Lundin Mining First Quarter 2025 Results

2025-05-07

TSX - Toronto Stock Exchange · Silver · Gold · Copper · Zinc · Lead · Canada

Canada NewsWire

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VANCOUVER, BC , May 7, 2025 /CNW/ - (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or the "Company") today reported its first quarter 2025 financial results. Unless otherwise stated, results are presented in United States dollars on a 100% basis.

Jack Lundin , President and CEO commented, "In the quarter we produced 76,774 tonnes of copper and 31,849 ounces of gold, keeping us firmly on track to achieve our annual guidance. Higher realized gold prices and solid operating performance drove nearly $1 billion in revenue, alongside $388 million in adjusted EBITDA from continuing operations and $337 million in adjusted operating cash flow from continuing operations. Our consolidated copper cash costs came in at $2.07 per pound, within the lower end of our guidance range, demonstrating our continued focus on cost discipline.

"Beyond operations, we completed several key strategic initiatives, including the $1.4 billion sale of our European assets on April 16th , which has meaningfully strengthened our balance sheet. We also introduced a new shareholder distribution policy that targets $220 million in annual shareholder returns.

"In January we finalized the joint acquisition of Filo Corp. with our partner BHP to form Vicuña Corp., and earlier this week we announced the combined Mineral Resource estimate for the Filo del Sol and Josemaria deposits collectively, the Vicuña project, demonstrating a significant future growth opportunity for the Company. This quarter reflects the strength of our strategy and positions us well for the year ahead."

First Quarter Operational and Financial Highlights

On April 16, 2025 , the Company closed the sale of its European assets, Zinkgruvan and Neves-Corvo, to Boliden for cash consideration of $1 ,402 million. The financial results from these assets are reported as "discontinued operations" in the Company's financial statements.

Copper Production: Production of 76,774 tonnes of copper in the first quarter from continuing operations. Other Production: During the quarter, 32,000 ounces of gold and 2,296 tonnes of nickel were produced. Revenue: $963.9 million in the first quarter from continuing operations with a realized copper price 1 of $4.63 /lb and a realized gold price 1 of $3,349 /oz. Net Earnings and Adjusted Earnings 1 : During the quarter, net earnings from continuing operations attributable to shareholders of the Company was $138.1 million ( $0.16 per share) and adjusted earnings from continuing operations was $93.9 million ( $0.11 per share). Adjusted EBITDA 1 : $387.9 million was generated from continuing operations for the quarter. Cash Generation: Cash provided by continuing operations was $122.3 million and free cash flow from operations - continuing operations 1 was $21.6 million , which was impacted by lower operating cash flow as a result of a $214.7 million negative change in working capital during the quarter. Growth: The Company completed several significant initiatives that redefined its asset portfolio and positioned the Company for long-term growth: During the quarter the Company completed the joint acquisition of Filo Corp. with BHP and formed the 50/50 joint arrangement, Vicuña Corp. ("Vicuña"), to hold the Filo del Sol project and the Josemaria project. The Company entered into an exclusivity agreement with Talon Metals Corp. on March 5, 2025 to acquire a highly prospective exploration project ("Boulderdash") adjacent to the Company's Eagle Mine. During the quarter Lundin Mining announced a new shareholder distribution policy that provides an annual return of approximately $220 million per year to shareholders through a combination of dividends and share buybacks. On April 16 , 2025 Lundin Mining completed the sale of Neves-Corvo and Zinkgruvan to Boliden for cash proceeds of $1,402 million and subsequently paid off its term loan of $1,150 million . On May 4, 2025 the Company announced an initial Mineral Resource estimate for the Filo del Sol sulphide deposit, an update to the Mineral Resource estimate for the Filo del Sol oxide deposit and an update to the Mineral Resource estimate for the Josemaria deposit, which highlighted the combined Vicuña project as one of the largest copper, gold and silver resources in the world.

Outlook: The Company reaffirms it is tracking to full year guidance for production, cash costs and capital expenditures. The Company continues to benefit from stronger throughput at Candelaria and Caserones, while higher gold prices have improved cash costs which are expected to continue into the second quarter. Assets and liabilities held for sale and discontinued operations: All assets and liabilities relating to the Neves-Corvo and Zinkgruvan reporting segments have been classified as current assets and current liabilities held for sale as at March 31, 2025 . The operating results of these segments have been classified as earnings (loss) from discontinued operations.

Total assets of $1,442.2 million and liabilities of $407.2 million have been classified as held for sale for this purpose. Net loss from discontinued operations of $13 .8 million represents the net loss of $39 .3 million and the net earnings of $25.5 million from Neves-Corvo and Zinkgruvan, respectively, for the quarter ended March 31, 2025 .

| | | 1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the quarter ended March 31, 2025 and the Reconciliation of Non-GAAP measures section at the end of this news release. |

Summary Financial Results

| | Three months ended

March 31, | | | (US$ millions continuing operations except where noted, except per share amounts) | 2025 | 2024 | | Revenue | 963.9 | 812.3 | | Gross profit | 308.9 | 197.5 | | Attributable net earnings a | 138.1 | 38.3 | | Net earnings | 181.4 | 83.0 | | Adjusted earnings a,b (all operations) | 146.2 | 45.2 | | Adjusted earnings a,b — continuing operations | 93.9 | 56.4 | | Adjusted earnings (loss) a,b — discontinued operations | 52.2 | (11.1) | | Adjusted EBITDA b (all operations) | 450.8 | 362.9 | | Adjusted EBITDA b — continuing operations | 387.9 | 338.5 | | Adjusted EBITDA b — discontinued operations | 62.8 | 24.4 | | Basic and diluted earnings per share ("EPS") a (all operations) | 0.15 | 0.02 | | Basic and diluted earnings per share ("EPS") a — continuing operations | 0.16 | 0.05 | | Basic and diluted loss per share ("EPS") a — discontinued operations | (0.02) | (0.03) | | Adjusted EPS a,b (all operations) | 0.17 | 0.06 | | Adjusted EPS a,b — continuing operations | 0.11 | 0.07 | | Adjusted EPS a,b — discontinued operations | 0.06 | (0.01) | | Cash provided by operating activities (all operations) | 177.0 | 267.5 | | Cash provided by operating activities - continuing operations | 122.3 | 232.2 | | Cash provided by operating activities - discontinued operations | 54.7 | 35.4 | | Adjusted operating cash flow b (all operations) | 392.8 | 313.7 | | Adjusted operating cash flow b — continuing operations | 337.0 | 294.0 | | Adjusted operating cash flow b — discontinued operations | 55.8 | 19.7 | | Adjusted operating cash flow per share b (all operations) | 0.46 | 0.41 | | Adjusted operating cash flow per share b — continuing operations | 0.40 | 0.38 | | Adjusted operating cash flow per share b — discontinued operations | 0.07 | 0.03 | | Free cash flow b (all operations) | (47.5) | (1.7) | | Free cash flow b — continuing operations | (53.1) | (0.3) | | Free cash flow b — discontinued operations | 5.6 | (1.4) | | Free cash flow from operations b (all operations) | 32.0 | 67.7 | | Free cash flow from operations b — continuing operations | 21.6 | 66.5 | | Free cash flow from operations b — discontinued operations | 10.4 | 1.2 | | Cash and cash equivalents | 341.6 | 365.5 | | Net debt excluding lease liabilities b | (1,441.7) | (981.4) | | Net debt b | (1,699.3) | (1,241.9) |

| a Attributable to shareholders of Lundin Mining Corporation. | | b These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the quarter ended March 31, 2025 and the Reconciliation of Non-GAAP Measures section at the end of this news release. |

For the quarter ended March 31, 2025 , the Company generated revenue from continuing operations of $963.9 million (Q1 2024 - $812.3 million ) and from discontinued operations of $180.1 million (Q1 2024 - $124.7 million ). Gross profit from continuing operations for the quarter of $308.9 million was $111.5 million higher than in the prior year comparable period of $197.5 million . The increase was primarily due to higher realized copper and gold prices, lower treatment charges, and favourable foreign exchange. Gross profit from discontinued operations for the quarter of $69.9 million increased from a gross loss of $12.1 million in the prior year comparable period primarily due to no depreciation being taken on assets classified as held for sale. Net earnings from continuing operations for the quarter of $181.4 million increased from the prior year comparable period of $83.0 million primarily due to an increase in gross profit. Net loss from discontinued operations for the quarter of $13.8 million (Q1 2024 - net loss of $24.4 million ) primarily resulted from the Euro strengthening in the quarter, resulting in a non-cash impairment of $65.7 million net of tax (Q1 2024 - nil) to reduce the carrying value of Neves-Corvo to the cash proceeds subsequently received for this asset. This loss was partially offset by increased gross profit from discontinued operations. Adjusted earnings from continuing operations for the quarter of $93.9 million , increased from the prior year comparable period of $56.4 million as a result of higher gross profit. Cash provided by operating activities related to continuing operations for the quarter of $122.3 million represented a decrease of $109.8 million from the prior year comparable period of $232.2 million . The decrease was primarily due to negative working capital outflows of $214.7 million (Q1 2024 - $61.8 million ) including a buildup of trade receivables from shipments toward the end of the quarter and the recognition of $45.0 million of revenue at Caserones for shipments in early January for which payment had been received in December 2024 . The shipments of copper concentrate were delayed due to certain operational and weather-related issues. Cash provided by operating activities related to discontinued operations for the quarter was $54.7 million (Q1 2024 - $35.4 million ). For the quarter, sustaining capital expenditures 1 from continuing operations of $112.6 million were lower than in the prior year comparable period of $176.5 million . The net reduction was primarily due to lower spending at Candelaria from reduced deferred stripping and reduced spending on the Los Diques tailing storage facility. Sustaining capital expenditures, from discontinued operations, related to Neves-Corvo and Zinkgruvan were $27.7 million and $21.3 million , respectively, for the quarter. Expansionary capital expenditures 1 of $62.9 million for the quarter were higher than $56.0 million in the prior year comparable period as a result of initiatives at Candelaria related to the mine life extension to 2040 under the Environmental Impact Assessment ("2040 EIA"), partially offset by lower allocated spending at the Josemaria Project due to the formation of Vicuña, which completed on January 15, 2025 . As of the formation date, 50% of Vicuña's capital expenditures are included in the Company's capital expenditures. Free cash flow 1 (all operations) for the quarter of negative $(47.5) million was lower than in the prior year comparable period of negative $(1.7) million primarily due to less cash provided by operating activities due to negative changes in working capital, partially offset by lower sustaining capital expenditures. Free cash flow from discontinued operations for the quarter was $5.6 million . As at May 7, 2025 , the Company had cash of approximately $252.6 million and net debt excluding lease liabilities 1 of approximately $279.6 million .

| _ | | 1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the quarter ended March 31, 2025 and the Reconciliation of Non-GAAP measures section at the end of this news release. |

Operational Performance

Total Production

| (Contained metal) a | 2025 | 2024 | | | | | | Q1 | Total | Q4 | Q3 | Q2 | Q1 | | | | | | | | | | | Continuing Operations | | | | | | | | Copper (t) b | 76,774 | 336,875 | 94,094 | 91,772 | 71,614 | 79,395 | | Nickel (t) | 2,296 | 7,486 | 1,617 | 893 | 1,721 | 3,255 | | Gold (koz) b | 32 | 158 | 46 | 47 | 32 | 33 | | Molybdenum (t) b | 602 | 3,183 | 912 | 693 | 714 | 864 | | | | | | | | | | Discontinued Operations | | | | | | | | Copper (t) | 7,094 | 32,192 | 7,397 | 8,083 | 8,094 | 8,618 | | Zinc (t) | 48,948 | 191,704 | 51,946 | 46,610 | 47,460 | 45,688 | | a - Tonnes (t) and thousands of ounces (koz). | | | | | | | | b - Candelaria and Caserones production are on a 100% basis. | | | | | | |

_Candelaria (80% owned): _Candelaria produced 37,071 tonnes of copper and approximately 21,000 ounces of gold in concentrate on a 100% basis during the quarter. Production in the quarter was positively impacted by increased throughput as a result of higher than anticipated ore softness in sections of Phase 11 in the open pit. The majority of the material processed was from Phase 11, together with material from Phase 12 and long-term stockpiles. Cash cost 3 of $1.75 /lb was positively impacted by favorable by-product credits driven primarily by higher metal prices.

_Caserones (70% owned): _Caserones produced 28,709 tonnes of total copper and 602 tonnes of molybdenum on a 100% basis during the quarter. Production was positively impacted by higher throughput in the mill as a result of operational efficiencies that mitigated lower than anticipated grades due to sequencing. Revenue and production costs increased as a result of higher sales volumes as two shipments delayed from December 2024 were completed in the quarter. Cash cost of $2.52 /lb in the quarter was impacted by higher contractor and maintenance costs.

_Chapada (100% owned): _Chapada produced 8,909 tonnes of copper and approximately 11,000 ounces of gold in concentrate during the quarter. Both metals were impacted by lower recoveries as a result of increased processing of ore from the older low-grade stockpile. Production costs were reduced by lower sales volumes and favourable foreign exchange. Cash cost of $1.47 /lb also benefitted from favourable foreign exchange, combined with higher gold by-product credits.

_Eagle (100% owned): _Eagle produced 2,296 tonnes of nickel and 2,085 tonnes of copper in the quarter. Production was impacted by lower grades than anticipated at the beginning of the quarter and winter weather which affected ore haulage. Ramp rehabilitation was completed during the quarter, and normal levels of production are expected for the remainder of the year. Production costs were reduced primarily by lower sales volumes. Nickel cash cost of $3.94 /lb was positively impacted by lower mining costs. During the quarter, the Company entered into an exclusivity agreement with Talon Metals Corp. ("Talon") to negotiate an earn-in agreement for the right to acquire up to a 70% ownership interest in the Boulderdash property that is near Eagle.

_Neves-Corvo (100% owned): _Neves-Corvo produced 6,123 tonnes of copper and 27,691 tonnes of zinc during the quarter. Cash cost during the quarter was $1.69 /lb.

_Zinkgruvan (100% owned): _Zinkgruvan produced 21,257 tonnes of zinc and 7,586 tonnes of lead in the quarter. Zinc cash cost during the quarter was $0.40 /lb.

| | | 3 This is a non-GAAP measure. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the quarter ended March 31, 2025 and the Reconciliation of Non-GAAP measures section at the end of this news release. |

Outlook

The Company reaffirms its guidance for production, cash costs, capital expenditures, and exploration that was released on January 16, 2025 . In regard to operations, the Company expects that all of its sites will meet their respective guidance ranges as published.

At Candelaria, softer ore is expected to continue into the second quarter which will benefit throughput in the mill as seen in this quarter. The Company expects cash costs in the second quarter to be in line with the first quarter, benefiting from a higher gold price.

At Caserones, the performance of the mill, together with expected grade increases and strong cathode production are expected to sustain the Company's annual production guidance for 2025.

At Chapada, production is second half of the year weighted, copper grades and recoveries are expected to increase during this period. Sequencing of the mine plan forecasts processing less lower-grade stockpile and more fresh ore.

At Eagle, it is expected that mine sequencing and grades will normalize during Q2 which supports maintaining the Company's annual production guidance. Additionally, mining at the Eagle deposit is expected to be completed towards the end of the year and higher grade ore from Eagle East will be sourced.

See below for the 2025 Guidance as released on January 16, 2025 :

2025 Production and Cash Cost Guidance a

| | | | Guidance | | | | (contained metal) | Production | Cash Cost ($/lb) b | | | | Copper (t) | Candelaria (100%) | 140,000 – 150,000 | 1.80 – 2.00 c | | | | Caserones (100%) | 115,000 – 125,000 | 2.40 – 2.60 | | | | Chapada | 40,000 – 45,000 | 1.80 – 2.00 d | | | | Eagle | 8,000 – 10,000 | | | | | Total | 303,000 – 330,000 | 2.05 – 2.30 | | | Gold (koz) | Candelaria (100%) | 78 – 88 | | | | | Chapada | 57 – 62 | | | | | Total | 135 – 150 | | | | Nickel (t) | Eagle | 8,000 – 11,000 | 3.05 – 3.25 |

| a. Guidance as outlined in the news release 'Lundin Mining Announces Record Production Results for 2024 and Provides 2025 Guidance' dated January 16, 2025.

b. 2025 cash costs are based on various assumptions and estimates, including but not limited to: production volumes, commodity prices (Cu: $4.40/lb, Au: $2,500/oz, Mo: $17.00/lb, Ag: $30.00/oz), foreign exchange rates (USD/CLP:900, USD/BRL:5.50) and operating costs. Cash cost is a non-GAAP measure - see section 'Non-GAAP and Other Performance Measures' of this MD&A for discussion.

c. 68% of Candelaria's total gold and silver production are subject to a streaming agreement. Cash costs are calculated based on receipt of approximately $433/oz gold and $4.32/oz silver.

d. Chapada's cash cost is calculated on a by-product basis and does not include the effects of its copper stream agreements. Effects of the copper stream agreements are reflected in copper revenue and will impact realized price per pound. |

2025 Capital Expenditure Guidance b

| | ($ millions) | Guidance a | | | Candelaria (100% basis) | 205 | | | Caserones (100% basis) | 215 | | | Chapada | 85 | | | Eagle | 25 | | | Total Sustaining | 530 | | | Expansionary - Candelaria (100% basis) | 50 | | | Expansionary - Vicuña Joint Arrangement (50% basis) | 155 | | | Total Capital Expenditures | 735 |

| a. Guidance as outlined in the news release 'Lundin Mining Announces Record Production Results for 2024 and Provides 2025 Guidance' dated January 16, 2025

b. Sustaining capital expenditure is a supplementary financial measure, and expansionary capital expenditure is a non-GAAP measure – see Section "Non-GAAP and Other Performance Measures" of this MD&A for discussion. |

2025 Exploration Investment Guidance

Total exploration expenditure guidance for 2025 is $40 million .