Exceptional operating performance drives record revenues and free cash flow
VANCOUVER, BC, Aug. 7, 2025 /CNW/ - Lundin Gold Inc. (TSX: LUG) (Nasdaq Stockholm: LUG) (OTCQX: LUGDF) ("Lundin Gold" or the "Company") today announced its financial results for the second quarter of 2025, featuring record revenues of $453 million and net income of $197 million ($0.82 per share). Free cash flow(1) of $236 million ($0.98 per share) was driven by strong gold production of 139,433 ounces ("oz"), with 136,737 oz sold at an average realized gold price(1) of $3,361 per oz, at low cash operating costs(1) of $756 and all-in sustaining costs(1) ("AISC") of $927 per oz sold. The Company also announced cash dividends totaling $0.79 per share (approximately $190 million) comprised of the fixed quarterly dividend of $0.30 per share and the variable quarterly dividend of $0.49 per share, to be paid at the end of the third quarter. All dollar amounts are stated in US dollars unless otherwise indicated. PDF Version
Ron Hochstein, President and CEO commented, "The second quarter of 2025 delivered outstanding results for Lundin Gold, featuring record revenues and record free cash flow. This was driven by excellent gold production, sales, and a robust realized gold price. Our mill achieved impressive throughput of 5,064 tpd with improved recoveries, a testament to our team's operational excellence.
Given this strong performance and outlook, we've elevated the lower end of our 2025 production guidance from 475,000 to 490,000 oz while maintaining the upper end at 525,000 oz. We also expect to remain within the upper end of our cash operating cost(1) and AISC(1) guidance for the year. We are confident that our continued efforts to reduce costs and improve mill throughput will allow us to offset the impact of rising gold prices on royalties and profit sharing payable to employees.
As a direct result of our strong Q2 financial performance, we are pleased to declare sector leading dividends totaling $0.79 per share, comprised of both our fixed and variable components, for payment in the third quarter. This demonstrates the effectiveness of our new dividend policy in returning capital to shareholders during periods of strong free cash flow, while still allowing us to strategically invest in our long-term growth initiatives. Lundin Gold remains in a formidable financial position, poised for continued success."
OPERATING AND FINANCIAL RESULTS SUMMARY
The following two tables provide an overview of key operating and financial results.
Three months endedJune 30, Six months endedJune 30,
2025 2024 2025 2024
Tonnes ore mined 448,627 419,173 851,848 838,931
Tonnes ore milled 460,820 424,899 858,979 838,495
Average mill
throughput (tpd) 5,064 4,669 4,745 4,607
Average head grade
(g/t) 10.4 11.0 10.4 10.2
Average recovery 90.9 % 89.0 % 89.8 % 88.6 %
Gold ounces produced 139,433 133,062 256,746 244,634
Gold ounces sold 136,737 129,396 254,378 238,312
___________
(1) Refer to "Non-IFRS Measures" section.
Three months endedJune 30, Six months endedJune 30,
2025 2024 2025 2024
Revenues ($'000) 452,880 301,431 809,225 528,172
Income from mining
operations ($'000) 314,161 171,757 547,707 284,994
Earnings before
interest, taxes,
depreciation, and
amortization
($'000)(1) 318,840 457,069 560,342 568,681
Adjusted earnings
before interest,
taxes,
depreciation,
and amortization
($'000)(1) 318,840 195,401 560,342 326,857
Net income ($'000) 196,731 119,291 350,231 161,188
Basic income per
share ($) 0.82 0.50 1.46 0.68
Cash provided by
operating
activities ($'000) 254,782 144,169 449,090 252,083
Free cash flow
($'000)(1) 235,670 (123,427) 406,453 (41,168)
Free cash flow per
share ($)(1) 0.98 (0.52) 1.69 (0.17)
Average realized
gold price ($/oz
sold)(1) 3,361 2,379 3,231 2,270
Cash operating cost
($/oz sold)(1) 756 725 773 730
All-in sustaining
costs ($/oz
sold)(1) 927 875 918 872
Adjusted earnings
($'000)(1) 196,731 98,938 350,231 156,734
Adjusted earnings
per share ($)(1) 0.82 0.41 1.46 0.66
Dividends paid per
share ($) 0.86 0.10 1.16 0.20
SECOND QUARTER HIGHLIGHTS
Financial Results
-- Gold sales totalled 136,737 oz, consisting of 89,615 oz in concentrate
and 47,122 oz as doré, resulting in gross revenues of $460 million
at an average realized gold price1 of $3,361 per oz. Average realized
gold price1 was positively impacted by rising gold prices on
provisionally priced gold sales which exceeded fair value estimates as at
March 31, 2025. Net of treatment and refining charges, revenues for the
quarter were $453 million.
-- Average realized gold price1 includes $3,276 per ounce of gross price
received and a favourable impact of $85 per ounce from adjustments to
provisionally priced sales.
-- Cash operating costs1 and AISC1 were $756 and $927 per oz of gold sold,
respectively. Sustaining capital expenditures1 are expected to increase
during the second half of 2025 with the continued ramp up of the fifth
tailings dam raise and other site infrastructure improvement projects.
-- The Company generated cash from operating activities of $255 million and
free cash flow1 of $236 million, or $0.98 per share, resulting in a cash
balance of $493 million at June 30, 2025 following quarterly dividend and
special dividend payments of $107 million and $100 million, respectively.
-- EBITDA1 was $319 million while income from mining operations was $314
million which, after deducting corporate, exploration, and taxes,
resulted in net income of $197 million for the quarter or $0.82 per
share.
___________
(1) Refer to "Non-IFRS Measures" section.
Production Results
-- The mine ramped up during the second quarter to keep pace with the mill
resulting in a record 448,627 tonnes mined at an average grade of 9.3
g/t.
-- The mill processed 460,820 tonnes at an average throughput rate of 5,064
tpd, with improved recoveries of 90.9%, achieving the process plant
expansion operational targets. The average grade of ore milled was 10.4
g/t.
-- Gold production was 139,433 oz which was comprised of 92,242 oz in
concentrate and 47,191 oz as doré.
Outlook
-- As a result of the strong operating performance in the first half of the
year, the Company is updating its 2025 production guidance from 475,000
to 525,000 oz to 490,000 to 525,000 oz. Due to mine sequencing, the
Company expects a reduction in average head grade during the second half
of the year.
-- The Company expects its cash operating cost1 and AISC1 to be near the
upper end of guidance of $730 to $790 and $935 to $995 per oz sold
respectively. While the significant increase in gold price has led to
record financial performance during the first half of 2025, it has also
resulted in increased royalties and profit sharing to employees, metrics
that impact cash operating cost1 and AISC1. Continued efforts to reduce
cost and improvements to mill throughput is expected to allow the Company
to remain within the upper end of its cost guidance even with average
realized gold prices1 of $3,231 per oz during the first half of 2025,
compared to its guidance assumption of $2,500 per oz.
-- Sustaining capital expenditures1 are expected to increase over the
remainder of the year and come in at the previously guided $75 to $85
million.
-- The near-mine underground drilling program is expected to continue to
advance at FDNS where the primary focus is the conversion and expansion
of this new system. The surface drilling program is expected to continue
to explore the recently discovered Trancaloma copper-gold porphyry
mineralization, expand the mineralization along the Bonza Sur and FDN
East sectors, and advance on new sectors around FDN.
-- Seventeen rigs are currently turning across the conversion and near-mine
exploration programs. The Company increased the near-mine drilling
program by 18,000 metres to a minimum of 83,000 metres to accelerate the
definition of near-mine targets and the conversion drilling program from
15,000 metres to approximately 25,000 metres. A minimum of 108,000 metres
of drilling are planned across the conversion and near-mine drilling
programs for 2025.
-- Mine engineering work is underway on FDNS to evaluate geotechnical, mine
design, metallurgical characteristics and infrastructure needs with the
goal of integrating FDNS into FDN's long-term mine plan in 2026.
-- The regional exploration program is expected to continue to focus on the
unexplored large package of mineral concessions located on a highly
prospective environment which hosts the Fruta del Norte deposit. This is
the first year of a new three-year greenfield strategy to identify new
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