Lundin Gold (LUG) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly revenues of $301 million from the sale of 129,396 oz at an average realized gold price of $2,379/oz in Q2 2024, with adjusted EBITDA of $195 million and net income of $119 million.

• Gold production for the quarter was 133,062 oz, supported by strong recoveries (89.0%), mill throughput (4,669 tpd), and head grade (11.0 g/t).

• Cash from operating activities was $144 million, with adjusted free cash flow of $112 million and a cash balance of $238 million at quarter end.

• Achieved debt-free status after completing the first tranche ($180 million) of the Stream Facility and Offtake buyout, with the second tranche ($150 million) due September 30, 2024.

• Doubled quarterly dividend to $0.20/share, or ~$200 million annually, starting Q3 2024.

Financial highlights

• Net revenues for Q2 2024 were $301 million, up from $244 million in Q2 2023; net income was $119 million, up from $63 million year-over-year.

• Adjusted EBITDA was $195 million (Q2 2023: $149.6 million); adjusted earnings per share were $0.41 (Q2 2023: $0.25).

• Cash flow from operations was $144 million; adjusted free cash flow was $112 million; adjusted free cash flow per share was $0.47.

• Cash operating costs and AISC were $725/oz and $875/oz, respectively, trending toward the upper end of guidance due to higher royalties and profit sharing.

• Ended Q2 with $238 million in cash and $254 million in working capital.

Outlook and guidance

• On track to meet 2024 production guidance of 450,000–500,000 oz, with average throughput of 4,500–5,000 tpd, recoveries of 89%, and head grade of 9.9–11.0 g/t.

• Cash operating costs expected to average $680–$740/oz and AISC $820–$890/oz for 2024.

• Process plant expansion to 5,000 tpd and improved recoveries by year-end remain on schedule.

• Largest-ever drill program planned for 2024, with a minimum of 80,000 metres across conversion, near-mine, and regional exploration.

• Quarterly dividends of at least $0.20/share expected, equating to ~$200 million annually.