5.1
For a detailed discussion of the Company’s financial instruments refer to Note 26 ‘Financial Instruments’ in the Company’s
Consolidated Financial Statements.
Foreign Currency Denominated Production Costs
For the year ended December 31, 2024, Candelaria and Caserones production costs are approximately 55% and 50% CLP
denominated respectively and Chapada production costs are approximately 80% BRL denominated. Production costs for
Eagle, Neves-Corvo and Zinkgruvan are substantially denominated in their functional currencies.
38
===== SIDA 55 =====
Non-GAAP and Other Performance Measures
The Company uses certain performance measures in its analysis and disclosure. These performance measures have no
standardized 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 cost.
Production costs
from continuing
operations and
Production costs
from discontinued
operations
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
from continuing
operations and
Production costs
from discontinued
operations
Copper, zinc and nickel AISC
and AISC 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.
39
===== SIDA 56 =====
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, 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 from
continuing
operations
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, and finance costs, net. 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 or reversals, goodwill impairment,
costs relating to the sinkhole near Ojos del Salado
operations, costs relating to the suspension of
underground operations at Eagle, gains or losses on
disposals of subsidiaries, income from investments in
associates, insurance proceeds and litigation and
settlements.
Net earnings (loss)
from continuing
operations and
from discontinued
operations
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 and
Net earnings (loss)
from continuing
operations
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
related to
continuing
operations and
Cash provided by
operating activities
related to
discontinued
operations
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 further
considers expansionary capital
expenditure.
Free cash flow Defined as cash flow provided by operating activities,
deducting sustaining capital expenditures and
expansionary capital expenditures (both as defined above).
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===== SIDA 57 =====
Adjusted operating
cash flow
Defined as cash provided by operating activities, excluding
changes in non-cash working capital items.
Cash provided by
operating activities
related to
continuing
operations and
Cash provided by
operating activities
related to
discontinued
operations
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.
Additionally, the
above items as
included in assets
held for sale, and
liabilities held for
sale
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.
41
===== SIDA 58 =====
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 as follows:
Three months ended December 31, 2024
Operations Candelaria Caserones Chapada Eagle
Total -
continuing
operations
Neves-
Corvo Zinkgruvan
Total -
discontinued
operations($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn)
Sales volumes:
Tonnes 49,052 26,750 10,200 1,088 5,230 18,627
Pounds (000s) 108,141 58,973 22,487 2,399 11,531 41,066
Production costs 486,877 102,300
Less: Royalties and other (27,839) (20)
459,038 102,280
Deduct: By-product credits (137,021) (75,716)
Add: Treatment and refining
charges 27,483 12,128
Cash cost 165,039 147,826 24,107 12,528 349,500 21,230 17,462 38,692
Cash cost per pound ($/lb) 1.53 2.51 1.07 5.22 1.84 0.43
Add: Sustaining capital
expenditure 55,526 42,988 32,916 5,224 12,680 22,470
Royalties 4,692 7,663 2,689 696 793 —
Reclamation and other
closure accretion and
depreciation 2,129 (4,457) 2,373 1,734 1,184 747
Leases and other 1,449 17,229 1,080 2,691 2,917 74
All-in sustaining cost 228,835 211,249 63,165 22,873 38,804 40,753
AISC per pound ($/lb) 2.12 3.58 2.81 9.53 3.37 0.99
Three months ended December 31, 2023
Operations Candelaria Caserones Chapada Eagle
Total -
continuing
operations
Neves-
Corvo Zinkgruvan
Total -
discontinued
operations($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn)
Sales volumes:
Tonnes 38,888 35,690 13,080 3,105 9,054 17,316
Pounds (000s) 85,733 78,683 28,836 6,845 19,961 38,176
Production costs 533,783 114,254
Less: Royalties and other (22,221) (2,299)
Inventory fair value
adjustment (7,760) —
503,802 111,955
Deduct: By-product credits (136,641) (67,523)
Add: Treatment and refining
charges 39,139 18,799
Cash cost 152,276 183,687 54,108 16,229 406,300 39,218 24,013 63,231
Cash cost per pound ($/lb) 1.78 2.33 1.88 2.37 1.96 0.63
Add: Sustaining capital
expenditure 79,316 55,031 19,858 6,548 28,070 10,546
Royalties — 8,270 2,174 5,003 1,081 —
Reclamation and other
closure accretion and
depreciation 2,158 1,427 2,047 2,620 1,305 933
Leases and other 2,901 25,715 1,131 1,101 106 103
All-in sustaining cost 236,651 274,130 79,318 31,501 69,780 35,595
AISC per pound ($/lb) 2.76 3.48 2.75 4.60 3.50 0.93
42
===== SIDA 59 =====
Twelve months ended December 31, 2024
Operations Candelaria Caserones1 Chapada Eagle
Total -
continuing
operations
Neves-
Corvo Zinkgruvan
Total -
discontinued
operations($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn)
Sales volumes:
Tonnes 158,017 113,867 39,615 5,662 26,721 68,086
Pounds (000s) 348,367 251,033 87,336 12,483 58,910 150,104
Production costs 1,898,627 445,227
Less: Royalties and other (84,501) (4,785)
1,814,126 440,442
Deduct: By-product credits (504,431) (305,479)
Add: Treatment and refining
charges 113,565 55,407
Cash cost 603,533 629,582 137,714 52,431 1,423,260 129,128 61,242 190,370
Cash cost per pound ($/lb) 1.73 2.51 1.58 4.20 2.19 0.41
Add: Sustaining capital expenditure 275,720 143,965 107,843 21,222 89,302 65,658
Royalties 15,730 32,106 8,580 7,442 3,961 —
Reclamation and other
closure accretion and
depreciation 8,570 (1,262) 10,153 6,767 5,220 4,033
Leases and other 9,133 69,002 3,576 6,949 3,322 309
All-in sustaining cost 912,686 873,393 267,866 94,811 230,933 131,242
AISC per pound ($/lb) 2.62 3.48 3.07 7.60 3.92 0.87
Twelve months ended December 31, 2023
Operations Candelaria Caserones1 Chapada Eagle
Total -
continuing
operations
Neves-
Corvo Zinkgruvan
Total -
discontinued
operations($000s, unless otherwise noted) (Cu) (Cu) (Cu) (Ni) (Cu) (Zn)
Sales volumes:
Tonnes 144,473 66,075 43,761 13,339 32,054 65,344
Pounds (000s) 318,508 145,670 96,476 29,407 70,667 144,059
Production costs 1,644,037 442,071
Less: Royalties and other (60,916) (5,321)
Inventory fair value
adjustment (39,945) —
1,543,176 436,750
Deduct: By-product credits (428,208) (271,707)
Add: Treatment and refining charges 118,480 64,848
Cash cost 660,160 290,553 219,278 63,457 1,233,448 167,424 62,467 229,891
Cash cost per pound ($/lb) 2.07 1.99 2.27 2.16 2.37 0.43
Add: Sustaining capital expenditure 380,112 83,880 72,291 22,201 102,621 53,358
Royalties — 15,820 8,568 22,994 3,949 —
Reclamation and other
closure accretion and
depreciation 9,258 2,560 7,836 11,331 5,387 3,744
Leases and other2 13,325 47,944 4,999 4,100 553 427
All-in sustaining cost 1,062,855 440,757 312,972 124,083 279,934 119,996
AISC per pound ($/lb) 3.34 3.03 3.24 4.22 3.96 0.83
1 Caserones 2023 results are from July 13, 2023.
43
===== SIDA 60 =====
Adjusted EBITDA
Adjusted EBITDA can be reconciled to Net Earnings (Loss) as follows:
Three months ended
December 31, Year ended December 31,
($thousands) 2024 2023 2024 2023 2022
Net earnings (loss) — continuing operations (159,618) 40,444 153,354 276,850 316,772
Add back:
Depreciation, depletion and amortization 148,033 181,865 607,744 497,873 416,204
Finance costs, net 38,282 32,023 141,455 91,429 51,317
Income taxes expense 34,767 101,858 229,973 214,366 104,113
EBITDA — continuing operations 61,464 356,190 1,132,526 1,080,518 888,406
Unrealized foreign exchange loss (gain) (10,808) 2,693 (10,994) 1,804 16,491
Unrealized losses (gains) on derivative contracts 85,986 (2,592) 85,168 8,464 (62,971)
Ojos del Salado sinkhole expenses (recoveries) (10,042) 1,687 (9,492) 16,922 63,271
Revaluation loss (gain) on marketable securities (911) (1,393) (7,383) (1,846) (5,201)
Caserones inventory fair value adjustment — 7,760 — 39,945 —
Partial suspension of underground operations at Eagle 11,436 — 36,073 — —
Revaluation of Caserones purchase option — 2,556 (11,728) 2,556 —
Write-down of assets 4,160 — 22,129 — 5,783
Goodwill and asset impairment 254,218 — 254,218 — 4,280
Inventory write-down (reversal) (26,626) — (26,626) — 62,546
Gain on disposal of subsidiary — — — (5,718) (16,828)
Other (637) 732 (2,085) 2,958 (2,133)
Total adjustments — EBITDA 306,776 11,443 329,280 65,085 65,238
Adjusted EBITDA — continuing operations 368,240 367,633 1,461,806 1,145,603 953,644
Including discontinued operations:
Net earnings (loss) — discontinued operations (244,816) 26,309 (214,671) 38,399 146,761
Add back:
Depreciation, depletion and amortization 32,831 41,191 155,344 155,723 138,546
Finance costs, net 1,813 2,868 9,793 11,270 12,868
Income taxes expense (22,173) 758 (13,711) 2,233 30,515
EBITDA — discontinued operations (232,345) 71,126 (63,245) 207,625 328,690
Unrealized foreign exchange loss (gain) (960) 76 (200) (580) 4,673
Unrealized losses (gains) on derivative contracts (466) (16,717) 18,597 13,468 —
Goodwill and asset Impairment 291,178 — 291,178 — (19)
Other (22) (2,388) (1,114) (2,568) 5,518
Total adjustments — EBITDA discontinued operations 289,730 (19,029) 308,461 10,320 10,172
Adjusted EBITDA — discontinued operations 57,385 52,097 245,216 217,945 338,862
Adjusted EBITDA (all operations) 425,625 419,730 1,707,022 1,363,548 1,292,506
44
===== SIDA 61 =====
Adjusted Earnings and Adjusted EPS
Adjusted Earnings and Adjusted EPS can be reconciled to Net Earnings (Loss) Attributable to Lundin Mining Shareholders as
follows:
Three months ended
December 31, Year ended December 31,
($thousands, except share and per share
amounts) 2024 2023 2024 2023 2022
Net (loss) earnings attributable to Lundin
Mining shareholders — continuing operations (195,343) 12,488 11,144 203,163 277,198
Add back:
Total adjustments - EBITDA 306,776 11,443 329,280 65,085 65,238
Tax effect on adjustments (57,600) (2,987) (59,519) (26,925) 2,882
Deferred tax expense due to change in tax rate — 14,500 — 40,200 —
Deferred tax arising from foreign exchange
translation 45,065 41,168 12,712 28,841 (20,733)
Non-controlling interest on adjustments (4,077) (4,221) (1,912) (22,886) 2,026
Total adjustments 290,164 59,903 280,560 84,315 49,413
Adjusted earnings — continuing operations 94,821 72,391 291,704 287,478 326,611
Including discontinued operations:
Net earnings attributable to Lundin Mining
shareholders - discontinued operations1 (244,816) 26,309 (214,671) 38,399 149,652
Add back:
Total adjustments - EBITDA - discontinued
operations 289,730 (19,029) 308,461 10,320 10,172
Tax effect on adjustments (20,544) — (26,547) — (3,679)
Total adjustments 269,186 (19,029) 281,914 10,320 6,493
Adjusted earnings — discontinued operations 24,370 7,280 67,243 48,719 156,145
Adjusted earnings (all operations) 119,191 79,671 358,947 336,197 482,756
Basic weighted average number of shares
outstanding 776,720,828 773,476,216 774,825,230 772,532,260 762,518,753
Net (loss) earnings attributable to Lundin
Mining shareholders - continuing operations (0.25) 0.02 0.01 0.26 0.36
Total adjustments 0.37 0.08 0.36 0.11 0.06
Adjusted EPS — continuing operations 0.12 0.09 0.38 0.37 0.43
Net (loss) earnings attributable to Lundin
Mining shareholders - discontinued operations (0.32) 0.03 (0.28) 0.05 0.20
Total adjustments 0.35 (0.03) 0.36 0.01 0.01
Adjusted EPS — discontinued operations 0.03 0.01 0.09 0.06 0.20
Net (loss) earnings attributable to Lundin
Mining shareholders (0.57) 0.05 (0.26) 0.31 0.56
Total adjustments 0.72 0.05 0.73 0.13 0.07
Adjusted EPS (all operations) 0.15 0.10 0.46 0.44 0.63
1 Represents Net (loss) earnings attributable to Lundin Mining Corporation shareholders less Net earnings from continuing
operations attributable to Lundin Mining Corporation shareholders.
45
===== SIDA 62 =====
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 Consolidated Statement of Cash Flows as follows:
Three months ended
December 31, Year ended December 31,
($thousands) 2024 2023 2024 2023 2022
Cash provided by operating activities related to continuing
operations 547,267 249,875 1,300,848 827,244 615,986
Sustaining capital expenditures (136,674) (165,211) (549,100) (571,245) (520,465)
General exploration and business development 12,974 11,062 45,352 44,010 135,213
Free cash flow from operations — continuing operations 423,567 95,726 797,100 300,009 230,734
General exploration and business development (12,974) (11,062) (45,352) (44,010) (135,213)
Expansionary capital expenditures (50,607) (41,082) (243,566) (275,913) (171,094)
Free cash flow — continuing operations 359,986 43,582 508,182 (19,914) (75,573)
Cash provided by operating activities related to discontinued
operations 73,014 56,206 218,009 189,368 260,903
Sustaining capital expenditures (35,150) (38,616) (154,960) (155,979) (119,366)
General exploration and business development 4,614 3,438 12,843 11,682 9,140
Free cash flow from operations — discontinued operations 42,478 21,028 75,892 45,071 150,677
General exploration and business development (4,614) (3,438) (12,843) (11,682) (9,140)
Expansionary capital expenditures — — — — (31,899)
Free cash flow — discontinued operations 37,864 17,590 63,049 33,389 109,638
Free cash flow from operations (all operations) 466,045 116,754 872,992 345,080 381,411
Free cash flow (all operations) 397,850 61,172 571,231 13,475 34,065
46
===== SIDA 63 =====
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 Consolidated Statement of Cash Flows as follows:
Three months ended
December 31, Year ended December 31,
($thousands, except share and per share amounts) 2024 2023 2024 2023 2022
Cash provided by operating activities related to continuing
operations 547,267 249,875 1,300,848 827,244 615,986
Changes in non-cash working capital items (295,508) 55,518 (220,880) 20,032 124,087
Adjusted operating cash flow — continuing operations 251,759 305,393 1,079,968 847,276 740,073
Cash provided by operating activities related to discontinued
operations 73,014 56,206 218,009 189,368 260,903
Changes in non-cash working capital items (10,895) 447 4,615 (12,427) (8,031)
Adjusted operating cash flow — discontinued operations 62,119 56,653 222,624 176,941 252,872
Adjusted operating cash flow (all operations) 313,878 362,046 1,302,592 1,024,217 992,945
Basic weighted average number of shares outstanding 776,720,828 773,476,216 774,825,230 772,532,260 762,518,753
Adjusted operating cash flow per share — continuing
operations 0.32 0.39 1.39 1.10 $ 1.00
Adjusted operating cash flow per share — discontinued
operations 0.08 0.08 0.29 0.23 $ 0.30
Adjusted operating cash flow per share (all operations) 0.40 0.47 1.68 1.33 $ 1.30
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 Consolidated Balance Sheets as follows:
As at December 31,
($ thousands), continuing operations December 31, 2024 December 31, 2023 December 31, 2022
Debt and lease liabilities (1,610,925) (1,273,162) (27,179)
Current portion of debt and lease liabilities (395,232) (212,646) (170,149)
Less deferred financing fees (netted in above) (7,656) (6,374) (4,926)
Add debt and lease liabilities related to liabilities classified as held-
for-sale (16,266) — —
(2,030,079) (1,492,182) (202,254)
Cash and cash equivalents 357,478 268,793 191,387
Add cash and cash equivalents related to assets classified as held-
for-sale 74,801 — —
Net debt (1,597,800) (1,223,389) (10,867)
Lease liabilities 249,185 277,208 27,166
Lease liabilities related to liabilities classified as held-for-sale 16,266 — —
Net debt excluding lease liabilities (1,332,349) (946,181) 16,299
47
===== SIDA 64 =====
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 29 of the Company’s Consolidated Financial Statements.
Changes in Accounting Policies and Critical Accounting Estimates and Judgments
The Company’s consolidated financial statements, including comparatives, have been prepared in compliance with IFRS.
The Company’s material accounting policies, including any changes in accounting policies, are described in Note 2 ‘Basis of
Presentation and Summary of Material Accounting Policies’ of the Company's Consolidated Financial Statements.
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.
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, 2024.
Internal Control over Financial Reporting (“ICFR”)
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 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, 2024.
There have been no changes in the Company’s ICFR during the three months ended December 31, 2024 that have
materially affected, or are reasonably likely to materially affect, the Company’s financial reporting.
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.
The development of the Vicuña Projects requires significant capital commitments from the Company, and additional
funding, beyond debt, may be required to advance the project to completion. Such additional funding may take the form of
a partnership, joint arrangement, royalty, stream or other arrangement (or a combination thereof) for the Vicuña Projects,
any of which would dilute the Company’s existing interest in the Vicuña Projects. The Company may also be required or
elect to pursue equity financing, which could have a dilutive effect on existing security holders if shares, options, warrants
or other convertible securities are issued.
48
===== SIDA 65 =====
The Company’s ability to obtain additional financing for the Vicuña Projects in the future will depend, in part, on prevailing
capital market conditions and the Company’s financial performance. Failure to secure adequate financing on a timely basis
may cause the Company to postpone, abandon, reduce or terminate its development activities in respect of the Vicuña
Projects and could have a material adverse effect on the Company’s business, results of operations, financial condition and
price of common shares.
In addition, the Company’s exploration, acquisition, development and operational activities generally require significant
investment of resources and capital. The Company allocates such resources and capital to support business objectives, and
the availability of required resources and capital is subject to market conditions and the Company’s financial position.
The Company has limited financial resources and there is no assurance that sufficient additional funding or financing will be
available to the Company or its direct and indirect subsidiaries on acceptable terms, or at all, for further exploration or
development of its properties, including the development of the Vicuña Projects, or to fulfill its obligations under any
applicable agreements.
The Company may incur substantial debt from time to time to finance working capital, capital expenditures, investments or
acquisitions or for other purposes. If the Company does so, the risks related to the Company’s indebtedness could intensify,
including, among other things: substantial interest and capital payments; increased difficulty in satisfying existing debt
obligations; limitations on the ability to obtain additional financing, or imposed requirements to make non-strategic
divestitures; imposed hedging requirements; explicit or implicit restrictions on the Company’s cash flows for capital
investment, dividends or distributions, opportunistic acquisitions and other business needs; increased vulnerability to
general adverse economic and industry conditions; interest rate risk exposure as borrowings may be at variable rates of
interest; decreased flexibility in planning for and reacting to changes in the industry in which it competes; reduced
competitiveness as compared to less leveraged competitors; and increased cost of additional borrowing.
The terms of the revolving credit facility and Term Loan agreements require the Company to satisfy various affirmative and
negative covenants and to meet certain financial ratios and tests. These covenants limit, among other things, the
Company’s ability to incur further indebtedness if doing so would cause it to fail to meet certain financial covenants, create
certain liens on assets or engage in certain types of transactions. A failure to comply with these covenants, including a
failure to meet the financial tests or ratios, would likely result in an event of default under the revolving credit facility and
Term Loan and would allow the lenders to restrict future loans or accelerate the debt, which could materially and adversely
affect the Company’s business, financial condition and results of operations, its ability to meet payment obligations under
its debt and the price of its common shares. The terms of the Term Loan entitle the Company to voluntarily prepay all or
any portion of the outstanding loan balance, without penalty. On certain occasions, a triggering event may meet the criteria
requiring mandatory prepayment. Any such prepayment made, mandatory or on the Company's accord, permanently
reduces the facility available to the Company on the Term Loan. As at December 31, 2024 , the Company is in compliance
with its debt covenants.
The Company may issue additional securities to raise funds, to pay for acquisitions or for other reasons. The Company
cannot predict the size of future issuances of securities or the effect, if any, that future issuances and sales of securities will
have on the market price of common shares. Sales or issuances of substantial numbers of common shares, or the
expectation that such sales could occur, may adversely affect prevailing market prices of the Company’s common shares. In
connection with any issuance of common shares, investors will suffer dilution to their voting power and the Company may
experience dilution in its earnings per share.
The Company is exposed to various counterparty risks including, among others: financial institutions that hold the
Company’s cash; companies that have payables to the Company, including concentrate customers; the Company’s
insurance providers; counterparties to the Company's derivative contracts; the Company’s lenders and other banking
counterparties; companies that have received deposits from the Company for the future delivery of equipment; and third
parties that have agreed to indemnify the Company upon the occurrence of certain events.
The Company maintains relationships with various banking partners for its operating activities in the jurisdictions in which
the Company operates. The Company’s access to funds under its credit facilities or other debt arrangements is dependent
on the ability of the financial institutions that are counterparties to the facilities to meet their funding commitments.
Default by financial institutions could require the Company to take measures to conserve cash until the markets stabilize or
until alternative credit or other funding arrangements for the Company’s business needs can be obtained.
If market prices for metals fall below the Company’s full production costs and remain at such levels for any sustained period
of time, the Company may experience losses and may decide to discontinue mining operations or development of a project
at one or more of its properties. If the prices drop significantly, the economic prospects of the mines and projects in which
the Company has an interest could be significantly reduced or rendered uneconomic, in which case the Company may need
49
===== SIDA 66 =====
to restate its Mineral Resource and Mineral Reserve estimates. Low metal prices will affect the Company’s liquidity, and if
they persist for an extended period of time, the Company may have to look for other sources of cash flow to maintain
liquidity until metal prices recover. A sustained and material impact on the Company’s liquidity may also impact the
Company’s ability to comply with financial covenants under its credit facilities.
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, 2024 and the “Cautionary Statement on Forward-Looking
Information” section 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 National
Instrument 43-101 ("NI 43-101") by Patrick Merrin, Executive Vice President, Technical Services, a "Qualified Person" under
NI 43-101. Mr. Merrin 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
February 19, 2025.
February 19,
2025
Common shares issued and outstanding 867,777,426
Stock options outstanding
(weighted average exercise price of C$10.21) 3,850,789
Time vesting share units1 1,406,034
Performance vesting share units2 1,023,125
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.
50
===== SIDA 67 =====
Consolidated Financial Statements of
Lundin Mining Corporation
December 31, 2024
===== SIDA 68 =====
Management’s Report
The accompanying consolidated financial statements of Lundin Mining Corporation ("Lundin Mining" or the “Company”)
and other information contained in the management’s discussion and analysis are the responsibility of management and
have been approved by the Board of Directors. The consolidated financial statements have been prepared by management
in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board
(“IFRS Accounting Standards”) as outlined in Part 1 of the Handbook of the Chartered Professional Accountants (“CPA”) of
Canada, and include some amounts that are based on management’s estimates and judgment.
The Board of Directors carries out its responsibility for the consolidated financial statements principally through its Audit
Committee, which is comprised solely of independent directors. The Audit Committee reviews the Company’s annual
consolidated financial statements and recommends its approval to the Board of Directors. The Company’s auditors have full
access to the Audit Committee, with and without management being present. These consolidated financial statements have
been audited by PricewaterhouseCoopers LLP, Chartered Professional Accountants.
(Signed) Jack Lundin (Signed) Teitur Poulsen
President and Chief Executive Officer Executive Vice President and Chief Financial Officer
Vancouver, British Columbia, Canada
February 19, 2025
===== SIDA 69 =====
PricewaterhouseCoopers LLP
PwC Place, 250 Howe Street, Suite 1400, Vancouver, British Columbia, Canada V6C 3S7
T.: +1 604 806 7000, F.: +1 604 806 7806, Fax to mail: ca_vancouver_main_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Independent auditor’s report
To the Shareholders of Lundin Mining Corporation
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of Lundin Mining Corporation and its subsidiaries (together, the Company) as at
December 31, 2024 and 2023, and its financial performance and its cash flows for the years then ended in
accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IFRS Accounting Standards).
What we have audited
The Company’s consolidated financial statements comprise:
the consolidated balance sheets as at December 31, 2024 and 2023;
the consolidated statements of (loss) earnings for the years then ended;
the consolidated statements of comprehensive (loss) income for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, comprising material accounting policy information
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities
in accordance with these requirements.
===== SIDA 70 =====
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2024. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Chapada cash-generating unit (CGU) goodwill
impairment assessment
Refer to note 2 – Basis of presentation and
summary of material accounting policies and
note 11 – Goodwill and asset impairment to the
consolidated financial statements.
The Company’s total carrying amount of goodwill as
at December 31, 2024 was $134 million, which
related to the Chapada CGU. The Company’s
goodwill is required to be tested annually for
impairment or when events or changes in
circumstances indicate that the related carrying
amount may not be recoverable. When the
recoverable amount of the CGU is less than the
carrying amount of that CGU, an impairment loss is
recognized.
The recoverable amount of the Chapada CGU was
based on a fair value less cost of disposal method
using a discounted cash flow model and market-
based approach. Management applied significant
judgment in estimating the recoverable amount of
the Chapada CGU. Significant assumptions used
by management to determine the recoverable
amounts include future metal prices, production
based on estimated quantities of mineral reserves
and mineral resources, production and capital
expenditures, foreign exchange rate, in-situ
multiples and discount rate. The recoverable
amount of the Chapada CGU determined by
management exceeded its carrying value, and as a
result, no impairment loss was recorded.
Our approach to addressing the matter included the
following procedures, among others:
Tested how management estimated the
recoverable amount of the Chapada CGU,
which included the following:
Tested the underlying data used by
management in the discounted cash flow
model and market-based valuation.
Evaluated the reasonableness of significant
assumptions such as future metal prices,
foreign exchange rate and production and
capital expenditures by (i) comparing future
metal prices and foreign exchange rate with
external market and industry data;
(ii) comparing future production and capital
expenditures against current and past
performance; and (iii) assessing whether
these assumptions were consistent with
evidence obtained in other areas of the
audit.
The work of management’s experts was
used in performing the procedures to
evaluate the reasonableness of the
estimates associated with the production
based on estimated quantities of mineral
reserves and mineral resources. As a basis
for using this work, the competence,
capabilities and objectivity of management’s
experts were evaluated, the work performed
was understood and the appropriateness of
the work as audit evidence was evaluated.
===== SIDA 71 =====
Management’s estimates of production based on
estimated quantities of mineral reserves and
mineral resources are based on information
compiled by qualified persons (management’s
experts).
We considered this a key audit matter due to the
significant auditor effort, subjectivity and significant
judgment in performing procedures to test
significant assumptions used by management in
determining the fair value of the Chapada CGU.
Professionals with specialized skill and knowledge
in the field of valuation assisted us in performing
our procedures.
The procedures performed also included
evaluation of the methods and assumptions
used by management’s experts, tests of the
data used by management’s experts and an
evaluation of their findings.
Professionals with specialized skill and
knowledge in the field of valuation assisted
in assessing the following:
(i) appropriateness of the discounted cash
flow model and market-based approach to
determine the recoverable amount of the
Chapada CGU; and (ii) the reasonableness
of the discount rate and in-situ multiples.
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
===== SIDA 72 =====
concern and using the going concern basis of accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s responsibilities for the audit of theconsolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
===== SIDA 73 =====
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Company as a basis for forming an opinion on
the consolidated financial statements. We are responsible for the direction, supervision and review of
the audit work performed for purposes of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Mark Patterson.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants
Vancouver, British Columbia
February 19, 2025
===== SIDA 74 =====
LUNDIN MINING CORPORATION
CONSOLIDATED BALANCE SHEETS As at
(in thousands of US dollars) December 31,
2024
December 31,
2023
ASSETS
Cash and cash equivalents (Note 5) $ 357,478 $ 268,793
Trade and other receivables (Note 6) 510,854 828,871
Income taxes receivable 14,520 34,542
Inventories (Note 7) 590,685 599,407
Marketable securities (Note 8) 50,105 —
Current portion of derivative assets (Note 26) 964 38,114
Other current assets 22,667 21,421
Assets held for sale (Note 3) 1,389,670 —
Total current assets 2,936,943 1,791,148
Restricted funds 8,665 59,979
Long-term inventory (Note 7) 871,885 797,597
Derivative assets (Note 26) 665 9,397
Other non-current assets (Note 9) 18,382 67,090
Mineral properties, plant and equipment (Note 10) 6,244,634 7,725,169
Deferred tax assets (Note 25) 191,254 170,203
Goodwill (Note 11) 134,284 240,616
7,469,769 9,070,051
Total assets $ 10,406,712 $ 10,861,199
LIABILITIES
Trade and other payables (Note 12) $ 674,204 $ 805,763
Income taxes payable 128,251 62,926
Current portion of derivative liabilities (Note 26) 39,416 26,389
Current portion of debt and lease liabilities (Note 13) 395,232 212,646
Current portion of deferred revenue (Note 14) 60,604 87,867
Current portion of reclamation and other closure provisions (Note 15) 20,876 14,442
Liabilities held for sale (Note 3) 393,109 —
Total current liabilities 1,711,692 1,210,033
Derivative liabilities (Note 26) 24,487 3,148
Debt and lease liabilities (Note 13) 1,610,925 1,273,162
Deferred revenue (Note 14) 447,133 535,363
Reclamation and other closure provisions (Note 15) 323,310 529,734
Deferred consideration and other long-term liabilities (Note 16) 128,783 133,199
Provision for pension obligations 768 6,752
Deferred tax liabilities (Note 25) 643,850 751,688
3,179,256 3,233,046
Total liabilities 4,890,948 4,443,079
SHAREHOLDERS' EQUITY
Share capital (Note 17) 4,585,607 4,574,830
Contributed surplus 51,308 55,201
Accumulated other comprehensive loss (375,837) (296,617)
Retained earnings 161,063 627,903
Equity attributable to Lundin Mining Corporation shareholders 4,422,141 4,961,317
Non-controlling interests (Note 18) 1,093,623 1,456,803
Total shareholders' equity 5,515,764 6,418,120
Total liabilities and shareholders' equity $ 10,406,712 $ 10,861,199
Commitments and contingencies (Note 27)
Subsequent events (Note 4, 8, 26)
The accompanying notes are an integral part of these consolidated financial statements.
APPROVED BY THE BOARD OF DIRECTORS
(Signed) Adam I. Lundin - Director (Signed) Dale C. Peniuk - Director
- 1 -
===== SIDA 75 =====
LUNDIN MINING CORPORATION
CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS
For the years ended December 31, 2024 and 2023
(in thousands of US dollars, except for shares and per share amounts)
2024 2023
Continuing Operations:
Revenue (Note 19) $ 3,422,604 $ 2,743,444
Cost of goods sold
Production costs (Note 20) (1,898,627) (1,644,037)
Depreciation, depletion and amortization (607,744) (497,873)
Reversal of inventory write-down (Note 7) 26,626 —
Gross profit 942,859 601,534
General and administrative expenses (Note 21) (58,349) (66,723)
Exploration and business development (Note 22) (45,352) (44,010)
Finance income (Note 23) 16,689 10,879
Finance costs (Note 23) (158,144) (102,308)
Other (expense) income (Note 24) (24,085) 91,844
Goodwill and asset impairment (Note 11) (254,218) —
Mine suspension costs (36,073) —
Earnings before income taxes from continuing operations 383,327 491,216
Current tax expense (Note 25) (294,938) (141,432)
Deferred tax recovery (expense) (Note 25) 64,965 (72,934)
Net earnings from continuing operations $ 153,354 $ 276,850
Net (loss) earnings from discontinued operations, net of taxes (Note 3) (214,671) 38,399
Net (loss) earnings $ (61,317) $ 315,249
Net earnings from continuing operations attributable to:
Lundin Mining Corporation shareholders $ 11,144 $ 203,163
Non-controlling interests 142,210 73,687
Net earnings from continuing operations $ 153,354 $ 276,850
Net (loss) earnings attributable to
Lundin Mining Corporation shareholders $ (203,527) $ 241,562
Non-controlling interests 142,210 73,687
Net (loss) earnings $ (61,317) $ 315,249
Basic and diluted earnings per share from continuing operations attributable to Lundin Mining
Corporation shareholders: $ 0.01 $ 0.26
Basic and diluted (loss) earnings per share from discontinued operations attributable to Lundin
Mining Corporation shareholders: $ (0.27) $ 0.05
Basic and diluted (loss) earnings per share attributable to Lundin Mining Corporation
shareholders: $ (0.26) $ 0.31
Weighted average number of shares outstanding (Note 17)
Basic 774,825,230 772,532,260
Diluted 777,569,041 773,292,895
The accompanying notes are an integral part of these consolidated financial statements.
- 2 -
===== SIDA 76 =====
LUNDIN MINING CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
For the years ended December 31, 2024 and 2023
(in thousands of US dollars)
2024 2023
Net (loss) earnings $ (61,317) $ 315,249
Other comprehensive (loss) income, net of taxes
Item that will not be reclassified to net earnings:
Remeasurements for post-employment benefit plans 573 2,320
Item that may be reclassified subsequently to net earnings:
Effects of foreign exchange (79,684) 43,710
Other comprehensive (loss) income (79,111) 46,030
Total comprehensive (loss) income $ (140,428) $ 361,279
Comprehensive (loss) income attributable to:
Lundin Mining Corporation shareholders $ (282,747) $ 287,232
Non-controlling interests 142,319 74,047
Total comprehensive (loss) income $ (140,428) $ 361,279
Total comprehensive income (loss) attributable to Lundin Mining Corporation shareholders
arising from:
Continuing operations $ 22,061 $ 197,723
Discontinued operations (304,808) 89,509
Comprehensive (loss) income attributable to Lundin Mining Corporation shareholders $ (282,747) $ 287,232
The accompanying notes are an integral part of these consolidated financial statements.
- 3 -
===== SIDA 77 =====
LUNDIN MINING CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the years ended December 31, 2024 and 2023
(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 — — — — — (152,000) (152,000)
Exercise of Caserones purchase option (Note 9) — — — — (52,667) (353,499) (406,166)
Exercise of share-based awards 3,250,382 31,181 (10,158) — — — 21,023
Share-based compensation — — 6,265 — — — 6,265
Dividends declared (Note 17(f)) — — — — (202,962) — (202,962)
Shares purchased (Note 17(g)) (2,815,200) (16,690) — — (7,684) — (24,374)
Accrued liability for automatic share purchase plan
commitment (Note 17(g)) — (3,714) — — — — (3,714)
Net (loss) earnings — — — — (203,527) 142,210 (61,317)
Other comprehensive (loss) income — — — (79,220) — 109 (79,111)
Total comprehensive (loss) income — — — (79,220) (203,527) 142,319 (140,428)
Balance, December 31, 2024 774,102,971 $ 4,585,607 $ 51,308 $ (375,837) $ 161,063 $ 1,093,623 $ 5,515,764
Balance, December 31, 2022 770,746,531 $ 4,555,125 $ 55,769 $ (342,287) $ 592,425 $ 564,089 $ 5,425,121
Distributions — — — — — (55,100) (55,100)
Caserones acquisition — — — — — 873,767 873,767
Exercise of share-based awards 2,921,258 19,705 (8,329) — — — 11,376
Share-based compensation — — 7,761 — — — 7,761
Dividends declared — — — — (206,084) — (206,084)
Net earnings — — — — 241,562 73,687 315,249
Other comprehensive income — — — 45,670 — 360 46,030
Total comprehensive income — — — 45,670 241,562 74,047 361,279
Balance, December 31, 2023 773,667,789 $ 4,574,830 $ 55,201 $ (296,617) $ 627,903 $ 1,456,803 $ 6,418,120
The accompanying notes are an integral part of these consolidated financial statements.
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LUNDIN MINING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2024 and 2023
(in thousands of US dollars)
Cash provided by (used in) 2024 2023
Operating activities
Net earnings $ 153,354 $ 276,850
Items not involving cash and other adjustments
Depreciation, depletion and amortization 607,744 497,873
Share-based compensation 6,422 7,301
Unrealized foreign exchange (gain) loss (10,994) 1,804
Finance costs, net (Note 23) 141,455 91,429
Recognition of deferred revenue (Note 14) (78,083) (64,698)
Deferred tax (recovery) expense (64,965) 72,934
Revaluation of Caserones purchase option (Note 24) (11,728) 5,150
Goodwill and asset impairment (Note 11) 254,218 —
Revaluation of foreign currency and diesel derivatives (Note 26) 87,218 (16,624)
Reversal of inventory write-down (Note 7) (26,626) —
Write-down of assets (Note 24) 22,129 —
Inventory write-down 19,445 49,793
Other 7,220 7,893
Reclamation payments (Note 15) (17,061) (9,823)
Pension payments (2,618) (690)
Changes in long-term inventory (7,162) (71,916)
Changes in non-cash working capital items (Note 32) 220,880 (20,032)
Cash provided by operating activities related to continuing operations 1,300,848 827,244
Cash provided by operating activities related to discontinued operations 218,009 189,368
1,518,857 1,016,612
Investing activities
Investment in mineral properties, plant and equipment (807,307) (857,138)
Acquisition of Caserones, net of cash acquired — (648,569)
Purchase of marketable securities (Note 8) (41,686) —
Cash received from disposal of subsidiary (Note 24) — 5,718
Payment of Chapada derivative liability (Note 26) (25,000) (25,000)
Interest received 16,135 10,328
Other 2,489 (4,151)
Cash used in investing activities related to continuing operations (855,369) (1,518,812)
Cash used in investing activities related to discontinued operations (151,537) (155,722)
(1,006,906) (1,674,534)
Financing activities
Proceeds from debt (Note 13) 1,500,551 2,490,597
Principal repayments of debt (Note 13) (944,330) (1,449,488)
Principal payments of lease liabilities (66,529) (46,400)
Interest paid (119,234) (57,140)
Payment of Caserones deferred consideration (Note 26) (10,000) —
Exercise of Caserones purchase option (Note 9) (350,000) —
Dividends paid to shareholders (202,497) (206,540)
Shares purchased (Note 17) (24,374) —
Proceeds from common shares issued 21,023 11,376
Distributions paid to non-controlling interests (152,000) (55,100)
Net proceeds from settlement of foreign currency and commodity derivatives (520) 24,062
Other (1,864) 543
Cash (used in) provided by financing activities related to continuing operations (349,774) 711,910
Cash provided by financing activities related to discontinued operations 5,547 16,676
(344,227) 728,586
Effect of foreign exchange on cash balances (4,238) 6,742
Increase in cash and cash equivalents during the year 163,486 77,406
Cash and cash equivalents, beginning of year 268,793 191,387
Less: Cash and cash equivalents included in assets held for sale, end of year (Note 3) (74,801) —
Cash and cash equivalents, end of year $ 357,478 $ 268,793
Supplemental cash flow information (Note 32)
The accompanying notes are an integral part of these consolidated financial statements.
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1. NATURE OF OPERATIONS
Lundin Mining Corporation ("Lundin Mining" or the "Company") is a diversified Canadian base metals mining company
primarily producing copper, zinc, nickel and gold. The Company owns 80% of the Candelaria and Ojos del Salado
mining complex ("Candelaria") located in Chile. 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 of the Caserones copper-molybdenum mine (“Caserones”) in Chile from
51% to 70%. The Company’s wholly-owned operating assets include the Chapada mine located in Brazil, the Eagle mine
located in the United States of America (“USA”), the Neves-Corvo mine located in Portugal, and the Zinkgruvan mine
located in Sweden. In addition, the Company owns the large scale copper-gold Josemaria project ("Josemaria Project"),
located in Argentina.
In December 2024, the Company announced that it had entered into a definitive agreement to sell its 100% interest in
Somincor-Sociedade Mineira de Neves-Corvo, S.A. ("Neves-Corvo Mine") and its 100% interests in each of Zinkgruvan
Mining AB and North Atlantic Natural Resources AB (together "Zinkgruvan Mine") to Boliden AB ("Boliden"). As a
result, the Company determined that the Neves-Corvo and Zinkgruvan reporting segments met the criteria to be
considered assets held for sale. The assets of the Neves-Corvo Mine and the Zinkgruvan Mine have been classified as
current assets held for sale, the liabilities of the Neves-Corvo Mine and the Zinkgruvan Mine have been classified as
current liabilities associated with assets held for sale, and re-presented the operating results of these segments as a
single line item of earnings (loss) from discontinued operations on the consolidated statement of (loss) earnings (Note
3).
The Company’s common shares are listed on the Toronto Stock Exchange (“TSX”) in Canada and the Nasdaq Stockholm
Exchange in Sweden. The Company is incorporated under the Canada Business Corporations Act. The Company is
domiciled in Canada and its principal place of business is 1055 Dunsmuir Street, Suite 2800, Vancouver, British
Columbia, Canada.
2. BASIS OF PRESENTATION AND SUMMARY OF MATERIAL ACCOUNTING POLICIES
(i) Basis of presentation and measurement
The consolidated financial statements have been 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.
The consolidated financial statements have been prepared on a historical cost basis except for certain financial
instruments which have been measured at fair value.
The Company's presentation currency is United States (“US”) dollars. Reference herein of $ or USD is to US
dollars, C$ or CAD is to Canadian dollars, SEK is to Swedish krona, € refers to the Euro, CLP refers to the Chilean
peso, BRL refers to the Brazilian real, and ARS refers to the Argentine peso.
These consolidated financial statements were approved by the Board of Directors of the Company for issue on
February 19, 2025.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 80 =====
(ii) Material accounting policies
The Company has consistently applied the accounting policies to all the years presented. The material accounting
policies applied in these consolidated financial statements are set out below.
(a) Basis of consolidation
The financial statements consist of the consolidation of the financial statements of the Company and its
subsidiaries.
Subsidiaries are entities over which the Company has control, including the power to govern the financial
and operating policies in order to obtain benefits from their activities. The existence and effect of potential
voting rights that are currently exercisable or convertible are considered when assessing whether the
Company controls another entity. Subsidiaries are fully consolidated from the date on which control is
obtained by the Company and are de-consolidated from the date that control ceases.
Where necessary, adjustments are made to the results of the subsidiaries and associates to bring their
accounting policies in line with those used by the Company. Intra-group transactions, balances, income and
expenses are eliminated on consolidation.
For non wholly-owned subsidiaries, the net assets attributable to outside equity shareholders are presented
as non-controlling interests in the equity section of the consolidated balance sheet. Net earnings for the
period that are attributable to non-controlling interests are calculated based on the ownership of the
minority shareholders in the subsidiary.
(b) Translation of foreign currencies
The functional currency of each entity within the Company is the currency of the primary economic
environment in which it operates. The Company’s presentation currency is US dollars.
Transactions denominated in currencies other than the functional currency are recorded using the exchange
rates prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated
in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items
that are measured at historical cost in a foreign currency are translated using the exchange rate at the date
of the transaction. Non-monetary items measured at fair value in a foreign currency are translated at the
rates prevailing on the date when the fair value was determined. Foreign currency translation differences on
deferred foreign tax liabilities and assets are reported in deferred tax expense/recovery in the consolidated
statement of (loss) earnings.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary
items, are recognized in the consolidated statement of (loss) earnings in the period in which they arise.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in
the consolidated statement of (loss) earnings.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of the
Company’s foreign operations are translated into US dollars, which is the presentation currency of the
group, at the rate of exchange prevailing at the end of the reporting period. Income and expenses are
translated at the average exchange rates for the period where these approximate the rates on the dates of
transactions.
On disposal of a foreign operation, the historical, cumulative amount of exchange differences recognized as
a separate component of equity is reclassified and recognized in the consolidated statement of (loss)
earnings.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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(c) Cash and cash equivalents
Cash and cash equivalents comprise cash on deposit with banks and highly liquid short-term interest-
bearing investments with a term to maturity at the date of purchase of 90 days or less which are subject to
an insignificant risk of change in value.
(d) Restricted funds
Restricted funds include reclamation funds and cash on deposit that have been pledged for reclamation and
closure activities which are not available for immediate disbursement.
(e) Inventories
Ore and concentrate stockpiles and cathode inventory are valued at the lower of production cost and net
realizable value (“NRV”). Production costs include costs of materials and labour related directly to mining
and processing activities, including production phase stripping costs, depreciation and amortization of
mineral property, plant and equipment directly involved in the related mining and production process,
amortization of any stripping costs previously capitalized and directly attributable overhead costs.
Dump leach pad inventory represents ore that has been mined and placed on leach pads where a solution is
applied to the surface of the heap to dissolve the copper and by-products. The resulting solution is further
processed in a plant to recover the copper. The cost of dump leach inventory is derived from current mining
and leaching costs and is removed at the weighted average cost per recoverable pound ("lb") of copper on
the leach pads as lbs of copper are recovered. Estimates of recoverable copper on the dump leach are
calculated based on the quantities of ore placed on the leach pads (measured in tonnes added to the leach
pads), the grade of ore placed on the leach pads (based on assay data), and an estimated recovery
percentage (based on estimated recovery assumptions from the block model). The nature of the leaching
process inherently limits the ability to precisely monitor inventory levels. As a result, estimates are refined
based on actual results and engineering studies over time. The final recovery of copper from the dump leach
will not be known until the leaching process is concluded at the end of the mine life. Ore on the dump leach
that is not expected to be recovered within the next twelve months is classified as non-current.
Materials and supplies inventories are valued at the lower of average cost less allowances for obsolescence
and NRV.
If the carrying value of inventories exceeds NRV, a write-down is recognized. The write-down may be
reversed in a subsequent period if the circumstances which caused the write-down no longer exist.
(f) Mineral properties
Mineral properties are carried at cost, less accumulated depletion and any accumulated impairment
charges. Expenditures on mineral properties include:
i. Acquisition costs which consist of payments for property rights and leases, including the
estimated fair value of exploration properties acquired as part of a business combination or the
acquisition of a group of assets.
ii. Exploration, evaluation and project investigation costs incurred on an area of interest once a
determination has been made that a property has economically recoverable Mineral Resources
and Mineral Reserves (“R&R”) and there is a reasonable expectation that costs can be
recovered by future exploitation or sale of the property. Exploration, evaluation and project
investigation expenditures made prior to a determination that a property has economically
recoverable R&R are expensed as incurred.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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iii. Deferred stripping costs which represent the costs incurred to remove overburden and other
waste materials to access ore in an open pit mine. Stripping costs incurred prior to the
production phase of the mine are capitalized and included as part of the carrying value of the
mineral property. During the production phase, stripping costs which provide probable future
economic benefits, identifiable improved access to the ore body and which can be measured
reliably are capitalized to mineral properties. Capitalized stripping costs are amortized using a
unit-of-production basis over the Proven and Probable Mineral Reserve to which they relate.
iv. Development costs incurred in an area of interest, once management has determined the
technical feasibility and commercial viability of a project, the project presents an appropriate
rate of return on investment, and the Board of Directors has demonstrated commitment to
advance the project. When additional development expenditures are made on a property after
commencement of production, the expenditure is capitalized as mineral property when it is
probable that additional economic benefit will be derived from future operations. Development
costs are amortized using a unit-of-production basis over the Proven and Probable Mineral
Reserve to which they relate.
v. Interest and financing costs on debt or other liabilities that are directly attributed to the
acquisition, construction and development of a qualifying asset. All other borrowing costs are
expensed as incurred.
vi. Easement costs incurred to support access to the Company's operating sites and the Josemaria
Project.
(g) Plant and equipment
Plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment
charges. For production plant and equipment, depreciation is recorded on a units-of-production basis.
Depreciation on all other plant and equipment is recorded on a straight-line basis over the estimated useful
life of the asset or over the estimated remaining life of the mine, if shorter. Residual values and useful lives
are reviewed annually. Gains and losses on disposals are calculated as proceeds received less the carrying
amount and are recognized in the consolidated statement of (loss) earnings.
Useful lives are as follows:
Number of years
Buildings 8-20
Plant and machinery 3-20
Equipment 3-8
(h) Intangible assets
Separately acquired intangible assets are initially measured at cost which comprises of its purchase price
and any directly attributable costs of preparing the asset for its intended use. The Company depreciates
intangible assets with finite useful lives on a straight-line basis over the estimated useful life of the asset.
For intangibles with an indefinite useful life, no amortization is calculated.
(i) Impairment and impairment reversals
At the end of each reporting period, the Company assesses whether there is an indication that an asset or
group of assets within a cash generating unit (“CGU”) may be impaired. When impairment indicators exist,
the Company estimates the recoverable amount of the asset or CGU and compares it against the asset or
CGU’s carrying amount. The recoverable amount is the higher of the fair value less cost of disposal
(“FVLCD”) and the asset or CGU’s value in use (“VIU”). If the carrying value exceeds the recoverable amount,
an impairment loss is recorded in the consolidated statement of (loss) earnings during the period. If either
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 83 =====
FVLCD or VIU exceeds the asset or CGU’s carrying amount, the asset or CGU is not impaired, and the
Company does not estimate the other amount.
In assessing VIU, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to
the CGU for which the estimates of future cash flows have not been adjusted. The cash flows are based on
best estimates of expected future cash flows from the continued use of the asset or the CGU and its
eventual disposal.
FVLCD is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants, which is best evidenced if obtained from an active market or
binding sale agreement. Where neither exists, the fair value is based partly on a discounted cash flow
projections model. Costs of disposal, other than those that have been recognized as liabilities, are deducted
in measuring FVLCD.
Reversals of impairment are assessed at each reporting period where there is an indication that an
impairment loss recognized previously may no longer exist or has decreased. If an impairment reversal
indicator exists, the recoverable amount is calculated. If the recoverable amount exceeds the carrying
amount, the carrying value of the CGU is increased to the recoverable amount net of depreciation. The
increased carrying amount cannot exceed the carrying amount that would have been determined had no
impairment loss been recognized for the CGU in prior years. A reversal of an impairment loss is recognized
as a gain in the consolidated statement of (loss) earnings in the period it is determined.
(j) Business combinations and goodwill
Acquisitions of businesses are accounted for using the purchase method of accounting whereby all
identifiable assets and liabilities are recorded at their fair values as at the date of acquisition. Any excess
purchase price over the aggregate fair value of net assets is recorded as goodwill. Goodwill is identified and
allocated to CGUs, or groups of CGUs, that are expected to benefit from the synergies of the acquisition.
Goodwill is not amortized. Any excess of the aggregate fair value of net assets over the purchase price is
recognized in the consolidated statement of (loss) earnings.
A CGU to which goodwill has been allocated is tested for impairment at least annually or when events or
changes in circumstances indicate that the related carrying amount may not be recoverable. For goodwill
arising on an acquisition in a financial year, the CGU to which the goodwill has been allocated is tested for
impairment before the end of that financial year.
When the recoverable amount of the CGU is less than the carrying amount of that CGU, the impairment loss
is allocated to reduce the carrying amount of any goodwill allocated to that CGU first, and then to the other
assets of that CGU on a pro-rata basis of the carrying amount of each asset in the CGU. Any impairment loss
for goodwill is recognized directly in the consolidated statement of (loss) earnings. An impairment loss for
goodwill is not reversed in subsequent periods.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain
or loss on disposal.
(k) Leases
At inception of a contract, the Company assesses whether the contract is, or contains a lease. A contract is,
or contains a lease, if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that
have a lease term of 12 months or less, and leases of low-value assets. For these leases, the Company
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 84 =====
recognizes the lease payments as an expense in the consolidated statement of (loss) earnings on a straight-
line basis over the term of the lease.
The Company recognizes a lease liability and a right-of-use asset at the lease commencement date.
The lease liability is initially measured as the present value of future lease payments discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, each operation’s applicable
incremental borrowing rate. The incremental borrowing rate is the rate which the operation would have to
pay to borrow, over a similar term and with a similar security, the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment.
Lease payments included in the measurement of the lease liability comprise the following:
- fixed payments, including in-substance fixed payments, less any lease incentives receivable;
- variable lease payments that depend on an index or a rate, initially measured using the index or
rate as at the commencement date;
- amounts expected to be payable by the Company under residual value guarantees;
- the exercise price of a purchase option if the Company is reasonably certain to exercise that option;
and
- payments of penalties for terminating the lease, if the Company expects to exercise an option to
terminate the lease.
The lease liability is subsequently measured by:
- increasing the carrying amount to reflect interest on the lease liability;
- reducing the carrying amount to reflect lease payments made; and
- remeasuring the carrying amount to reflect any reassessment or lease modifications.
Variable lease payments that do not depend on an index or rate are not included in the measurement of the
lease liability.
The lease liability is remeasured when there is a change in future lease payments arising from a change in an
index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a
residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option.
Each lease payment is allocated between the lease liability and finance cost. The finance cost is recorded as
an expense in the consolidated statement of (loss) earnings over the lease period to produce a constant
periodic rate of interest on the remaining balance of the liability for each period.
The right-of-use asset is initially measured at cost, which comprises the following:
- the amount of the initial measurement of the lease liability;
- any lease payments made at or before the commencement date, less any lease incentives received;
- any initial direct costs incurred by the Company; and
- an estimate of costs to be incurred by the Company in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease, unless those costs are incurred to produce
inventories.
The right-of-use asset is subsequently measured at cost, less any accumulated depreciation and any
accumulated impairment losses, and adjusted for any remeasurement of the lease liability. It is depreciated
in accordance with the Company’s accounting policy for plant and equipment, from the commencement
date to the earlier of the end of its useful life or the end of the lease term.
On the consolidated balance sheet, right-of-use assets and lease liabilities are reported in mineral
properties, plant and equipment and debt and lease liabilities, respectively.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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(l) Non-current assets held for sale and discontinued operations
Assets and businesses are classified as held for sale if their carrying amount will be recovered or settled
principally through a sale transaction rather than through continuing use. The asset or business must be
available for immediate sale and the sale must be highly probable within one year.
Assets and businesses classified as held for sale are measured at the lower of carrying amount and fair value
less costs to sell ("FVLCS"). Immediately prior to reclassification to assets held for sale, the Company is
required to assess for impairment of assets of CGU's under its normal impairment policies. If the carrying
value related to a specific asset or business classified as held for sale exceeds its FVLCS an impairment loss is
recognized in the consolidated statement of (loss) earnings. No depreciation is charged on assets and
businesses classified as held for sale. Assets and liabilities classified as held for sale are presented separately
as current items in the consolidated balance sheet.
A discontinued operation is a component of the Company’s business that represents a separate major line
of business or geographical area of operations that has been disposed of, has been abandoned, or meets
the criteria to be classified as held for sale. Discontinued operations are excluded from the results of
continuing operations and are presented as a single amount as profit or loss after tax from discontinued
operations in the consolidated statement of (loss) earnings.
(m) Reclamation and other closure provisions
The Company incurs reclamation and other closure costs related to its mining properties such as facility
decommissioning and dismantling, end of mine life severance, site restoration and ongoing environmental
monitoring. These costs are a normal consequence of mining and are dependent on the requirements of the
Company’s legal and constructive obligations, as well as any other commitments made to stakeholders. The
majority of these expenditures will be incurred at the end of the life of mine and are dependent upon a
number of factors such as the life and nature of the asset, the operating license conditions and the
environment in which the mine operates.
The future obligations for mine closure activities are estimated by the Company using mine closure plans or
other similar studies which outline the activities to be undertaken to meet regulatory and internal
requirements. Since the obligations are dependent on the laws and regulations of the countries in which the
mines operate, they are regularly evaluated by management and external experts. Costs included in the
obligations encompass all reclamation and other closure activities expected to occur progressively over the
life of the operation at the time of closure and post-closure in connection with disturbances as at the
reporting date.
Obligations may change as a result of amendments in laws and regulations relating to environmental
protection and/or other legislation affecting resource companies. Included in the estimated obligations are
a number of significant assumptions made by management in determining closure provisions. Accordingly,
closure provisions are more uncertain the further into the future mine closure activities are expected to be
carried out.
The Company records the present value of its reclamation and other closure provisions as a liability with a
corresponding increase in the carrying value of the related asset. The provision is discounted to its net
present value using a country specific, current market, pre-tax discount rate. The unwinding of the discount,
referred to as an accretion expense, is included in finance costs in the consolidated statement of (loss)
earnings and results in an increase in the carrying amount of the liability. Reclamation obligations settled in
the year are offset against the corresponding liability. Unplanned reclamation costs are reported as either
part of the cost of inventory or recognized as a cost in the consolidated statement of (loss) earnings, if they
relate to either production activities or a closed site.
The capitalized cost of the reclamation and other closure activities is recognized in the mineral property and
plant & equipment and depreciated on a unit-of-production basis over the expected mine life of the
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 86 =====
operation or asset to which it relates. Depreciation costs are included in the consolidated statement of (loss)
earnings as part of cost of goods sold.
Changes in obligations resulting from revisions to the timing or amount of expenditures, discount rate or
foreign exchange rate are recognized as an increase or decrease in the reclamation and other closure
provision liability, and a corresponding change in the carrying amount of the related assets.
(n) Revenue recognition
Revenue from contracts with customers is recognized when a customer obtains control of the promised
asset and the Company satisfies its performance obligation. Revenue is allocated to each performance
obligation. The Company considers the terms of the contract in determining the transaction price. The
transaction price is based upon the amount the entity expects to be entitled to in exchange for the
transferring of promised goods. The Company earns revenue from contracts with customers related to its
concentrate and copper cathode sales, and its copper, gold and silver streaming arrangements.
The Company satisfies its performance obligations for its concentrate and copper cathode sales per
specified contract terms which are generally upon shipment or delivery of an individual parcel. Revenue
from concentrate and copper cathode sales is recorded based upon forward market prices of the expected
final sales price date. The Company typically recognizes revenue when concentrate or copper cathodes have
been placed on board a vessel for shipment or delivered to a location specified by the customer.
Deferred revenue arises from up-front payments received by the Company or obligations acquired in
consideration for future commitments as specified in its various streaming arrangements. The accounting
for streaming arrangements is dependent on the facts and terms of each of the arrangements. Revenue
from streaming arrangements is recognized when the customer obtains control of the copper, gold and/or
silver metal and the Company has satisfied its performance obligations.
The Company identified significant financing components related to its streaming arrangements resulting
from a difference in the timing of the up-front consideration received and delivery of the promised goods.
Interest expense on deferred revenue is recognized in finance costs, or in mineral properties, plant and
equipment if directly attributable to the acquisition, construction and development of a qualifying asset.
The interest rate is determined based on the rate implicit in each streaming agreement at the date of
inception or acquisition.
The initial consideration received from the streaming arrangements is considered variable, subject to
changes in the total copper, gold and silver volumes to be delivered. Changes to variable consideration are
reflected in revenue in the consolidated statement of (loss) earnings.
(o) Share-based compensation
The Company grants share-based awards in the form of share options and share units to certain employees
in exchange for the provision of services. The share options and share units are equity-settled awards. The
Company determines the fair value of the awards on the date of grant. This fair value is charged to the
consolidated statement of (loss) earnings using a graded vesting attribution method over the vesting period
of the awards, with a corresponding credit to contributed surplus. When the share options or share units
are exercised, the applicable amounts of contributed surplus are transferred to share capital. At the end of
the reporting period, the Company updates its estimate of the number of awards that are expected to vest
and adjusts the total expense to be recognized over the vesting period. The Company also grants share-
based awards to non-employee Directors in the form of deferred share units (“DSUs”) in exchange for the
provision of services. DSUs are liability awards settled in cash and measured at the quoted market price at
the grant date. The corresponding liability is adjusted for changes in fair value at each subsequent reporting
date until the awards are settled. The fair value of the DSUs are expensed at the grant date and subsequent
changes to fair value are charged to the consolidated statement of (loss) earnings.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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(p) Current and deferred income taxes
Income tax expense represents the sum of current and deferred tax. Current taxes payable is based on
taxable earnings for the year. Taxable earnings may differ from earnings before income tax as reported in
the consolidated statement of (loss) earnings because it may exclude items of income or expense that are
taxable or deductible in other years and it may further exclude items of income or expense that are never
taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted at the balance sheet date.
Income tax assets and liabilities are offset when there is a legally enforceable right to offset the assets and
liabilities and when they relate to income taxes levied by the same tax authority on either the same taxable
entity or different taxable entities where there is an intention to settle the balance on a net basis.
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable earnings. Deferred
tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are
recognized to the extent that it is probable that future taxable profits will be available against which
deductible temporary differences or tax loss carryforwards can be utilized. Such assets and liabilities are not
recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects neither the taxable earnings
nor the accounting earnings. Deferred tax liabilities are recognized for taxable temporary differences arising
on investments in subsidiaries and investments in associates, except where the Company is able to control
the reversal of the temporary differences and it is probable that the temporary differences will not reverse
in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date
and reduced to the extent that it is no longer probable that sufficient taxable earnings will be available to
allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is
settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date. Deferred tax is charged or credited to earnings, except when it relates to
items charged or credited directly to equity, in which case the deferred tax is reflected in equity.
(q) Earnings per share
Basic earnings per share is calculated using the weighted average number of common shares outstanding
during each reporting period. Diluted earnings per share is calculated assuming the proceeds from the
exercise of “in-the-money” share-based arrangements are used to purchase common shares at the average
market price during the period.
(r) Accounting for debt and equity investments
As part of the capital funding process for ongoing activities at the Josemaria Project, the Company purchases
debt and equity instruments via a third-party investment broker. The instruments are held for a pre-
determined period and then sold. The Company only purchases equity instruments with high trading
volumes and low volatilities. The instruments are designated as held-for-trading, and as such all changes in
the fair value of the underlying instruments are recognized through the consolidated statement of (loss)
earnings.
Upon receipt of the transferred equity instruments, or in the case of bonds the sale, by the local investment
broker, the Company realizes an immediate foreign exchange impact. This foreign exchange impact is
incurred directly as a result of holding debt and equity instruments with the intention of trading, and as such
the foreign exchange impact is also recognized through the consolidated statement of (loss) earnings in
Other income.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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(s) Financial instruments
Financial instruments are recognized on the consolidated balance sheet on the trade date, the date on
which the Company becomes a party to the contractual provisions of the financial instrument. The Company
classifies its financial instruments in the following categories:
Financial Assets at Amortized Cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortized cost. The Company intends to hold these
receivables until cash flows are collected. Receivables are recognized initially at fair value, net of any
transaction costs incurred and subsequently measured at amortized cost using the effective interest
method. The Company recognizes a loss allowance for expected credit losses on a financial asset that is
measured at amortized cost.
Financial Assets at Fair Value through Profit or Loss (“FVTPL”)
Financial assets measured at FVTPL are assets which do not qualify as financial assets at amortized cost or
those not designated in hedge relationships.
Provisionally priced trade receivables are measured at FVTPL as some or all of the cash flows are dependent
on commodity prices. These receivables are initially measured at their transaction price. Subsequent
changes to provisionally priced trade receivables are recorded in the consolidated statement of (loss)
earnings as revenue from other sources.
Marketable securities, equity investments, and derivative assets not designated in hedge relationships are
classified as FVTPL. These financial assets are initially recognized at their fair value with changes to fair
values recognized in the consolidated statement of (loss) earnings.
Financial Liabilities at Amortized Cost
Financial liabilities are measured at amortized cost using the effective interest method, unless they are
required to be measured at FVTPL, or the Company has opted to measure them at FVTPL. Long-term debt is
recognized initially at fair value, net of any transaction costs incurred, and subsequently at amortized cost
using the effective interest method.
Financial Liabilities at FVTPL
Financial liabilities at FVTPL are liabilities which include embedded derivatives and cannot be classified as
amortized cost or derivative liabilities not designated in hedge relationships. Financial liabilities at FVTPL are
initially recognized at fair value with changes to fair values recognized in the consolidated statement of
(loss) earnings.
The Company derecognizes financial assets only when the contractual rights to cash flows from the financial
assets expire, or when it transfers the financial assets and substantially all of the associated risks and
rewards of ownership. Gains and losses on derecognition are generally recognized in the consolidated
statement of (loss) earnings.
The Company derecognizes financial liabilities only when its obligations under the financial liabilities are
discharged, cancelled or expelled. The difference between the carrying amount of the financial liability
derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities
assumed, is recognized in the consolidated statement of (loss) earnings.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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The Company may enter into derivative instruments to mitigate exposures to commodity price and currency
exchange rate fluctuations, among other exposures. Unless the derivative instruments qualify for hedge
accounting, and management undertakes appropriate steps to designate them as such, they are classified as
financial assets or liabilities at FVTPL and recorded at their fair value with realized and unrealized gains or
losses arising from changes in the fair value recorded in the consolidated statement of (loss) earnings in the
period they occur. Fair values for derivative instruments are determined using valuation techniques. The
valuations use assumptions based on prevailing market conditions on the reporting date.
(iii) New standards and interpretations adopted January 1, 2024
Amendments to IAS 1 - Classification of Liabilities as Current or Non-Current
In January 2020, the International Accounting Standards Board ("IASB") issued Classification of Liabilities as
Current or Non-Current (Amendments to IAS 1) providing a more general approach to the classification of
liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. Under pre-existing
requirements, a liability was current if an entity expected to settle it in the normal operating cycle or
unconditional right to defer settlement of the liability for at least twelve months after the reporting period did
not exist. With the introduction of the two amendments to IAS 1 in 2024, for a liability to be classified as non-
current, a company must have the right to defer settlement of the liability for at least twelve months after the
reporting period. The right must have substance and exist at the end of the reporting period, and the
classification of the liability must be unaffected by the likelihood that the company will exercise that right. The
amendments apply retrospectively for annual reporting periods beginning on or after 1 January 2024, with early
application permitted and have been applied with no material impact on the Company in the current reporting
period.
Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules
In May 2023, the IASB issued amendments to IAS 12 – Income Taxes. The amendments provide an exception to
the requirements regarding the recognition of deferred tax assets and liabilities related to the Pillar Two global
minimum tax rules and were effective immediately. The Company has applied the exception to recognizing and
disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.
Additionally, the amendments to IAS 12 require disclosure of the Company's current tax expense or income
related to Pillar Two income taxes and disclosure of known or reasonably estimable information regarding the
Company's exposure to Pillar Two income taxes. Among the jurisdictions where the Company operates, Pillar Two
legislation is enacted in Sweden, the Netherlands, Portugal and Canada. On October 3, 2024, Brazil issued a
Provisional Measure introducing Qualified Domestic Minimum Top-Up Tax to be effective from 2025 onwards.
The Company has performed an analysis of the country-by-country reporting (CbCR) safe harbour test, and
concluded that no top-up tax was required in 2024.
(iv) New standards and interpretations not yet adopted
IFRS 18 - Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18 - Presentation and Disclosure in Financial Statements, which replaces IAS 1 -
Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by
requiring income and expenses to be presented into three defined categories (operating, investing, and
financing) and by specifying certain defined totals and subtotals. Where company-specific measures related to
the income statement are provided ("management-defined performance measures"), IFRS 18 requires disclosure
of the explanations around those measures. IFRS 18 also provides additional guidance on principles of
aggregation and disaggregation which apply to the primary financial statements and notes. IFRS 18 will not
impact the recognition and measurement of items in the financial statements, nor will it impact which items are
classified in other comprehensive income and how these items are classified. The standard is effective for
reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective
application is required and early application is permitted. The Company is currently assessing the effect of this
new standard on its financial statements.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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IFRS 9 - Financial Instruments and IFRS 7 – Financial Instruments: Disclosures
In May 2024, the IASB issued amendments to the classification and measurement of financial instruments. These
amendments updated classification and measurement requirements in IFRS 9 Financial Instruments and related
disclosure requirements in IFRS 7 Financial Instruments: disclosures. The IASB clarified the recognition and
derecognition date of certain financial assets and liabilities, and amended the requirements related to settling
financial liabilities using an electronic payment system. Moreover, the amendments clarify the assessment of the
contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of
principal and interest (SPPI) criterion, including financial assets that have environmental, social and corporate
governance (ESG)-linked features and other similar contingent features. The IASB added disclosure requirements
for financial instruments with contingent features that do not relate directly to basic lending risks and costs, and
amended disclosures relating to equity instruments designated at fair value through other comprehensive
income.
Additionally in December 2024, the IASB published amendments to IFRS 9 and IFRS 7 - Contracts Referencing
Nature dependent Electricity. The amendments clarify the application of the ‘own-use’ requirements for in-scope
contracts, amend the designation requirements for a hedged item in a cash flow hedging relationship for in-scope
contracts, and add new disclosure requirements.
These amendments apply retrospectively for annual reporting periods beginning on or after 1 January 2026, with
early application permitted. The Company is currently evaluating the impact of these amendments on its
consolidated financial statements.
(v) Estimation uncertainty and judgements in applying the entity’s accounting policies
The preparation of consolidated financial statements in accordance with IFRS Accounting Standards requires the
use of certain critical accounting estimates and judgements. These estimates and judgements are based on
management’s best knowledge of the relevant facts and circumstances taking into account previous experience,
but actual results may differ materially from the amounts included in the financial statements.
Areas where estimation uncertainty have the most significant effect on the amounts recognized in the
consolidated financial statements include:
Depreciation, depletion and amortization of mineral properties, plant and equipment - Mineral properties,
plant and equipment comprise a large component of the Company’s assets and as such, the depreciation,
depletion and amortization of these assets have a significant effect on the Company’s financial statements. Upon
commencement of commercial production, the Company depletes mineral property over the life of the mine
based on the depletion of the mine’s Proven and Probable Mineral Reserves. In the case of mining equipment or
other assets, if the useful life of the asset is shorter than the life of the mine, the asset is amortized over its
expected useful life.
Proven and Probable Mineral Reserves are determined based on a professional evaluation using accepted
international standards for the estimation of Mineral Reserves. The assessment involves geological and
geophysical studies, economic data and the reliance on a number of assumptions. The estimates of the Mineral
Reserves may change based on additional knowledge gained subsequent to the initial assessment. This may
include additional data available from continuing exploration, results from the reconciliation of actual mining
production data against the original Mineral Reserve estimates, or the impact of economic factors such as
changes in the price of commodities or the cost of components of production.
A change in the original estimate of Mineral Reserves would result in a change in the rate of depreciation,
depletion and amortization of the related mineral assets. The effect of a change in the estimates of Mineral
Reserves would have a relatively greater effect on the amortization of the current mining operations at Eagle
because of the relatively short mine life of this operation. A short mine life results in a higher rate of amortization
and depreciation, and mineral assets may exist at these sites that have a useful life in excess of the revised life of
the related mine.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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Valuation of long-term inventory - The Company carries its long-term inventory at the lower of production cost
and NRV. If the carrying value exceeds the net realizable amount, a write-down is required. The write-down may
be reversed in a subsequent period if the circumstances which caused it no longer exist.
The Company reviews NRV at least annually. In particular, for the NRV of long-term inventory, the Company
makes significant estimates in its use of a discounted NRV model related to future production plans, forecasted
commodity prices, foreign exchange rates, R&R quantities, future capital and production costs to complete,
estimates of recoverable copper in leach pads, and the discount rate. These estimates are subject to various risks
and uncertainties and may have an effect on the NRV estimate and the carrying value of the long-term inventory.
Valuation of mineral properties - The Company carries its mineral properties at cost less accumulated depletion
and any accumulated provision for impairment. The Company expenses exploration costs which are related to
specific projects until technical feasibility and commercial viability of extracting a mineral resource are
demonstrable. The costs of each property and related capitalized development expenditures are depleted over
the economic life of the property on a unit-of-production basis. Costs are charged to the consolidated statement
of (loss) earnings when a property is abandoned or when there is a recognized impairment in value.
The Company undertakes a review of the carrying values of mineral properties and related expenditures
whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net
recoverable amounts determined by reference to estimated future operating results and discounted net cash
flows. An impairment loss is recognized when the carrying value of those assets is not recoverable. Where a
previous impairment has been recorded, the Company analyzes any reverse impairment indicators. Impairment
reversals are recognized in subsequent periods when there has been a change in the estimates used to determine
the asset’s recoverable amount since the last impairment loss was recognized. In undertaking this review,
management of the Company is required to make significant estimates of, amongst other things, future
production and sale volumes, metal prices, foreign exchange rates, R&R quantities, future capital and production
costs and reclamation costs to the end of the mine’s life. These estimates are subject to various risks and
uncertainties which may ultimately have an effect on the expected recoverability of the carrying values of the
mineral properties and related expenditures.
Goodwill - The amount by which the purchase price of a business acquisition exceeds the fair value of identifiable
assets and liabilities acquired is recorded as goodwill. Goodwill is allocated to the CGUs acquired based on the
assessment of which CGU would be expected to benefit from the synergies of the acquisition. Estimates of
recoverable value may be impacted by changes in future metal prices, foreign exchange rates, production based
on estimated quantities of R&R, production and capital expenditures, pricing of in-situ mineral resources implied
by the market value of selected comparable transactions involving the sale of similar companies and mineral
properties, discount rates, and other factors that may be different from those used in determining fair value.
Changes in estimates could have a material impact on the carrying value of the goodwill. Management's
estimates of production based on quantities of R&R are based on information compiled by qualified persons
(management's experts).
Reclamation and other closure provisions - The Company incurs reclamation and other closure costs related to
its mining properties. The future obligations for mine closure activities are estimated by the Company using mine
closure plans or other similar studies which outline the activities to be undertaken to meet regulatory and
internal requirements. Since the obligations are dependent on the laws and regulations of the countries in which
the mines operate, they are regularly reviewed by management and external experts, and could change as a
result of amendments to the laws and regulations. Included in the estimated obligations are a number of
significant assumptions made by management in determining closure provisions. Accordingly, closure provisions
are more uncertain the further into the future the mine closure activities are to be carried out.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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The Company’s policy for recording reclamation and other closure provisions is to establish provisions for future
mine closure costs based on the present value of the future cash flows required to satisfy the obligations. This
provision is updated as the estimate for future closure costs change. The amount of the present value of the
provision is added to the cost of the related mineral property and plant & equipment and depreciated over the
life of the mine. The provision is accreted to its future value over the life of mine through a charge to finance
costs.
Areas where accounting policy judgements have the most significant effect on the amounts recognized in the
consolidated financial statements include:
Income taxes - Deferred tax assets and liabilities are determined based on differences between the financial
statement carrying values of assets and liabilities and their respective income tax bases (“temporary differences”)
and losses carried forward.
The determination of the ability of the Company to utilize tax loss carry-forwards and deductible temporary
differences to offset deferred tax liabilities requires management to exercise judgment and make certain
assumptions about the future performance of the Company. Management is required to assess whether it is
“probable” that the Company will benefit from these prior losses and other deductible temporary differences.
Changes in economic conditions, metal prices and other factors could result in revisions to the estimates of the
benefits to be realized or the timing of utilization of the losses.
Assessment of impairment and reverse impairment indicators - Management applies significant judgement in
assessing whether indicators of impairment or reversal of impairment exist for a CGU which would necessitate
impairment testing. Internal and external factors used by management to determine whether indicators exist
include, but are not limited to, significant changes in the use of the asset, commodity prices, foreign exchange
rates, the Company's market capitalization, capital and production forecasts, R&R quantities, and discount rates.
Contingent liabilities - Contingent liabilities are possible obligations that arise from past events which will be
confirmed by the occurrence or non-occurrence of future events. These contingencies are not recognized in the
consolidated financial statements when the obligation is not probable or if the obligation cannot be measured
reliably. The Company exercises significant judgment when determining the probability of the future outcome
and with regard to any required disclosure of contingencies, and measuring the liability is a significant estimate.
Joint arrangements - The Company is party to an arrangement over which it does not have control. Judgment is
required in determining whether joint control over the arrangement exists and, if so, which parties have joint
control, and whether the arrangement is a joint venture or a joint operation. In assessing whether the Company
has joint control, management analyzes the activities of an arrangement to determine which activities most
significantly affect the returns of the arrangement over its life. If joint control over the arrangement exists, an
assessment of whether the arrangement is a joint venture or a joint operation is required. This assessment is
based on whether the Company retains rights to the assets, and obligations for the liabilities, relating to the
arrangement or the Company only has the rights to the net assets of the arrangement is more applicable. In
making this determination, management reviews the legal form of the arrangement, the terms of the contractual
arrangement, and other facts and circumstances. In a situation where the legal form and the terms of the
contractual arrangement do not give the Company rights to the assets and obligations for the liabilities, an
assessment of other facts and circumstances is required, including whether the activities of the arrangement are
primarily designed for the provision of output to the parties and whether the parties are substantially the only
source of cash flows contributing to the arrangement. Consideration of other facts and circumstances may result
in the conclusion that a joint arrangement is a joint operation. Such conclusions require judgment and are specific
to each arrangement. Other facts and circumstances, such as the right and the obligation to take a share of the
output of the arrangement have led management to conclude the arrangement formed on January 15, 2025 is a
joint operation (Note 4).
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 93 =====
3. ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS
On December 9, 2024, the Company announced that it had entered into a definitive agreement to sell its 100%
interest in the Neves-Corvo Mine and its 100% interest in the Zinkgruvan Mine to Boliden, with the transaction
expected to close in the first half of 2025 ("Definitive Agreement"). The transaction constitutes the sale of all of the
Company's European operating assets allowing the Company to focus on its copper-dominant assets in South America.
Under the terms of the agreement, the Company will receive at least $1.37 billion in upfront cash consideration, which
increases at a rate of 5% per annum from August 31, 2024 up to closing, and is payable to the Company at closing. The
Company may also receive up to $150.0 million in contingent cash consideration if certain metal price thresholds are
met. These include a percentage of incremental revenue realized at the Neves-Corvo Mine in each of the three
calendar years between 2025 and 2027 and at the Zinkgruvan Mine between 2025 and 2026. The upfront
consideration assumes a normalized level of working capital and is subject to customary working capital adjustments.
Following the date of the definitive agreement, on December 9, 2024, the Neves-Corvo Mine and Zinkgruvan Mine
reporting segments met the criteria to be classified as held-for-sale and discontinued operations. The results of these
operations have been restated for the current and comparative years to reclassify the earnings (loss) as earnings (loss)
from discontinued operations. All assets and liabilities relating to the Neves-Corvo and Zinkgruvan reporting segments
have been classified as current assets and current liabilities held for sale at December 31, 2024.
The Company is required to assess for impairment of the CGU's separately immediately prior to reclassifying the
assets held for sale. An impairment charge of $291.2 million ($270.3 million net of tax) was recorded in December
2024 relating to the Neves-Corvo reporting segment to recognize goodwill, mining rights and mineral properties at
their estimated fair value, based on the expected sales price as established by the Definitive Agreement (level 2
measurement). The impairment charge includes $90.7 million allocated to the Neves-Corvo goodwill (Note 11).
The net loss from discontinued operations from the Neves-Corvo reporting segment, which include the results of
operating activities for the years ended December 31, 2024 and 2023, are as follows:
2024 2023
Revenues $ 438,053 $ 425,042
Production costs (323,163) (326,677)
Depreciation, depletion and amortization (118,324) (121,599)
General exploration and business development (2,810) (7,122)
Finance income 2,961 231
Finance costs (7,810) (6,313)
Other (expense) income (4,829) 2,927
Goodwill and asset impairment (291,178) —
Loss before income taxes (307,100) (33,511)
Current tax recovery (expense) 829 (3,001)
Deferred tax recovery 27,667 11,691
Net loss $ (278,604) $ (24,821)
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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The net earnings from discontinued operations from the Zinkgruvan reporting segment, which include the results of
operating activities for the years ended December 31, 2024 and 2023 are as follows:
2024 2023
Revenues $ 256,748 $ 223,591
Production costs (122,064) (115,394)
Depreciation, depletion and amortization (37,020) (34,124)
General exploration and business development (10,033) (4,560)
Finance income 1,576 27
Finance costs (6,520) (5,215)
Other (expense) income (3,969) 9,818
Earnings before income taxes 78,718 74,143
Current tax expense (15,450) (9,983)
Deferred tax recovery (expense) 665 (940)
Net earnings $ 63,933 $ 63,220
As at December 31, 2024, the assets and liabilities that are included in the held for sale categories are summarized
below:
Neves-Corvo Mine Zinkgruvan Mine Total
Assets classified as held-for-sale
Cash and cash equivalents $ 23,901 $ 50,900 $ 74,801
Trade and other receivables 90,160 22,867 113,027
Income taxes receivable 823 — 823
Inventories 39,689 16,496 56,185
Restricted funds 49,590 — 49,590
Mineral properties, plant and equipment 810,587 284,551 1,095,138
Other non-current assets — 106 106
$ 1,014,750 $ 374,920 $ 1,389,670
Liabilities classified as held-for-sale
Trade and other payables $ 99,805 $ 32,357 $ 132,162
Income taxes payable — 7,796 7,796
Debt and lease liabilities 15,702 564 16,266
Deferred revenue 25,078 39,227 64,305
Reclamation and other closure provisions 89,852 44,230 134,082
Other long-term liabilities 7,740 127 7,867
Provision for pension obligations — 4,441 4,441
Deferred tax liabilities — 26,190 26,190
$ 238,177 $ 154,932 $ 393,109
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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4. ACQUISITION OF FILO AND FORMATION OF VICUÑA
On January 15, 2025, the Company, together with BHP Investments Canada Inc. ("BHP"), completed the acquisition of
Filo Corp (“Filo”) through a plan of arrangement (the “Arrangement”). The Company’s share of the consideration for
the Arrangement was $612.4 million (C$877.8 million) in cash and 94.1 million of the Company’s shares to Filo
shareholders, along with its existing 1.7% interest in Filo (prior to completion). BHP's share of the consideration for the
Arrangement was $1.4 billion (C$2.0 billion) in cash, along with its existing 7.0% interest in Filo (prior to completion).
Concurrently, the Company and BHP formed a 50/50 joint arrangement, Vicuña Corp. (the “Joint Arrangement” or
"Vicuña") holding the Filo del Sol project and the Josemaria project. BHP paid the Company a cash consideration of
$690 million for a 50% interest in the Josemaria project.
Commencing in 2025 the Company expects to account for Vicuña as a joint operation, and accordingly will include its
50% share of the respective assets, liabilities, revenue, expenses and cash flows of Vicuña in the consolidated financial
statements of the Company. The Company determined that its interest in the Josemaria project did not meet the
criteria to be classified as held for sale as at December 31, 2024.
5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents are comprised of the following:
December 31, 2024 December 31, 2023
Cash $ 197,189 $ 197,537
Short-term deposits 160,289 71,256
$ 357,478 $ 268,793
6. TRADE AND OTHER RECEIVABLES
Trade and other receivables are comprised of the following:
December 31, 2024 December 31, 2023
Trade receivables $ 347,820 $ 643,722
Value added tax 52,959 80,088
Prepaid expenses 42,621 48,901
Other receivables 67,454 56,160
$ 510,854 $ 828,871
The Company does not have any significant balances that are past due nor any significant expected credit losses. The
Company's credit risk is discussed in Note 30.
The carrying amounts of trade and other receivables are mainly denominated as follows:
Currency December 31, 2024 December 31, 2023
USD1 365,006 678,680
CLP 93,826,669 77,982,061
CAD 37,788 22,423
EUR1 8 22,924
SEK1 100,011 114,144
BRL 94,581 34,538
ARS 621,565 341,180
1 As at December 31, 2024, trade and other receivables denominated in the foreign currencies held at discontinued operations have been classified
as assets held for sale.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 96 =====
7. INVENTORIES
Inventories are comprised of the following:
December 31, 2024 December 31, 2023
Materials and supplies $ 279,446 $ 313,966
Ore stockpiles and dump leach 188,812 207,602
Finished goods - concentrate stockpiles 116,567 72,515
Finished goods - copper cathode 5,860 5,324
$ 590,685 $ 599,407
Long-term inventories are comprised of the following:
December 31, 2024 December 31, 2023
Ore stockpiles at Candelaria $ 480,885 $ 427,075
Ore stockpiles at Chapada 299,899 270,570
Dump leach at Caserones 91,101 99,952
$ 871,885 $ 797,597
As at December 31, 2024, as a result of higher market expectations for long-term copper and gold prices, the Company
recognized a partial reversal of $28.3 million of previous net realizable value write-downs of the long-term ore stockpile
at Chapada (December 31, 2023 - $nil), $ 1.7 million of the reversal is included in depreciation, depletion and
amortization (December 31, 2023 - $nil).
8. MARKETABLE SECURITIES
Pursuant to the terms of the Arrangement, in August 2024 the Company subscribed for 1,742,424 Filo shares at a price
of C$33.00 per share. As at December 31, 2024, the Company held 2,264,924 Filo shares with a fair value of the
securities held for trading purposes of $50.1 million (December 31, 2023 - $nil). Subsequent to December 31, 2024, the
Company announced the completion of the Arrangement and the formation of Vicuña (Note 4).
9. OTHER NON-CURRENT ASSETS
Other non-current assets are comprised of the following:
December 31, 2024 December 31, 2023
Marketable securities, non-current portion $ 9,955 $ 14,268
Caserones purchase option (a) — 44,438
Other 8,427 8,384
$ 18,382 $ 67,090
a) Pursuant to the terms of the purchase agreement to acquire 51% of Lumina Copper, the Company in July 2024
exercised its right to purchase an additional 19% interest in the Caserones mine for $350.0 million ("Caserones
Purchase Option"). Prior to exercise on July 2, 2024, the Caserones Purchase Option was recorded at fair value
with changes in fair value recorded in Other Income and Expense. Following the exercise, the Caserones
Purchase Option was derecognized with a corresponding reduction of $52.7 million to retained earnings.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 97 =====
10. MINERAL PROPERTIES, PLANT AND EQUIPMENT
Mineral properties, plant and equipment are comprised of the following:
Cost
Mineral
properties
Plant and
equipment
Assets under
construction1
Development
project2
Software
intangible
assets Total
As at December 31, 2022 $ 5,546,923 $ 3,752,177 $ 236,056 $ 876,419 $ 32,626 $ 10,444,201
Caserones acquisition — 1,243,432 94,110 — — 1,337,542
Additions 280,100 96,281 406,540 253,648 82 1,036,651
Disposals — (82,632) (843) — (323) (83,798)
Transfers 117,462 260,712 (409,084) — 30,910 —
Effects of foreign exchange 70,269 38,027 3,482 — 274 112,052
As at December 31, 2023 6,014,754 5,307,997 330,261 1,130,067 63,569 12,846,648
Additions 239,220 100,009 367,924 265,500 712 973,365
Impairment (Note 11) (331,231) (111,710) (1,066) — — (444,007)
Write-downs — — (4,110) (18,019) — (22,129)
Disposals — (91,513) — — — (91,513)
Transfers 68,593 285,636 (355,823) — 1,594 —
Effects of foreign exchange (134,367) (72,804) (6,299) — (527) (213,997)
Reclassification to assets
held for sale (Note 3) (1,720,451) (1,009,154) (79,266) — (7,220) (2,816,091)
As at December 31, 2024 $ 4,136,518 $ 4,408,461 $ 251,621 $ 1,377,548 $ 58,128 $ 10,232,276
Accumulated depreciation,
depletion and amortization
Mineral
properties
Plant and
equipment
Assets under
construction1
Development
project2
Software
intangible
assets Total
As at December 31, 2022 $ 2,835,431 $ 1,621,439 $ — $ — $ 11,645 $ 4,468,515
Depreciation 313,900 346,669 — — 5,270 665,839
Disposals — (74,790) — — — (74,790)
Effects of foreign exchange 44,744 17,063 — — 108 61,915
As at December 31, 2023 3,194,075 1,910,381 — — 17,023 5,121,479
Depreciation 368,178 419,642 — — 9,313 797,133
Disposals — (85,235) — — — (85,235)
Effects of foreign exchange (88,218) (36,304) — — (260) (124,782)
Reclassification to assets
held for sale (Note 3) (1,187,574) (530,038) — — (3,341) (1,720,953)
As at December 31, 2024 $ 2,286,461 $ 1,678,446 $ — $ — $ 22,735 $ 3,987,642
Net book value
Mineral
properties
Plant and
equipment
Assets under
construction1
Development
project2
Software
intangible
assets Total
As at December 31, 2023 $ 2,820,679 $ 3,397,616 $ 330,261 $ 1,130,067 $ 46,546 $ 7,725,169
As at December 31, 2024 $ 1,850,057 $ 2,730,015 $ 251,621 $ 1,377,548 $ 35,393 $ 6,244,634
¹ Represent assets under construction at the Company's operating mine sites which are currently non-depreciable.
2 Assets relate to the Josemaria Project which are currently non-depreciable.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 98 =====
The Company completed the Caserones acquisition on July 13, 2023, acquiring $1,337.5 million of plant and
equipment and assets under construction during the year ended December 31, 2023.
During the year ended December 31, 2024, the Company capitalized $37.4 million (December 31, 2023 - $20.4 million)
of finance costs to the Josemaria Project at a weighted average interest rate of 6.0% (December 31, 2023 - 6.2%).
During the year ended December 31, 2024, the Company capitalized $226.2 million (December 31, 2023 - $222.4
million) of deferred stripping costs to mineral properties. The depreciation expense related to deferred stripping for
the year was $187.0 million (December 31, 2023 - $109.0 million). Included in the mineral properties balance at
December 31, 2024 is $436.3 million (December 31, 2023 - $277.5 million) related to deferred stripping at Candelaria
and Caserones, which is currently non-depreciable.
The Company leases various assets including power line infrastructure, buildings and storage facilities, rail cars,
vehicles, machinery and equipment. The following table summarizes the changes in right-of-use assets within plant
and equipment:
Net book value
As at December 31, 2022 $ 27,923
Caserones acquisition 257,655
Additions 54,809
Depreciation (51,391)
Disposals (5,363)
Effects of foreign exchange 364
As at December 31, 2023 283,997
Additions 70,844
Depreciation (76,449)
Disposals (2,672)
Effects of foreign exchange (258)
Reclassification to assets held for sale (Note 3) (16,141)
As at December 31, 2024 $ 259,321
11. GOODWILL AND ASSET IMPAIRMENT
a) Goodwill
The Company recognized goodwill on the acquisition of Chapada, Neves-Corvo, and Ojos del Salado ( “Ojos”). Goodwill
is allocated to the following CGUs:
Chapada Neves-Corvo Ojos¹ Total
Balance at December 31, 2022 $ 134,284 $ 92,297 $ 10,713 $ 237,294
Additions — — — —
Impairment charges — — — —
Effects of foreign exchange — 3,322 — 3,322
Balance at December 31, 2023 134,284 95,619 10,713 240,616
Effects of foreign exchange — (4,942) — (4,942)
Impairment charges (Note 3) — (90,677) (10,713) (101,390)
Balance at December 31, 2024 $ 134,284 $ — $ — $ 134,284
¹ Ojos is included in the Candelaria reporting segment.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 99 =====
The Company performs an impairment assessment annually, or more frequently if there are impairment indicators, for
the carrying amount of its CGUs where goodwill is allocated.
The recoverable value of a CGU is determined using the FVLCD method applied by using a discounted cash flow model
based on life-of-mine financial plans, and a market-based approach. Significant assumptions used by management to
determine the recoverable amount include future metal prices, production based on estimated quantities of R&R,
production and capital expenditures, foreign exchange rates, pricing of in-situ mineral resources implied by the market
value of selected comparable transactions involving the sale of similar companies and mineral properties, and discount
rates.
For the 2024 assessment, future metal prices and foreign exchange rates used in the discounted cash flow models are
based on market consensus estimates observed during the fourth quarter of 2024. The valuation of recoverable
amount is most sensitive to changes in metal prices, exchange rates, discount rates and pricing of in-situ mineral
resources.
Production costs and capital expenditures included in the discounted cash flow models are based on operating plans
which consider past and estimated future performance.
Inputs utilized in the discounted cash flow models were based on level 3 fair value measurements (Note 26), which
were not based on observable market data. The R&R were based on the Company’s last published estimate dated
December 31, 2024. Incorporated in the FVLCD are fair value estimates developed by the Company for mineral
resources not captured in the cash flow projections model. These estimates are valued using third-party market
information, which includes pricing of in-situ mineral resources implied by the market value of selected comparable
transactions involving the sale of similar companies and mineral properties.
Chapada
For the Chapada CGU impairment review, the Company used a FVLCD model (level 3 measurement). For the years
ended December 31, 2024 and 2023, the Company determined that the recoverable amount of the Chapada CGU was
higher than its carrying value, and therefore no impairment was recognized. Management applied significant judgment
in estimating the recoverable amount of the Chapada CGU.
Sensitivity analysis was performed on the cash flow model for Chapada. At December 31, 2024, the discount rate
(+/-1%) did not have a material impact on the result of the Company’s goodwill impairment assessment. Changes in
key inputs such as a 5% weaker foreign exchange rate or 5% lower copper and gold prices would result in impairment.
Key assumptions for Chapada
2024 2023
Copper price $/lb 4.30 - 4.70 3.80 - 4.20
Gold price $/oz 2,150 - 2,575 1,750 - 2,000
After-tax discount rate 7.5% 7.5%
BRL/$ exchange rate 5.50 5.00
Life of mine 26 years 28 years
Ojos
In January 2025 the Company received a notice from the Superintendencia del Medio Ambiente (“SMA”), following its
investigative proceedings involving the sinkhole that occurred at the Alcaparrosa mine in 2022. The Alcaparrosa mine
is included in the Ojos CGU. The notice levies a fine of $3.3 million and orders the continued closure of the Alcaparrosa
mine, at which mining operations have been suspended since the incident occurred in 2022 (Note 27(d)). As a result,
an impairment charge of $55.9 million ($41.6 million net of tax) was recorded in December 2024 relating to the Ojos
CGU to write off goodwill and the remaining carrying values of underground development and mine infrastructure.
The impairment charge includes $10.7 million allocated to the Ojos goodwill.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 26 -
===== SIDA 100 =====
b) Other Asset Impairment
Eagle
At every reporting period, the Company assesses whether there is an indication that an asset or group of assets may
be impaired. When impairment indicators exist, the Company estimates the recoverable amount of the asset and
compares it against the asset's carrying amount.
During the fourth quarter of 2024, factors including a decline in nickel prices and prolonged rehabilitation of the Eagle
East ramp were identified as an impairment indicator for the Eagle mine.
For the Eagle mine CGU impairment review, the Company used a FVLCD model (level 3 measurement). As the
recoverable amount determined for the CGU was lower than the carrying value, an impairment of $104.9 million
($82.8 million net of tax) was recorded to reduce the carrying value of underground development, plant and other
infrastructure to its recoverable value.
Key assumptions for Eagle Mine
2024
Nickel price $/lb 8.50-9.00
Copper price $/lb 4.30-4.70
After-tax discount rate 9.0%
Life of mine 5 years
Suruca
In February 2025, the Company removed the Suruca gold deposit from Mineral Reserves as development is not
contemplated in the current life-of-mine plan. The Suruca gold deposit is included in the Chapada segment. This was
considered an indicator of impairment for the Suruca mineral property asset. An impairment of $ 93.4 million ($ 61.7
million net of tax) was recorded in earnings in December 2024 to reduce the carrying value of the mineral property
asset to nil.
12. TRADE AND OTHER PAYABLES
Trade and other payables are comprised of the following:
December 31, 2024 December 31, 2023
Trade payables $ 297,687 $ 393,829
Unbilled goods and services 175,152 176,444
Employee benefits payable 68,801 114,514
Prepayment from customers 45,027 21,963
Royalties payable 24,548 23,773
Sinkhole provision1 16,918 29,827
Automatic share purchase plan commitment (Note 17) 3,714 —
Pricing provisions on concentrate sales2 15,541 13,201
Deferred consideration, current portion3 10,000 10,000
Other 16,816 22,212
$ 674,204 $ 805,763
1 Relates to expected remediation costs and potential fines directly related to the sinkhole near the Company's Ojos del Salado
operations.
2 Includes balances owing to customers and provisions arising from forward market price adjustments.
3 Relates to the current portion of the remaining deferred cash consideration arising from the Caserones acquisition, payable in
installments over the next five years.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 101 =====
13. DEBT AND LEASE LIABILITIES
Debt and lease liabilities are comprised of the following:
December 31, 2024 December 31, 2023
Revolving credit facility (a) $ 264,659 $ 245,084
Term loan (b) 1,147,685 798,542
Candelaria and Chapada term loans (c) 245,932 48,850
Lease liabilities (d) 249,185 277,208
Commercial paper (e) 98,696 116,025
Line of credit — 99
Debt and lease liabilities 2,006,157 1,485,808
Less: current portion 395,232 212,646
Long-term portion $ 1,610,925 $ 1,273,162
The changes in debt and lease liabilities are comprised of the following:
Leases Debt Total
As at December 31, 2022 $ 27,166 $ 170,162 $ 197,328
Caserones acquisition 257,655 — 257,655
Additions 54,392 2,490,597 2,544,989
Payments (59,841) (1,451,804) (1,511,645)
Disposals (6,221) — (6,221)
Interest 12,521 — 12,521
Financing fee amortization — 846 846
Deferred financing fee — (2,950) (2,950)
Effects of foreign exchange (8,464) 1,749 (6,715)
As at December 31, 2023 277,208 1,208,600 1,485,808
Additions 69,881 1,500,551 1,570,432
Payments (93,461) (944,428) (1,037,889)
Disposals (2,028) — (2,028)
Interest 24,053 — 24,053
Financing fee amortization — 2,360 2,360
Deferred financing fee — (3,643) (3,643)
Reclassified to liabilities held for sale (Note 3) (16,266) — (16,266)
Effects of foreign exchange (10,202) (6,468) (16,670)
As at December 31, 2024 249,185 1,756,972 2,006,157
Less: current portion 50,604 344,628 395,232
Long-term portion $ 198,581 $ 1,412,344 $ 1,610,925
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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===== SIDA 102 =====
a) The Company has a revolving credit facility of $1,750.0 million. On April 26, 2024, the credit facility, which
originally matured in April 2028, was amended and extended to April 2029. The credit facility bears interest on
drawn funds at rates of Term Secured Overnight Financing Rate (“Term SOFR”) plus Credit Spread Adjustment
(“CSA”) of 0.10% plus an applicable margin of 1.45% to 2.50%, depending on the Company’s net leverage ratio.
The revolving credit facility is unsecured, save and except for a charge over certain assets in the USA, and is
subject to customary covenants. During the year ended December 31, 2024 , the Company drew down $ 340.0
million (December 31, 2023 - $1.21 billion), and repaid $ 320.0 million (December 31, 2023 - $977.0 million). As
at December 31, 2024 , a principal balance of $270.0 million (December 31, 2023 - $250.0 million) was
outstanding, with unamortized deferred financing fees of $5.3 million (December 31, 2023 - $4.9 million) netted
against borrowings.
b) In July 2023, the Company obtained a term loan of a principal amount of $800.0 million with an additional
$400.0 million accordion, maturing July 2026. On April 26, 2024, the Company amended the terms to extend
maturity to July 2027. The term 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. The
term loan is unsecured, save and except for a charge over certain assets in the USA, and has similar covenants
to the Company’s existing $1,750.0 million revolving credit facility. In August 2024 the Company exercised the
accordion option and drew down an additional $350.0 million. As at December 31, 2024, a principal balance of
$1,150.0 million (December 31, 2023 - $800.0 million) was outstanding, with unamortized deferred financing
fees of $2.3 million (December 31, 2023 - $1.5 million) netted against borrowings.
c) Compañia Contractual Minera Candelaria S.A. ("Candelaria Mine"), a subsidiary owned 80% by the Company
which owns the Candelaria mine, obtained a series of unsecured fixed term loans during the year ended
December 31, 2024 totalling $215.0 million (December 31, 2023 - $nil). Candelaria Mine repaid $115.0 million
of the outstanding loans during the year ended December 31, 2024 (December 31, 2023 - 50.0 million). As at
December 31, 2024 , there were two term loans outstanding at Candelaria Mine totalling $ 100.0 million
(December 31, 2023 - $nil). The outstanding term loan s accrue interest at rates ranging from 5.07% to 5.30%
per annum with interest payable upon maturity, for which $50 million matures in February 2025 and the
remaining $50 million matures in May 2025.
Mineração Maracá Indústria e Comércio S.A. (“Chapada”), a subsidiary of the Company which owns the
Chapada mine, obtained a series of unsecured fixed term loans during the year ended December 31, 2024
totalling $324.2 million (December 31, 2023 - $205.7 million). Chapada repaid $227.1 million of the outstanding
term loans during the year ended December 31, 2024 (December 31, 2023 - $234.3 million). As at December 31,
2024, there were 41 term loans outstanding at Chapada totalling $145.9 million (December 31, 2023 - 16 term
loans totalling $48.9 million). These outstanding term loans accrue interest at rates ranging from 5.66% to
6.32% per annum with interest payable upon maturity. The maturity dates range from January to May 2025.
d) Lease liabilities relate to leases on power line infrastructure, buildings and storage facilities, rail cars, vehicles,
machinery and equipment which have remaining lease terms of one to thirteen years and interest rates of 1.0%
- 10.0% over the terms of the leases.
Certain leases relating to mine development, exploration, production and transportation equipment contain
variable lease expenses based on tonnage or drilling metres. Variable lease expense for the year ended
December 31, 2024 was $113.7 million (December 31, 2023 - $111.7 million). The Company has short-term
leases related to mining equipment and office space. Short-term lease expense for the period ended December
31, 2024 was $27.9 million (December 31, 2023 - $27.3 million).
e) Neves-Corvo entered into three unsecured commercial paper programs during 2022 and 2023. Total borrowing
capacity available is €115.0 million collectively, with maturities ranging from May 2025 to July 2028. The
commercial papers bear interest on drawn funds at rates of EURIBOR plus an applicable margin of 0.30% to
0.50% .
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 29 -
===== SIDA 103 =====
During the year ended December 31, 2024, Neves-Corvo drew down $271.3 million (€250.0 million) from the
commercial paper programs (December 31, 2023 - $275.9 million (€255.0 million)) and repaid $282.2 million
(€260.0 million) (December 31, 2023 - $188.2 million (€175.0 million)).
As at December 31, 2024, a principal balance of $98.7 million (€95.0 million) (December 31, 2023 - $116.0
million (€105.0 million)) was outstanding and pursuant to the terms of the Definitive Agreement have not been
classified as held for sale.
The schedule of undiscounted lease payment and debt obligations is as follows:
Leases Debt Total
Less than one year $ 68,649 $ 344,628 $ 413,277
One to five years 164,309 1,420,000 1,584,309
More than five years 133,842 — 133,842
Total undiscounted obligations as at December 31, 2024 $ 366,800 $ 1,764,628 $ 2,131,428
Related to continuing operations $ 348,042 $ 1,764,628 $ 2,112,670
Related to discontinued operations $ 18,758 $ — $ 18,758
14. DEFERRED REVENUE
The following table summarizes the changes in deferred revenue:
As at December 31, 2022 $ 654,106
Recognition of revenue (72,743)
Variable consideration adjustment 3,018
Finance costs 36,004
Effects of foreign exchange 2,845
As at December 31, 2023 623,230
Recognition of revenue (78,267)
Variable consideration adjustment (1,550)
Finance costs 34,331
Reclassified to liabilities held for sale (Note 3) (64,305)
Effects of foreign exchange (5,702)
As at December 31, 2024 507,737
Less: current portion 60,604
Long-term portion $ 447,133
Consideration received under the Company’s gold, silver and copper streaming agreements is deemed to be variable
and can be subject to cumulative adjustments when the contractual volume to be delivered changes. As a result of
changes to the Company’s R&R, adjustments have been made to the deferred revenue liability for 2023 and 2024
which were recognized through revenue and finance costs.
For the year ended December 31, 2024, the Company recognized finance costs at a weighted average rate of 5.5%
(2023 - 5.5%) on the deferred revenue balances.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 30 -
===== SIDA 104 =====
a) Candelaria
The Company entered into a stream agreement with Franco-Nevada Corporation (“FN”), whereby the Company
has agreed to sell 68% of all the gold and silver contained in production from Candelaria until 720,000 Ounces
("oz") of gold and 12 million oz of silver have been delivered. Thereafter, FN will be entitled to purchase 40% of the
gold and silver production from Candelaria. The Company received an up-front payment of $648 million which is
being recognized as gold and silver are delivered to FN under the contract.
For each ounce of gold and silver delivered, FN makes payments equal to the lesser of the prevailing market prices
and approximately $429/oz of gold and $4.28/oz of silver (2023 - $425/oz of gold and $4.24/oz of silver), subject to
a 1% annual inflationary adjustment. In 2024, approximately 59,000 oz of gold and 1,225,000 oz of silver ( 2023 -
approximately 56,000 oz of gold and 889,000 oz of silver) were subject to the terms of the streaming agreement.
As at December 31, 2024, approximately 603,000 oz of gold and 9,991,000 oz of silver have cumulatively been
subject to the terms of the streaming agreement (2023 - 543,000 oz of gold and 8,765,000 oz of silver).
The deferred revenue balance as at December 31, 2024 at Candelaria is $368.0 million (December 31, 2023 -
$409.7 million).
b) Chapada Mine
The Company assumed the following streaming agreements with Sandstorm Gold Ltd. (“Sandstorm”) and Altius
Minerals Corporation (“Altius”) when the Chapada mine was acquired:
Sandstorm is entitled to purchase the lesser of 3.9 million pounds (“Mlbs”) or 4.2% of the payable copper produced
annually from Chapada at 30% of the market price. The percentage of payable copper is subject to two reduction
thresholds. Once an aggregate of 39 Mlbs has been delivered, the percentage of payable copper reduces to 3.0%.
Upon delivery of 50 Mlbs of copper in aggregate, the percentage of payable copper reduces to 1.5% for the
remaining life of mine. In 2024, approximately 3.6 Mlbs (2023 – 3.5 Mlbs) were delivered under this agreement. As
at December 31, 2024, approximately 33.2 Mlbs (2023 - 29.6 Mlbs) have cumulatively been delivered under this
agreement.
Altius is entitled to purchase 3.7% of the payable copper produced from Chapada at 30% of the market price. The
percentage of payable copper is subject to two reduction thresholds. In the event of a specified expansion at
Chapada, the percentage of payable copper reduces to 2.65%. Also, upon delivery of 75 Mlbs of copper in
aggregate, the percentage of payable copper reduces to 1.5% for the remaining life of mine. In 2024,
approximately 3.3 Mlbs (2023 – 3.4 Mlbs) were delivered under this agreement . As at December 31, 2024,
approximately 33.3 Mlbs (2023 - 30.0 Mlbs) have cumulatively been delivered under this agreement.
The deferred revenue balance as at December 31, 2024 at Chapada is $139.7 million (December 31, 2023 - $146.2
million).
c) Assets Held for Sale and Discontinued Operations
The Neves-Corvo Mine and Zinkgruvan Mine each have an agreement to deliver all of the silver contained in
concentrate produced to Wheaton Precious Metals Corporation (“Wheaton”). Each received an up-front payment
which was deferred and is being recognized in revenue as silver is delivered under the contracts. The assets held
for sale and discontinued operations receive the lesser of a fixed payment (subject to annual inflationary
adjustments) and the market price per ounce of silver. During 2024, Neves-Corvo Mine received approximately
$4.50/oz of silver (2023 - $4.46/oz). The agreement extends to the earlier of September 2057 and the end of mine
life. An aggregate total of approximately 11.5 million oz has been delivered since the inception of the contract.
During 2024, Zinkgruvan Mine received approximately $4.68/oz of silver (2023 - $4.60/oz). The agreement includes
a guaranteed minimum delivery of 40.0 million oz of silver over an initial 25 year term. If at the end of the initial
term the Company has not met its minimum obligation, it must pay $1.00 for each ounce of silver not delivered. An
aggregate total of approximately 35.1 million oz has been delivered since the inception of the contract in 2004.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 31 -
===== SIDA 105 =====
As at December 31, 2024, Neves-Corvo Mine and Zinkgruvan Mine met the criteria to be classified as held for sale
and discontinued operations (Note 3). The deferred revenue balance as at December 31, 2024 related to assets
held for sale and discontinued operations is $64.3 million (December 31, 2023 - $67.4 million).
15. RECLAMATION AND OTHER CLOSURE PROVISIONS
Reclamation and other closure provisions relating to the Company's mining operations are as follows:
Reclamation
provisions
Other closure
provisions Total
Balance, December 31, 2022 $ 401,020 $ 44,828 $ 445,848
Acquisition of Caserones 92,440 — 92,440
Accretion 23,169 — 23,169
Changes in estimate (30,507) 5,572 (24,935)
Changes in discount rate 14,584 — 14,584
Payments (8,842) (1,649) (10,491)
Effects of foreign exchange 5,281 (1,720) 3,561
Balance, December 31, 2023 497,145 47,031 544,176
Accretion 25,528 — 25,528
Changes in estimate (31,362) 6,740 (24,622)
Changes in discount rate (34,056) — (34,056)
Payments (11,672) (6,046) (17,718)
Reclassification to liabilities held for sale (Note 3) (125,490) (8,592) (134,082)
Effects of foreign exchange (9,748) (5,292) (15,040)
Balance, December 31, 2024 310,345 33,841 344,186
Less: current portion 16,125 4,751 20,876
Long-term portion $ 294,220 $ 29,090 $ 323,310
The Company expects these liabilities to be settled between 2025 and 2110. The reclamation provisions on continuing
operations are discounted using current market pre-tax discount rates which range from 4.3% to 14.4% (2023 - 2.0% to
10.4%)
Reclamation and other closure provisions related to discontinued operations are discounted between 2.3% and 2.8%
(2023 - 2.0% and 2.8%) and are expected to be settled between 2025 and 2062. As at December 31, 2024, the
reclamation and closure provision balance related to discontinued operations is $134.1 million.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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16. DEFERRED CONSIDERATION AND OTHER LONG-TERM LIABILITIES
Deferred consideration and other long-term liabilities are comprised of the following:
December 31, 2024 December 31, 2023
Deferred consideration, non-current portion $ 102,833 $ 106,210
Other 25,950 26,989
$ 128,783 $ 133,199
Deferred consideration represents the non-current portion of the remaining cash consideration for the acquisition of
51% of Lumina Copper, completed July 13, 2023. The deferred consideration is payable in installments as follows:
$50.0 million to be paid in five installments of $10.0 million on the anniversary of the transaction closing date in each
of 2024, 2025, 2026, 2027, and 2028; and $100 million to be paid on the anniversary of the closing date in 2029. The
Company paid the first $10.0 million installment in July 2024.
17. SHARE CAPITAL
(a) Authorized and issued shares
Authorized share capital consists of an unlimited number of voting common shares with no par value. As at
December 31, 2024, there were 774,102,971 fully paid voting common shares issued (2023 - 773,667,789 shares).
(b) Share units
The Company has a Share Unit Plan (“SU Plan”) which provides for share unit awards (“SUs”) to be granted by the
Board of Directors to certain employees of the Company. The maximum number of SUs that are issuable under
the SU Plan is 14,000,000. A SU is a unit representing the right to receive one common share (subject to
adjustments) issued from treasury.
The number and terms of SUs awarded will be determined by the Board of Directors based on the closing market
price on the TSX of the Company’s common shares on the date of the grant. The Company uses the fair value
method of accounting for the recording of SU grants to employees and officers.
i) Time-vesting SUs
During 2024, the Company granted 624,250 time-vesting SUs to employees and officers that expire in 2027.
These SUs vest three years from the grant date with the number of SUs being fixed, and with no vesting
conditions other than service. The fair value of the time-vesting SUs are based on the market value of the
shares on the date of the grant and an estimated forfeiture rate of approximately 11% (2023 - 11%). The
weighted average fair value per time-vesting SU granted during 2024 was C$10.71 (2023 - C$8.23). The
Company incurred share-based compensation related expenditures of $2.9 million for 2024 (2023 - $2.9
million) with a corresponding credit to contributed surplus related to time-vesting SUs. As at December 31,
2024, there was $4.3 million (2023 - $3.8 million) of unamortized stock-based compensation expense
related to time-vesting SUs.
ii) Performance-vesting SUs
During 2024, the Company granted 417,200 performance-vesting SUs to officers that expire in 2027. These
SUs vest three years from the grant date with the number of SUs being variable, which can range from zero
to 834,400 contingent upon achieving predetermined performance criteria related to the Company's share
price over the three-year period. The fair value of the performance-vesting SUs are based on a Monte Carlo
model and an estimated forfeiture rate of approximately 11% (2023 - 11%). The weighted average fair value
per performance-vesting SU granted during 2024 was C$10.71 (2023 - C$7.94). The Company incurred
share-based compensation related expenditures of $2.0 million for 2024 (2023 - $1.3 million) with a
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
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