Inaugural Dividend Anticipated Following Q2 Results under Recently Approved Policy
VANCOUVER, BC, May 3, 2022 /CNW/ - 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 AISC1 of $860 to $930 for 2022 remain unchanged. All amounts are in U.S. dollars unless otherwise indicated. PDF version
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 price1 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 costs1 and AISC1 were $619 and $696 per oz of gold sold, respectively, mainly due to continued improvements in recoveries and low sustaining capital during the quarter.
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 amortization1 ("EBITDA") and adjusted EBITDA1 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.
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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
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.
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