Bli medlem
Bli medlem

Du är här

2021-02-25

Lundin Gold Inc.: Lundin Gold Reports Fourth Quarter and Full Year Results

VANCOUVER, BC, Feb. 24, 2021 /CNW/ - Lundin Gold Inc. (TSX: LUG; Nasdaq Stockholm: LUG) ("Lundin Gold" or the "Company") today reports results for the fourth quarter and year ended December 31, 2020 (the "2020 Year"). These are highlighted by gold production of 96,830 ounces ("oz") during the quarter and 242,400 oz during the 2020 Year, and average all-in sustaining costs ("AISC") of $747 and $773 per oz of gold sold[1] during the same periods, respectively. Cash flow from operations was $95.0 million in the fourth quarter and $113.6 million in the 2020 Year, and the Company made scheduled principal and interest payments under its debt facilities totalling $77.7 million in the 2020 Year.

Since the restart of operations in July 2020, Fruta del Norte generated revenues, net income after tax, and cash flow from operations of $308.2 million, $26.5 million, and $118.4 million, respectively. All amounts are in U.S. dollars unless otherwise indicated.

Ron Hochstein, President and CEO commented, "This is a very exciting time for Lundin Gold, and despite the challenges faced as a result of the ongoing COVID-19 pandemic, we performed remarkably well during our first year of commercial production, as reflected in our operating and financial results. Momentum is expected to continue through 2021, as we undertake our throughput expansion program, as well as complete and announce results from the resource expansion and regional exploration drilling programs. I believe these, and other capital investments, have positioned the Company to deliver many years of strong production and significant free cash flow generation."

Fourth Quarter and Full-Year Operating and Financial Highlights

The following two tables provide an overview of key operating and financial results during the fourth quarter of 2020 and the 2020 Year.  In addition, operating results are provided for the ten-month operating period from March 1, 2020, following declaration of commercial production, to December 31, 2020 (the "2020 Operating Period").

Three months ended December 31, 2020 2020 Operating Period
Tonnes mined 350,474 672,906
(tonnes)
Tonnes milled 337,146 724,007
(tonnes)
Average head 10.1 10.0
grade (g/t)
Average 88.6 87.2
recovery (%)
Average mill 3,665 3,448
throughput
(tpd)
Gold ounces 96,830 202,830
produced
Gold ounces 106,190 199,256
sold

During the 2020 Year, which includes the pre-commercial production period from January 1 to February 28, a total of 242,400 oz of gold was produced and 234,464 oz were sold, including 35,208 oz sold prior to declaration of commercial production.

[1] Refer to "Non-IFRS Measures" section.
 

[][][][][][][][][][]
Three months Year ended December 31, 2020
endedDecember 31,
2020
Net revenues ($'000) 189,250 358,156[1]
Income from mining 94,857 172,386[1]
operations ($'000)
Net loss ($'000) (1,233) (47,158)
Operating cash flow 95,019 113,644
($'000)
Average gold sale price 1,850 1,866[1]
($/oz sold)[2]
Average cash operating 627 667[1]
cost ($/oz sold)[2]
Average all-in 747 773
sustaining costs ($/oz
sold)[2]
Operating cash flow per 0.41 0.50
share ($)[2]
Adjusted net earnings 76,224 105,914
($`000)[2]
Adjusted net earnings 0.33 0.47
per share ($)[2]

(in thousands of U.S. dollars) As at December 31, 2020 As at December 31, 2019
Financial Position:
Cash $ 79,592 $ 75,684
Working capital $ 56,603 $ 32,800
Total assets $ 1,505,360 $ 1,408,961
Long-term debt $ 857,094 $ 878,586

Fourth Quarter and 2020 Operating Period Production Overview

  • Gold production during the fourth quarter of 2020 totalled 96,830 oz, comprised of 56,900 oz of concentrate and 39,930 oz of doré. Gold production during the 2020 Operating Period totalled 202,830 oz, comprised of 133,153 oz of concentrate and 69,677 oz of doré.

  • During the fourth quarter, the mine continued to operate according to plan, resulting in 350,474 tonnes of ore mined, while, over the 2020 Operating Period, the mine delivered a combined 672,906 tonnes of ore to the plant or stockpile.

  • Underground mine development also continued as planned, advancing a total of 2,201 meters during the fourth quarter of 2020, versus 1,556 meters in the third quarter, and development rates averaging 23.9 meters per day in December.  A total of 4,808 meters of development were completed during the 2020 Operating Period.  Good ground conditions allowed conversion from drift and fill mining methods to long-hole stoping in key high-grade areas.

  • Mill operations in the fourth quarter achieved similar processing results to those achieved in the third quarter of 2020, with 337,146 tonnes of ore milled at an average throughput of 3,665 tonnes per day ("tpd"). During the 2020 Operating Period, the mill operated at an average throughput of 3,448 tpd, resulting in a total of 724,007 tonnes milled. Engineering and procurement of additional equipment are underway on the expansion project designed to increase the mill throughput from 3,500 to 4,200 tpd.

  • The average grade of ore milled was 10.1 grams per tonne ("g/t") for the fourth quarter of 2020, with average recovery at 88.6%, which continues to grow quarter-by-quarter. For the 2020 Operating Period, the average grade of ore milled was 10.0 g/t with average recovery at 87.2%. The Company continues to review the mill process to optimize recoveries.

[1] Amount relates to the 2020 Operating Period.
[2] Refer to "Non-IFRS Measures" section.

 

Fourth Quarter and Full-Year 2020 Financial Overview

During the fourth quarter, the Company sold a total of 106,190 oz of gold, consisting of 70,540 oz of concentrate and 35,650 oz of doré, at an average realized gold price[1] of $1,850 per oz for total gross revenues from gold sales of $196 million. During the 2020 Operating Period, the Company sold a total of 199,256 oz of gold, consisting of 136,756 oz of concentrate and 62,500 oz of doré, at an average realized gold price[1] of $1,866 per oz for total revenues from gold sales of $371.8 million.

Net of treatment and refining charges, revenues achieved in the fourth quarter and 2020 Operating Period were $189.3 million and $358.2 million, respectively.

Cash operating costs[1] and AISC[1] for the quarter were $627 and $747 per oz of gold sold, respectively. Higher than planned recovery rates combined with the processing of high grade ore during the quarter contributed to these good results. Cash operating costs[1] and AISC[1] for the 2020 Operating Period were $667 and $773 per oz of gold sold, respectively.

Income from mining operations was $94.9 million in the fourth quarter, and the Company generated cash flow from operations of $95.0 million, or $0.41 per share[1]. Income from mining operations was $172.4 million during the 2020 Operating period, and the Company generated cash flow of $113.6 million from operations or $0.50 per share[1] for the 2020 Year.

Net loss after tax in the fourth quarter was $1.2 million, after deducting corporate, exploration and finance costs, and derivative losses, partially offset by the income tax recovery recognized during the period.  Adjusted earnings[1] for the quarter, which excludes derivative losses, were $76.2 million, or $0.33 per share.

During the 2020 Year, the Company recorded a net loss of $47.2 million, after deducting finance, corporate, exploration and other costs of $66.5 million, as well as derivative losses of $137.0 million and suspension of operations of $29.3 million, from income from mining operations and offset by a deferred income tax recovery of $13.2 million.

Adjusted earnings[1] during the 2020 Year, which exclude suspension of operations costs and derivative losses, were $105.9 million, or $0.47 per share.

Results for the year are impacted by non-cash derivative gains and losses associated with fair value accounting for the gold prepay and stream facilities. These non-cash items are driven by numerous factors including anticipated forward gold prices and yields. Non-cash derivative losses associated with anticipated increasing forward gold prices are recorded in the statement of operations, while non-cash derivative gains associated with increasing yields are recorded in the statement of other comprehensive income. These non-cash gains and losses are derived from complex valuation modelling and accounting treatment which are more fully explained in the MD&A. Revaluation of these obligations may result in considerable period-to-period volatility in the Company's net income, comprehensive income, current and long term liabilities.

Liquidity and Capital Resources

Following the re-start of operations in early July, the Company generated $118.4 million of net cash from its operating activities, which also involved an increase in working capital while at the same time satisfying planned capital expenditures and loan facilities obligations. For the 2020 Year, the Company made scheduled principal and interest payments under its debt facilities totalling $77.7 million, which included monthly payments under the stream facility that commenced in February 2020 and totalled $18.0 million. In December, a payment under the gold prepay facility totalling $18.3 million and principal repayments totalling $22.8 million under the senior debt facilities were also made, as scheduled. Repayments of the gold prepay and senior debt facilities are due quarterly.

[1] Refer to "Non-IFRS Measures" section.

The Company expects to generate strong operating cash flow during 2021 based on its production and AISC guidance at current gold prices. This strong operating cash flow will support debt repayments, exploration program costs, and planned capital expenditures, including an expansion project to increase the mill throughput from 3,500 to 4,200 tonnes per day.

Increase in Probable Mineral Reserves[1]

In conjunction with the update to the life-of-mine plan, Lundin Gold updated its estimates of Probable Mineral Reserves for Fruta del Norte ("2020 Reserve") to 5.41 million oz, an increase of 427,000 oz compared to its 2019 year-end reconciliation of Probable Mineral Reserves. The 2020 Reserve is effective as of July 31, 2020 and reflects mill feed to July 31, 2020;  the update is primarily the result of converting a significant portion of drift and fill mineable orebody sections to long-hole stoping, as a result of the good ground conditions experienced in the mine to date. Alongside the reserve increase, these changes also resulted in a slight increase to dilution and decrease in average grade. Mineral Resource estimates at F...

Författare Cision

Tala om vad ni tycker

Tala om vad ni tycker

Ni är just nu inne på en betaversion av nya aktiespararna. Lämna gärna feedback på vad ni tycker i formuläret nedan.