Lundin Gold boasts 'exceptional' first quarter performance, generates $92 million in free cash flow
(Kitco News) - Lundin Gold (TSX: LUG) said yesterday that the company produced 121,665 ounces of gold at its Fruta del Norte mine in Ecuador in Q1 2022, up 17% compared to 104,137 ounces produced in Q1 2021.
The company added that in Q1 2022, cash operating costs and AISC were $619 and $696 per oz of gold sold, respectively, lower than cash costs of $672/oz and AISC of $830/oz a year ago, mainly due to continued improvements in recoveries and low sustaining capital during the quarter.
The company generated free cash flow of $91.8 million this quarter (Q1 2021: $43.6 million), resulting in a cash balance of $337 million at quarter end.
Net income was $23.2 million after deducting derivative losses, corporate, exploration, finance costs, and associated taxes on earnings. Adjusted earnings, which exclude derivative losses, were $57.6 million, or $0.25 per share.
Lundin Gold noted that its "exceptiona" performance in Q1 2022 provides a robust foundation for the rest of the year, and the company's production guidance of 405,000 to 445,000 oz and AISC of $860 to $930 for 2022 remain unchanged.
Following the approval of the dividend policy, the company anticipates declaring and paying an inaugural $0.20 per share dividend after the announcement of the company's Q2 2022 financial results.
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President and CEO Ron Hochstein commented, "I am delighted to announce that the strong operational and financial results achieved in 2021 have continued in Q1 2022. It is clear that Fruta del Norte is generating significant free cash flow providing Lundin Gold the opportunity to begin returning capital to shareholders.
"With continuing strong performance, Lundin Gold will be in the enviable position of being able to distribute a portion of its free cash flow directly to its shareholders by way of dividends, while still enabling the company to accelerate debt repayments, carry out expanded exploration programs, potential future capital projects, and pursue growth opportunities. I believe Lundin Gold is poised to perform well this year and continue to create shareholder value."
Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador and a large exploration land package that hosts the Fruta del Norte deposit at its northern edge. Fruta del Norte is among the highest-grade operating gold mines in the world.