Bumper 2023 for Lundin Gold

Lundin Gold has reported a net profit of US$179.5 million for 2023 on revenues of $902.5 million, a jump of 144% compared to the 73.6 million reported in 2022, meeting its annual guidance.

The company produced 481,274oz of gold from its Fruta del Norte mine in Ecuador, 1% more than in 2022, at an all-in sustaining cost (AISC) of $860/oz, 6.8% higher than in 2022, due to lower gold sales in the quarter. Lundin saw its AISC jump 17% in the December quarter to $1062/oz compared with the September quarter and 22.8% year-on-year.

Lundin Gold ended 2023 with $268 million in cash, 26% lower than at the end of 2022, with long-term debt of $241.9 million, 25% lower than at the end of 2022. It also paid $94.9 million in dividends to shareholders during 2023.

During 2023, the gold prepay facility and the senior debt facility were fully repaid, leaving the stream credit facility as the last remaining project finance facility outstanding. The company can repay 50% of the streaming facility outstanding on June 30 for $150 million and the other 50% on June 30, 2026 for $225 million. "This makes good sense at current price forecasts," said Lundin Gold chief executive Ron Hochstein during the 2023 results conference call.

"Looking ahead to 2024, we are focused on operational excellence and delivering the process plant expansion project to achieve increased throughput and recovery improvements. Furthermore, we continue to make significant headway on our exciting exploration programmes; 2024 will be the largest drilling programme ever conducted in the district that hosts Fruta del Norte," said Hochstein.

The plant expansion will increase processing capacity to 5000tpd and improve gold recovery to 91%. In 2023, the mill processed an average of 4533tpd with an average recovery of 88.4%.

In 2023, the company completed 11,233m of conversion drilling in 79 drill holes which will be the basis for an updated reserves and resources estimate, due later in the March quarter of 2024. It also drilled 35,305m in its near-mine exploration programme.

Newmont, which acquired Newcrest Mining, a strategic investor in Lundin Gold, in November 2023. Newmont has dropped its option to earn a 25% interest in eight exploration concessions to the north and south of Fruta del Norte and terminated the earn-in agreement. Lundin is assessing various options for some or all of these concessions.

This year, the company is planning its largest drilling programme with 9815m of conversion drilling, 46,000m of near-mine drilling and 10,000m of regional drilling, with an aggregate budget of more than $42 million.

Lunding Gold also said it has set a target to be carbon neutral by 2030.

Shares in Lundin Mining opened 1.5% higher at C$15.44, valuing the company at C$3.7 billion.