Lundin Mining (LUN) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $1.1 billion, driven by strong commodity prices, operational performance, and working capital inflows.

• Exercised option to increase Caserones ownership to 70%, adding 25,000 tonnes of attributable copper at an attractive price.

• Formed a joint venture with BHP to acquire Filo and develop the Vicuña District, enhancing long-term copper growth prospects.

• Tracking to meet full-year copper, zinc, and gold production guidance, with production weighted to the second half.

• Published 2023 Sustainability Report and achieved Copper Mark certification at Candelaria and Caserones.

Financial highlights

• Q2 adjusted EBITDA reached $461 million, up from $363 million in Q1; free cash flow from operations was $338 million.

• Adjusted earnings attributable to shareholders were $122 million, up 170% from Q1.

• Operating cash flow was $492 million, benefiting from a $122 million working capital release.

• Net debt at quarter-end was just below $900 million, with a leverage ratio of 0.5x LTM adjusted EBITDA.

• Announced quarterly dividend of CAD 0.09 per share, annualized at CAD 0.36.

Outlook and guidance

• Annual copper production guidance maintained at 366,000–400,000 tonnes, with higher grades expected in H2.

• Caserones copper guidance increased to 124,000–135,000 tonnes; Eagle guidance reduced due to operational issues.

• Full-year sustaining capital expenditure guidance reduced by $45 million to $795 million.

• On track to meet unit cash cost guidance at all sites except Eagle, which is revised upward.

• Exploration budget set at $48 million, focusing on near-mine and higher-grade resources.