Ivanhoe Electric Inc. press release
Lundin Mining First Quarter 2022 Results
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TORONTO , April 27, 2022 /CNW/ - (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or the "Company") today reported earnings attributable to Lundin Mining shareholders of $345 .1 million ( $0.47 per share) in its first quarter 2022. Adjusted earnings 1 were $295 .6 million ( $0.40 per share) and adjusted EBITDA 1 were $587.8 million for the quarter. View PDF .
Peter Rockandel , President and CEO commented, "We delivered strong financial results in the first quarter, highlighted by adjusted EBITDA of $588M , generation of $473M of adjusted operating cash flow 1 , and record adjusted EPS 1 of $0.40 .
Overall, our operations performed well, particularly as we adapted to new challenges of the fast-spreading COVID Omicron variant, which had the greatest impact on absences since the onset of the pandemic. Candelaria, Eagle, Zinkgruvan and Neves-Corvo operations, including ramp up of the Zinc Expansion Project, are all on plan for the year. Chapada has had a slow start as abnormally high rainfall and COVID-related absences impacted our mining activities, though opportunities to catch up on waste stripping and production plans are being reviewed.
On the growth front, exploration at Chapada's Saúva discovery continues to deliver impressive results expanding the mineralized footprint, we are working to include the Upper Keel zone at Eagle into next year's update of the life-of-mine plan with the aim of first ore in 2024, and we are excited to soon be closing our acquisition of Josemaria Resources, meaningfully increasing our copper and gold growth profile. "
Summary Financial Results
| | | Three months ended | | | | | | March 31, | | | | US$ Millions (except per share amounts) | | 2022 | | 2021 | | Revenue | | 991.1 | | 681.5 | | Gross profit | | 478.8 | | 252.5 | | Attributable net earnings 2 | | 345.1 | | 135.2 | | Net earnings | | 378.1 | | 154.2 | | Adjusted earnings 1 | | 295.6 | | 144.4 | | Adjusted EBITDA 1 | | 587.8 | | 354.4 | | Basic and diluted earnings per share 2 | | 0.47 | | 0.18 | | Basic adjusted earnings per share 1 | | 0.40 | | 0.20 | | Cash flow from operations | | 317.3 | | 158.7 | | Adjusted operating cash flow 1 | | 472.8 | | 279.8 | | Adjusted operating cash flow per share 1 | | 0.64 | | 0.38 | | Free cash flow 1 | | 186.5 | | 56.0 | | Cash and cash equivalents | | 733.9 | | 181.3 | | Net cash (debt) 1 | | 704.9 | | (8.1) | | 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 for the three months ended March 31, 2022 and the Reconciliation of Non-GAAP Measures section at the end of this news release.
2 Attributable to shareholders of Lundin Mining Corporation. | | | | | | | | | | |
Highlights
Operational Performance
Overall, operations performed well during the quarter and the Company remains on track to achieve overall production guidance. Operations adapted to new challenges of the fast-spreading COVID Omicron variant, which had the greatest impact on absences since the onset of the pandemic, as the Company continued to adhere to precautionary measures necessary to protect the safety of the workforce and communities. Copper and gold production exceeded the prior year quarter, while zinc production was in-line and nickel production was lower than the prior year quarter , as expected. Cash costs 1 for the quarter were better than the prior year quarter at all sites except Eagle and Chapada, where cash costs were in accordance with expectations.
Candelaria (80% owned): Candelaria produced 39,503 tonnes of copper, and approximately 22,000 ounces of gold in concentrate on a 100% basis in the quarter, in-line with expectations. Copper and gold production were higher than the prior year quarter primarily due to better grades. Copper cash cost of $1.58 /lb for the current quarter was better than the prior year quarter due mainly to positive foreign exchange effects and higher sales volumes.
Chapada (100% owned): Chapada produced 10,100 tonnes of copper and approximately 12,000 ounces of gold in concentrate in the quarter. First quarter production was less than planned as ore release and mining activities were impacted by abnormally high rainfall and COVID related absences necessitating a greater portion of the mill feed to be sourced from stockpile; however copper production was higher than the prior year quarter due to higher recoveries. Copper cash cost of $1.82 /lb for the quarter was higher than the prior year quarter due mainly to higher mining costs resulting from inflation.
Eagle (100% owned): Eagle produced 4,281 tonnes of nickel and 4,420 tonnes of copper during the quarter. While production was better than planned, it was lower than the prior year quarter, primarily due to lower head grades. Nickel cash cost of negative $1.25 /lb was unfavourable compared to the prior year quarter due to lower sales volumes, partially offset by increased by-product credits, and remained in the first quartile of industry cash cost.
Neves-Corvo (100% owned): Neves-Corvo produced 9,860 tonnes of copper for the quarter and 14,751 tonnes of zinc. Higher copper production in the current quarter compared to the prior year quarter resulted from better grades and throughput. Zinc production was higher in the quarter over prior year quarter largely driven by the recent start-up of the Zinc Expansion Project ("ZEP"), though partially offset by lower recoveries. A voluntary temporary suspension of operations took place following a fatal accident on March 30, 2022 . Initial lessons learned from the fatality have been shared across the Company's operations, and Lundin Mining remains committed to safe production. Copper cash cost of $1.70 /lb for the quarter was better than the prior year quarter due to favourable zinc by-product credits.
Zinkgruvan (100% owned): Zinc production of 17,640 tonnes was lower than the prior year comparable period but in-line with expected volumes. Lead production of 6,728 tonnes was higher than the prior year quarter due to better grades and recoveries. Zinc cash cost of $0.27 /lb was better than the prior year quarter largely due to higher by-product credits.
Total Production
| (Contained metal in concentrate) | 2022 | 2021 | | | | | | | Q1 | Total | Q4 | Q3 | Q2 | Q1 | | | | Copper (t) a | 65,081 | 262,884 | 76,996 | 65,077 | 63,457 | 57,354 | | | Zinc (t) | 32,391 | 143,797 | 36,830 | 38,769 | 34,833 | 33,365 | | | Gold (koz) a | 34 | 167 | 46 | 46 | 41 | 34 | | | Nickel (t) | 4,281 | 18,353 | 4,101 | 4,124 | 4,774 | 5,354 | | | a. Candelaria's production is on a 100% basis. | | | | | | | | | | | | | | | | |
| | | 1 This is a non-GAAP measure. Please refer to the Company's discussion of non-GAAP measures in its Management's Discussion and Analysis for the three months ended March 31, 2022. | | |
Corporate Highlights
On February 17, 2022 , the Company announced the retirement of Mr. Lukas Lundin as the Chair of Lundin Mining's Board of Directors, effective at the Company's 2022 Annual Shareholders Meeting.
On February 17, 2022 , the Company declared a regular dividend of C$0.09 per share and a semi-annual performance dividend of C$0.11 , for a combined total of C$0.20 per share of dividends declared.
On March 30, 2022 , the Company reported a fatality at its Neves-Corvo mine in Portugal . Operations were voluntarily temporarily suspended and relevant authorities were notified. Mandatory regulatory investigations were commenced and the Company continues to cooperate fully with those investigations.
Financial Performance
Gross profit for the quarter ended March 31, 2022 was $478.8 million , an increase of $226.3 million compared to the first quarter of 2021. The increase was primarily due to higher revenues driven by higher metal prices and price adjustments ( $238.5 million ) and higher sales volumes.
Net earnings for the current quarter were $378.1 million , a $223.9 million increase over the first quarter of 2021 primarily attributable to higher gross profit.
Adjusted earnings for the quarter were $295.6 million , compared to $144.4 million in the prior year quarter, a reflection of higher gross profit partially offset by higher income taxes.
Financial Position and Financing
Cash and cash equivalents increased by $139.8 million during the quarter ended March 31, 2022 to $733.9 million , with cash flow from operations of $317.3 million exceeding capital expenditures of $144.9 million . In connection with the definitive agreement to acquire Josemaria Resources Inc, ("Josemaria Resources") and its copper-gold project located in the San Juan province of Argentina , the Company provided a $100.0 million bridge loan facility; during the quarter $40.5 million was advanced to Josemaria Resources under this facility.
Net cash as at March 31, 2022 was $704.9 million , an increase of $141.8 million from the net cash balance as at December 31, 2021 . The increase in net cash is attributable to the positive cash flow impacts previously described.
As of April 27, 2022 , the Company had a cash and net cash balance of approximately $680.0 million and $650.0 million , respectively, after paying dividends of approximately $115.0 million on April 13, 2022 .
Outlook
During the quarter, continuing risks associated with global inflation as well as supply chain delivery persisted. These risks have been further heightened with the Russian-Ukraine conflict. To date, there has not been a significant impact on our operations relating to supply chain availability; however, inflationary increases on energy, fuel, contractor costs and consumables are expected to impact operating costs for the remainder of the year. The Company has implemented procurement strategies to mitigate the impact and to continue to monitor these risks.
Total copper, zinc and nickel production are all tracking above the mid-point of the Company's 2022 guidance ranges of 258,000t – 282,000t of copper, 188,000t – 203,000t of zinc, and 15,000t – 18,000t of nickel. Gold production is currently trending at the low end of the 153,000oz – 163,000oz range.
Candelaria, Neves-Corvo, Eagle and Zinkgruvan metal production are on plan and tracking well to achieve annual guidance. Opportunities to increase waste stripping to improve ore availability and production over the remainder of the year at Chapada are being evaluated and actioned; production is currently trending below the annual guidance.
Forecast cash costs remain in-line with annual guidance for Candelaria, Neves-Corvo and Zinkgruvan with expected inflationary impacts on consumables being largely offset by production volumes and by-product metal prices. Chapada's forecast copper cash cost is trending above annual guidance considering the impact of inflation on prices of consumables, the strengthening local currency and production volumes. Eagle's forecast nickel cash cost is trending positively compared to annual guidance, primarily due to copper by-product prices.
Capital expenditures at Eagle, Neves-Corvo and Zinkgruvan are all tracking well to annual guidance. Candelaria and Chapada capital expenditures are trending above annual guidance with inflationary cost increases on capitalized stripping, including diesel, explosives and other consumables.
Total exploration expenditures are on target to be $45.0 million in 2022.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining company with operations in Brazil , Chile , Portugal , Sweden and the United States of America , primarily producing copper, zinc, gold and nickel.
The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below on April 27, 2022 at 18:15 Eastern Time .
Reconciliation of Non-GAAP Measures
The Company uses certain performance measures in its analysis. These performance measures have no standardized meaning within generally accepted accounting principles under International Financial Reporting Standards, and therefore, amounts presented may not be comparable to similar data presented by other mining companies. For additional details please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the three months ended March 31, 2022 which is available on SEDAR at www.sedar.com .
Adjusted EBITDA can be reconciled to the Company's Condensed Interim Consolidated Statement of Earnings as follows:
| | | Three months ended March 31, | | | | | ($thousands) | | 2022 | | 2021 | | | Net earnings | | 378,109 | | 154,219 | | | Add back: | | | | | | | Depreciation, depletion and amortization | | 129,837 | | 125,910 | | | Finance income and costs | | 14,972 | | 11,096 | | | Income taxes | | 77,206 | | 69,902 | | | | | | 600,124 | | 361,127 | | Unrealized foreign exchange loss | | 7,853 | | 962 | | | Revaluation loss (gain) on derivative liability | | 3,293 | | (7,103) | | | Revaluation gain on marketable securities | | (3,892) | | (549) | | | Gain on disposal of subsidiary | | (16,828) | | - | | | Other | | (2,776) | | 2 | | | Total adjustments - EBITDA | | (12,350) | | (6,688) | | | Adjusted EBITDA | | 587,774 | | 354,439 | |
Adjusted earnings and adjusted earnings per share can be reconciled to the Company's Condensed Interim Consolidated Statement of Earnings as follows:
| | | Three months ended March 31, | | | | | ($thousands, except share and per share amounts) | | 2022 | | 2021 | | | Net earnings attributable to:
Lundin Mining shareholders | | 345,078 | | 135,185 | | | Add back: | | | | | | | Total adjustments - EBITDA | | (12,350) | | (6,688) | | | Tax effect on adjustments | | (2,034) | | 3,129 | | | Deferred tax arising from foreign exchange translation | | (34,954) | | 12,909 | | | Other | | (132) | | (166) | | | Total adjustments | | (49,470) | | 9,184 | | | Adjusted earnings | | 295,608 | | 144,369 | | | | | | | | | | Basic weighted average number of shares outstanding | | 736,410,739 | | 736,891,008 | | | | | | | | | | Net earnings attributable to shareholders | | 0.47 | | 0.18 | | | Total adjustments | | (0.07) | | 0.02 | | | Adjusted earnings per share | | 0.40 | | 0.20 | |
Adjusted operating cash flow and adjusted operating cash flow per share can be reconciled to cash flow provided by operating as follows:
| | | | Three months ended March 31, | | | | ($thousands, except share and per share amounts) | | 2022 | 2021 | | | | | | | | | | | Cash provided by operating activities | | 317,257 | | 158,675 | | | Changes in non-cash working capital items | | 155,548 | | 121,170 | | | Adjusted operating cash flow | | 472,805 | | 279,845 | | | | | | | | | | Basic weighted average number of shares outstanding | | 736,410,739 | | 736,891,008 | | | Adjusted operating cash flow per share | | 0.64 | | 0.38 | |
Free cash flow can be reconciled to cash provided by operating activities as follows:
| | | Three months ended March 31, | | | | ($thousands) | | 2022 | | 2021 | | Cash provided by operating activities | | 317,257 | | 158,675 | | Sustaining capital expenditures | | (130,758) | | (102,644) | | Free cash flow | | 186,499 | | 56,031 | | | | | | |
Net cash (debt) can be reconciled as follows:
| ($thousands) | | March 31, 2022 | | March 31, 2021 | | Cash and cash equivalents | | 733,876 | | 181,322 | | | | | | | | Current portion of total debt and lease liabilities | | 13,488 | | 120,480 | | Debt and lease liabilities | | 15,494 | | 67,490 | | Deferred financing fees (netted in above) | | - | | 1,462 | | | | 28,982 | | 189,432 | | Net cash (net debt) | | 704,894 | | (8,110) | | | | | | |
Cash Cost and AISC can be reconciled to the Company's production costs as follows:
| | Three months ended March 31, 2022 | | | | | | | | | | | | | | | | Operations | | Candelaria | | Chapada | | Eagle | | Neves-Corvo | | Zinkgruvan | | | | | | ($000s, unless otherwise noted) | | (Cu) | | (Cu) | | (Ni) | | (Cu) | | (Zn) | | Total | | | | Sales volumes (Contained metal in concentrate): | | | | | | | | | | | | | | | | Tonnes | | 38,448 | | 12,804 | | 3,267 | | 8,484 | | 15,802 | | | | | | Pounds (000s) | | 84,763 | | 28,228 | | 7,202 | | 18,704 | | 34,837 | | | | | | | | | | | | | | | | | | | | | | Production costs | | | | | | | | | | | | 382,427 | | | | Less: Royalties and other | | | | | | | | | | | | (15,877) | | | | | | | | | | | | | | | | 366,550 | | | | Deduct: By-product credits | | | | | | | | | | | | (181,007) | | | | Add: Treatment and refining charges | | | | | | | | | | | | 32,155 | | | | Cash cost | | 133,985 | | 51,437 | | (8,979) | | 31,797 | | 9,458 | | 217,698 | | | | Cash cost per pound ($/lb) | | 1.58 | | 1.82 | | (1.25) | | 1.70 | | 0.27 | | | | | | | | | | | | | | | | | | | | | | Add: Sustaining capital expenditure | | 82,964 | | 14,455 | | 4,460 | | 19,516 | | 9,039 | | | | | | Royalties | | - | | 3,664 | | 7,791 | | 2,813 | | - | | | | | | Interest expense | | 1,433 | | 1,721 | | 401 | | 36 | | 22 | | | | | | Leases & other | | 2,504 | | 1,092 | | 4,867 | | 497 | | 1,333 | | | | | | All-in sustaining cost | | 220,886 | | 72,369 | | 8,540 | | 54,659 | | 19,852 | | | | | | AISC per pound ($/lb) | | 2.61 | | 2.56 | | 1.19 | | 2.92 | | 0.57 | | | | | | | | | | | | | | | | | | | | | | Three months ended March 31, 2021 | | | | | | | | | | | | | | | | Operations | | Candelaria | | Chapada | | Eagle | | Neves-Corvo | | Zinkgruvan | | | | | | ($000s, unless otherwise noted) | | (Cu) | | (Cu) | | (Ni) | | (Cu) | | (Zn) | | Total | | | | Sales volumes (Contained metal in concentrate): | | | | | | | | | | | | | | | | Tonnes | | 35,516 | | 7,379 | | 4,118 | | 6,565 | | 15,703 | | | | | | Pounds (000s) | | 78,299 | | 16,268 | | 9,079 | | 14,473 | | 34,619 | | | | | | | | | | | | | | | | | | | | | | Production cost | | | | | | | | | | | | 303,113 | | | | Less: Royalties and other | | | | | | | | | | | | (6,505) | | | | | | | | | | | | | | | | 296,608 | | | | Deduct: By-product credits | | | | | | | | | | | | (125,380) | | | | Add: Treatment and refining charges | | | | | | | | | | | | 28,993 | | | | Cash cost | | 129,071 | | 21,699 | | (14,730) | | 37,753 | | 26,428 | | 200,221 | | | | Cash cost per pound ($/lb) | | 1.65 | | 1.33 | | (1.62) | | 2.61 | | 0.76 | | | | | | | | | | | | | | | | | | | | | | Add: Sustaining capital expenditure | | 70,742 | | 8,970 | | 3,529 | | 8,946 | | 10,411 | | | | | | Royalties | | - | | 2,073 | | 6,846 | | 704 | | - | | | | | | Interest expense | | 1,119 | | 859 | | 177 | | 20 | | 18 | | | | | | Leases & other | | 2,056 | | 669 | | 2,591 | | 1,546 | | 1,381 | | | | | | All-in sustaining cost | | 202,988 | | 34,270 | | (1,587) | | 48,969 | | 38,238 | | | | | | AISC per pound ($/lb) | | 2.59 | | 2.11 | | (0.17) | | 3.38 | | 1.10 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cautionary Statement on Forward-Looking Information
Certain of the statements made and information contained herein is "forward-looking information" within the meaning of applicable Canadian securities laws. All statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements regarding the Company's plans, prospects and business strategies; the Company's guidance on the timing and amount of future production and its expectations regarding the results of operations; expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any Preliminary Economic Assessment, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimates, and mine and mine closure plans; anticipated market prices of metals, currency exchange rates, and interest rates; the development and implementation of the Company's Responsible Mining Management System; the Company's ability to comply with contractual and permitting or other regulatory requirements; anticipated exploration and development activities at the Company's projects; expectations and ability to complete the Josemaria Resources Inc. transaction; the Company's integration of acquisitions and any anticipated benefits thereof, including the Josemaria Resources Inc. transaction; and expectations for other economic, business, and/or competitive factors. Words such as "believe", "expect", "anticipate", "contemplate", "target", "plan", "goal", "aim", "intend", "continue", "budget", "estimate", "may", "will", "can", "could", "should", "schedule" and similar expressions identify forward-looking statements.