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(Kitco News) - Lundin Gold (TSX: LUG) (OTCQX: LUGDF) yesterday reported Q2 2023 gold production of 129,731 ounces from its Fruta del Norte gold mine in southeast Ecuador, up 16% from Q2 2022 (111,890 ounces).
The company noted that higher than expected grade and mill throughput in the second quarter have offset lower recoveries, which were caused by changes in ore type and oxidation impacts on the coarse ore stockpile.
Lundin Gold said it generated $132 million in free cash flow over the three-month period (Q2 2022: free cash flow of $21 million), the highest quarterly free cash flow achieved to date.
The company posted a net income of $63.1 million in Q2 2023 (Q2 2022: net income of $56 million) and adjusted net earnings of $59.4 million (Q2 2022: adjusted net earnings of $13.5 million).
Lundin Gold said that based on “very strong” performance during the first half of 2023, the company has increased its 2023 production guidance to 450,000 to 485,000 oz from 425,000 to 475,000 oz. In addition, the company has reduced its 2023 cash operating cost and all-in sustaining cost (AISC) guidance.
The company also announced that its board of directors has declared a quarterly cash dividend of US$0.10 per common share.
Commenting on the results, President and CEO Ron Hochstein said, "As a result of strong operating results in the first half of 2023 and confidence that our team can continue to deliver excellent performance, we are increasing production guidance and reducing cash operating cost and AISC guidance.
“We've said that Lundin Gold is a cash flow story for some time now, and our free cash flow generated during the second quarter highlights that. This free cash flow enables us to fund future highly prospective exploration programs, pay down our debt, pay dividends, and look at potential expansion opportunities."
“The company is in a strong position, and I am excited to take this momentum into the second half of the year," he added.
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.
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