Lundin Gold to cancel debt after strong quarter
Another loan bites the dust
Lundin Gold has reported net earnings of US$62.7 million on revenues of $211.3 million for the September quarter.
The company produced 112,212oz of gold in the quarter from its Fruta del Norte mine in Ecuador, 7.8% less than the prior year period and 13.5% down on the June quarter, which was a record quarter for the company of 140,021/oz. It said it is on track to achieve the upper end of its revised 2023 production guidance of 450,000-485,000oz.
The all-in sustaining cost increased to $907/oz, 12.4% higher than a year ago and 13.1% higher than the June quarter.
"After another strong quarter of free cash flow generation, we are advancing our debt reduction strategy with the repayment in full of the remaining balance of our senior debt facility," said Lundin Gold chief executive Ron Hochstein.
Lundin Gold ended the quarter with $302.5 million in cash and $236.7 million in long-term debt. It declared a 10c per share quarterly dividend and said it has elected to fully repay the remaining principal balance of $70.5 million plus accrued interest under its senior debt facility on November 14, well before the maturity date of June 2026.
During the September quarter, Lundin Gold drilled 9,664m in 14 holes from surface and underground near Fruta del Norte. It also reported that a second phase of scout drilling was completed at the Gamora project by Newcrest Mining (now Newmont) under an earn-in agreement to earn up to a 50% interest in eight exploration concessions around Fruta del Norte. A total of 3,247m were drilled testing copper-gold targets but did not return significant intercepts. Newcrest has met the expenditure requirement and has until early December to exercise its option to acquire 25% of the subsidiary that holds the assets.
Shares in Lundin Gold are trading at C$16.05, valuing the company at C$3.8 billion.
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