Earnings call transcript: Lundin Mining’s Q1 2025 shows strong copper performance

Lundin Mining Corporation reported robust financial results for Q1 2025, with revenues reaching $964 million, driven primarily by copper sales. The company also announced a significant reduction in net debt following the sale of its European assets. Currently trading at $8.22, InvestingPro analysis suggests the stock is slightly overvalued based on its proprietary Fair Value model. With a market capitalization of $7.1 billion and impressive revenue growth of 24.8% over the last twelve months, the company maintains a strong market position in the mining sector.

Key Takeaways

• Revenues hit $964 million, supported by strong copper sales.
• Net debt significantly reduced after European asset sale.
• Copper production on track to meet annual guidance.
• Market reaction was modest, with stock price up 0.79%.
• Lundin Mining maintains strong financial flexibility.

Company Performance

Lundin Mining demonstrated solid performance in Q1 2025, largely due to its copper operations, which accounted for 84% of its revenue. This marks an increase from 76% last year, highlighting the company’s strategic focus on copper. The company is on track to meet its annual production guidance for both copper and gold.

Financial Highlights

• Revenue: $964 million
• Adjusted EBITDA: $388 million
• Adjusted Operating Cash Flow: $337 million
• Net Debt: Reduced from $1.44 billion to $262 million
• Copper Sold: 81,000 tons at $4.63/pound
• Gold Sold: 30,000 ounces at $3,350/ounce

Outlook & Guidance

Lundin Mining reaffirmed its annual copper cost guidance of $2.05-$2.30 per pound. The company is also progressing with the Vicuna Project, with an integrated technical report expected in Q1 2026. The upcoming Capital Markets Day in June will provide further details on the Candelaria underground expansion plans. Analysts maintain a moderately bullish outlook, with price targets ranging from $8.16 to $13.77, suggesting potential upside. The company’s next earnings report is scheduled for May 7, 2025.

Executive Commentary

Titor Polson, CFO, emphasized the company’s improved financial position, stating, "We are effectively at net debt zero." CEO Jack Lundin expressed optimism about the Vicuna Project, noting, "Vicuna is stacking up next to large world-class mining operations." He also highlighted the positive investment climate in Argentina.

Risks and Challenges

• Fluctuating commodity prices could impact revenue.
• Regulatory changes in South America may pose challenges.
• Potential delays in the Vicuna Project could affect timelines.
• Market saturation in copper mining could pressure margins.
• Global economic uncertainties could influence demand.

Lundin Mining’s Q1 2025 results underscore its strong operational performance and strategic focus on copper, while maintaining financial flexibility through debt reduction and asset sales. The company maintains a "GOOD" overall financial health score according to InvestingPro’s comprehensive assessment framework, which evaluates growth, profitability, and cash flow metrics. Discover the complete analysis and detailed Pro Research Report, available exclusively to InvestingPro subscribers.

Full transcript - Lundin Mining Corporation (LUN) Q1 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the Lundin Mining First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Jack Lundin, President and CEO. Please go ahead.

Jack Lundin, President and CEO, Lundin Mining: Good morning, and thank you everyone for joining Lundin Mining’s first quarter twenty twenty five conference call. Yesterday, we reported our operating and financial results for Q1. A copy of our press release containing the details of the quarter and a presentation are available on our website, where a replay will also be made available. All figures presented are in US dollars unless otherwise noted. I would like to remind everyone that yesterday’s results and certain comments on the call include forward looking information.

I will draw your attention to the cautionary statements on this slide for reference and our latest relevant filings on SEDAR. On the call with me today, I’m joined by my colleagues, Titor Polson, our Executive Vice President and Chief Financial Officer, and Juan Andres Morell, our Executive Vice President and Chief Operating Officer. We will be presenting our figures from continuing operations, Candelaria, Casaronis, Chapada, and Eagle. Touching on the highlights from Q1, quarterly copper production for the company was 76,774 tonnes, while gold production was 31,849 ounces, which keeps us on track to meet our annual guidance of between 303,000 to 330,000 tons of copper and 135,000 to 150,000 ounces of gold. The operational performance supported by strong gold prices in the quarter translated into another quarter of almost a billion dollars in revenue, $388,000,000 in adjusted EBITDA and $337,000,000 in adjusted operating cash flow, which excludes the impact of a working capital build of $215,000,000 When we released our annual guidance in January, we introduced a consolidated cash cost range.

For the quarter, we produced copper at $2.07 a pound, which is in the lower end of our cash cost guidance range for the year between $2.05 and $2.3 a pound. In addition to the operations performing as per plan, executed on a number of strategic initiatives that I will touch on in the next slide. On April 16, outside the current earnings period, we successfully completed the sale of our European assets, Nevis Corvo and Zinc Rubin for cash proceeds of US1.4 billion dollars Following receipt of those proceeds, we paid off and cancelled our term loan of US1.15 billion dollars and repaid a portion of the debt drawn on our revolving credit facility, all of which has significantly strengthened our balance sheet in support of our future growth opportunities. In March, the company entered into an option agreement with Talon Metals to acquire a highly prospective exploration project called Boulder Dash adjacent to the company’s Eagle Mine. This transaction provides a low risk, high potential opportunity that could extend the mine life at Eagle If Exploration continues to be successful, improving out an economic ore body.

During the quarter Lundin Mining also announced a new shareholder distribution policy that commits an annual return of approximately US220 million dollars per year to shareholders. This is in line with previous annual distributions, but we have increased the level of share buybacks and adjusted the dividend to maintain the set amount. On an annualized basis, we are now paying a dividend yield which is in line with our peers. In February, we updated our mineral resource and mineral reserve statement for our operating assets, where we were able to successfully offset mine depletion and replace reserves associated with the sale of Nevis Corvo and Zinc Rubin. This past Monday we announced the impressive initial mineral resource estimate for the the Vicuna project, outlining the world’s largest advanced stage copper gold silver development project of which Lundin Mining owns 50% alongside our partnership with BHP.

On January 15, we closed the transaction to jointly acquire Philo Corp, and the mineral resource announcement is the first major milestone for the joint venture. It forms the basis for our upcoming integrated technical report that will continue to outline a multi phase development plan for the district in the emerging Argentinian mining province of San Juan. I will now hand the call over to Juan Andres, our COO, to walk us through in more detail the company’s production results. Thank you, Jack, and good morning, everyone.

Juan Andres Morell, Executive Vice President and Chief Operating Officer, Lundin Mining: The company is tracking to production guidance on consolidated basis for all metals in 2025. As Jack mentioned, copper production for continuing operations for the company was 77,000 tons and gold production was 32,000 ounces for the quarter. At Candelaria, production was 37,000 tons of copper and 21,000 ounces of gold. During the quarter, throughput was positively impacted by softer than anticipated ore from sections in the Phase 11 in the open pit. This is expected to continue into the first part of the second quarter.

Overall production at Candelaria is tracking to guidance. Casa Dones has performed well this quarter and throughput was positively impacted by improvements to operations from the full potential program underway. During the quarter, the mill processed 8,700,000 tons, which is a quarterly record for Casaones. In addition, cathode production was strong at 6,500 tons due to continued benefits from ore material being placed on the pads and higher aggregation rates on the dung leach. Casarones is tracking to guidance for the full year.

Production at Chapada will be modestly weighted to the second half of the year. During the quarter, Chapada produced 8,900 tons of copper and 11,000 ounces of gold. Results were driven by an increase in stockpile material to the mill, which led to lower recoveries for the period. Grades in copper recoveries are expected to increase in the second half of the year due to higher contributions from fresh ore and less stockpile material processed. Chapada is tracking to guidance for the year for both copper and gold.

At Eagle, nickel production was 2,300 tons and copper production was 2,100 tons for the quarter. Ramp rehabilitation at Eagle East has been completed after the fall of ground in Q2 twenty twenty four, and normal production levels are expected for the remainder of 2025. Mine sequencing and grades are expected to normalize in Q2, which will support the annual guidance forecast for the year. In the first quarter, we experienced impacts from winter weather that affected ore haulage, which affected mining rates and mill throughput. Overall, we have had a good start of the year and production is tracking to guidance for 2025.

I will now turn the call over to Tyler to provide the summary on our financial results.

Titor Polson, Executive Vice President and Chief Financial Officer, Lundin Mining: Okay. Thank you, Panadrias, and good morning, everyone. So before going into the numbers, a reminder that for the first quarter twenty twenty five, we continue to report our European assets as discontinued operations, and the balance sheet items from these subsidiaries will be reported as assets and liabilities held for sale. As previously mentioned, the transaction closed on April 16. And as such, our reporting for the second quarter will also include the contribution from our European assets for the first fifteen days of the second quarter as discontinued operations.

So the company generated $964,000,000 in revenue from continuing operations. The quarter benefited from certain delayed shipments at Casa Rona around 40,000 metric tons of concentrate, which slipped into January and contributed around $80,000,000 to our revenue generation for the first quarter. With the sale of our European assets, our revenue mix is now even more geared towards copper, with copper generating 84% of the quarter’s revenue compared to last year when copper made up around 76%. Approximately 95% of our revenue now comes from our South American assets, with Candelaria and Casarona being the largest contributors. Turning to Slide 13.

As mentioned previously, with the delayed shipments from Casarone, this benefited the volume of copper sold during the quarter. On a consolidated basis, we did, in fact, sell around 5% more copper in the quarter than we produced. The total copper sold amounted to 81,000 tons during the quarter at a realized price of $4.63 per pound of copper and 30,000 ounces of gold at $3,350 per ounce before the impact of streaming and including adjustments from prior period sales. This translated into, as I said, dollars $964,000,000 for the quarter in revenue, which also includes 45,000,000 positive adjustments from prior period provisional pricing on copper and gold. And as you can see on the graph to the right, this quarter was the highest revenue generation from our continuous operations over the last five quarters.

A portion of our revenue for the quarter is derived from volumes sold under provisional pricing. The final prices for these volumes are subject to adjustments and will typically be determined in the following quarter. At the end of the first quarter, just over 80,000 tons of copper were provisionally priced at $4.43 per pound with final pricing still pending. Turning to Slide 14. Production costs from continuing operations totaled $517,000,000 for the quarter, which is slightly higher than the costs recorded for the previous couple of quarters.

This quarter includes the costs associated with the change in inventory at Casaronis in relation to the previously mentioned delayed shipments of concentrate in addition to recording higher production costs at Eagle. In the previous two quarters, a portion of the costs at Eagle were categorized as standby costs, so not reflected in production costs, while RAF rehabilitation work was carried out. But with Eagle now having returned to full production, all costs incurred are now charged to the production cost line and thus increasing our consolidated production costs for the quarter by around 15,000,000 to $20,000,000 compared to the previous two quarters. Valeria’s total costs have come down from prior quarter due to lower sales volumes, while C1 costs for the quarter are slightly higher compared to previous two quarters as the mine went through higher grade ores during the second half of last year. Costs at Casarona were driven by higher throughputs and an increase in sales volumes from the previously mentioned delayed shipments, while Casarona’s C1 costs continue to remain fairly stable.

At Chapada, our C1 costs for the quarter are somewhat higher than the previous two quarters due to lower sold volumes for copper and gold. Nevertheless, the C1 costs for the quarter remained significantly below guidance of 1.8 to $2 per pound copper for the full year, the continued favorable FX and also due to higher gold prices. On a consolidated basis, as previously mentioned, our 1 costs amounted to $2.07 per pound copper, which is towards the bottom end of our guidance of $2.05 per copper to $2.3 per copper. Our costs continue to benefit from weaker local currencies, and our C1 unit costs also continue to benefit from higher gold prices compared to what’s assumed in our guidance. Going to Slide 15.

The total capital expenditure for the quarter were below guidance primarily due to the deferral of capital projects at Candelaria, including deferrals of the SAG power system upgrade and the deferral of relocating certain electrical lines as well as lower volume moved at Casaronis TSF. These are all expenditure deferrals and are expected to be incurred later in the year. Almost 70% of the sustaining CapEx in the quarter was for stripping and tailing storage development. Gold and mining’s fifty percent share of capital expenditure related to Vicuna was $43,000,000 which is tracking slightly above the full year guidance. Higher expansionary capital costs during the quarter were also the result of an opportunistic mineralized purchase at Candelaria during the quarter.

We remain on track for full year guidance with sustaining and expansionary CapEx of $175,000,000 for the quarter, while the total guidance for the year is $735,000,000 The first quarter key financial metrics are presented on Slides sixteen and seventeen. As mentioned, we generated adjusted EBITDA of $388,000,000 and adjusted operating cash flow of $337,000,000 which excludes a build on working capital of $250,000,000 during the first quarter. Cash taxes of $43,000,000 also impacted operating cash flow in the quarter with a further cash tax installment of $108,000,000 made in April to settle final taxes due in Chile and Brazil for 2024. Free cash flow from operations was $22,000,000 from continuing operations, which includes the working capital build of $215,000,000 Adjusted earnings were $94,000,000 for the quarter. We finished the quarter in a moderate net debt position of roughly $1,440,000,000 excluding capital leases, which equates to a leverage ratio of onetime net debt to adjusted EBITDA for continuing operations.

The company remains in good financial health with costs trending according to guidance, with some potential upside on the cost structure due to the continued weaker local currencies as well as a stronger gold price. Turning to Slide 18, with the closing of the Vicuna transaction in January and the closing of the European asset sale in April, there have been a number of cash inflows and outflows impacting our cash flow statement and our net debt positions. Reading this chart from left to right, we have already explained the quarterly adjusted operating cash flow, working capital build and the expenditure on capital items. The closing of Vicuna resulted in a net cash inflow of $79,000,000 with a cash payment to Filo shareholders of $611,000,000 and receipt of cash from BHP for their 50% stake in Hosmeria of $690,000,000 With our recently announced revised shareholder distribution policy, the company has pivoted to do more share buybacks, and the company bought $71,000,000 worth of its own shares during the quarter. Accounting for cash interest and certain other items, the company ended the quarter with a net debt of $1,440,000,000 After Q1, the company completed the sale of the European assets and received $1,400,000,000 in proceeds and released to Bulletin a cash accumulated cash in dissolved subsidiaries amounting to $84,000,000 Following the closing of the European asset sale, the company paid off $1,150,000,000 in term loans as well as repaid $170,000,000 of debt drawn under the revolving credit facility.

The company also paid out a Q4 dividend of just over $50,000,000 and continued to repurchase shares during April. As previously mentioned, we paid a cash tax installment of $108,000,000 in April to settle final taxes due in Chile and in Brazil for 2024, leaving the company with a net debt position of two sixty two million dollars as of 05/02/2025. So with that, I will now turn the call back to Jack.

Jack Lundin, President and CEO, Lundin Mining: Thank you, Titor. During the quarter, as I mentioned, we entered into an earning agreement with Talon Metals to acquire up to 70% ownership in the Boulder Dash property, which is adjacent to our Eagle mine. Initial drilling at Boulder Dash intercepted 100 meters grading 0.41% nickel and 0.35% copper starting at a depth of approximately nine meters. More recently, drilling has intercepted grades of 2.33 nickel and 2.95% copper, which is in line with the current head grades at Eagle. Lundin Mining has agreed to fund an initial 30,000 meter drill campaign.

Following the completion of the 30,000 meters of drilling, the company can decide to fund a feasibility study in exchange for a total ownership of 70%. This highly anticipated drilling program is set to start within the coming weeks. On Monday’s webinar, we were able to detail the announcement of the impressive Vicuna mineral resource estimate. A replay is available on our website, which I encourage the audience to visit. The initial mineral resource has highlighted the Vicuna project as one of the highest grade undeveloped open pittable copper projects.

Its size and scale, not only in copper, validates Vicuna as one of the largest gold and silver resources globally as well. The total measured indicated and inferred resource contains 38,000,000 tonnes of copper, 81,000,000 ounces of gold, and just under 1,500,000,000 ounces of silver. Philo Del Sol and the Vicuna district are poised to develop into a world class deposit that will support a globally ranked mining complex. Since the initial oxide discovery in February, Philo del Sol has emerged as a generational discovery highlighted by the drilling of the high grade Aurora zone in 2021. Alongside Jose Maria discovered in 02/2004, it forms the Vicuna project, now representing the largest greenfield copper discovery in the last thirty years.

The figure to the bottom of the screen shows resource data collected from SMT Global Platform. The figure shows the relative measured indicated inferred resource size of initial discoveries from 1990 until present day. You can see Vicuna is stacking up next to the large world class mining operations such as Coyoacci, Cerro Verde, and Escondida. The scale is impressive, however, not only the size and scale of Acuna, but also the elevated grades that exist in the core of the deposits make it truly unique. At Filo Del Sol, there is over 600,000,000 tonnes at 1.14% copper equivalent in the measured and indicated category, containing 4,500,000 tonnes of copper.

At Jose Maria, there’s a near surface high grade core of 200,000,000 tonnes at point 73% copper equivalent containing 1,000,000 tonnes of copper, which would likely contribute to the initial years of mining. The mineral resource estimate is a key milestone for the district and will form the basis for the integrated technical report that will outline a combined project that is scheduled for completion the beginning of twenty twenty six. In summary, Lundin Mining has completed a significant transformation to start the year. Most importantly, our existing operations are performing well and are tracking to full year production guidance across all metals. To streamline our portfolio and position the organization with the ability to focus on the key value drivers for our business, we officially launched Vicuna Corp in partnership with BHP in January.

Since then, we have made solid progress to in derisking and confirming the significant growth potential of the Vicuna District highlighted by the mineral resource estimate, was released on May 4. The accompanying technical report will follow within the coming weeks. Subsequent to the first quarter, we finalized the sale of our European assets generating 1,400,000,000.0 in proceeds. This enabled us to repay and cancel our term loan and reduce our revolving credit facility, resulting in a strong balance sheet going forward. As we move into the next phase of growth centered on the high potential Bacuna District as well as near term growth opportunities at our existing operations, we do so with an enhanced financial flexibility and a clear focus on delivering long term shareholder value.

The company is well positioned for the future with a strong commitment to achieving our operational targets, improving margins through disciplined cost management, and maintaining the highest health and safety standards to protect our workforce. Thank you to those on the call, and I’ll now open up for questions.

Conference Operator: Thank you. At this time, we will conduct the question and answer session. Our first question comes from Lawson Winder of BofA Securities. Your line is now open.

Lawson Winder, Analyst, BofA Securities: Thank you very much, operator, and good morning, Jack and team. Thank you for the update. We spent a lot of time talking on Monday about Vicuna. So I think maybe I’d like to ask about some of the other operations this morning and ask about Candelaria and the expansion. At this point, what remains outstanding in terms of information that you need to gather in order to make a decision on the underground expansion?

Then what is the current thinking on the timeline? Thank you.

Jack Lundin, President and CEO, Lundin Mining: Hi Lawson, it’s Jack here. Thanks a lot for the question and thanks a lot for the interest on the call on Monday as well. Yeah, for Candelaria, the underground, you know, were looking historically at quite a large underground expansion that we were dubbing as the Q Jet project, and I think we’ve telegraphed in recent calls that we’ve since kind of modified the approach to the underground expansion and looked at kind of increasing the capacity from the underground in more of an incremental way, and through more traditional measures rather than in implementing underground infrastructure like crushing and conveying, we’re looking at improving the productivity of our underground mining crews and then potentially adding more mobile underground equipment to increase production from the underground incrementally. So, know QJEP, the large QJEP expansion project has been you know essentially put to the side and at our Capital Markets Day in June we’ll be outlining kind of the next steps for how we’re going to be incrementally growing production from the underground. But it’s not going to be a heavy CapEx item, we’re looking at a low capital intensity initiative to incrementally increase production and we’ll outline those details in June at our Capital Markets Day.

Lawson Winder, Analyst, BofA Securities: Yeah, that’ll be very helpful. No, but what does that imply in terms of permitting? Does incremental mean a more streamlined permitting process or do you face the same constraints on that front?

Juan Andres Morell, Executive Vice President and Chief Operating Officer, Lundin Mining: Lawson, this is Juan Andres. In terms of permitting, the underground expansion was already permitted in the EIA 2 Thousand 40. But as Jack mentioned, since we’re making some changes from underground material handling system to more mobile based expansion, we will have to amend some permits, and we’re currently working on doing that.

Lawson Winder, Analyst, BofA Securities: Any sense on timeline to having those amendments?

Juan Andres Morell, Executive Vice President and Chief Operating Officer, Lundin Mining: Not yet.

Lawson Winder, Analyst, BofA Securities: Okay. Something to follow-up with on the Investor Day in June. That’ll informative. On Candelaria as well, I wanted to ask about the stream. So the drop down in the percent payout to Franco Nevada on both the gold and silver is approaching relatively quickly in my model.

And at current gold and silver prices, we’re getting something in the range of an annual boost to free cash flow of about $100,000,000 Is that in line to your estimate at spot prices? And then what’s your current estimate on the timing of that dropdown?

Titor Polson, Executive Vice President and Chief Financial Officer, Lundin Mining: Yeah. Morning, Lawson. It’s Tyger here. Yeah. So we are currently forecasting that that step down from 68% of the gold down to 40% gold and silver should happen kind of towards the end of twenty twenty six.

And obviously, depending on spot prices at that point in time, yeah, I think your order of magnitude number is in the ballpark.

Lawson Winder, Analyst, BofA Securities: Okay, great. That’ll be nice to have. And then just finally on when you’re thinking about the capital to develop Jose Maria and Philo, which I mean, I think you made very clear on the last call that it would be done incremental fashion. Nevertheless, have you considered copper hedges as an option to protect downside risk and ensure funding for that process?

Titor Polson, Executive Vice President and Chief Financial Officer, Lundin Mining: The short answer is no. We’re not really contemplating copper hedges. Mean, you’ve seen from our presentation today, our balance sheet is very, very strong. We are effectively at net debt zero. So we have all the flexibility in the world really in terms of how we go about funding this.

I mean, we obviously will remain very disciplined on cost control and obviously trying to optimize the economics of Vicuna in terms of phasing of CapEx. But hedging on commodities is not on the table at the moment.

Lawson Winder, Analyst, BofA Securities: Fantastic. Thank you all very much.

Jack Lundin, President and CEO, Lundin Mining: Thank you.

Conference Operator: Thank you. Our next question comes from the line of Craig Hutchinson of TD Cowen. Your line is now open.

Craig Hutchinson, Analyst, TD Cowen: Good morning, guys. I just want to follow-up from Monday’s call. The integrated technical report that’s going to come out in Q1 of next year, is the intent that the Phase one, Jose Maria, will be at feasibility level and the oxides from Philo will be at a PEA level or do I have that right? I guess I’m just going to ask you if Jose Maria is the plan to whatever you put out in Q1, that’s the project you’re going move forward with through the rigging?

Jack Lundin, President and CEO, Lundin Mining: Hey Greg, thanks for the question. Yeah, that’s right. So phase one, you know, what we’re looking at right now, Jose Maria, we’re getting the level definition of the study to definitive feasibility study level. We’ve obviously been studying Jose Maria for a number of years and have much more detail on that project and have significantly de risked it. We’ve been also looking of course at the Phylloxides, there was a PFS that came out when Phylloxorp was in control of the Phyllodel Sol deposit and so we’re advancing the and redoing kind of the PFS on the Phylloxides and then for the Phyllosulphide, so once we get into large scale full kind of capacity production that would be at a PEA level that we would be you know doing the study at.

So, all of these three studies that are ran in parallel are at different definitions based on the amount of data we’ve accumulated and the amount of work we’ve done to date.

Craig Hutchinson, Analyst, TD Cowen: Okay, great. And do I understand it correctly, the idea is after you’ve kind of moved through the high grade zone and Jose Maria, you’re looking at the PA will look at potentially substituting that ore with the high grade zone from Villa Del Solvo.

Jack Lundin, President and CEO, Lundin Mining: Yeah, that’s exactly right. I mean, we’re integrating the deposits together and looking at coming up with the most optimal mine plan based on kind of the mineral resource endowment that both of these deposits have. And so, know the plan is for us to you know as cost effectively as possible get into production at scale, and then you know ensure that we have a robust mine plan so that we’re mining for as long as possible the highest grade material from either ore body. So you know that’s why putting these deposits together building it out in sequence makes so much sense because as we’ve discussed there’s a high grade core in both deposits and for us to kind of capitalize on that through integrated mine planning, we’ll be able to come up with the most I think economic and robust kind of scenario.

Craig Hutchinson, Analyst, TD Cowen: Okay, great. And just maybe one housekeeping item for me, the negative $250,000,000 non cash working capital in the quarter. Can you just give some context around that? And do you expect some of that to unwind here in Q2 and Q3?

Titor Polson, Executive Vice President and Chief Financial Officer, Lundin Mining: Yes. Mean if you look at our Q4 numbers, we had the opposite effect. We had a big working capital cash inflow. And part of the reason was that we these two customer only shipments, which got delayed from December into January, we actually got those prepaid, so they were paid upfront, which obviously impacted working capital positively in Q4, but it’s reversing in Q1. And then just generally, with copper prices having increased, when you have increasing copper prices, your receivables are increasing, so that’s always building working capital.

So those are the reasons. Okay. Great. Thanks, guys.

Conference Operator: Thank you. Our next question comes from Connor McKay of Vinton Financial. Your line is now open.

Connor McKay, Analyst, Vinton Financial: Hey, thanks guys. Thanks for taking my question here. I just wanted to talk about the investment climate in Argentina a bit. I imagine with the I think we’ve spoken in the past that the integrated technical report coming early next year is going to form the basis of the RIGI application for for the Vaikunya project. Are you guys have you seen have you been seeing other projects kind of start to trickle into the Regi process?

Is there any color you can provide on on sort of how those how those projects are advancing, and and if there’s anything that that you guys are watching out for in in crafting your own application?

Jack Lundin, President and CEO, Lundin Mining: Thanks for the question Connor. I think it’s obviously super important to understand kind of the climate in Argentina as we look to potentially make a large investment into the country, into San Juan province, and what we’ve been seeing is you know a lot of positive momentum building in Argentina. A lot of the management team will be heading down there at the end of this month, we’ll be going to Buenos Aires, we’ll be heading to San Juan and visiting the site, And you know all of this is in anticipation of us getting ready to submit a RIGI application, and we’re working now with you know the joint venture with our partners to kind of identify and align on when we think that application would be you know, optimal to be sent in to the government. But what we’re seeing is, yeah, there are other projects coming in not just in the mining sector, but you know, any kind of industry that can be applicable for the regime there. There have been a number of applications, not many yet for mining, but you know we’re trending towards being in a position to apply.

But overall what we’ve been able to see and what Javier Mille, President of Argentina has been able to do has been extremely positive for the investment climate for projects like ours. So you know we continue to be encouraged with what we’re seeing in Argentina.

Connor McKay, Analyst, Vinton Financial: Awesome. That’s good to hear. And then I just had a question on cash costs and particularly just want to get a reminder, what gold price did you guys assume in coming up with your cash cost guidance for the year? And if we do see these elevated gold prices continue throughout the remainder of the year, is there potential for guidance to come down? Or are you seeing maybe cost inflation elsewhere offset some of those gains?

Titor Polson, Executive Vice President and Chief Financial Officer, Lundin Mining: Yes. So we will revisit all our guidance at the Capital Markets Day in mid June, but what we so far have assumed is 2,500 ounces $2,500 per ounce in gold. And on FX, we assumed COP 900,000,000,000,000 and 5,500,000,000.0 Perfect.

Connor McKay, Analyst, Vinton Financial: Thanks for the detail there. That’s it for me. Thanks.

Craig Hutchinson, Analyst, TD Cowen: Thank you.

Conference Operator: Thank you. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. One moment please. Our next question comes from the line of Daniel Maishore of UBS. Your line is now open.

Daniel Maishore, Analyst, UBS: Hi, guys. Thanks for the details on Monday and thanks for the questions. Yes, just wanted to follow-up a couple on Argentina. I mean, the integrated technical report is coming. But in terms of thinking about the structure of that, we discussed a little bit on Monday that you would look to develop the phylloxides and Jose Maria sulfides in conjunction with each other in the first phase.

If we’re thinking about scaling the CapEx for Phase one, is a reasonable starting point to assume the $4,000,000,000 plus guidance that you’d previously given for Jose Maria plus the kind of 1.8, I think it was, filo guidance from 2023 technical report as a kind of starting point for Phase one?

Jack Lundin, President and CEO, Lundin Mining: Thanks, Daniel, for the question. So, you know, obviously, as we go through the period that we’re in right now to fully define and build those capital estimates for all phases that you know as I discussed kind of different level of definition, you know we’ll be in a position to kind of firmly announce what those numbers look like. But you know Jose Maria phase one you know looking to trend probably a little bit higher than what you’ve said and then the PFS level on the oxides is still early days for us to kind of dictate what that number is going to be. But we’re working hard to make sure that this is the most cost effective initial capital project on phase one, and at this time, we’re not really in a position to reveal more information than that.

Daniel Maishore, Analyst, UBS: Okay, thanks. And then a follow-up on the RIGI and how that fits in with your timeline of potential FID in 2026. If you submitted the RIGI by midyear, so the deadline for midyear, I mean, would it be possible to FID or assume that you could FID the project as you’ve submitted that application? Or will it take a long time to kind of process that and have visibility FID the project? Is it going to be a long timeline for the RIGI to be processed?

Jack Lundin, President and CEO, Lundin Mining: We don’t believe that critical path item would be the RIGI application. I think you know from what we’re studying and what we understand is once we submit that application it’s quite a clear cut process of going through and getting the, you know enabling us to adhere to that, so RIGI is definitely not to hang up. Mean, we’re putting our efforts forward so that we can be in a position to really understand the magnitude of all phases of the project next year, understand the fiscal stability regime that once we sign up and adhere to Rege, so that next year we’ll have all of the information in front of us and able to make a decision on sanction or going into construction or initiating phase one.

Daniel Maishore, Analyst, UBS: Great. Thanks so much.

Conference Operator: Thank you. Our next question comes from the line of Ralph Profiti of Stifel. Your line is now open.

Ralph Profiti, Analyst, Stifel: Thanks operator and thanks Jack and team for taking my questions. I wanted to delve into this irrigation rate flow at Casaronis which was behind some of the outperformance on production and just wondering is that design change in leach kinetics or is this the sort of ore character telling you something is there gonna be a cost impact to some of these higher irrigation rates? And it leads to my second question which is how close should we be watching this in terms of similar oxide characteristics at Fido del Sol’s oxide core and whether or not you’re going to be learning lessons on how you take the approach from Casaronis oxides to Phylloxides. Thank you.

Juan Andres Morell, Executive Vice President and Chief Operating Officer, Lundin Mining: Good morning Ralph, thanks for the question. So, probably it’s good to start by highlighting that is a dump leach. So, the kinetic cycle is normally very long, especially with the secondary sulfides. So as we dump more secondary sulfides, of course, the extraction becomes a little slower. But in general, we’re on track with the budget or internal plans on the placement of the leaching material.

So we are taking advantage of irrigating some slopes in the down bleach, and that is why we’re being able to produce more cathodes than expected. But we’re basically on track with our internal plans.

Ralph Profiti, Analyst, Stifel: Gotcha. Okay. Thanks very much.

Conference Operator: Thank you. I am showing no further questions at this time. I’d like to thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

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