Lundin Mining Fourth Quarter and Full Year 2024 Results

2025-02-20

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VANCOUVER, BC , Feb. 19, 2025 /CNW/ - (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or the "Company") today reported its fourth quarter and full year 2024 financial results. Unless otherwise stated, results are presented in United States dollars on a 100% basis.

Jack Lundin , President and CEO commented, "2024 was highlighted by three transformative transactions, along with achieving record copper and zinc production which generated strong revenue and operating cashflow for the Company. Among these deals, the formation of Vicuña Corp. has positioned the Company on a clear path to becoming a top-tier copper producer. Vicuña is targeting a new and updated mineral resource estimate at Filo del Sol and Josemaria within the second quarter of 2025. These resource estimates will form the basis of an integrated technical report which will outline the development plan for the phased construction of the district in Argentina .

"Operationally, we met copper guidance for the second consecutive year, translating to over $870 million in annual free cash flow from operations 1 . Notwithstanding the $350 million purchase of an additional 19% at Caserones to bring our overall ownership to 70%, our net debt 1 position at year end was just over $1.3 billion . Our debt is expected to be reduced significantly within the first half of this year pending the finalization of the sale of our European assets, Zinkgruvan and Neves-Corvo, making the Company net-debt free on a pro-forma basis. With our strong financial standing and well-positioned asset base, our operations will continue to drive returns, fueling the growth opportunities within our current portfolio of assets.

"Lastly, in 2024 we celebrated our 30 th anniversary, reflecting our longstanding legacy of creating value in the base metals sector. We believe we are well positioned for the future at Lundin Mining and remain committed to executing within our targeted guidance ranges, enhancing margins through sustainable cost control, while upholding the highest health and safety standards to protect our workforce."

Fourth Quarter and Full Year Operational and Financial Highlights

On December 9th, 2024 , the Company announced the sale of its European assets, Zinkgruvan and Neves Corvo, to Boliden. As a result of this, the financial results from these assets are reported as "discontinued operations" in the Company's financial statements and met the criteria to be classified as held-for-sale. The transaction is expected to close at the latest by mid-year 2025, subject to the completion of customary conditions and regulatory approvals.

Fourth Quarter Highlights

Copper Production: Consolidated production of 101,491 tonnes of copper in the fourth quarter. Other Production: During the quarter, a total of 51,946 tonnes of zinc, 1,617 tonnes of nickel and approximately 46,000 ounces of gold were produced. Revenue: $1,023.8 million in the fourth quarter, comprised of $858.9 million from continuing operations with a realized copper price 1 of $3.75 /lb and a realized gold price 1 of $2,643 /oz, and $165.0 million from discontinued operations. Net Earnings and Adjusted Earnings 1 : During the quarter, net loss attributable to shareholders of the Company was $440.2 million , comprised of $195.3 million ( $0.25 per share) net loss from continuing operations and $244.8 million net loss from discontinued operations. Net loss attributable to shareholders of the Company was impacted by non-cash impairments of goodwill and assets at Eagle, Suruca, Neves-Corvo and Alcaparossa. Adjusted earnings 1 were $119.2 million , comprised of $94.8 million ( $0.12 per share) from continuing operations and $24.4 million from discontinued operations. Adjusted EBITDA1: $425.6 million for the quarter, $368.2 million from continuing operations and $57.4 million was generated from discontinued operations during the quarter. Cash Generation: Cash provided by operating activities in the quarter was $620.3 million , comprised of $547.3 million from continuing operations and $73.0 million from discontinued operations. Free cash flow from operations 1 was $466.0 million , comprised of $423.6 million from continuing operations and $42.5 million from discontinued operations, which was increased by a working capital release of $295.5 million from continuing operations.

| | | 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 year ended December 31, 2024 and the Reconciliation of Non-GAAP measures section at the end of this news release. |

Full Year 2024 Highlights

Copper Production: Record copper production of 369,067 tonnes of copper for the full year which is within the 2024 annual copper production guidance. Other Production: During the year, record zinc production of 191,704 tonnes, 7,486 tonnes of nickel and approximately 158,000 ounces of gold were produced. Production for all metals was within revised guidance ranges. Revenue: $4,117 million for the full year, comprised of $3,422.6 million from continuing operations with a realized copper price 1 of $4.18 /lb and a realized gold price 1 of $2,532 /oz, and $694.8 million from discontinued operations. Adjusted EBITDA 1 : $1,707.0 million for the full year, comprised of $1,461.8 million from continuing operations and $245.2 million from discontinued operations. Net Earnings and Adjusted Earnings 1 : Net loss attributable to shareholders of the Company was $203.5 million , comprised of $11.1 million ( $0.01 per share) net earnings from continuing operations and $214.7 million net loss from discontinued operations. Net earnings from continuing operations was impacted by non-cash impairments of goodwill and assets relating to Eagle, Suruca, and Alcaparossa. Adjusted earnings was $358.9 million , $291.7 million ( $0.38 per share) from continuing operations and $67.2 million from discontinued operations. Cash Generation: During the year, cash provided by operating activities was $1,518.9 million , $1,300.8 million from continuing operations and $218.0 million from discontinued operations. Free cash flow from operations 1 was $873.0 million , $797.1 million from continuing operations and $75.9 million from discontinued operations, which included a working capital release of $220.9 million from continuing operations. Balance Sheet: To exercise the Caserones purchase option, the consideration of $350 million was fully funded through an increase to the Company's term loan from $800 million to $1.15 billion . As at December 31, 2024 , the Company had a net debt 1 balance of $1,332.3 million , excluding lease liabilities. Net debt 1 is expected to reduce significantly with the closing of the sale of Neves-Corvo and Zinkgruvan. Growth: During the year the Company announced three significant transactions: On July 2, 2024 , the Company closed the option to increase ownership in Caserones to 70%, which adds approximately 24,000 tonnes of additional attributable copper production to the Company's production profile 2 . On July 29, 2024 , Lundin Mining and BHP announced the joint acquisition of Filo Corp. ("Filo") and the concurrent formation of a 50/50 joint arrangement ("Joint Arrangement") to hold the Filo del Sol ("FDS") project and the Josemaria project. The partnership will create a multi-generational mining district with world-class potential that could support a globally ranked mining complex. On December 9, 2024 , the Company announced the sale of Neves-Corvo and Zinkgruvan to Boliden for total consideration of up to $1.52 billion . The proceeds from the transaction will strengthen the Company's balance sheet and support its growth plans in the Vicuña District.

Assets and liabilities held for sale and discontinued operations: At December 31, 2024 , the Neves-Corvo and Zinkgruvan reporting segments met the criteria to be classified as held-for-sale and discontinued operations. Accordingly, 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 at December 31, 2024 .

Total assets of $1,389.7 million and liabilities of $393.1 million have been classified as held for sale for this purpose. A net loss from discontinued operations of $214 .7 million represents the loss after tax of $278.6 million and earnings after tax of $63.9 million from Neves-Corvo and Zinkgruvan, respectively, for the year ended December 31, 2024 .

| _ | | 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 year ended December 31, 2024 and the Reconciliation of Non-GAAP measures section at the end of this news release. | | 2 Based on Caserones 2024 revised production guidance as outlined in the outlook section of the MD&A for the year ended December 31, 2024. |

Summary Financial Results

| | Three months ended

December 31, | | Year ended

December 31, | | | | (US$ millions continuing operations except where noted, except per share amounts) | 2024 | 2023 | | 2024 | 2023 | | Revenue | 858.9 | 893.4 | | 3,422.6 | 2,743.4 | | Gross profit | 250.6 | 177.8 | | 942.9 | 601.5 | | Attributable net earnings a | (195.3) | 12.5 | | 11.1 | 203.2 | | Net earnings | (159.6) | 40.4 | | 153.4 | 276.9 | | Adjusted earnings a,b (all operations) | 119.2 | 79.7 | | 358.9 | 336.2 | | Adjusted earnings a,b — continuing operations | 94.8 | 72.4 | | 291.7 | 287.5 | | Adjusted earnings a,b — discontinued operations | 24.4 | 7.3 | | 67.2 | 48.7 | | Adjusted EBITDA b (all operations) | 425.6 | 419.7 | | 1,707.0 | 1,363.5 | | Adjusted EBITDA b — continuing operations | 368.2 | 367.6 | | 1,461.8 | 1,145.6 | | Adjusted EBITDA b — discontinued operations | 57.4 | 52.1 | | 245.2 | 217.9 | | Basic earnings per share ("EPS") a (all operations) | (0.57) | 0.05 | | (0.26) | 0.31 | | Basic earnings per share ("EPS") a — continuing operations | (0.25) | 0.02 | | 0.01 | 0.26 | | Basic earnings per share ("EPS") a — discontinued operations | (0.32) | 0.03 | | (0.27) | 0.05 | | Adjusted EPS a,b (all operations) | 0.15 | 0.10 | | 0.46 | 0.44 | | Adjusted EPS a,b — continuing operations | 0.12 | 0.09 | | 0.38 | 0.37 | | Adjusted EPS a,b — discontinued operations | 0.03 | 0.01 | | 0.09 | 0.06 | | Cash provided by operating activities (all operations) | 620.3 | 306.1 | | 1,518.9 | 1,016.6 | | Cash provided by operating activities related to continuing operations | 547.3 | 249.9 | | 1,300.8 | 827.2 | | Cash provided by operating activities related to discontinued operations | 73.0 | 56.2 | | 218.0 | 189.4 | | Adjusted operating cash flow b (all operations) | 313.9 | 362.0 | | 1,302.6 | 1,024.2 | | Adjusted operating cash flow b — continuing operations | 251.8 | 305.4 | | 1,080.0 | 847.3 | | Adjusted operating cash flow b — discontinued operations | 62.1 | 56.7 | | 222.6 | 176.9 | | Adjusted operating cash flow per share b (all operations) | 0.40 | 0.47 | | 1.68 | 1.33 | | Adjusted operating cash flow per share b — continuing operations | 0.32 | 0.39 | | 1.39 | 1.10 | | Adjusted operating cash flow per share b — discontinued operations | 0.08 | 0.08 | | 0.29 | 0.23 | | Free cash flow b (all operations) | 397.9 | 61.2 | | 571.2 | 13.5 | | Free cash flow b — continuing operations | 360.0 | 43.6 | | 508.2 | (19.9) | | Free cash flow b — discontinued operations | 37.9 | 17.6 | | 63.0 | 33.4 | | Free cash flow from operations b (all operations) | 466.0 | 116.8 | | 873.0 | 345.1 | | Free cash flow from operations b — continuing operations | 423.6 | 95.7 | | 797.1 | 300.0 | | Free cash flow from operations b — discontinued operations | 42.5 | 21.0 | | 75.9 | 45.1 | | Cash and cash equivalents | 357.5 | 268.8 | | 357.5 | 268.8 | | Net debt excluding lease liabilities b | (1,332.3) | (946.2) | | (1,332.3) | (946.2) | | Net debt b | (1,597.8) | (1,223.4) | | (1,597.8) | (1,223.4) |

| 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 year ended December 31, 2024 and the Reconciliation of Non-GAAP Measures section at the end of this news release. |

For the year ended December 31, 2024 , the Company generated annual revenue from continuing operations of $3.4 billion (2023 - $2.7 billion ). Revenue from discontinued operations was $694.8 million (2023 - $648.6 million ), and the combination of revenue from continuing operations and discontinued operations ("all operations") was an annual record for the Company of $4.1 billion (2023 - $3.4 billion ). The Company achieved record production of 369,067 tonnes of copper, record production of 191,704 tonnes of zinc, and 158 thousand ounces ("koz") of gold, which achieved the most recently disclosed annual guidance for all metals. For the quarter ended December 31, 2024 , the Company generated revenue from continuing operations of $858.9 million (Q4 2023 - $893.4 million ). Net loss in the quarter from continuing operations was $159.6 million (Q4 2023 - net earnings of $40.4 million ) and adjusted EBITDA 1 (all operations) was $425.6 million (Q4 2023 - $419.7 million ). Net loss for the year was $61.3 million , comprised of a net earnings of $153.4 million from continuing operations and $214.7 million net loss from discontinued operations, a decrease in earnings from the prior year comparable period of $276.9 million from continuing operations and a decrease from net earnings of $38.4 million from discontinued operations, primarily due to non-cash impairments of goodwill and assets relating to Neves-Corvo, Eagle, Suruca and Alcaparrosa during the year, partially offset by higher gross profit. Adjusted earnings 1 from continuing operations attributable to shareholders of the Company for the year were $291.7 million or $0.38 per share. Adjusted earnings 1 from discontinued operations attributable to shareholders of the Company for the year were $67.2 million or $0.09 per share. Cash and cash equivalents at continuing operations as at December 31, 2024 were $357.5 million . As indicated above, cash provided by operating activities related to continuing operations of $1,300.8 million in the year was used to fund investing activities from continuing operations of $855.4 million , which primarily includes $807.3 million investment in mineral properties, plant and equipment, $41.7 million subscription for Filo shares to provide interim financing to Filo and the final $25.0 million payment of contingent consideration for the acquisition of Chapada. Cash used in financing activities related to continuing operations of $349.8 million was comprised primarily of funds used to exercise the Company's option to acquire an additional 19% interest in Caserones for $350.0 million , which was funded by debt proceeds, $202.5 million dividends paid to shareholders and $152.0 million in distributions paid to non-controlling interests. Free cash flow 1 from continuing operations for the year was $508.2 million and free cash flow 1 from discontinued operations for the year was $63.0 million . As at February 19, 2025 , the Company had cash of approximately $407.1 million and net debt excluding lease liabilities of approximately $1,322.4 million . Net cash in Vicuña is included on a 50% basis to represent Lundin Mining's attributable share. Cash and net debt balances include assets and liabilities classified as held-for-sale.

Operational Performance

Total Production

| (Contained metal) a | 2024 | 2023 | | | | | | | | | | YTD | Q4 | Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | | | Copper (t) b | 369,067 | 101,491 | 99,855 | 79,708 | 88,013 | 314,798 | 103,337 | 89,942 | 60,057 | 61,462 | | Zinc (t) | 191,704 | 51,946 | 46,610 | 47,460 | 45,688 | 185,161 | 50,719 | 49,774 | 36,115 | 48,553 | | Nickel (t) | 7,486 | 1,617 | 893 | 1,721 | 3,255 | 16,429 | 3,729 | 4,290 | 4,686 | 3,724 | | Gold (koz) b | 158 | 46 | 47 | 32 | 33 | 149 | 44 | 35 | 34 | 36 | | Molybdenum (t) b | 3,183 | 912 | 693 | 714 | 864 | 2,024 | 928 | 1,096 | — | — |

| a. Tonnes (t) and thousands of ounces (koz) | | | | b. Candelaria and Caserones production is on a 100% basis. Caserones results are from July 13, 2023. | | |

_Candelaria (80% owned): _Candelaria produced, on a 100% basis, 162,487 tonnes of copper, approximately 93,000 ounces of gold and 2.0 million ounces of silver during the year. Copper and gold production benefited from planned higher grade ore from Phase 11 and in the second half of the year, the operation produced 98,970 tonnes of copper which was one of its best second-half performances in its 30-year history. In late 2024, production from Phase 11 shifted to lower average grades, resulting in annual copper production slightly below the most recently published guidance range. In 2025, production will continue to be sourced primarily from Phase 11 with a planned reduction in average copper grades from those realized in the second half of 2024. Annual gold production was within the most recently disclosed annual guidance range. Copper cash cost 2 of $1.73 /lb was within the most recently disclosed 2024 cash cost guidance range and benefitted from higher sales volumes, favourable foreign exchange, and higher by-product credits.

_Caserones _(70% owned): Caserones produced, on a 100% basis, 124,761 tonnes of copper and 3,183 tonnes of molybdenum, both within the most recently disclosed 2024 annual production guidance ranges. Production during the year was impacted by labour action in August which reduced throughput to approximately 50% capacity over a 14-day period. Mine sequencing changes as a result of hydrogeologic conditions in Phase 5 reduced grades and impacted recoveries in the mill during the quarter. Copper cathode production was positively impacted by increased irrigation pattern on the dump leach pad. Copper cash cost 2 of $2.51 /lb was below the low end of the most recently disclosed cash cost guidance range and benefitted from higher by-product credits and favourable foreign exchange.

| | | 1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its MD&A for the year ended December 31, 2024 and the Reconciliation of Non-GAAP measures section at the end of this news release. | | 2 This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of the MD&A for discussion and the Reconciliation of Non-GAAP measures section at the end of this news release. |

_Chapada (100% owned): _Chapada produced 43,261 tonnes of copper and approximately 65,000 ounces of gold during the year, both metals were within the most recently disclosed 2024 production guidance ranges. An optimized mine plan led to a significant reduction in overall material movement, including waste and ore, and contributed to lower production costs. Increased processing of ore from the older low-grade stockpile and North pit resulted in lower copper production due to lower grades and recoveries. Gold production benefited from higher grades and throughput as emphasis was placed on gold in the current elevated gold price environment. Production costs during the year also benefited from a weakening of the BRL against the USD. Copper cash cost 1 of $1.58 /lb was within the most recently disclosed 2024 cash cost guidance range and benefited from higher by-product credits and favourable foreign exchange.

_Eagle (100% owned): _Eagle produced 7,486 tonnes of nickel and 6,366 tonnes of copper during the year. Production was impacted by reduced mining rates following a fall of ground in the lower ramp in May, which limited access to Eagle East while ramp rehabilitation was completed. During the quarter mining re-commenced at Eagle East and normal throughput is expected to resume in Q1 2025. Both metals were within the most recently disclosed 2024 production guidance ranges. Production costs decreased in line with lower production and sales. Nickel cash cost 1 of $4.20 /lb was above the most recently disclosed 2024 cash cost guidance range due to mining rates not recovering as quickly as expected in the quarter.