LUNDIN GOLD REPORTS FOURTH QUARTER AND FULL YEAR RESULTS Production and Cost Performance Meets Upgraded Guidance
NEWS RELEASE
Vancouver, February 22, 2024
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 FOURTH QUARTER AND FULL YEAR RESULTS
Production and Cost Performance Meets Upgraded Guidance
Lundin Gold Inc. (TSX: LUG; Nasdaq Stockholm: LUG ; OTCQX: LUGDF ) ("Lundin Gold" or the "Company") is
pleased to report results for the fourth quarter and year ended December 31, 2023. Lundin Gold’s year is
highlighted by its production of 481,274 oz of gold at an all -in sustaining cost (“AISC”) 1 of $860 per oz sold,
meeting upwardly revised production guidance of 450,000 to 485,000 oz and AISC1 guidance of $820 to $870 per
oz sold. Cash from operating activities of $519 million was generated for the year resulting in free cash flow¹ of
$263 million which is net of a one -time interest and finance charge payment of $129 million from the full
repayment of the gold prepay facility (the “Gold Prepay Facility”). All amounts are in U.S. dollars unless otherwise
indicated.
Ron Hochstein, President and CEO commented, “ Lundin Gold continues its strong track record by meeting its
upgraded production and improved cost guidance for 2023, and in doing so generating significant cash flow.
Looking ahead to 2024, we are focused on operational excellence and delivering the Process Plant Expansion
Project to achieve increased throughput and recovery improvement s. Furthermore, we continue to make
significant headway on our exciting exploration programs ; 2024 will be the largest drilling program ever
conducted in the district that hosts Fruta del Norte. We expect continued generation of free cash flow, which will
enable the Company to continue to pursue debt reduction, M&A and potential increase in returns to shareholders
through increased dividends.”
OPERATING AND FINANCIAL RESULTS SUMMARY
The following two tables provide an overview of key operating and financial results.
Three months ended
December 31,
Year ended
December 31,
2023 2022 2023 2022
Tonnes ore mined 405,705 365,250 1,635,550 1,492,230
Tonnes ore milled 427,743 420,838 1,654,520 1,559,178
Average head grade (g/t) 8.2 10.0 10.2 10.6
Average recovery 88.1% 89.6% 88.4% 89.5%
Average mill throughput (tpd) 4,649 4,574 4,533 4,272
Gold ounces produced 99,310 121,139 481,274 476,329
Gold ounces sold 98,005 119,890 474,365 470,103
1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on
pages 16 to 18 of the Company's MD&A for the year ended December 31, 2023 available on SEDAR+.
2
Three months ended
December 31,
Year ended
December 31,
2023 2022 2023 2022
Net revenues ($’000) 190,688 210,961 902,518 815,666
Average realized gold price ($/oz sold)1 2,021 1,814 1,958 1,789
Income from mining operations ($’000) 78,051 92,095 435,180 369,754
Earnings before interest, taxes, depreciation, and amortization ($’000)1 67,274 141,274 493,976 543,660
Adjusted earnings before interest, taxes, depreciation, and amortization ($’000)1 95,908 112,057 526,045 467,343
Net income (loss) ($’000) 11,062 (68,259) 179,457 73,558
Basic income (loss) per share ($) 0.05 (0.29) 0.76 0.31
Cash provided by operating activities ($’000) 92,574 133,390 519,395 426,145
Free cash flow ($’000)1 62,330 91,179 263,473 269,435
Cash operating cost ($/oz sold)1 832 713 697 671
All-in sustaining costs ($/oz sold)1 1,062 865 860 805
Free cash flow per share ($)1 0.26 0.39 1.11 1.15
Adjusted net earnings ($‘000)1 33,236 33,584 204,310 125,003
Adjusted net earnings per share ($)1 0.14 0.14 0.86 0.53
Dividends paid ($’000) 23,782 - 94,914 47,033
Dividends paid per share ($) 0.10 - 0.40 0.20
FOURTH QUARTER AND FULL YEAR HIGHLIGHTS
Financial Results – Cash Flow Story Intact
• Fourth quarter gold sales of 98,005 oz, consisting of 65,223 oz of concentrate and 32,782 oz of doré, at an
average realized gold price 1 of $2,021 per oz for total gross revenues from gold sales of $ 198 million. For
2023, sales totalled 481,274 oz gold and total revenues from gold sales amounted to $929 million.
• Net of treatment and refining charges, revenues in the fourth quarter and 2023 were $191 million and $903
million, respectively.
• Cash operating costs1 and AISC1 for the quarter were $832 and $1,062 per oz of gold sold, respectively. Both
metrics were impacted by a decrease in oz sold compared to previous quarters. In particular, AISC 1 was
impacted by the timing of sustaining capital expenditures incurred to complete the fourth raise of the
tailings dam plus other projects, including the underground maintenance facility. For 2023, cash operating
costs1 and AISC1 were $697 and $860 per oz of gold sold, respectively, which are in line with the Company’s
improved 2023 guidance.
• Cash provided by operating activities was $92.6 million in the fourth quarter and the Company generated
free cash flow1 of $62.3 million from operations, or $0.26 per share. For 2023, cash from mining operations
was $519 million, and the Company generated free cash flow1 of $263 million, or $1.11 per share. At the
end of 2023, the Company had a cash balance of $268 million.
• Earnings before interest, taxes, depreciation, and amortization1 (“EBITDA”) and adjusted EBITDA1 during the
fourth quarter were $ 67.3 million and $ 95.9 million, respectively, with the difference resulting from
derivative losses recognized during the year. For the year, EBITDA1 and adjusted EBITDA1 were $494 million
and $526 million, respectively.
1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on pages
16 to 18 of the Company's MD&A for the year ended December 31, 2023 available on SEDAR+.
3
• In the fourth quarter, n et income was $11.1 million including a derivative loss of $2 8.6 million, and net of
corporate, exploration, finance costs, and associated taxes . Adjusted earnings 1, which exclude the
derivative loss, were $33.2 million. In 2023, net income and adjusted earnings1 were $179 million and $204
million, respectively, or $0.86 per share.
Production Results – Another Strong Quarter, Room to Improve
• Gold production during the fourth quarter totalled 98,310 oz, comprised of 65,298 oz in concentrate and
34,012 oz as doré. Gold production for 2023 was 481,274 oz , achieving the upper end of upgraded
production guidance.
• During the fourth quarter, 405,705 tonnes of ore were mined while the mill processed 427,743 tonnes of
ore at an average throughput of 4,649 tpd. In 2023, a total of 1,635,550 and 1,654,520 tonnes of ore were
mined and processed, respectively. Ore inventory management is the primary reason for the difference
between ore mined and processed. Both the fourth quarter and annual processing tonnages are records for
FDN.
• The average ore grade milled in the fourth quarter was 8.2 g/t, with average recovery at 88.1%. For 2023,
the average grade of ore milled was 10. 2 g/t with average recovery at 8 8.4%. The lower ore grade
experienced during the quarter was expected based on the current mine plan while r ecoveries were
affected by processing of ore from sectors that contain higher levels of finely disseminated sulphide
minerals which impacted flotation recovery.
Outlook
• Gold production at FDN in 2024 is projected to be between 450,000 to 500,000 oz based on an average
throughput rate of 4,500 tpd, average recoveries of 89% and average head grade of 9.9 g/t.
• Completion by the end of the year the $36 million Process Plant Expansion Project to increase plant
throughput to 5,000 tpd and improve metallurgical recoveries by approximately 3%.
• 2024 cash operating costs1 are estimated to average between $680 and $740 per oz of gold sold and AISC1
is expected to average between $820 and $890 per oz of gold sold. Both cash operating costs 1 and AISC1
will vary throughout the year.
• Total sustaining capital in 2024 is expected to range between $35 to $45 million and will include conversion
drilling, preliminary works for future TSF expansion, implementation of a mine dispatch system, and
upgrade of camp facilities.
• The Company intends to release updated estimates of Mineral Reserves and Resources for FDN near the
end of the first quarter of 2024 based on the results of its 2023 conversion drilling program.
• Expansion of the near-mine and regional exploration programs with a planned 56,000 metres of drilling in
2024 and a budget of $42 million, the largest program in the history of FDN since its discovery in 2006.
• Continued focus on deleveraging the balance sheet, including assessing options related the potential
buyback of the Stream Facility, which has a 50% buyback option for $150 million in June 2024 and a further
50% buyback option for $225 million in June 2026.
1 Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found on
pages 16 to 18 of the Company's MD&A for the year ended December 31, 2023 available on SEDAR+.
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• The Company anticipates continuing to declare quarterly dividends of at least $0.10 per share , which is
equivalent to approximately $100 million annually.
Liquidity and Capital Resources
At the end of 2023, the Company is in a strong financial position.
(in thousands of U.S. dollars) As at December 31,
2023
As at December 31,
2022
Financial Position:
Cash 268,025 363,400
Working capital 346,859 194,804
Total assets 1,468,209 1,668,865
Long-term debt
Senior debt facility
Principal and accrued interest - 183,638
Deferred transaction costs - (10,784)
Fair value of stream credit facility and offtake 305,647 287,666
Fair value of gold prepay credit facility - 207,446
Total long-term debt 305,647 667,966
As at December 31, 2023, the Company had cash of $268 million and a working capital balance of $347 million
compared to cash of $363 million and a working capital balance of $195 million at December 31, 2022.
The change in cash during 2023 was primarily due to the full repayment of the Gold Prepay Facility of $208
million; full repayment of the Senior Facility totalling $193 million, including interest; principal repayments,
interest and finance charges, including associated taxes, under the Stream Facility totalling $79.9 million;
dividends of $94.9 million; and cash outflows of $53.5 million relating to investing activities. This is offset by cash
generated from operating activities of $519 million, which is net of a $25 million voluntary advance income tax
payment to the Government of Ecuador during the fourth quarter that will reduce the Company’s corporate
income tax payment due in April 2024, and proceeds from the exercise of stock options and anti-dilution rights
totalling $14.2 million.
The Stream Facility is the last remaining debt on the Company’s balance sheet following the full repayment of
both the Gold Prepay Facility and Senior Facility during 2023. The Company has the option to repay (i) 50% of
the Stream Facility outstanding on June 30, 2024 for $150 million and / or (ii) the other 50% outstanding on June
30, 2026 for $225 million.
Capital Expenditures
Sustaining Capital
• Total sustaining capital spent during the year was $ 47.9 million, of which $ 14.5 was spent during the
fourth quarter.
• The fourth raise of the tailings dam and underground mine maintenance facility were completed during
the fourth quarter. The new warehouse was completed during the second quarter.
• Other sustaining capital projects such as extending two underground levels to the south for the 2024
conversion drill program, implementing a mine dispatch system, upgrading the sewage treatment plants,
and other efficiency improvement projects were well -advanced in 2023 and are expected to be
completed in 2024.
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• The 2023 conversion drilling program focused on the north-central and southern extension of FDN with
approximately 11,233 metres drilled across 79 holes.
o In the southern sector, 51 drill holes were completed and mostly intercepted the mineralized
zones associated with manganoan carbonate, chalcedony veins and sulphides.
o In the north -central sector, 28 drill holes were completed and positive assay results are
associated with zones of hydrothermal breccias along the downdip extension and the north limit
of FDN.
o The geological and mineral resource model is nearly complete, and an updated Mineral
Resources and Reserves estimate is expected before the end of the first quarter of 2024.
Process Plant Expansion Project
The Process Plant Expansion Project is expected to deliver increased plant throughput to 5,000 tpd and increased
metallurgical recoveries of approximately 3% by the end of 2024 with upgrades to the concentrate dewatering,
new tailings and reclaim lines, the addition of three Jameson cells, and other ancillary works. During the fourth
quarter, expenditures of $0.9 million were incurred of the total estimated expansion project capital estimate of
$36.0 million.
Health and Safety
During 2023 there were no Lost Time Incidents (“LTIs”) and seven Medical Aid Incident (“MAIs”). The Total
Recordable Incident Rate across exploration and operations was 0. 24 per 200,000 hours worked during 2023.
FDN operations had more than one year and over 7.6 million hours worked without a LTI as of December 31,
2023. Subsequent to year end, FDN operations experienced an LTI on February 2, 2024.
Community
Various community projects supported by the Company progressed during the year including initiatives focused
on community health and education. Lundin Gold continued to support an innovative program which provides
mental health services to local community members. Education programs sponsored by the Company which
improve local student access to higher education continued to show success as a cohort of local students prepare
to graduate from university in the coming months, a significant milestone for the Lo s Encuentros Parish. The
Company also launched a complementary program designed to improve the quality of local education during
the year.
Infrastructure investment continues to be a priority for Lundin Gold. In addition to the Company’s long-standing
commitment to support road maintenance, Lundin Gold co -funded with the Ministry of Education the
rehabilitation of the local school, which more than 1,300 children from the Los Encuentros Parish attend. Work
on this project was nearing completion at the end of the year.
Lundin Gold continued to support local businesses in conjunction with the Lundin Foundation, including women-
led businesses through the third series of the program “Soy Emprendadora”. Among the supported businesses,
the local textile manufacturer, fire ext inguisher maintenance company, and pest control/fumigation company
all increased their business activities during the year with Lundin Gold as an anchor client. Efforts have continued
to ensure that local farmers retain access to local, national, and inter national markets. The Company also
continued to engage with local indigenous people, especially the Shuar Federation of Zamora Chinchipe, to
jointly implement projects that promote economic opportunities and the Shuar culture.
Following the election of new local authorities, the round table dialogue process restarted during the third
quarter, with high participation rates by local community members.
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EXPLORATION
Near-Mine Exploration Program
During the year, the Company completed a total of 35,305 metres across 68 holes from surface and underground,
of which approximately 13,372 metres across 31 holes were drilled in the fourth quarter. Drilling from
underground explored to the east and at depth of the FDN deposit, while drilling from surface continued to test
along the extensions of the controlling structures of the FDN deposit.
• The surface drilling program continues along the south extension of the East Fault, where Bonza Sur and
the FDN South (“FDNS”) targets were discovered. During the fourth quarter, 14 surface drill holes were
completed, mostly at Bonza Sur, where the drillin g program continues to indicate continuity of
mineralization. Exploratory holes were also completed along the north and south extensions of the FDN
deposit and at the FDN East target.
o At Bonza Sur, located only one kilometre from FDN, seven surface drill holes were completed
and continue to expand the recently discovered epithermal system. Drilling continued to achieve
multiple positive intersections and has extended mineralization along north-south strike as well
as at depth. The mineralized zones are represented by veins/veinlets of quartz and minor
chalcedony and manganoan-carbonate associated with the occurrence of sulphides. The Bonza
Sur mineralization has already been identified f or more than 1.1 kilometres along the north -
south strike and for at least 500 metres along the downdip and remains open in all directions.
o At FDNS, three surface drill holes were completed along the south extension which intercepted
gold mineralization with variable widths. This vein system remains open along the northeast -
southwest direction and at depth.
o The exploratory drilling program aimed to explore new sectors advanced on distinct targets near
the FDN deposit. At FDN East, one drill hole intercepted zones of hydrothermal alteration hosted
on volcanic rocks associated to gold mineralization. In the north extension of the FDN deposit,
three exploratory holes were completed and intercepted large zones of hydrothermal alteration
with narrow intervals of gold mineralization.
• The underground drilling program continues to explore the continuity of the FDN deposit at depth and
beyond the major east and west faults. During the fourth quarter of 2023, a total of 17 drill holes were
completed. At depth, in the north sector of the FDN deposit, the drilling program confirmed
hydrothermal alteration zones and gold mineralization below the mineral envelope of FDN. In the
southern sector, the drill holes intercepted hydrothermal alteration zones represented by manganoan-
carbonate veins/veinlets with sulfides and narrow intervals of gold mineralization along the downdip
extension. Furthermore, the drilling program continue d to explore the continuity of the FDN mineral
envelope beyond the East fault and one drill hole intercepted narrow zones of hydrothermal alteration
with no significant gold mineralization.
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Regional Exploration Program
The regional program continue d to advance the identification of important indicators that point toward the
presence of buried epithermal deposits in the southern basin. The 2023 drilling program focused on distinct
sectors along the southeastern and southwestern borders of the Suarez basin and a total of 3,120 metres across
five drill holes were completed in the fourth quarter resulting in 8,461 metres completed under the 2023
program across 12 drill holes. Regional drilling focused on the Crisbel, Barbasco SE and Quebrada La Negra
targets.
• At the Crisbel target, two drill holes were completed testing a geochemical soil anomaly (gold and
epithermal pathfinder elements such as Sb, As) along the southwest contact between the Suarez Border
and the volcanic sequence. Limited hydrothermal alterati on was intercepted and no significant results
were returned.
• At Barbasco SE, one drill hole was completed and tested the extension of the FDN East Fault along the
southeastern extension of the Suarez basin. Zones of hydrothermal alteration with illite -silica was
intercepted, suggesting the presence hydrothermal activity in this sector.
• At Quebrada La Negra, two drill holes tested a Au -As-Sb soil anomaly and silicified conglomerate
outcrops. The drilling intercepted zones of hydrothermal alteration represented by silica-illite-marcasite
with associated chalcedony veinlets, suggesting furt her follow up drilling is required in this sector.
Results are pending.
Newcrest Earn-In Agreement
At the end of the fourth quarter, Newcrest Mining Limited (“Newcrest”), a subsidiary of Newmont Corporation
(“Newmont”), elected not to exercise its option to proceed to earn a 25% interest in Surnorte S.A., which holds
eight exploration concessions locate d to the north and south of Fruta del Norte. As a result, the earn -in
agreement has been terminated. The Company is now assessing various options for some or all of these
concessions.
CORPORATE
The Company paid quarterly dividends of $0.10 per share for a total of $94.9 million during the year. With the
release of its 2023 year -end results, the Company has declared a cash dividend of $0.10 per share which is
payable on March 25, 2024 (March 28, 2024 for shares trading on Nasdaq Stockholm) to shareholders of record
on March 8, 2024.
The Company’s second TCFD -aligned climate change report and seventh annual sustainability report were
published in May. Based on publicly available data from 152 gold mines that reported their Scopes 1 and 2
greenhouse gas emissions in 2021 and on Lundin Gold's 2022 emissions performance, the emissions intensity of
Fruta del Norte was among the lowest in the industry. The Company has set a target to be carbon neutral by
2030 with respect to its Scopes 1 and 2 emissions based on its current life of mine plan.
A number of changes to the Company’s directors too k place in 2023. At the Company’s annual shareholders’
meeting on May 15, 2023, Ms. Angelina Mehta was elected as a director, replacing Ms. Chantal Gosselin who
did not stand for re-election. Furthermore, upon the acquisition of the Company’s largest shareholder, Newcrest
Mining Limited (“Newcrest”) , by Newmont Corporation (“Newmont”) on November 6, 2023 , the Company
appointed two new directors to the Board as Newmont nominees: Ms. Melissa Harmon and Mr. Scott Langley.
Mr. Craig Jones and Ms. Jill Terry, the former Newcrest nominees, resigned from the Board on the same day.
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The Company also announced several changes to the Company’s officers during the year including the
appointment of Mr. Christopher Kololian as Chief Financial Officer, shortly after the retirement of Mr. Alessandro
Bitelli, and Mr. Terry Smith as Chief Operating Officer. With the departure of Mr. Nathan Monash, Vice President,
Sustainability, Ms. Sheila Colman took on the role of Vice President, Legal and Sustainability and Corporate
Secretary, while Ms. Iliana Rodriguez, Vice President, Human Resources, departed the Company early in the first
quarter.
Qualified Persons
The technical information relating to FDN contained in this News Release has been reviewed and approved by
Ron Hochstein P. Eng, Lundin Gold's President and 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 Friday, February 23 at 7:00 a.m.
PT, 10:00 a.m. ET, 4:00 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 / 89101592
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 its completion until February 28, 2024.
Toll Free North America Replay Number: +1 888-390-0541
International Replay Number: +1 416-764-8677
Replay passcode: 101592 #
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 impac ted communities, fostering a healthy and safe