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(Kitco News) – Lundin Gold (TSX: LUG) (OTCQX: LUGDF) yesterday reported Q3 2023 gold production of 112,212 ounces from its Fruta del Norte gold mine in Ecuador, down 8% compared to Q3 2022 (121,635 ounces).
In a press release, the company said the increase in mill throughput partially offset lower recoveries in the third quarter resulting in a decrease in production compared to that achieved during the same quarter last year.
Lundin Gold added that Q3 2023 cash operating costs and all-in sustaining costs (AISC) were $704 (Q3 2022: $656) and $907 (Q3 2022: $807) per oz of gold sold, respectively, which are both higher than previous periods albeit in line with expectations.
The company explained that cash operating costs per oz sold were impacted by lower gold production due to expected lower grade and recoveries partially offset by increased mill throughput, while the higher AISC also reflects the increase in sustaining capital activities during the quarter.
The company said it generated Q3 2023 cash from operating activities of $120 million (Q3 2022: $105 million) and free cash flow of $80.9 million or $0.34 per share (Q3 2022: $65.2 million or $0.28 per share) resulting in a cash balance of $302 million at September 30, 2023 (December 31, 2022: $363 million).
Lundin Gold reported net income of $53.8 million including a derivative gain of $11.7 million, and net of corporate, exploration, finance costs, and associated taxes (Q3 2022: $62.7 million). Adjusted earnings, which exclude the derivative gain and related taxes, were $44.7 million or $0.19 per share (Q3 2022: $20.4 million or $0.09 per share).
The company said it is on track to achieve full year 2023 production near the upper end of its revised guidance of 450,000 to 485,000 oz and firmly on track to meet its revised AISC guidance of $820 to $870 per oz sold.
Lundin Gold also announced that its Board of Directors has declared a quarterly cash dividend of US$0.10 per common share, which represents an estimated annual yield of approximately 3.4% based on yesterday’s closing price of the company’s common shares on the Toronto Stock Exchange of CAD$16.37.
President and CEO Ron Hochstein commented, “After another strong quarter of free cash flow generation, we are advancing our debt reduction strategy with the repayment in full of the remaining balance of our senior debt facility. We are firmly on track to meet our revised AISC guidance and expect to be near the upper end of our revised production guidance.
“I am also very excited about the continued expansion of our near-mine exploration program, which is yielding very positive results going into 2024.”
Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador. Fruta del Norte is among the highest-grade operating gold mines in the world.
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