TSX-listed Lundin Mining recorded cash flows of $158.7-million generated from operations in the first quarter of this year.

Adjusted operating cash flows for the quarter were $279.8-million.

Net earnings attributable to shareholders were $135.2-million and adjusted earnings were $144.4-million.

Adjusted earnings before interest, taxes, depreciation and amortisation were $354.4-million for the quarter.

On February 18, Lundin announced a 50% increase in its cash dividend to C$0.06 apiece, compared with the quarterly dividends paid in 2020.

“Our operations performed well in the first quarter. Candelaria and Chapada significantly increased mill throughput quarter-on-quarter and a new record for zinc ore was set at Zinkgruvan [in Sweden].

“With increasing ore grades at Candelaria and Chapada, we are well positioned to deliver our annual guidance,” CEO and president Marie Inkster says.

Lundin has 80% ownership of the Candelaria copper mine, in Chile, and owns 100% of the Chapada copper/gold mine, in Brazil.

While first-quarter financial results were impacted on by the timing of a shipment from Chapada pushed into early April, the company generated significant operating cash flow, she notes.

The Eagle copper and nickel mine, in the US, achieved a cash cost of negative $1.62/lb nickel and contributed over $75-million of operating cash flow.

The zinc expansion project at the Neves-Corvo copper and zinc mine, in Portugal, restarted in early January and is on track for commissioning later this year.

Also, in early April, at Chapada, Lundin was successful in the acquisition of 23 highly prospective near-mine exploration claims through government auction, increasing its overall land position by 80%, Inkster says. 

“We continue to expect 2021 to be an exciting and rewarding year for Lundin Mining, as we benefit from the recent investments made in our operations to take full advantage of the favourable metal price environment and to generate meaningful free cash flow for our shareholders,” she acclaims.

OUTLOOK

The company’s full-year nickel production guidance has been increased, from 15 000 oz to 18 000 oz, to 17 000 oz to 20 000 oz, reflecting the good first-quarter results from Eagle.

While the company has not experienced significant disruptions to production, shipments of concentrate, or its supply chain owing to Covid-19, it continues to caution that a localised outbreak at the operations may require the need to implement increased isolation and containment measures which could impact production, delay maintenance activities or disrupt supply chains.

Given the uncertainty of the duration and magnitude of the impact of Covid-19, production and cash cost estimates are subject to a higher than normal degree of uncertainty, Lundin states.