"I'm pleased to report another great start to the year for
OPERATING AND FINANCIAL RESULTS SUMMARY
The following two tables provide an overview of key operating and financial results.
Three months ended | ||
2024 | 2023 | |
Tonnes ore mined | 419,758 | 427,735 |
Tonnes ore milled | 413,596 | 392,332 |
Average mill throughput (tpd) | 4,545 | 4,359 |
Average mill head grade (g/t) | 9.5 | 12.3 |
Average recovery | 88.3 % | 90.6 % |
Gold ounces produced | 111,572 | 140,021 |
Gold ounces sold | 108,916 | 134,691 |
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1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 13 to 16 of the Company's MD&A for the first quarter ended |
Three months ended | ||
2024 | 2023 | |
Revenues ($'000) | 226,741 | 256,728 |
Income from mining operations ($'000) | 113,237 | 132,708 |
Earnings before interest, taxes, depreciation, and amortization ($'000)1 | 111,612 | 143,632 |
Adjusted earnings before interest, taxes, depreciation, and amortization ($'000)1 | 131,456 | 159,066 |
Net income ($'000) | 41,897 | 51,465 |
Basic income per share ($) | 0.18 | 0.22 |
Cash provided by operating activities ($'000) | 107,914 | 144,439 |
Free cash flow ($'000)1 | 82,259 | (11,653) |
Free cash flow per share ($)1 | 0.35 | (0.05) |
Average realized gold price ($/oz sold)1 | 2,141 | 1,952 |
Cash operating cost ($/oz sold)1 | 735 | 644 |
All-in sustaining costs ($/oz sold)1 | 868 | 728 |
Adjusted earnings ($'000)1 | 57,796 | 67,014 |
Adjusted earnings per share ($)1 | 0.24 | 0.28 |
Dividends paid per share ($) | 0.10 | 0.10 |
FIRST QUARTER HIGHLIGHTS - FDN STRONGLY POSITIONED TO PROFIT FROM RISING GOLD PRICES
Financial Results
- Gold sales totalled 108,916 oz, consisting of 71,676 oz in concentrate and 37,240 oz as doré, resulting in gross revenues of
$233 million at an average realized gold price1 of$2,141 per oz. - Net of treatment and refining charges, revenues for the quarter were
$227 million . - Cash operating costs1 and AISC1 were
$735 and$868 per oz of gold sold, respectively, which are both in line with expectations. Cash operating costs1 per oz sold were at the upper end of guidance as a result of lower gold production resulting from expected lower grades and recoveries, while the lower level of sustaining capital activities than anticipated during the quarter reduced AISC1. - The Company generated cash from operating activities of
$108 million and free cash flow1 of$82.3 million or$0.35 per share resulting in a cash balance of$324 million atMarch 31, 2024 . - Earnings before interest, taxes, depreciation, and amortization1 ("EBITDA") and adjusted EBITDA1 were
$112 million and$131 million , respectively, with the difference resulting from derivative losses recognized in the quarter and a one-time special government levy, payable in two equal instalments. - Net income was
$41.9 million including a derivative loss of$17.9 million , and net of corporate, exploration, finance costs, and associated taxes. Adjusted earnings1, which exclude the one-time special government levy, derivative losses and related taxes, were$57.8 million , or$0.24 per share.
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1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 13 to 16 of the Company's MD&A for the first quarter ended |
Production Results
- Gold production was 111,572 oz which was comprised of 73,964 oz in concentrate and 37,608 oz as doré.
- Mine production totalled 419,758 tonnes of ore at an average grade of 10.5 grams per tonne.
- The mill processed 413,596 tonnes of ore at an average throughput rate of 4,545 tpd which is consistent with the throughput rate achieved during the previous year.
- The average grade of ore milled was 9.5 grams per tonne with average recovery at 88.3%.
Outlook
- First quarter performance provides a strong foundation for the rest of the year. The Company's production guidance of 450,000 to 500,000 oz and AISC[3] guidance of
$820 to$890 oz. sold remain unchanged. - Production is expected to be higher during the second half of the year driven by planned increase in grades and recoveries.
Process Plant Expansion Project to increase plant throughput to 5,000 tpd and improve metallurgical recoveries, with the addition of three Jameson cells, remains on track for completion by the end of 2024.- Near-mine drilling program to continue to explore
Bonza Sur where the primary focus is to better understand the target's mineralized zones as well as expanding the system to the north and at depth. - At the new FDN East discovery, two rigs will focus on expanding the initial positive results achieved to gain a better understanding of the mineralized zones and the main geological controls.
- One underground rig is expected to continue to test the extension of the FDN mineral envelope at depth.
- The regional drilling program is planned to start during the second quarter with one surface rig testing the Robles and Lupita targets in the
Southern Basin . - Ten rigs are turning across the conversion, near-mine and regional programs and a minimum of 65,000 metres of drilling continues to be planned in 2024. This represents the largest drill program ever completed at the land package that hosts the FDN deposit. The estimated exploration budget for 2024 remains
$42 million . - The Company anticipates continuing to declare quarterly dividends of at least
$0.10 per share, which is equivalent to approximately$100 million annually, based on currently issued and outstanding shares. With the Company becoming debt free combined with rising gold prices, the Company expects to review its dividend policy in the latter half of 2024.
Liquidity and Capital Resources
At the end of the first quarter of 2024, the Company is in a strong financial position:
(in thousands of | As at 2024 | As at 2023 |
Financial Position: | ||
Cash | 323,935 | 268,025 |
Working capital | 413,528 | 346,859 |
Total assets | 1,508,987 | 1,468,209 |
Long-term debt | ||
Fair value of stream credit facility and offtake | 326,791 | 305,647 |
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1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages 13 to 16 of the Company's MD&A for the first quarter ended |
The change in cash during the first quarter was primarily due to cash generated from operating activities of
The Stream Facility was the last remaining debt on the Company's balance sheet following the full repayment of both the gold prepay credit facility and senior debt facility during 2023. On
Capital Expenditures
- Sustaining Capital:
- Sustaining capital activities during the quarter focused on completing projects that began in 2023 including the implementation of a mine dispatch system and the upgrade of the surface haul road from the mine to the ore stockpile area.
- For the conversion drilling program, a total of 3,710 metres across 30 drill holes were completed in the north sector of the FDN deposit. Conversion drilling continues to confirm mineralization at FDN with high-grade drilling intercepts associated with breccias and stockwork zones, like the mineralization found in the north sector of the Mineral Reserve envelope. Two rigs are currently turning under the conversion program.
Process Plant Expansion Project - Detailed engineering advanced during the quarter, along with procurement activities of plant equipment for the expansion which is expected to improve throughput to 5,000 tonnes per day and improve recoveries by approximately 3%.
- Construction of the upgraded tailings and reclaim pipelines commenced late in the quarter.
- The project continues to track on schedule for completion in December of this year.
Health and Safety
During the first quarter there were two Lost Time Incidents and three Medical Aid Incidents. The Total Recordable Incident Rate across exploration and operations was 0.63 per 200,000 hours worked for the quarter.
Community
Infrastructure investment continued to be a priority for
During the first quarter of 2024, two series of dialogue round tables occurred, with high participation rates by local community members.
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1 The Transaction constitutes a "related party transaction", as defined under Multilateral Instrument 61-101 ("MI 61-101"). The Transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as the consideration paid pursuant to the Transaction does not exceed 25% of the Company's market capitalization. |
EXPLORATION
Near-Mine Exploration Program
During the first quarter of 2024, the Company completed a total of 12,331 metres across 26 holes from surface and underground. Drilling from underground explored mainly the FDN deposit at depth while drilling from surface continued to test sectors located along the extensions of the controlling structures of the FDN deposit, such as
- During the quarter, the surface drilling program continued along the extensions of the East Fault, where the Bonza Sur discovery and other prospective sectors like FDN East, FDN North and Alejandro are located.
- At
Bonza Sur , located one kilometre from FDN, eight surface drill holes were completed and continue to expand this new epithermal system. Recent results confirm higher-grade intercepts at shallower depths associated mainly to vein/veinlet zones of quartz and minor chalcedony and manganoan-carbonate with occurrences of disseminated to semi-massive levels of sulphides (mainly sphalerite and galena). Mineralization has already been identified for more than 1.3 kilometres along the north-south strike and for at least 500 metres along the downdip and remains open in all directions. - At FDN East, a new buried epithermal mineralized system was discovered only 100 metres east from FDN. The target is hosted in similar volcanic and intrusive rocks as those found at the FDN deposit and is buried by sedimentary cover. Four drill holes were completed during the first quarter and intercepted gold mineralization associated with significant levels of hydrothermal alteration represented by veins and/or veinlets of chalcedony, sulfides (mainly pyrite) and visible gold.
- At
- Underground exploration drilling at FDN continues to explore extensions of the mineral envelope at depth and four drill holes have been completed year-to-date. Of note, drill hole UGE-DD-24-089 indicates gold mineralization associated with zones of hydrothermal alteration of a similar composition to that found at shallower levels of the mine and underscores the potential to expand FDN's current mineral envelope at depth.
Regional Exploration Program
The 2024 regional program continues to advance the identification of important indicators that point toward the presence of buried epithermal deposits in the southern basin. New sectors have been identified along the south border of the Suarez basin. A total of 10,000 metres of drilling is planned to be completed in 2024.
During the quarter, exploration fieldwork activities were completed on the Robles and Lupita targets, located to the south of the
CORPORATE – QUARTERLY DIVIDEND OF
The Company paid its quarterly dividend of
Qualified Persons
The technical information relating to FDN contained in this News Release has been reviewed and approved by
Webcast and Conference Call
The Company will host a conference call and webcast to discuss its results on
Conference Call Dial-In Numbers:
+1 416-764-8659 | |
+1 888-664-6392 | |
Participant Dial-In Sweden: | 0200899189 |
Conference ID: |
A link to the webcast will be available on the Company's website, www.lundingold.com.
A replay of the conference call will be available two hours after the completion of the call until
Toll Free North America Replay Number: | +1 888-390-0541 |
International Replay Number: | +1 416-764-8677 |
Replay passcode: | 420882 # |
About
Non-IFRS Measures
This news release refers to certain financial measures, such as average realized gold price per oz sold, EBITDA, adjusted EBITDA, cash operating cost per oz sold, all-in sustaining cost, free cash flow, free cash flow per share, and adjusted earnings, which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. These measures may differ from those made by other companies and accordingly may not be comparable to such measures as reported by other companies. These measures have been derived from the Company's financial statements because the Company believes that, with the achievement of commercial production, they are of assistance in the understanding of the results of operations and its financial position. Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on page 13 of the Company's MD&A for the three months ended
Additional Information
The information in this release is subject to the disclosure requirements of
Caution Regarding Forward-Looking Information and Statements
Certain of the information and statements in this press release are considered "forward-looking information" or "forward-looking statements" as those terms are defined under Canadian securities laws (collectively referred to as "forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as "believes", "anticipates", "expects", "is expected", "scheduled", "estimates", "pending", "intends", "plans", "forecasts", "targets", or "hopes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "will", "should" "might", "will be taken", or "occur" and similar expressions) are not statements of historical fact and may be forward-looking statements. By their nature, forward-looking statements and information involve assumptions, inherent risks and uncertainties, many of which are difficult to predict, and are usually beyond the control of management, that could cause actual results to be materially different from those expressed by these forward-looking statements and information.
This press release contains forward-looking information in several places, such as in statements relating to the Company's 2024 production outlook, including estimates of gold production, grades recoveries and AISC; operating plans; expected sales receipts, and cash flow forecasts, completion of the buy out of the Stream Credit Facility and the Offtake Agreement; timing of the completion of the
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