FULLTEXT DEL 3 AV 3
Kvartalsrapport Q4 2024
corresponding credit to contributed surplus related to performance-vesting SUs. As at December 31, 2024,
there was $3.2 million (2023 - $2.7 million) of unamortized stock-based compensation expense related to
performance-vesting SUs.
During 2024, 318,679 common shares (2023 - 722,822) were issued as a result of SUs being vested.
(c) Stock options
The Company’s Stock Option Plan provides for stock option awards to be granted by the Board of Directors to
certain employees of the Company. The term of any stock options granted under the Stock Option Plan may not
exceed seven years from the date of grant. The maximum number of stock options that are issuable under the
Stock Option Plan is 42,000,000. The vesting requirements are established by the Board of Directors.
The Company uses the fair value method of accounting for the recording of stock options. Under this method, the
Company incurred share-based compensation related expenditures of $1.4 million for 2024 (2023 - $3.6 million)
with a corresponding credit to contributed surplus.
During 2024, the Company granted 1,498,160 stock options to employees and officers that expire in 2031. The
stock options vest over three years from the grant date. The Black-Scholes option pricing model used to
determine the fair value of the stock options at the date of the grant assumed a dividend of $0.36/share, risk-free
interest rate of 2.29% to 3.70% (2023 - 3.09% to 3.96%), expected life of 4.7 years (2023 - 4.4 years) and expected
price volatility of 46% to 48% (2023 - 47% to 48%). Volatility is determined using the historical daily volatility over
the expected life of the options. A forfeiture rate of approximately 11% was applied ( 2023 - 11%). The weighted
average fair value per stock option granted during 2024 was C$2.24 (2023 - C$2.51). As at December 31, 2024,
there was $0.5 million of unamortized stock-based compensation expense ( 2023 - $1.9 million) related to stock
options.
During 2024, 2,822,650 and 109,077 common shares were issued as a result of stock options and replacement
options, respectively, being exercised (2023 - 2,044,059 and 154,377).
The continuity of share-based payments outstanding is as follows:
Number of SUs
Number of
Replacement
options1
Weighted
average
exercise price
(C$)
Number of
options
Weighted
average
exercise price
(C$)
Outstanding, December 31, 2022 1,313,056 435,231 5.09 6,458,997 10.08
Granted 1,380,803 — — 1,918,733 8.06
Forfeited (150,096) — — (824,869) 11.53
Exercised (722,822) (154,377) 5.42 (2,044,059) 7.04
Outstanding, December 31, 2023 1,820,941 280,854 4.91 5,508,802 10.29
Granted 1,041,450 — — 1,498,160 10.71
Forfeited (97,683) (10,189) 5.86 (422,539) 12.51
Exercised (318,679) (109,077) 4.84 (2,822,650) 9.95
Outstanding, December 31, 2024 2,446,029 161,588 4.90 3,761,773 10.46
1 During 2022, the Company issued 2,513,866 replacement options upon completion of the Josemaria Resources Inc.
acquisition.
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 34 -
===== SIDA 108 =====
The following table summarizes options outstanding as at December 31, 2024:
Outstanding Options Exercisable Options
Range of exercise prices (C$)
Number of
Options
Outstanding1
Weighted
Average
Remaining
Contractual
Life (Years)
Weighted
Average
Exercise
Price (C$)
Number of
Options
Exercisable1
Weighted
Average
Remaining
Contractual
Life (Years)
Weighted
Average
Exercise
Price (C$)
4 to 6.99 161,588 0.8 4.89 161,588 0.8 4.89
7 to 9.99 1,275,216 4.8 7.96 243,426 3.4 7.79
10 to 12.99 2,030,957 5.5 10.94 271,705 3.7 11.53
13 to 15.99 455,600 2.2 14.95 455,600 2.2 14.95
3,923,361 4.7 10.19 1,132,319 2.6 11.15
1 Includes Replacement options
(d) Deferred share units
During the year ended December 31, 2023, the Company adopted a Deferred Share Unit ("DSU") Plan effective
January 1, 2024 under which DSUs are granted by the Board of Directors quarterly to eligible non-employee
Directors. During 2024, 33,076 (2023 - nil) DSUs were granted, and 9,455 (2023, nil) DSUs were forfeited under
the plan. As at December 31, 2024, there were 23,621 DSUs outstanding (2023 - nil).
(e) Basic and diluted weighted average number of shares outstanding
December 31, 2024 December 31, 2023
Basic weighted average number of shares outstanding 774,825,230 772,532,260
Effect of dilutive securities 2,743,811 760,635
Diluted weighted average number of shares outstanding 777,569,041 773,292,895
Antidilutive securities 705,931 137,900
The effect of dilutive securities relates to in-the-money outstanding stock options and SUs.
(f) Dividends
The Company declared dividends in the amount of $203.0 million (2023 - $206.1 million), or C$0.36 per share, for
the year ended December 31, 2024 (2023 - C$0.36 per share).
(g) Normal course issuer bid
In December 2023, the Company obtained approval from the TSX for the renewal of its normal course issuer bid
("NCIB") to purchase up to 52,538,870 common shares between December 11, 2023 and December 10, 2024.
Daily purchases (other than pursuant to a block purchase exemption) on the TSX under the NCIB were limited to
a maximum of 564,097 common shares. In connection with the NCIB renewal, the Company entered into an
automatic share purchase plan (“ASPP”) with its broker to allow for the purchase of common shares at times
when the Company ordinarily would not be active in the market due to trading blackout periods, insider trading
rules or otherwise.
In December 2024, the Company obtained approval from the TSX for the renewal of its NCIB to purchase up to
57,597,388 common shares between December 16, 2024 and December 15, 2025. Daily purchases (other than
pursuant to a block purchase exemption) on the TSX under the NCIB are limited to a maximum of 560,989
common shares. In connection with the NCIB renewal, the Company entered into an ASPP with its broker under
the same terms as the ASPP entered in December 2023.
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)
- 35 -
===== SIDA 109 =====
During the year ended December 31, 2024, 2,815,200 shares were purchased under the NCIB at an average price
of C$12.33 per share for total consideration of $ 24.4 million. All of the common shares purchased were
cancelled. As at December 31, 2024, the Company recorded an accrual of $3.7 million in trade and other payables
due to the timing of settlement of the repurchase of 429,800 shares that on the last trading day of the year which
were settled during January 2025.
No shares were purchased under the NCIB during the year ended December 31, 2023.
18. NON-CONTROLLING INTERESTS
Set out below is summarized financial information for each subsidiary with non-controlling interest ("NCI") that is
material to the group. As part of its Candelaria segment, the Company owns 80% of the Candelaria Mine and
Compañia Contractual Minera Ojos del Salado S.A.’s ("Ojos") copper mining operations and supporting infrastructure
in Chile (together the "Candelaria complex").
On July 2, 2024, the Company exercised its option to acquire an additional 19% interest in the issued and outstanding
equity of Lumina Copper, bringing the Company's ownership in Caserones from 51% to 70% and reducing the NCI to
30%.
The continuity of the Company's non-wholly owned subsidiaries with material NCI is as follows:
Candelaria complex Caserones mine Total
NCI in subsidiary at December 31, 2024 20% 30%1
As at December 31, 2022 $ 564,089 $ — $ 564,089
Caserones acquisition — 873,767 873,767
Share of net comprehensive income (loss) 41,753 32,294 74,047
Distributions (11,000) (44,100) (55,100)
As at December 31, 2023 594,842 861,961 1,456,803
Share of net comprehensive income (loss) 71,434 70,885 142,319
Distributions (86,000) (66,000) (152,000)
Acquisition of additional interest in Caserones1 — (353,499) (353,499)
As at December 31, 2024 $ 580,276 $ 513,347 $ 1,093,623
1 Prior to July 2, 2024, NCI in Caserones was 49%.
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)
- 36 -
===== SIDA 110 =====
Summarized financial information for the Company's non-wholly owned subsidiaries on a 100% basis, before
inter-company eliminations is as follows:
Summarized Balance Sheets
Candelaria complex Caserones mine1
As at Dec. 31, 2024 As at Dec. 31, 2023 As at Dec. 31, 2024 As at Dec. 31, 2023
Total current assets $ 627,020 $ 512,217 $ 600,270 $ 708,927
Total non-current assets $ 3,070,339 $ 3,140,799 $ 1,563,113 $ 1,629,052
Total current liabilities $ 452,576 $ 266,314 $ 298,374 $ 323,797
Total non-current liabilities $ 611,134 $ 646,189 $ 231,921 $ 267,263
1Caserones results from July 13, 2023
Summarized Statements of Earnings and Comprehensive Income
Candelaria complex Caserones mine1
For the year ended
December 31, 2024 2023 2024 2023
Total revenue $ 1,858,920 $ 1,529,583 $ 1,147,654 $ 601,775
Net earnings $ 355,225 $ 181,984 $ 171,857 $ 63,349
Net comprehensive income $ 355,334 $ 182,344 $ 171,857 $ 63,349
1Caserones results from July 13, 2023
Summarized Statement of Cash Flows
Candelaria complex Caserones mine1
For the year ended
December 31, 2024 2023 2024 2023
Cash provided by operating
activities $ 745,217 $ 504,464 $ 438,098 $ 179,371
Cash used in investing activities (269,047) (379,946) (136,659) (129,266)
Cash used in financing activities (376,952) (131,127) (313,493) (131,807)
Increase (decrease) in cash and
cash equivalents during the period $ 99,218 $ (6,609) $ (12,054) $ (81,702)
1Caserones results from July 13, 2023
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)
- 37 -
===== SIDA 111 =====
19. REVENUE
The Company's analysis of revenue from contracts with customers, segmented by product, is as follows:
2024 2023
Revenue from contracts with customers:
Copper $ 2,801,428 $ 2,145,132
Gold 294,364 234,318
Molybdenum 136,820 82,069
Nickel 97,167 291,169
Silver 47,236 31,184
Other 30,131 39,664
3,407,146 2,823,536
Provisional pricing adjustments on current year concentrate sales (9,330) (59,889)
Provisional pricing adjustments on prior year concentrate sales 24,788 (20,203)
Revenue $ 3,422,604 $ 2,743,444
The Company's geographical analysis of revenue from contracts with customers, segmented based on the
destination of product, is as follows:
2024 2023
Revenue from contracts with customers:
Japan $ 1,122,739 $ 661,410
China 1,066,198 809,594
Spain 557,012 498,012
Canada 213,660 402,235
Chile 169,384 131,059
Germany 129,752 88,957
Finland 100,028 102,917
Other 48,373 129,352
3,407,146 2,823,536
Provisional pricing adjustments on current year concentrate sales (9,330) (59,889)
Provisional pricing adjustments on prior year concentrate sales 24,788 (20,203)
Revenue $ 3,422,604 $ 2,743,444
Revenue from contracts with customers related to continuing operations for the year ended December 31, 2024
includes a increase of $4.2 million (2023 - decrease of $0.8 million) due to variable consideration adjustments.
Provisional pricing adjustments on prior year concentrate sales include adjustments on pricing from sales during 2023.
During the three months ended December 31, 2024, provisional pricing adjustments on current and prior period
concentrate sales were $31.7 million negative and $46.1 million negative, 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)
- 38 -
===== SIDA 112 =====
20. PRODUCTION COSTS
The Company's production costs are comprised of the following:
2024 2023
Direct mine and mill cost $ 1,729,956 $ 1,491,867
Transportation 104,813 104,788
Royalties 63,858 47,382
Total production costs $ 1,898,627 $ 1,644,037
During the year ended December 31, 2024, the Company incurred $15.8 million related to union negotiation
settlements within operations in Chile, which were reported in direct mine and mill costs (2023 - $6.3 million).
During the year ended December 31, 2024, direct mine and mill costs include a write down totaling $32.7 million
related to inventory items used in repair and maintenance of mineral properties, plant and equipment.
21. GENERAL AND ADMINISTRATIVE EXPENSES
The Company's general and administrative expenses recognized in the consolidated statement of (loss) earnings are
comprised of the following:
2024 2023
Salaries and benefits $ 23,899 $ 33,257
Office related expenses 14,104 12,143
Consulting 10,616 10,322
Stock-based compensation 6,552 7,761
Insurance 1,300 685
Other 1,878 2,555
Total general and administrative expenses $ 58,349 $ 66,723
22. EXPLORATION AND BUSINESS DEVELOPMENT
The Company's exploration and business development costs are comprised of the following:
2024 2023
General exploration $ 38,698 $ 33,048
Project development 5,331 4,814
Corporate development 1,323 6,148
Total exploration and business development $ 45,352 $ 44,010
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)
- 39 -
===== SIDA 113 =====
23. FINANCE INCOME AND COSTS
The Company's finance income and costs are comprised of the following:
2024 2023
Interest income $ 16,689 $ 10,879
Interest expense and bank fees (101,046) (47,150)
Accretion expense on reclamation provisions (22,286) (19,736)
Lease liability interest (23,301) (12,491)
Deferred revenue finance costs (4,888) (19,571)
Other (6,623) (3,360)
Total finance costs, net $ (141,455) $ (91,429)
Finance income $ 16,689 $ 10,879
Finance costs (158,144) (102,308)
Total finance costs, net $ (141,455) $ (91,429)
24. OTHER INCOME AND EXPENSE
The Company's other income and expense are comprised of the following:
Year ended
December 31,
2024 2023
Foreign exchange gain (a) $ 32,861 $ 4,796
Foreign exchange and trading gains on debt and equity investments (b) 28,292 86,784
Revaluation of Caserones purchase option (c) 11,728 (2,556)
Revaluation of marketable securities 7,383 1,846
Realized (losses) gains on derivative contracts (Note 26) (2,050) 25,088
Ojos del Salado sinkhole recovery (expenses) (d) 9,492 (16,922)
Unrealized losses on derivative contracts (Note 26) (85,168) (8,464)
Write-down of assets (e) (22,129) —
Revaluation of Chapada derivative liability (631) (2,594)
Gain on disposal of subsidiary — 5,718
Other expense (3,863) (1,852)
Total other (expense) income, net $ (24,085) $ 91,844
a) Foreign exchange gains during the year ended December 31, 2024 and 2023, relate to the foreign exchange
revaluation of trade payables and lease liabilities held in foreign currencies.
b) Foreign exchange and trading gains on debt and equity investments include the changes in fair value of debt and
equity instruments supporting capital funding for the Josemaria Project.
c) The Caserones purchase option is revalued at each reporting period up to the date of exercise, with changes in
fair value recorded in Other Income and Expense. The purchase option was exercised on July 2, 2024 and
resulting impact during the year ended December 31, 2024 remained in Other Income and Expense.
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)
- 40 -
===== SIDA 114 =====
d) Ojos del Salado sinkhole recovery during the year ended December 31, 2024 include adjustments of expenses
originally accrued for as a result of updated information obtained related to the sinkhole near the Company's
Ojos del Salado operations.
e) Write-down of assets during the year ended December 31, 2024 include a non-cash write-down of capital works
in progress at the Josemaria Project that are no longer expected to be required.
25. CURRENT AND DEFERRED INCOME TAXES
2024 2023
Current tax expense:
Current tax on net taxable earnings $ 290,405 $ 139,652
Adjustments in respect of prior years 4,533 1,779
294,938 141,431
Deferred tax (recovery) expense:
Origination and reversal of temporary differences (40,467) 49,778
Change in tax rate — 39,376
Utilization and recognition of previously unrecognized tax losses and temporary
differences (6,863) (11,628)
Temporary differences for which no deferred asset was recognized (17,635) (4,592)
(64,965) 72,934
Total tax expense $ 229,973 $ 214,365
The tax on the Company's earnings before income tax differs from the amount that would arise using the weighted
average rate applicable to earnings of the consolidated entities as follows:
2024 2023
Earnings excluding income taxes $ 383,327 $ 491,216
Combined basic federal and provincial rates 27.0 % 27.0 %
Income taxes based on Canadian statutory income tax rates $ 103,498 $ 132,628
Effect of different tax rates in foreign jurisdictions 107,825 33,147
Tax calculated at domestic tax rates applicable to earnings in the respective
countries 211,323 165,775
Tax effects of:
Non-deductible and non-taxable items (a) 14,917 3,645
Change in tax rates (b) — 39,376
Changes in estimates on Chilean royalty tax rate (c) 14,970
Adjustments in respect of prior years (d) (3,384) (18,919)
Tax losses and temporary differences for which no deferred income tax
asset was recognized (e) (17,635) (4,591)
Foreign exchange impact on temporary differences and other
translation amounts (f) 12,704 29,128
Utilization and recognition of previously unrecognized temporary differences (6,863) (11,628)
Tax recovery associated with government grants and other tax
credits (2,749) (4,265)
Net withholding tax on accrued interest and dividends received 5,498 16,652
Other 1,192 (808)
Total tax expense $ 229,973 $ 214,365
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)
- 41 -
===== SIDA 115 =====
The Company operates in tax jurisdictions that have tax rates (including mining royalty tax) ranging from 20.6% to
37.9%.
a) Includes non-deductible environmental expenses incurred at Caserones of $47.6 million.
b) The new mining royalty law in Chile, which includes a 1% ad-valorem tax on sales, was enacted in the third
quarter of 2023 and became effective January 1, 2024 for Candelaria and will become effective in 2028 for
Caserones when its tax stability agreement expires. In addition to the ad-valorem tax, both operations in Chile
are expected to pay mining tax of approximately 8% - 15% on net mining income. The maximum effective tax
rate for the combined mining royalty, corporate income tax and final taxes in Chile is set at 46.5%.
c) Additional deferred royalty tax impact of $23.3 million in Candelaria and an offsetting $8.3 million of deferred tax
recovery in Caserones were recorded due to increased mining operating margin anticipated in future production
estimates.
d) Adjustments in respect of prior years includes temporary difference of $5.0 million deferred tax expense in
Candelaria associated with adjustments to the severance accrual (2023 - $6.4 million deferred tax recovery),
offset by $8.2 million deferred tax recovery in Chapada related to the reversal of stockpile adjustments booked in
the prior period (2023 - $2.8 million).
e) Deferred tax expense associated with temporary differences not recognized includes $29.7 million in Candelaria
(2023 - $1.6 million), $14.1 million in Canada (2023 - $1.3 million) and $2.4 million in Eagle (2023- $0) offset by
deferred tax recovery of $64.8 million associated with the reversal of deferred tax assets previously not
recognized in Caserones (2023 - $9.2 million).
f) The effects of tax inflation adjustment and revaluation of non-monetary assets in Argentina from the local
currency ARS to USD resulted in a $ 38.6 million tax recovery (2023 - $53.6 million tax expense) in Josemaria. The
revaluation of non-monetary assets in Brazil from the translation of deferred tax liabilities from the local currency
BRL to USD resulted in a net increase to deferred tax expense of $51.3 million in Brazil (2023 - $24.5 million
decrease to deferred tax expense).
Global Minimum Top-up Tax - Pillar Two
The Company is within the scope of OECD Pillar Two model rules. Among the jurisdictions where the Company
operates, Pillar Two legislation has been enacted in Sweden, Canada, Portugal and the Netherlands. On October 3,
2024, Brazil issued a Provisional Measure introducing Qualified Domestic Minimum Top-Up Tax to be effective from
2025 onwards.
The Company applies the exception to recognizing and disclosing information about deferred tax assets and liabilities
as provided by the amendments to IAS 12 in May 2023. The Company also accounts for any top up taxes as a current
tax when it is incurred. 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.
Deferred tax liabilities, net
December 31, 2024 December 31, 2023
Deferred tax assets $ 191,254 $ 170,203
Deferred tax liabilities (643,850) (751,688)
Deferred tax liabilities, net $ (452,596) $ (581,485)
Net deferred tax liabilities of $430.8 million (2023 - $555.0 million) are expected to be settled after 12 months and net
deferred tax liabilities of $21.8 million (2023 - $26.5 million net deferred tax assets) are expected to be settled within
12 months.
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)
- 42 -
===== SIDA 116 =====
The movement in deferred income tax assets and liabilities during the year, without taking into consideration the
offsetting of balances within the same jurisdiction, is as follows:
As at
December 31,
2023
(Expensed)/
recovered
Discontinued
Operations
Balance sheet/
Equity
adjustment
Effects of
foreign
exchange
As at
December 31,
2024
Deferred tax assets:
Loss carryforwards $ 58,062 $ 96,155 — $ — $ (915) $ 153,302
Reclamation and
other closure
provisions 62,018 5,672 (15,263) — (3,633) 48,794
Deferred revenue 12,791 — (12,791) — — —
Future tax credits 4,315 — (4,315) — — —
Leases 5,936 19,988 (304) — (39) 25,581
Sinkhole provision 6,631 — — — — 6,631
Fair value gains/
losses (12,804) 22,022 7,615 — 1,549 18,382
Deferred tax liabilities:
Mineral properties,
plant & equipment (496,140) (10,431) 44,580 — 17,160 (444,831)
Right-of-use assets (31,304) (1,547) 385 — (27) (32,493)
Provisions (88,284) (5,538) 30,689 — (2,117) (65,250)
Mining royalty
taxes (9,589) (23,618) — — — (33,207)
Long-term
inventory (88,197) (34,504) 9,499 — (6,584) (119,786)
Foreign currency
contracts (9,162) 1,552 — — — (7,610)
Pension provision (580) — — — — (580)
Other 4,822 (4,786) (1,650) 290 (205) (1,529)
$ (581,485) $ 64,965 $ 58,445 $ 290 $ 5,189 $ (452,596)
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)
- 43 -
===== SIDA 117 =====
As at
December 31,
2022
(Expensed)/
recovered
Balance Sheet/
Equity
adjustment
Effects of
foreign
exchange
As at
December 31,
2023
Deferred tax assets:
Loss carryforwards $ 5,624 $ 52,438 $ — $ — $ 58,062
Reclamation and other
closure provisions 65,130 (3,623) — 511 62,018
Deferred revenue 12,129 152 — 510 12,791
Future tax credits 6,563 (2,432) — 184 4,315
Leases 5,265 657 — 14 5,936
Sinkhole provision 6,631 — — — 6,631
Other 4,502 1,074 629 (1,383) 4,822
Deferred tax liabilities:
Mineral properties, plant
and equipment (656,975) (34,712) 197,550 (2,003) (496,140)
Right-of-use assets (5,208) (1,758) (24,321) (17) (31,304)
Provisions (23,633) (64,651) — — (88,284)
Mining royalty taxes (22,370) (13,141) 25,922 — (9,589)
Long-term inventory (73,366) (4,046) (10,785) — (88,197)
Fair value gains (15,095) 2,291 — — (12,804)
Foreign currency contracts (14,170) 5,376 (368) (9,162)
Pension provision (792) 192 — 20 (580)
$ (705,765) $ (62,183) $ 188,995 $ (2,532) $ (581,485)
Deferred tax assets are recognized for tax loss carry-forwards and other temporary differences to the extent that the
realization of the related tax benefit through future taxable profits is probable. The Company determined that it is
probable that sufficient future taxable profits will be available to allow the benefit of the deferred tax assets to be
utilized.
The Company did not recognize deferred tax assets of $1,058.7 million (2023 - $1,116.9 million) in respect of losses
amounting to $3,924.3 million (2023 - $4,141.0 million) that can be carried forward against future taxable income.
Caserones has approximately $4.2 billion in net operating losses which can be applied to future taxable income over
the mine life. A deferred tax asset has been recognized to the extent that the Company expects to realize sufficient
taxable profit in the foreseeable future.
The deferred mining tax liability in Candelaria has been revalued based on changes in future production estimates for
the mining royalty in Chile, resulting in a net additional deferred mining tax expense of $23.3 million (2023 -$39.4
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)
- 44 -
===== SIDA 118 =====
26. FINANCIAL INSTRUMENTS
Derivative instruments
From time to time, the Company uses derivative contracts as part of its risk management strategy to mitigate exposure
to foreign currencies and commodities. The Company maintains foreign currency forward and option contracts on
EUR, CAD, BRL, CLP, and SEK foreign currencies intended to limit the foreign exchange exposure of its forecasted
foreign currency denominated after-tax attributable operating and capital expenditures. Additional commodity
forward swap and option contracts are maintained to limit exposure to changes in the price of diesel fuel purchases at
Candelaria, and limit its exposure to changes in the price of copper and gold.
The foreign exchange and commodities contracts have not been designated as hedges for purposes of hedge
accounting and are measured at fair value with changes in fair value recognized in the consolidated statement of (loss)
earnings.
During the years ended December 31, 2024 and 2023, the Company entered into various foreign currency and
commodity contracts continuing its risk mitigation strategy. These include:
a) Foreign currency forward contracts
During the year ended December 31, 2024, the Company entered into USD/CAD foreign currency forward
contracts with a notional value of $499 million and average contract rates of CAD 1.40. These are set to expire
during 2025 with the majority being settled upon the completion of the Arrangement (Note 4).
During 2023, the Company entered into USD/SEK forward contracts with a notional value of SEK 845.7 million
and contract rates ranging from SEK 10.76 to SEK 10.92. These contracts partially expired through 2024 with
SEK 758 million expiring through 2025. During 2022, the Company also entered into EUR/USD forward
contracts.
b) Foreign currency option contracts
During the year ended December 31, 2024, the Company entered into zero cost collar contracts in USD/BRL
and USD/CLP currency pairs totaling $246 million (equivalent to BRL 1.3 billion) and $950 million (equivalent to
CLP 926 billion), respectively. The collar ranges on the respective contracts are an average of BRL 5.00 to BRL
6.11 and CLP 900 to CLP 1,085 and remaining contracts are set to expire through 2025 and 2026.
During 2023, the company entered into zero cost collar contracts in USD/BRL, USD/CLP, and USD/SEK currency
pairs totaling $321 million (equivalent to BRL 1.7 billion), $347 million (equivalent to CLP 303 billion), and SEK
396 million, respectively. The collar ranges on the respective contracts range from BRL 5.00 to BRL 6.12, CLP
800 to CLP 1,035, and SEK 10.35 to SEK 11.15. Remaining contracts are set to expire through 2025. During
2022, the Company also entered into CAD foreign currency option contracts.
c) Commodity contracts
During the year ended December 31, 2024, the Company entered into copper and gold collar contracts with
notional amounts of 21,500 metric tonnes of copper and 105,200 oz of gold. The average collar range for
copper was set between $4.10/lb to $4.52/lb and expired in May 2024. The average collar range for gold is set
between $2,500 to $3,261 per oz and are set to expire through 2025 and 2026.
An additional position was taken on diesel, with collar contracts in the amount of 67.5 million litres ("L"), with
average collar ranges of $0.50/L to $0.65/L. During the year, 13.5 million L expired, with the remainder
expiring through 2025.
During 2023, the Company entered into diesel forward swaps with a notional value of $55 million and average
contract rates of $0.68/L. As at December 31, 2024, the diesel forward swaps are fully expired.
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)
- 45 -
===== SIDA 119 =====
As at December 31, 2024, all EUR forwards have expired, while SEK options and forwards are set to expire through
2025 and remain a component of continuing operations.
The following tables outline the foreign currency and commodity derivative notional contract positions and their
expiry dates:
Expired in Expiring throughout:
Foreign currency forward contracts 2024 2025 2026
USD/CAD forwards1
Average contract price — 1.40 —
Position (USD millions) — 499 —
USD/SEK forwards2
Average contract price 10.89 10.83 —
Position (SEK millions) 322 758 —
EUR/USD forwards2
Average contract price 1.02 — —
Position (EUR millions) 52 — —
1 Subsequent to December 31, 2024, $463 million of the USD/CAD forwards were settled to facilitate the acquisition of Filo (Note 4)
2 EUR/USD and USD/SEK forwards expired in 2024 and expiring throughout 2025 reflect the position of continuing operations
Expired in Expiring throughout:
Foreign currency option contracts 2024 2025 2026
USD/BRL collars
Average contract price 5.01/6.33 5.06/6.04 5.07/6.04
Position (USD millions) 213 185 114
USD/CLP collars
Average contract price 882/1,040 872/1,032 904/1,060
Position (USD millions) 552 511 342
USD/CAD collars
Average contract price 1.30/1.40 — —
Position (CAD millions) 19 — —
USD/SEK collars1
Average contract price 10.35/11.15 — —
Position (SEK millions) 132 — —
1 USD/SEK collars expired in 2024 reflect only the position of continuing operations
LUNDIN MINING CORPORATION
Notes to consolidated financial statements
For the years ended December 31, 2024 and 2023
(Tabular amounts in thousands of US dollars, except for shares and per share amounts)
- 46 -
===== SIDA 120 =====
Expired in Expiring throughout:
Commodity hedge contracts 2024 2025 2026
Copper collars
Average contract price ($/lb) 4.10/4.52 — —
Position (millions lbs) 47 — —
Gold collars
Average contract price ($/oz) — 2,500/3,125 2,500/3,455
Position (oz) — 62,000 43,200
Diesel collars
Average contract price ($/L) 0.50/0.65 0.50/0.65 —
Position (millions litres) 14 54 —
Diesel forward swaps
Average contract price ($/L) 0.667 — —
Position (USD millions) 27 — —
The Company’s net unrealized and realized (loss)/gain on foreign currency and commodity derivative contracts are as
follows:
2024 2023
Unrealized loss on derivative financial instruments:
Foreign currency contracts $ (87,692) $ (7,568)
Commodity hedge contracts 2,524 (896)
(85,168) (8,464)
Realized (loss)/gain on derivative financial instruments:
Foreign currency contracts 2,589 23,302
Commodity hedge contracts (4,639) 1,786
(2,050) 25,088
Total unrealized and realized (loss)/gain on derivative contracts: $ (87,218) $ 16,624
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)
- 47 -
===== SIDA 121 =====
A summary of the fair values of unsettled derivative contracts recorded on the consolidated balance sheet is as
follows:
December 31, 2024 December 31, 2023
Foreign currency contracts:
Current asset position $ — $ 38,114
Non-current asset position — 9,397
Current liability position 39,416 1,124
Non-current liability position 24,487 3,148
Commodity contracts:
Current asset position 964 —
Non-current asset position 665 —
Current liability position — 896
Other contracts:
Chapada derivative current liability — 24,369
Fair values of financial instruments
The Company’s financial assets and financial liabilities have been classified into categories that determine their basis of
measurement. The following table shows the carrying values, fair values and fair value hierarchy of the Company’s
financial instruments as at December 31, 2024 and December 31, 2023:
December 31, 2024 December 31, 2023
Level
Carrying
value Fair value
Carrying
value Fair value
Financial assets
Fair value through profit or loss
Restricted funds 1 $ 8,665 $ 8,665 $ 59,979 $ 59,979
Trade receivables (provisional) 2 337,081 337,081 605,644 605,644
Marketable securities 1 60,060 60,060 14,268 14,268
Foreign currency contracts 2 — — 47,511 47,511
Commodity contracts 2 1,629 1,629 — —
Caserones purchase option 3 — — 44,438 44,438
$ 407,435 $ 407,435 $ 771,840 $ 771,840
Financial liabilities
Amortized cost
Debt 3 $ 1,756,972 $ 1,756,972 $ 1,208,600 $ 1,208,600
Caserones deferred consideration 2 112,833 112,833 116,210 116,210
Fair value through profit or loss
Pricing provisions on concentrate sales 2 $ 7,149 $ 7,149 $ 1,840 $ 1,840
Chapada derivative liability 2 — — 24,369 24,369
Foreign currency contracts 2 63,903 63,903 4,272 4,272
Diesel contracts 2 — — 896 896
$ 71,052 $ 71,052 $ 31,377 $ 31,377
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)
- 48 -
===== SIDA 122 =====
Fair values of financial instruments are determined by valuation methods depending on hierarchy levels as defined
below:
Level 1 – Quoted market price in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted market prices included within Level 1 that are observable for the assets or
liabilities, either directly (i.e. observed prices) or indirectly (i.e. derived from prices).
Level 3 – Inputs for the assets or liabilities are not based on observable market data.
The Company calculates fair values based on the following methods of valuation and assumptions:
Marketable securities/debt and equity investments/restricted funds – The fair value of investments in shares and
bonds is determined based on the quoted market price.
Trade receivables/pricing provisions on concentrate sales – The fair value of trade receivables that contain
provisional pricing sales arrangements are valued using quoted forward market prices. The Company recognized
negative pricing adjustments of $77.7 million in revenue during the three months ended December 31, 2024
(December 31, 2023 - $17.1 million negative pricing adjustments). The Company recognized positive pricing
adjustments of $15.5 million in revenue during the year ended December 31, 2024 (December 31, 2023 - $80.1
million negative pricing adjustments).
Foreign currency and commodity contracts – The fair value of these derivatives are determined by the
counterparties to the contracts and are assessed by Management using pricing models based on active market
prices.
Caserones purchase option – The fair value of the Caserones purchase option was determined using a valuation
model that incorporates such factors as the mine's discounted cash flow projections, metal price volatility, expiry
date, and risk-free interest rate. The Company exercised the Caserones purchase option in July 2024. Upon
exercise, the asset was derecognized into equity of the Company.
Chapada derivative liability – The fair value of this derivative was determined using a valuation model that
incorporates such factors as metal prices, metal price volatility, expiry date, and risk-free interest rate. The
Company paid the final $25.0 million tranche related to the Chapada derivative liability in August 2024.
Caserones deferred consideration – The fair value of the Caserones deferred consideration has been discounted
at the estimated credit adjusted risk free rate applicable to future payments.
Debt – The fair values approximate carrying values as the interest rates are comparable to current market rates.
The carrying values of certain financial instruments maturing in the short-term approximate their fair values.
These financial instruments include cash and cash equivalents, trade and other receivables other than those
provisionally priced, and trade and other payables other than those provisionally priced, which are classified as
amortized cost.
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)
- 49 -
===== SIDA 123 =====
27. COMMITMENTS AND CONTINGENCIES
a) The Company has capital commitments of $333.9 million on various initiatives of which $304.1 million and $29.8
million relate to continuing and discontinued operations, respectively. Capital commitments of $157.6 million are
expected to be paid during 2025 of which $127.7 million is related to continuing operations.
b) The Chapada acquisition included contingent consideration of up to $125.0 million payable over five years from
the acquisition date if certain gold price thresholds are met. The Company paid $25.0 million tranches in each of
2020, 2021, 2022, 2023, and 2024. The final contingent consideration payment was made in 2024.
The Company has been provided with an indemnity for any tax liabilities that may arise for periods prior to the
date of the Chapada acquisition. For identified tax claims existing at the date of acquisition, the Company has
agreed to be liable for up to the first $21.0 million (BRL 101.5 million). While it is uncertain, no material liabilities
have been accrued as the Company believes material payment is not likely due to the nature of the tax claims.
c) The following summarizes total tax exposure under two contradictory assessments received from the Chilean
Internal Revenue Service (“IRS”). Given that the assessments relate to the same issue, the Company’s potential
exposure is expected to be limited to one of the below scenarios:
i) For taxation years 2014 through 2019, the IRS issued tax assessments denying tax deductions related to
interest expenses arising from an intercompany debt. The total of all assessments amounts to $265.3
million ($145.6 million in taxes plus interest and penalties of $119.7 million). If the Company loses the
dispute, it may be liable for an additional $96.3 million in accrued interest as of December 2024. All tax
refunds arising from the tax deductions related to the intercompany debt have been received up to
December 2024. The Company maintains its position that the assessments are inconsistent with Chilean tax
law and, therefore, without merit.
ii) On the same intercompany debt for taxation years 2016 through 2019, the Company has also received
assessments from the IRS seeking additional withholding taxes, including interest and penalties, on interest
payments made. The total of all assessments amounts to $246.6 million ($114.2 million in taxes plus interest
and penalties of $132.4 million). The Company may be liable for an additional $90.7 million in accrued
interest as of December 2024. All tax refunds arising from the tax deductions related to the intercompany
debt have been received up to December 2024. The Company maintains its position that the assessments
are inconsistent with Chilean tax law and, therefore, without merit.
The Company has filed claims against the tax assessments related to taxation years 2014 to 2019. No tax expense
has been accrued for these assessments as the Company believes its original filing position is in compliance with
tax regulations and intends to vigorously defend its position. The Company does not expect further assessments
to be issued related to this tax matter as the intercompany loan was amended in 2020 with an interest rate
accepted by the IRS.
d) In July 2022, a sinkhole was detected near the Company's Ojos del Salado operations in Chile. In October 2022,
the Company received an infraction notice from the environmental regulators covering four alleged violations of
its environmental permit for the Alcaparrosa underground mine, which forms part of the Company's Ojos del
Salado operations. In January 2025, the Company received a notice from the environmental regulators levying a
fine of $3.3 million and ordering the continued closure of the Alcaparrosa mine. The Company will review the
notification and determine the next steps relating to the charges that it allegedly breached its environmental
permit at its at Minera Ojos del Salado operation.
In addition, in May 2023, the Company received a civil environmental damage claim along with an injunction to
close the Alcaparrosa mine, from the state defence counsel, alleging that the Company did not fulfill its
environmental obligations under its environmental resolution. With respect to the environmental damage claim,
the Company is contesting the allegations that it allegedly breached its obligations under its environmental
resolution at its at Minera Ojos del Salado operation.
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)
- 50 -
===== SIDA 124 =====
e) The Company may be involved in legal proceedings arising in the ordinary course of business, including the
actions described below. The potential amount of the liability with respect to such legal proceedings is not
expected to materially affect the Company’s financial position. The Company believes the claims to be without
merit and the loss, if any, cannot be determined at this time for all contingencies. The Company has accordingly
not accrued any amounts related to the litigations below (unless otherwise noted). The Company intends to
vigorously defend these claims.
Two proposed class actions were filed against the Company and certain officers and directors. The first, in the
province of Ontario, on December 7, 2017 (Markowich v. Lundin Mining Corporation et al) and a second
overlapping action in the province of Québec on January 18, 2018 (Prévreau v. Lundin Mining Corporation et al).
Both proposed class actions seek damages of $132.3 million (C$175.0 million) and punitive damages of $7.6
million (C$10.0 million) and assert various statutory and other claims related to, among other things, alleged
misrepresentations and/or failure to make timely disclosure of material information about the Company’s
business and operations and, in particular, the operations of the Candelaria Mine and a rock slide at the
Candelaria Mine on October 31, 2017. The proposed Ontario class action asserts claims on behalf of a putative
class comprising persons who acquired securities of the Company between October 25, 2017, and November 29,
2017, whereas the proposed Québec class action asserts claims on behalf of only such persons who are resident
or domiciled in Québec. In June 2018, counsel to the plaintiffs in the Québec action agreed to a stay (i.e.,
indefinite cessation) of that proceeding in light of the Ontario action. On August 30, 2018, the Québec Superior
Court, on consent of the parties, stayed the Québec action indefinitely. On September 2, 2020, the plaintiff in the
Ontario action served motion materials for leave and certification with the Ontario Superior Court of Justice. On
January 6, 2022, the Ontario Superior Court of Justice denied the leave application and declined the motion for
certification. On May 24, 2023, the Ontario Court of Appeal granted the plaintiff’s appeal of this decision. In
August 2023, the defendants filed an application for leave to appeal the Ontario Court of Appeal decision to the
Supreme Court of Canada , which leave to appeal was granted on March 25, 2024. The Supreme Court of Canada
heard the appeal on January 15, 2025. Its decision is under reserve and is expected to be released in 2025.
28. SEGMENTED INFORMATION
The Company is engaged in mining, exploration and development of mineral properties at four operating sites located
in Chile, Brazil, and USA, and at the Josemaria Project located in Argentina. Operating segments are reported in a
manner consistent with the internal reporting provided to the executive leadership team who act as the operating
decision-makers. The chief operating decision makers consider the business from a site and project-level perspective.
Executive management are responsible for allocating resources and assessing performance of the operating segments.
The Company has identified five reportable segments which include four operating sites, and the Josemaria Project.
Discontinued operations includes results from the Neves-Corvo and Zinkgruvan segments (Note 3).
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)
- 51 -
===== SIDA 125 =====
For the year ended December 31, 2024
Candelaria Caserones Chapada Eagle Josemaria Other Total
Continuing
Operations
Discontinued
Operations Total
Chile Chile Brazil USA Argentina
Revenue $ 1,618,936 $ 1,153,625 $ 497,576 $ 152,467 $ — $ — $ 3,422,604 $ 694,801 $ 4,117,405
Cost of goods sold
Direct mine and mill costs (679,906) (709,383) (248,500) (90,969) — (1,198) (1,729,956) (410,093) (2,140,049)
Transportation (31,049) (34,703) (25,553) (13,508) — — (104,813) (31,173) (135,986)
Royalties (15,730) (32,106) (8,580) (7,442) — — (63,858) (3,961) (67,819)
Depreciation, depletion and amortization (313,058) (184,054) (76,524) (33,569) — (539) (607,744) (155,344) (763,088)
Reversal of inventory write-down — — 26,626 — — — 26,626 — 26,626
Gross profit (loss) 579,193 193,379 165,045 6,979 — (1,737) 942,859 94,230 1,037,089
General and administrative expenses — — — — — (58,349) (58,349) — (58,349)
Exploration and business development (10,124) (14,846) (5,636) (3,208) (8,307) (3,231) (45,352) (12,843) (58,195)
Finance (costs) income (26,922) (17,318) (25,673) (3,678) 21,510 (89,374) (141,455) (9,793) (151,248)
Other income (expense) 14,860 37,575 3,768 (2,265) 7,319 (85,342) (24,085) (8,798) (32,883)
Goodwill and asset impairment (55,918) — (93,443) (104,857) — — (254,218) (291,178) (545,396)
Partial suspension of underground operations cost — — — (36,073) — — (36,073) — (36,073)
Income tax (expense) recovery (237,879) (877) (62,211) 28,839 50,086 (7,931) (229,973) 13,711 (216,262)
Net earnings (loss) $ 263,210 $ 197,913 $ (18,150) $ (114,263) $ 70,608 $ (245,964) $ 153,354 $ (214,671) $ (61,317)
Capital expenditures $ 275,720 $ 143,965 $ 107,843 $ 21,222 $ 258,207 $ 350 $ 807,307 $ 154,960 $ 962,267
Total non-current assets1 $ 3,063,812 $ 1,374,683 $ 1,289,965 $ 107,516 $ 1,408,246 $ 6,581 $ 7,250,803 $ — $ 7,250,803
1 Non-current assets include long-term inventory, mineral properties, plant and equipment, and 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)
- 52 -
===== SIDA 126 =====
For the year ended December 31, 2023
Candelaria Caserones Chapada Eagle Josemaria Other Total
Continuing
Operations
Discontinued
Operations Total
Chile Chile Brazil USA Argentina
Revenue $ 1,329,599 $ 601,775 $ 461,175 $ 350,895 $ — $ — $ 2,743,444 $ 648,633 $ 3,392,077
Cost of goods sold
Direct mine and mill costs (695,734) (367,467) (278,692) (146,299) — (3,675) (1,491,867) (405,917) (1,897,784)
Transportation (30,759) (21,550) (30,057) (22,411) — (11) (104,788) (32,205) (136,993)
Royalties — (15,820) (8,568) (22,994) — — (47,382) (3,949) (51,331)
Depreciation, depletion and amortization (272,377) (108,489) (63,480) (52,050) (38) (1,439) (497,873) (155,723) (653,596)
Gross profit (loss) 330,729 88,449 80,378 107,141 (38) (5,125) 601,534 50,839 652,373
General and administrative expenses — — — — — (66,723) (66,723) — (66,723)
Exploration and business development (14,589) (622) (10,460) (5,691) (2,751) (9,897) (44,010) (11,682) (55,692)
Finance (costs) income (32,214) (7,901) (22,996) (4,336) 18,726 (42,708) (91,429) (11,270) (102,699)
Other (expense) income (402) 6,391 6,229 (597) 84,316 (4,093) 91,844 12,745 104,589
Income tax (expense) recovery (135,078) (19,265) 1,888 (2,899) (51,266) (7,746) (214,366) (2,233) (216,599)
Net earnings (loss) $ 148,446 $ 67,052 $ 55,039 $ 93,618 $ 48,987 $ (136,292) $ 276,850 $ 38,399 $ 315,249
Capital expenditures $ 380,112 $ 83,880 $ 72,291 $ 22,201 $ 285,893 $ 12,761 $ 857,138 $ 155,979 $ 1,013,117
Total non-current assets1 $ 3,134,028 $ 1,405,852 $ 1,391,417 $ 204,776 $ 1,161,771 $ 5,097 $ 7,302,941 $ 1,460,441 $ 8,763,382
1 Non-current assets include long-term inventory, mineral properties, plant and equipment, and 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)
- 53 -
===== SIDA 127 =====
29. RELATED PARTY TRANSACTIONS
a) Key management personnel - The Company has identified its directors and senior officers as its key management
personnel. Employee benefits for key management personnel are as follows:
2024 2023
Wages and salaries $ 7,281 $ 7,454
Pension benefits 94 130
Share-based compensation 2,246 2,983
Termination benefits — 5,760
$ 9,621 $ 16,327
b) Other related part ies - For the year ended December 31, 2024, the Company incurred $8.4 million (2023 – $4.9
million), and received a refund amounting to $2.1 million (2023 – $nil) for services provided by companies owned
by members of key management personnel primarily relating to office rental, renovation costs, and related
services. For the year ended December 31, 2024, the Company incurred $2.6 million (2023 – $2.1 million) for
services provided by the Lundin Foundation, a not-for-profit organization supporting community economic
development programs and related initiatives in the regions in which the Company operates.
30. MANAGEMENT OF FINANCIAL RISK
The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, foreign
exchange risk, commodity price risk and interest rate risk.
(a) Credit risk
The exposure to credit risk arises through the failure of a customer or another third party to meet its contractual
obligations to the Company. The Company believes that its maximum exposure to credit risk as at December 31,
2024 is the carrying value of its trade and other receivables.
Concentrate and cathodes produced at the Company’s Candelaria, Caserones, Chapada, and Eagle mines is sold
to a number of strategic customers with whom the Company has established long-term relationships. Limited
amounts of concentrate are occasionally sold to commodity traders, under prevailing market conditions.
Payment terms vary and provisional payments are normally received when concentrate or copper cathodes have
been placed on board a vessel for shipment or delivered to a location specified by the customer , in accordance
with industry practice, with final settlement up to six months following the date of shipment. Sales to commodity
traders are made against secure payment terms such as a letter of credit, pre-payment or payment against
scanned shipping documents. Credit worthiness of customers is reviewed by the Company on an annual basis or
more frequently, if warranted, and those not meeting certain credit criteria may be asked to make 100%
provisional payment up-front or provide an acceptable payment instrument such as a letter of credit. The failure
of any of the Company’s strategic customers could have a material adverse effect on the Company’s financial
position. For the year ended December 31, 2024, the Company has four customers that individually account for
more than 10% of the Company’s total sales. The Company's largest customers represent approximately 20%,
14%, 13%, and 11% of total sales (2023 - four customers representing 23%, 16%, 14%, and 13% of total sales).
With respect to credit risk arising from the other financial assets of the Company, which comprise cash and cash
equivalents, restricted funds, marketable securities and equity investments, and foreign currency contracts, the
Company’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to
the carrying amount of these instruments. The Company limits material counterparty credit risk on these assets
by dealing with financial institutions with long-term credit ratings with Standard & Poor’s of at least A, or the
equivalent thereof with Moody’s, or those which have been otherwise approved.
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)
- 54 -
===== SIDA 128 =====
(b) Liquidity risk
The Company has in place a planning and forecasting process to help determine the funds required to support
the Company’s normal operating requirements on an ongoing basis. The Company ensures that there is sufficient
available capital to meet its short-term business requirements, taking into account its anticipated cash flows from
operations and its holdings of cash and cash equivalents. The Company has a revolving credit facility in place to
assist with meeting its cash flow needs as required (Note 13).
The maturities of the Company’s non-current liabilities are disclosed in Note 13 and Note 27. All current liabilities
are due to be settled within one year.
(c) Foreign exchange risk
The Company operates internationally and is exposed to foreign exchange risk arising from various currencies,
primarily with respect to CLP, BRL, and ARS.
The Company’s risk management strategy is to manage cash flow risk related to foreign denominated cash flows.
The Company is exposed to currency risk related to changes in rates of exchange between foreign denominated
balances and the functional currencies of the Company’s principal operating subsidiaries. The Company’s
revenues are denominated in US dollars, while most of the Company’s operating and capital expenditures are
denominated in the local currencies. The Company may, at its discretion, use forward or derivative contracts to
manage its exposure to foreign currencies, the use of which is subject to appropriate approval procedures. A
significant change in the currency exchange rates between the US dollar and foreign currencies could have a
material effect on the Company’s net earnings and other comprehensive income.
The following table illustrates the estimated impact a 10% US dollar change against the €, CLP, SEK and BRL would
have on pre-tax earnings as a result of translating the Company's foreign denominated financial instruments as at
December 31, 2024 before the impact of derivative contracts:
Currency Change Effect on Pre-Tax Earnings Change Effect on Pre-Tax Earnings
€ +10% $8,033 -10% $(8,033)
CLP +10% $(18,095) -10% $18,095
SEK +10% $5,241 -10% $(5,241)
BRL +10% $(2,143) -10% $2,143
(d) Commodity price risk
The Company is subject to price risk associated with fluctuations in the market prices for metals. A significant
change in metal prices could have a material effect on the Company’s revenues.
The Company may, at its discretion, use forward or derivative contracts to manage its exposure to changes in
commodity prices, the use of which is subject to appropriate approval procedures. The Company is also subject to
price risk on the final settlement of its provisionally priced trade receivables.
The following table illustrates the sensitivity of the Company’s risk on final settlement of its provisionally priced
trade receivables:
Metal Payable metal Provisional price on
December 31, 2024 Change Effect on Revenue
($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
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)
- 55 -
===== SIDA 129 =====
(e) Interest rate risk
The Company’s exposure to interest rate risk arises from the interest rate impact on its cash and cash
equivalents, restricted funds, and debt facilities. Certain of the Company's debt facilities include a variable rate
component such as references to Term SOFR on various term loans and credit facilities, as well as applicable
credit spreads depending on the Company's net leverage ratio. The interest rates on the Company’s revolving
credit facility and non-revolving term loan reference Term SOFR.
As at December 31, 2024, holding all other variables constant, a 1% change in the interest rate would result in an
approximate $12.5 million change in interest expense on an annualized basis (2023 - $4.2 million).
31. MANAGEMENT OF CAPITAL RISK
The Company’s objectives when managing its capital include ensuring a sufficient combination of positive operating
cash flows and debt and equity financing in order to meet its ongoing capital development and exploration programs
in a way that maximizes the shareholder return given the assumed risks of its operations while, at the same time,
safeguarding the Company’s ability to continue as a going concern. The Company considers the following items as
capital: excess cash balances, debt and lease liabilities, and share capital reserve.
Through the ongoing management of its capital, the Company will modify the structure of its capital based on
changing economic conditions in the jurisdictions in which it operates. In doing so, the Company may issue new shares
or debt, buy back issued shares, or pay off any outstanding debt. The Company continuously monitors its capital
structure to determine the appropriateness of paying dividends.
Planning, including life-of-mine plans, annual budgeting and controls over major investment decisions are the primary
tools used to manage the Company’s capital. Updates are made as necessary to both capital expenditure and
operational budgets in order to adapt to changes in risk factors of proposed expenditure programs and market
conditions within the mining industry.
32. SUPPLEMENTARY CASH FLOW INFORMATION
2024 2023
Changes in non-cash working capital items consist of:
Trade and income taxes receivable, inventories, and other current assets $ 100,751 $ (2,580)
Trade and income taxes payable, and other current liabilities 120,129 (17,452)
$ 220,880 $ (20,032)
Operating activities included the following cash payments:
Income taxes paid $ 184,378 $ 110,482
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)
- 56 -
===== SIDA 130 =====
Registered Office
1055 Dunsmuir Street, Suite 2800, Bentall IV, Vancouver, BC V7X 1L2
Tel: +1.604.806.3081
lundinmining.com