Bullboard - Stock Discussion Forum Lundin Mining Corp LUNMF

Primary Symbol: T.LUN

Metals & Mining Copper

Lundin Mining Corp. is a Canada-based diversified base metals mining company. The Company is engaged in metals mining with projects and operations in Argentina, Brazil, Chile, Portugal, Sweden and the United States primarily producing copper, zinc, gold and nickel. The Company’s operations include Candelaria, Caserones, Chapada, Eagle, Neves-Corvo, Josemaria and Zinkgruvan. Candelaria comprises... see more

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TSX:LUN - Post Discussion

Lundin Mining Corp > TD

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Post by retiredcf on May 04, 2023 9:35am

TD

Lundin Mining Corp.

(LUN-T) C$10.43

Q1/23: ZEP Finding its Legs Event

May 4, 2023

Recommendation: HOLD

Risk: HIGH

12-Month Target Price: C$11.00

12-Month Dividend (Est.): C$0.54

12-Month Total Return: 10.6%

LUN reported adjusted Q1/23 EPS of $0.16, in line with TD at $0.15 and consensus at $0.17. Adjusted EBITDA for the quarter was $336.9 million (TD $314 million; consensus $339 million).

Impact: NEUTRAL

Consolidated copper, zinc, and nickel production were in line with our forecasts. Consolidated copper production totaled 61,462 tonnes (TD 62,884 tonnes), while consolidated zinc production totaled 48,553 tonnes (TD 47,192 tonnes). Management noted that production was in line with expectations and tracking towards the 2023 production guidance ranges. On a q/q basis, copper production was up 9% and zinc production increased 10%.

Cash operating costs were mixed but generally in line with our expectations.

The C1 copper operating cost at Candelaria was $2.21/lb (TD $1.98) - Q1/23 cash costs were impacted by new labour agreements (including bonus payments) reached with the two remaining unions at the operation, which impacted Candelaria’s production costs by $0.08/lb. At Chapada, the C1 copper operating cost was $2.37/ lb (TD $2.58/lb), down ~20% from Q4/22. Neves Corvo operating costs were better than we expected at $1.69/lb, which compares to our forecast of $2.39/lb, which was the result of better zinc production than we expected. LUN has maintained its cash cost guidance for the year.

The Zinc Expansion Project (ZEP) at Neves Corvo appears to be gaining some traction. Zinc production almost doubled relative to Q1/22 to ~27,800 tonnes and zinc recoveries were 78.7% in Q1/23 vs. 66.1% in Q1/22. C1 cash costs were $1.69/ lb, flat y/y, demonstrating the impact of higher zinc byproduct credits - on a q/q basis, the cash cost was down ~25%.

Josemaria Project engineering and early site work moving forward. Plant engineering was at 39% completion as of March 31, including procurement of key long lead equipment. Early works continue onsite, mainly with the completion of the Phase 1 camp construction which was 94% complete and internal access road construction was 84% complete at the end of the quarter.

LUN ended the quarter with cash and net debt balances of approximately $180M and $90M, respectively. Available liquidity at the end of the quarter was ~ $1.7 billion.