LUNDIN GOLD REPORTS EXCEPTIONAL RESULTS IN THE FIRST QUARTER OF 2022 Inaugural Dividend Anticipated Following Q2 Results under Recently Approved Policy
NEWS RELEASE
Vancouver, May 3, 2022
Lundin Gold Inc. 885 West Georgia Street, Suite 2000 Phone: +1 604 689 7842 lundingold.com
Vancouver, BC, V6C 3E8 Fax: +1 604 689 4250 Email: [email protected]
LUNDIN GOLD REPORTS EXCEPTIONAL RESULTS IN THE FIRST QUARTER OF 2022
Inaugural Dividend Anticipated Following Q2 Results under Recently Approved Policy
Lundin Gold Inc. (TSX: LUG; Nasdaq Stockholm: LUG) ("Lundin Gold" or the "Company") today reports
exceptional results for the first quarter of 2022, highlighted by the production and sale of 121,665 and 119,282
ounces of gold, respectively, at an All-in Sustaining Cost (AISC)1 of $696 per oz sold. The Company generated free
cash flow1 of $91.8 million this quarter resulting in a cash balance of $337 million at quarter end. Lundin Gold’s
exceptional performance in Q1 2022 provides a robust foundation for the rest of the year, and the Company’s
production guidance of 405,000 to 445,000 oz and AISC 1 of $860 to $930 for 2022 remain unchanged. All
amounts are in U.S. dollars unless otherwise indicated.
As a result of the Company’s significant cash flow generation throughout 2021 and continuing in Q1 2022, the
Company’s Board of Directors has approved implementation of a dividend policy. Under this newly established
policy, the Company anticipates paying two cash dividends per calendar year, following the release of second
quarter and year end results, respectively . Subject always to the board’s discretion , the Company anticipates
declaring and paying an inaugural semi-annual dividend of $0.20 per share (equivalent to approximately $100
million annually based on currently issued and outstanding shares) pursuant to the policy after the
announcement of the Company’s Q2 2022 financial results.
Ron Hochstein, President and CEO commented, “I am delighted to announce that the strong operational and
financial results achieved in 2021 have continued in Q1 2022. It is clear that Fruta del Norte is generating
significant free cash flow providing Lundin Gold the opportunity to begin returning capital to shareholders. With
continuing strong performance, Lundin Gold will be in the enviable position of being able to distribute a portion
of its free cash flow directly to its shareholders by way of dividends, while still enabling the Company to accelerate
debt repayments, carry out expanded exploration programs, potential future capital projects, and pursue growth
opportunities. I believe Lundin Gold is poised to perform well this year and continue to create shareholder value.”
First Quarter of 2022 Financial Overview
• The Company sold a total of 119,282 oz of gold, consisting of 75,928 oz of concentrate and 43,354 oz of
doré at an average realized gold price 1 of $1,862 per oz for total gross revenues from gold sales of $222.1
million. Net of treatment and refining charges, revenues were $216.5 million.
• Cash operating costs 1 and AISC 1 were $619 and $696 per oz of gold sold, respectively, mainly due to
continued improvements in recoveries and low sustaining capital during the quarter.
1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on
page 11 of the Company's MD&A for the three months ended March 31, 2022 available on SEDAR
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• Income from mining operations was $111 million. The Company generated cash flow of $127.3 million from
operations and ended the quarter with a cash balance of $337 million. Free cash flow1 for the quarter was
$91.8 million or $0.39 per share.
• Earnings before interest, taxes, depreciation, and amortization 1 (“EBITDA”) and adjusted EBITDA 1 were
$98.8 million and $133.5 million, respectively.
• Net income was $23.2 million after deducting derivative losses, corporate, exploration, finance costs, and
associated taxes on earnings. Adjusted earnings1, which exclude derivative losses, were $ 57.6 million, or
$0.25 per share.
First Quarter of 2022 Production Overview
• The mine maintained its strong operating performance during the quarter with 379,629 tonnes mined at an
average grade of 8.7 grams per tonne.
• Underground mine development also continued as planned with a total of 2,253 metres completed.
Development rates averaged 25.0 metres per day in the first quarter.
• The mill processed 373,407 tonnes of ore at an average throughput rate of 4,149 tpd, near design capacity,
notwithstanding downtime for both SAG and ball mill relining.
• The average grade of ore milled was 11.2 grams per tonne with average recovery at 90.2%.
• Gold production was 121,665 oz, comprised of 78,601 oz of concentrate and 43,064 oz of doré.
First Quarter of 2022 Operating and Financial Highlights
The following two tables provide an overview of key operating and financial results.
Three months ended
March 31
2022 2021
Tonnes ore mined 379,629 365,471
Tonnes ore milled 373,407 324,591
Average mill head grade (g/t) 11.2 11.4
Average recovery (%) 90.2% 87.8%
Average mill throughput (tpd) 4,149 3,607
Gold ounces produced 121,665 104,137
Gold ounces sold 119,282 81,805
1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on
page 11 of the Company's MD&A for the three months ended March 31, 2022 available on SEDAR
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Three months ended
March 31
2022 2021
Net revenues ($’000) 216,474 139,991
Income from mining operations ($’000) 111,207 64,031
Earnings before interest, taxes, depreciation, and amortization ($’000) 1 98,813 129,966
Adjusted earnings before interest, taxes, depreciation, and amortization ($’000) 1 133,537 78,443
Net income ($’000) 23,182 85,980
Free cash flow ($’000) 1 91,806 43,580
Average realized gold price ($/oz sold) 1 1,862 1,765
Cash operating cost ($/oz sold)1 619 672
All-in sustaining costs ($/oz sold) 1 696 830
Free cash flow per share ($)1 0.39 0.19
Adjusted net earnings ($‘000) 1 57,550 37,409
Adjusted net earnings per share ($)1 0.25 0.16
Liquidity and Capital Resources
At the end of the first quarter of 2022, the Company is in a strong financial position
(in thousands of U.S. dollars) As at March 31,
2022
As at December 31,
2021
Financial Position:
Cash 336,939 262,608
Working capital 273,680 217,221
Total assets 1,735,223 1,685,113
Long-term debt 752,482 739,977
The change in cash during Q1 2022 was primarily due to cash generated from operating activities of $127.3
million and proceeds from the exercise of stock options, warrants, and anti-dilution rights of $5.9 million. This is
offset by principal, interest and finance charge repayments under the gold prepay and stream credit facilities
totalling $30.3 million, the first cash sweep payment under the senior debt of $12.9 million and cash outflows of
$12.2 million for capital expenditures, which include costs for the SVR and sustaining capital.
The Company generated strong operating cash flow during the first quarter of 2022 and expects to continue to
do so for the remainder of the year based on its production and AISC guidance. At current gold prices this strong
operating cash flow will continue to support aggressive debt repayments, regional exploration and underground
expansion drilling at FDN, planned capital expenditures, growth initiatives and now dividends under the recently
approved dividend policy.
Capital Expenditures
• South Ventilation Raise: The SVR progressed in accordance with the revised work plan defined in 2021, and
completion is still expected to occur near the end of the second quarter of 2022. Following mobilization of
equipment and personnel, the set up of the head frame was completed in Marc h with the 5.1 metre slash
and concrete lined shaft reaching 30 metres by the end of the quarter.
1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on
page 11 of the Company's MD&A for the three months ended March 31, 2022 available on SEDAR
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• Sustaining Capital: Planning for the third raise of the tailings dam was carried out during the first quarter
and construction has now commenced. Resource expansion drilling at Fruta del Norte continued to
progress with 3,006 metres completed during the quarter continuing to focus on expansion of the inferred
resource at the south end of the deposit. Expenditures for other sustaining capital project s will ramp up
throughout the remainder of the year.
Health and Safety
The health and safety of personnel at site is of paramount importance, and stringent procedures remain in place
to minimize the impact of COVID-19 on the workforce. Through vaccination campaigns by Ecuador’s Ministry of
Public Health, 100% of the Company’s employees and on-site contractors were vaccinated and as at March 31,
2022, 71% have received a booster shot.
Two lost time incidents and two medical aid incidents were recorded during the first quarter of 2022. The Total
Recordable Incident Rate during this period was 0.36 per 200,000 hours worked.
Community
Various community projects supported by the Company are under way in 2022 , including sponsoring the
establishment of micro businesses providing ancillary services to Fruta del Norte and the community, such as a
textile manufacturer and fire extinguisher maintenance provider. These are in addition to ongoing projects such
as road maintenance, education projects and economic development. The public bridge over the Zamora River,
for which Lundin Gold provided the funding, opened during Q1 2022.
Exploration
The Company’s 2022 regional exploration program continued on the Barbasco and Puenta Princesa targets.
Drilling is ongoing, with two rigs currently turning, and 3,100 metres completed during the first quarter of 2022.
Results will be announced when available.
Mr. Andre Oliveira was announced as the Company’s new Vice President, Exploration during the quarter with
responsibility for regional exploration, near mine exploration and resource expansion programs.
Early in the second quarter, Newcrest International Pty Ltd. (“Newcrest”), a wholly owned subsidiary of
Newcrest Mining Limited, met the first expenditure requirement under the Earn-In Agreement covering eight of
Lundin Gold’s early-stage concessions to the north and south of Fruta del Norte. The initial program is focused
on testing priority copper -gold porphyry targets. Two core holes were completed during the quarter which
detected low-level porphyry style copper mineralisation. Drilling is ongoing. Newcrest must exercise its option
to proceed to the second stage of the earn -in by May 28 , 2022 . Through completion of the second stage,
Newcrest would earn an initial indirect 25% interest in the eight concessions through a joint venture entity with
Lundin Gold.
Outlook
Lundin Gold’s exceptional performance in Q1 2022 provid es a robust foundation for the rest of the year, and
the Company’s production guidance of 405,000 to 445,000 oz and AISC 1 of $860 to $930 for 2022 remain
unchanged.
1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on
page 11 of the Company's MD&A for the three months ended March 31, 2022 available on SEDAR
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The SVR is the last remaining scope of work under the original FDN construction project. Completion of the SVR
remains on track for the second quarter of 2022 with no anticipated impact on production in 2022.
Sustaining capital will ramp up substantially starting in Q2 2022 with construction of the third raise of the TSF
beginning, and completion expected in Q4 2022. Our FDN drilling program for the conversion of inferred
resources and definition of additional resources is ongoing. Several other capital projects are planned for 2022
and are expected to ramp up starting in Q2, contributing to an expected increase in sustaining capital costs
during the balance of the year.
The 16,500 metre regional exploration dri ll program continues at Puente -Princesa and Barbasco. At Barbasco,
the drilling program will continue exploring for a large geochemical anomalous area. In addition, prospecting
continues throughout the Company’s regional concessions to identify new areas for future drilling.
An exploration data review carried out during the first quarter ha s indicated several potential targets in areas
immediately near the Fruta del Norte deposit. These targets, located in areas coincident with geochemical
anomalies on surface, display similar geological characteristics to the Fruta del Norte deposit but have not been
tested by drilling. Based on this review, an additional near mine exploration drill program has been developed
with an expected cost of $4 million to be incurred during the remainder of the year.
Following the approval of the dividend policy, the Company anticipates declaring and paying an inaugural $0.20
per share dividend after the announcement of the Company’s Q2 2022 financial results.
Qualified Persons
The technical information relating to Fruta del Norte contained in this press release has been reviewed and
approved by Ron Hochstein P. Eng, Lundin Gold’s President & CEO who is a Qualified Person under NI 43 -101.
The disclosure of exploration information contained in this press release was prepared by Andre Oliveira, P.Geo,
Lundin Gold’s V.P. Exploration, who is a Qualified Person in accordance with the requirements of NI 43-101.
Webcast and Conference Call
The Company will host a conference call and webcast to discuss its results on Wednesday, May 4 at 8:00 a.m.
PT, 11:00 a.m. ET, 5:00 p.m. CET.
Conference Call Dial-In Numbers:
Participant Dial-In North America: +1 416-764-8659
Toll-Free Participant Dial-In North America: +1 888-664-6392
Participant Dial-In Sweden: 0200899189
Conference ID: Lundin Gold / 78094940
A link to the webcast is 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 May 18, 2022.
Toll Free North America Replay Number: +1 888-390-0541
International Replay Number: +1 416-764-8677
Replay passcode: 094940 #
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About Lundin Gold
Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador and
a large exploration land package that hosts the Fruta del Norte deposit at its northern edge. Fruta del Norte is
among the highest-grade operating gold mines in the world.
The Company's board and management team have extensive expertise in mine operations and are dedicated to
operating Fruta del Norte responsibly. The Company operates with transparency and in accordance with
international best practices. Lundin Gold is committed to delivering value to its shareholders, while
simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe
workplace and minimizing the environmental impact. The Company believes that the value created through the
development of Fruta del Norte will benefit its shareholders, the Government and the citizens of Ecuador.
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 11 of the Company's MD&A for the three months ended March 31, 2022 available on
SEDAR.
Additional Information
The information in this release is subject to the disclosure requirements of Lundin Gold under the EU Market
Abuse Regulation. This information was publicly communicated on May 3, 2022 at 5:30 p.m. Pacific Time through
the contact persons set out below.
For more information, please contact
Ron F. Hochstein Finlay Heppenstall
President and CEO Director, Investor Relations
Tel (Ecuador): +593 2-299-6400 Tel: +1 604 806 3089
Tel (Canada): +1-604-806-3589 [email protected]
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, object ives,
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. Lundin Gold believes that the expectations reflected in this forward -looking information
are reasonable, but no assurance can be given that these expectations will prove to be correct. Forward -looking information should not
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be unduly relied upon. This information speaks only as of the date of this press release, and the Company will not necessarily update this
information, unless required to do so by securities laws.
This press release contains forward -looking information in a number of places, such as in statements relating t o the Company’s 2022
production outlook, including estimates of gold production, grades recoveries and AISC; expected sales receipts, cash flow forecasts and
financing obligations; its estimated capital costs and the expected timing and impact of completion of capital projects including the south
ventilation raise; the Company’s declaration and payment of dividends pursuant to its dividend policy; the timing and the suc cess of its
drill program at Fruta del Norte and its other exploration activities; and the Company’s efforts to protect its workforce from COVID -19.
There can be no assurance that such statements will prove to be accurate, as Lundin Gold's actual results and future events could differ
materially from those anticipated in this forward -looking information as a result of the factors discussed in the "Risk Factors" section
in Lundin Gold's Annual Information Form dated March 21, 2022, which is available at www.lundingold.com or on SEDAR.
Lundin Gold's actual results could differ materially from those anticipated. Factors that could cause actual results to differ materially from
any forward-looking statement or that could have a material impact on the Company or the trading price of its shares include: risks
associated with the Company's community relationships; risks related to political and economic instability in Ecuador; risks related to
estimates of production, cash flows and costs; the impacts of a pandemic virus outbreak; risks inherent to mining operations; failure of
the Company to maintain its obligations under its debt facilities; shortages of critical supplies; control of the Company's largest
shareholders; risks related to Lundin Gold’s compliance with environmental laws and liability for environmental contamination; the lack of
availability of infrastructure; the Company's reliance on one mine; exploration and development risks; risks related to the Company’s
ability to obtain, maintain or renew regulatory approvals, permits and licenses; uncertainty with the tax regime in Ecuador; risks related
to the Company’s workforce and its labour relations; volatility in the price of gold; the reliance of the Company on its information systems
and the risk of cyber-attacks on those systems; deficient or vulnerable title to concessions, easements and surface rights; inherent safety
hazards and risk to the health and safety of the Company’s employees and contractors; the imprecision of Mineral Reserve and Resource
estimates; key talent recruit ment and retention of key personnel; volatility in the market price of the Company’s shares; measures to
protect endangered species and critical habitats; social media and reputation; the cost of non -compliance and compliance costs; risks
related to illegal mining ; the adequacy of the Company’s insurance; risks relating to the declaration of dividends; uncertainty as to
reclamation and decommissioning; the ability of Lundin Gold to ensure compliance with anti -bribery and anti -corruption laws; the
uncertainty regarding risks posed by climate change; limits of disclosure and internal controls; security risks to the Company, its assets
and its personnel; the potential for litigation; and risks due to conflicts of interest.