Lundin Gold Inc. · TSX:LUG
Lundin Gold — Non-Deal Roadshow (October 2022)
43 slides from Lundin Gold's roadshow presentation, Oct 11, 2022
Slide 1: Building a Leading Gold Company Through Responsible Mining
BUILDING A LEADING GOLD COMPANY THROUGH RESPONSIBLE MINING October 11, 2022 VIRTUAL NON-DEAL ROADSHOW www.lundingold.com TSX, Nasdaq Stockholm: LUG / OTCQX: LUGDF
Slide 2: Caution Regarding Forward-Looking Information and Statements
CAUTION REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS All statements, other than statements of historical fact, made and There can be no assurance that such statements will prove to be Important Information for US Investors information contained in this presentation and responses to accurate,
Slide 3: Fruta del Norte: The First Large-Scale Gold Mine in Ecuador
FRUTA DEL NORTE THE FIRST LARGE-SCALE GOLD MINE IN ECUADOR Location: Zamora Chinchipe Province, Southeast Ecuador Ownership: Stage: Mine Type: 100% Producing Underground Life of Mine: Probable LOM Average ~13 Years Reserves: Gold Production: 4.92 Million Oz 340,000 Oz Of Gold Grading Per Year 8.7 g/
Slide 4: Non-Executive Board of Directors, Management and Operations Team
NON-EXECUTIVE BOARD OF DIRECTORS, MANAGEMENT AND OPERATIONS TEAM Non Executive Board of Directors Jack Lundin Carmel Daniele Gillian Davidson Ian Gibbs Chantal Gosselin Ashley Heppenstall Craig Jones Bob Thiele Chairman Director Director Director Director Director Director Director Management Ron F.
Slide 5: Corporate Structure
CORPORATE STRUCTURE (DATA AS AT OCTOBER 10, 2022) CAPITAL MARKETS DATA SHAREHOLDERS TSX: LUG / OMX: LUG Market Capitalization 2,396 M Symbol / OTCQX: LUGDF Cash Position (June 30, 2022) US$301 M Share price (CAD/sh) 10.19 LT Debt (June 30, 2022) US$646 M 14% 52 Week Retail 7.80/12.73 Trading Range S
Slide 6: Strongly Positioned to Create Shareholder Value
STRONGLY POSITIONED TO CREATE SHAREHOLDER VALUE Operational Excellence Cash Flow Growth ESG Improved 2022 production and Significant cash flow generation in Regional exploration Focused on building our cost guidance 2021 and H1 2022 market leading ESG strategy Near mine exploration Focus on continue
Slide 7: Firmly on Track to Meet Guidance
FIRMLY ON TRACK TO MEET GUIDANCE THREE MONTHS ENDED SEPT 30, 2022 NINE MONTHS ENDED SEPT 30, 2022 121,635 oz 355,190 oz Gold produced Gold produced 81,607 oz 40,028 oz 235,938 oz 119,252 oz Gold as concentrate Gold as doré Gold as concentrate Gold as doré 379,258 11.0 g/t 1,138,340 10.9 g/t Tonnes m
Slide 8: Lundin Gold in the Lower Quartile of the Global Gold AISC Curve
LUNDIN GOLD IN THE LOWER QUARTILE OF THE GLOBAL GOLD AISC CURVE1 2000 H1 2022 AISC3 1800 Gold Price ~$1,664/oz2 1600 Cash operating costs $656 1400 All-In Sustaining Cost (US$/oz) Corporate social responsibility $4 1200 Treatment and refining charges $76 1000 Accretion of restoration prevision $2 80
Slide 9: Guidance Upgraded Due to Strong Operating Results
GUIDANCE UPGRADED DUE TO STRONG OPERATING RESULTS Gold Production 405,000 – 445,000 430,000 – 460,000 oz gold oz gold AISC1 $860 – 930 $820 – 870 per oz gold sold2 per oz gold sold2 Cash Operating Costs1 $710 – 780 $660 – 720 per oz gold sold2 per oz gold sold2 1. Please refer to pages 13 to 16 in t
Slide 10: Three-Year Outlook Underscores Free Cash Flow Potential
THREE-YEAR OUTLOOK UNDERSCORES FREE CASH FLOW1 POTENTIAL 2022 2023 2024 430,000 - 460,000 390,000 - 430,000 400,000 - 440,000 Gold Production (oz) Gold Production (oz) Gold Production (oz) 40 - 45 30 - 35 7 - 12 Sustaining Capital ($ million) Sustaining Capital ($ million) Sustaining Capital ($ mill
Slide 11: Second Quarter of 2022 Financial Highlights
SECOND QUARTER OF 2022 FINANCIAL HIGHLIGHTS Three Months ended Six Months ended June 30 June 30 (Tables are expressed in $’000, except share and per share 2022 2021 2022 2021 amounts, or unless otherwise stated) Net revenues 177,808 216,474 394,280 356,136 Income from mining operations 82,522 111,20
Slide 12: Second Quarter of 2022 Balance Sheet
SECOND QUARTER OF 2022 BALANCE SHEET As at June 30, 2022 As at December 31, 2021 (Table expressed in $’000) Financial Position: Cash 301,032 262,608 Working capital 253,921 217,221 Total assets 1,664,030 1,685,113 Long-term debt 645,724 739,977 Equity 910,165 814,477 Slide 12 Lundin Gold Corporate P
Slide 13: Debt Repayment in Focus
DEBT REPAYMENT IN FOCUS ACCELERATING SENIOR DEBT REPAYMENT NEWCREST FINANCING PACKAGE AND SENIOR DEBT Gold Prepay Credit Facility US$150 million Payments began in Q4 2020 and will end by Q3 2025 Repayable in 19 fixed quarterly principal and interest instalments equivalent to the value of 9,775 oz1 g
Slide 14: Cash Is King at FDN
CASH IS KING AT FDN In H1 2022, Lundin Gold generated $113 million in free cash flow1 and ended the quarter with a cash balance of $301.3 million, which supports debt repayments, near-mine, regional exploration and underground expansion drilling, planned capital expenditures, and dividends $9.4 $(67
Slide 15: FCF Yield Well Above Our Peers
FCF1 YIELD WELL ABOVE OUR PEERS GOLD MINING INDUSTRY AVERAGE FCF YIELD (%) - 20212 15.6% 8.6% 3.0% -0.8% Lundin Gold Average All Large Producers Medium Producers (Production: +1000 Koz) (Production: 200-1000Koz) 1. Please refer to pages 13 to 16 in the Company's MD&A for the year ended June 30, 2022
Slide 16: Strongly Positioned to Create Shareholder Value
STRONGLY POSITIONED TO CREATE SHAREHOLDER VALUE DEBT REPAYMENT ORGANIC DIVIDENDS GROWTH/ Based on guidance and current gold prices, Lundin Gold will M&A generate significant free cash flow1 for many years to come 1. Please refer to pages 13 to 16 in the Company's MD&A for the year ended June 30, 202
Slide 17: Dividend Policy Approved
DIVIDEND POLICY APPROVED Semi-Annual Payout First Dividend Payment SIGNIFICANT CASH LEFT AFTER $0.20/sh September 13 DIVIDEND PAYMENT TO: (September 15 for shares trading on Nasdaq Stockholm) Gold Mining Industry Average Dividend Yields % - 20211 5.7% Accelerate Carry out expanded debt exploration r
Slide 18: Ongoing Construction Projects – South Ventilation Raise
ONGOING CONSTRUCTION PROJECTS – SOUTH VENTILATION RAISE Next steps: demobilization of Last concrete ring poured, contractor, installation of completing slash and line of surface infrastructure and SVR commissioning of fans Anticipated SVR Completion Early Q4 2022 Slide 18 Lundin Gold Corporate Prese
Slide 19: Sustaining Capital Activities Ramping Up
SUSTAINING CAPITAL ACTIVITIES RAMPING UP THIRD RAISE OF TAILINGS DAM › Construction underway › Estimated to be complete in Q4 2022 RESOURCE CONVERSION DRILLING › Conversion drilling aims to convert inferred to indicated resources at the south-end of the deposit › 4,096 metres completed in Q2 2022 ›
Slide 20: Exploration Strategy: Simple Approach
EXPLORATION STRATEGY SIMPLE APPROACH CONVERSION DRILLING › Replace depleted ounces and grow reserve base through conversion of inferred resources NEAR-MINE PROGRAM › Grow inferred resources through extension and identify new targets REGIONAL PROGRAM › Develop long-term inventory through exploration
Slide 21: Conversion Program
CONVERSION PROGRAM RESOURCE AND RESERVE UPDATE Drill intercepts have confirmed continuity of the mineral envelope Indicated Resources Conversion drilling program to convert inferred resources mainly in the south domain of the deposit Northern Domain is now complete. Total of South Domain 18,340m of
Slide 22: Near Mine Exploration Strategy
NEAR MINE EXPLORATION STRATEGY › The first near mine program around Fruta del Norte › Expansion of Fruta del Norte and discovery of satellite deposits will provide opportunities to add mineral reserves close to existing infrastructure › Currently three major focuses: 1. Fruta Del Norte: Expand the c
Slide 23: Near Mine Exploration – Fruta del Norte Deposit
NEAR MINE EXPLORATION – FRUTA DEL NORTE DEPOSIT Underground exploration drill program is underway targeting resource & reserve growth in several parts of the deposit, prioritizing extension of higher grade shoots along the down plunge continuity Fruta Del Norte North-South Longitudinal Section Au_pp
Slide 24: FDN South Targets / FDN East & West Targets
FDN SOUTH TARGETS FDN EAST & WEST TARGETS Targets in the south extension are opportunities for Few holes drilled beyond the East and West faults. discoveries and resource definition. First holes Epithermal hydrothermal alteration was intercepted to intercepted large alteration zones. East by Aurelia
Slide 25: Regional Exploration in Full Swing
Q. La Negra REGIONAL EXPLORATION IN FULL SWING Puente-Princesa Barsbasco Norte Regional drilling has already Puente defined promising areas for Princesa • Major structure defined to be followed further drilling up toward Quebrada La Negra sector Capullo Barbasco Barbasco Norte • Hydrothermal alterat
Slide 26: Robust Exploration Target Pipeline Balanced for Continued Growth
ROBUST EXPLORATION TARGET PIPELINE BALANCED FOR CONTINUED GROWTH Proven & Probable Reserves Prospect Advancement Development Measured & Preliminary Economic Assessment, Scoping Indicated Resource Pre-Feasibility Study & Feasibility Study Conversion and Infill Drilling, Geo. Modelling, FDN South Min.
Slide 27: ESG Considered in Every Aspect of Our Activities
ESG CONSIDERED IN EVERY ASPECT OF OUR ACTIVITIES Responsible Resource Governance Work with many stakeholders to improve resource governance in Ecuador. Climate Change Active within the EITI* and report according to the ESTMA**. Have a leadership Inaugural Climate Change report published. Established
Slide 28: One of the Lowest GHG Emitters Worldwide per Ounce of Gold Produced
ONE OF THE LOWEST GHG EMITTERS WORLDWIDE PER OUNCE OF GOLD PRODUCED 2021 SCOPE 1 EMISSIONS BY ENERGY SOURCE GHG Emissions Intensity Baseline: Diesel: 97% › 35.01 t CO2eq/kt ore milled › 0.12 t CO2eq/oz Au produced Gasoline: 1% Other Fuels (LPG, Jet A1): 1% Implementing Climate Strategy 2021 ESTIMATE
Slide 29: Mining Playing an Important Part in Ecuadorian Economic Growth
MINING PLAYING AN IMPORTANT PART IN ECUADORIAN ECONOMIC GROWTH Mineral Resources 4th now represent one $2.1 billion1 Mining exports in 2021 Mining products now represent the of Ecuador’s top 4th largest export in Ecuador, after oil, +541% vs. 2019 exports prawns and bananas Lundin Gold will $815 mil
Slide 30: Upgraded to OTCQX and DTC Eligible
UPGRADED TO OTCQX AND DTC ELIGIBLE Upgrading to the OTCQX Market enables Lundin Gold to provide transparent trading for U.S. investors Lundin Gold’s common shares recently graduated from the OTC This will give a greater number of investors the Pink® market and are opportunity to invest in Lundin Gol
Slide 31: Lundin Gold – Foundation for Value Creation
LUNDIN GOLD – FOUNDATION FOR VALUE CREATION Operational Excellence Near term FDN Catalysts Completion of the SVR Cash Flow Regional and near-mine exploration drilling results GHG emissions targets Growth Updated resource ESG Dividend payments Slide 31 Lundin Gold Corporate Presentation | October 202
Slide 32: Thank You
Contact information: Finlay Heppenstall - Director, Investor Relations finlay.heppenstall@lundingold.com +1 604-806-3089 BUILDING A LEADING GOLD COMPANY THROUGH RESPONSIBLE MINING THANK YOU TSX, NASDAQ STOCKHOLM: LUG OTCQX: LUGDF Lundin Gold Ecuador LundinGold LundinGold @LundinGold / LundinGoldEC w
Slide 33: Appendix
APPENDIX Slide 33 Lundin Gold Corporate Presentation | October 2022
Slide 34: Probable Mineral Reserves of 4.92 Moz of Gold at 8.7 g/t
PROBABLE MINERAL RESERVES OF 4.92 MOZ OF GOLD AT 8.7 G/T1 December 31, 2020 2021 LOMP Update 2021 Production December 31, 20212 Mt 20.3 (1.2) (1.5) 17.6 Au (g/t) 8.03 10.8 8.7 Au (Moz) 5.24 0.20 (0.54) 4.92 Ag (g/t) 11.45 11.5 12.1 Ag (Moz) 7.46 (0.06) (0.58) 6.85 Changes in Probable Mineral Reserve
Slide 35: Mineral Resources
MINERAL RESOURCES Notes to Probable Mineral Reserve Update NI 43-101 Mineral Resources - Mineral 1. Additional information on Mineral Resource and Mineral Reserve estimates for Fruta del Norte is contained in the in the Technical Report which is available under the Company's profile on SEDAR. Except
Slide 36: FDN One of the Few Multi-Million Ounce, High-Grade Gold Assets in Production
FDN ONE OF THE FEW MULTI-MILLION OUNCE, HIGH-GRADE GOLD ASSETS IN PRODUCTION1 Producers with gold reserves > 4 million ounces Slide 36 Lundin Gold Corporate Presentation | October 2022 TSX: LUG / OMX: LUG / OTCQX: LUGDF
Slide 37: 37 km of Underground Mine Development Completed
37 KM OF UNDERGROUND MINE DEVELOPMENT COMPLETED1 2,190 meters developed during the first quarter. Rates averaged 24.0 m per day. 1. As at June 30, 2022 Slide 37 Lundin Gold Corporate Presentation | October 2022 TSX: LUG / OMX: LUG / OTCQX: LUGDF
Slide 38: Process Plant Flow Diagram
PROCESS PLANT FLOW DIAGRAM ROM Ore 4,200 t/d Mine F80 = 15” Crushing To process Auxiliary systems Industrial P80 = 3.5” Rich Gravimetric Water concentrate solution Gravimetric Grinding ILR SR To Electrowinning To process concentration Reagent preparation P80 = 55 µm Tailings Concentrate Concentrate
Slide 39: Process Plant Operations
PROCESS PLANT OPERATIONS Slide 39 Lundin Gold Corporate Presentation | October 2022 TSX: LUG / OMX: LUG / OTCQX: LUGDF
Slide 40: Generating Significant Free Cash Flow
GENERATING SIGNIFICANT FREE CASH FLOW1 Three Months ended Six Months ended June 30 June 30 (Tables are expressed in $’000, except share and per 2022 2021 2022 2021 share amounts, or unless otherwise stated) Net cash provided by operating activities 60,686 142,005 142,005 217,088 Net cash used for in
Slide 41: Regional Exploration Potential
REGIONAL EXPLORATION POTENTIAL Fruta del Norte FDN East FDN SW Key exploration ground is the 38 km2 Suarez Pull-Apart Basin Alejandro Suarez Pull The Basin remains essentially untested and Apart Basin – 38 km2 geological conditions are similar to those at La Negra Norte Fruta del Norte La Negra Puen
Slide 42: Newcrest Financing Package and Senior Debt Facility
NEWCREST FINANCING PACKAGE AND SENIOR DEBT FACILITY GOLD PRE-PAY AND STREAM FINANCE PACKAGE SENIOR DEBT FACILITY Gold Prepay Credit Facility US$150 million $350 million from lenders syndicate Repayable in 19 fixed quarterly principal and interest instalments 7 lenders and 1 export credit agency equi
Slide 43: Government Agreements
GOVERNMENT AGREEMENTS The Company has all the major agreements and permits with the Government of Ecuador in place THE EXPLOITATION AGREEMENT THE INVESTMENT PROTECTION AGREEMENT The Exploitation Agreement sets out the rights and obligations of the The Investment Protection Agreement primarily deals