Lundin Gold Inc.

Good morning, ladies and gentlemen, and welcome to the Lundeen Gold's second quarter of 2024 results conference call. At this time, all participant lines are in a listen-only mode. Following the presenters' remarks, there will be a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Friday, August 9, 2024. and I would like to turn the conference over to Ron Hochstein. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Thank you all for joining us on our conference call today. We're Terry Smith, Chief Operating Officer, Chester C., Chief Financial Officer, and I are going to take you through our results for the second quarter of 2024. Please note lending goals disclaimers on this slide. This discussion includes forward-looking information. Actual future results may differ from expected results for a variety of reasons described in the caution regarding forward-looking information and statements section of our press release. Lending Gold is a U.S. dollar reporting entity and all amounts in this presentation refer to U.S. dollars unless otherwise indicated. Lending gold achieved another strong quarter, highlighted by record quarterly revenues of $301 million realized during the second quarter from the sale of 129,396 ounces at an average realized gold price of $2,379 per ounce. From this, adjusted EBITDA and adjusted earnings of $195 million and $99 million respectively were achieved. also a record. The company continued to generate significant cash flow, with cash from operating activities of $144 million and adjusted free cash flow of $112 million, which excludes the one-time finance expense incurred upon buyout of the stream facility and offtake. The strong financial performance was underpinned by gold production this quarter at just over 133,000 ounces, driven by recoveries of 89%, average mill throughput of 4,669 tons per day, and average mill head grade of 11 grams per ton. This resulted in cash operating costs of $725 per ounce sold and all-in sustaining costs of $875 per ounce sold. Having produced over 244,000 ounces in the first half of 2024, Lending Gold is firmly on track to meet its production guidance of 450 to 500,000 ounces. Cash operating costs and all-in sustaining costs have trended toward the upper end of guidance due to the higher average realized gold price, resulting in higher royalties and profit sharing, for which the portion attributable to employees is recorded in operating costs. That being said, we are confident that we will meet our cost guidance of $820 to $890 per ounce sold for the year. Exploration activities during the first half of 2024 also continued to yield positive results. Over 13,700 meters of drilling across 38 holes were completed from surface and underground on the near mine program in the second quarter. At Bonsasur, gold mineralization now extends more than 1.6 kilometers along the north-south strike and for at least 500 meters along the down dip, while at FD&S, significant results were highlighted by one of the highest rate intercepts achieved in this sector to date. Importantly, our exploration programs are illustrating the potential to increase our resources at FD&S. Based on the positive results achieved in the first half of the year, we will be adding an additional 15,000 meters to what was already the largest drilling program ever conducted on the land package that hosts FDN. As you are all aware, a key priority starting in 2023 was to clean up our balance sheet. In Q1 2023, we elected to repay in full the 10 remaining quarterly installments. of the gold prepaid facility for 208 million. And in Q4, we fully repaid the remaining balance under the senior debt facility of 72 million. Continuing this trend, at the start of Q2 this year, Lending Gold announced that we had come to an agreement with Newmont to buy up 100% of the remaining balance of the stream credit facility and offtake agreement for 330 million. As per the agreement, Lending Gold completed the buyout following the payment of the first tranche of the purchase price of $180 million on June 27. The second and final tranche of $150 million is due on September 30. The stream facility and offtake were the last two remaining facilities established as part of the project financing package to fund the development and construction of FDN. While this milestone is now complete, Lending Gold has repaid in full all of its project finance debt, only four years after achieving commercial production at Fruita del Norte, a fantastic achievement. Today, Lending Gold is no longer bound by obligations to our previous debtors, and 100% of our cash flow is attributable to shareholders. The company now has full exposure to rising gold prices, resulting in increased amounts of free cash flow to support capital allocation initiatives, including growth and shareholder returns. With the buyout of the stream facility and offtake now complete, we are pleased to announce that starting in the third quarter, we will be doubling our quarterly dividends from the current 10 cents per share to 20 cents per share, which is equivalent to approximately 200 million annually. Even after the payment of dividends, we will still retain a healthy treasury for other value-generating initiatives, such as our exploration programs, future capital projects, as well as other growth initiatives. With that, I'd now like to turn the call over to Terry.

Thanks, Ron, and hello, all. We had a solid Q2 that was highlighted by quarterly gold production, totaling approximately 133,000 ounces. In the same period last year, gold production totaled roughly 129,000 ounces. We had stronger production during the quarter due to higher mill throughput, as well as stronger recoveries and improved grades compared to recent periods. Mine production was close to 419,000 tons of ore at an average grade of 10.5 grams per ton. Grades during the second quarter were slightly higher than planned as we made some mine sequencing decisions with the benefit of our improved understanding of FDN's geometallurgy. Average grades in the second half of the year are planned to be slightly lower than the grade achieved in the first half. The mill processed about 425,000 tons of ore at an average throughput rate of 4,669 tons per day, another quarterly record. which was achieved from continued de-bottlenecking of our process, by our process team and their focus on operational excellence. As we look ahead to the second half of the year, our plant expansion project will have numerous tie-ins that will need to be completed. With the ability to run the mill harder, we bought ourselves some flexibility needed to complete the expansion. We anticipate more scheduled downtime and commissioning for new equipment than the first half of the year. As for the process plants expansion, it remains on track and we continue to expect operations to be positively impacted once completed at the end of this year. Detailed engineering reached 90% completion at the end of Q2 and will be completed before the end of the third quarter. In addition, all major items required for the expansion have been awarded to vendors. Now we're squarely focused on completing construction safely and efficiently. Construction of the upgraded tailings and reclaimed lines continued during the second quarter. In addition, earthworks for the addition of three Jameson cells, as well as the expansion of the concentrate filter building commenced. Once we've completed the project, the process plan at FDN will be capable of consistent throughput of 5,000 tons per day with an improvement of at least 3% to recoveries. Record gold prices have allowed Lundeen Gold to realize significant revenues and adjusted earnings to date. But this has also increased royalties and accrued profit sharing, as Ron mentioned earlier. These costs have an impact on our cash operating costs and all in sustaining costs per ounce, which have trended toward the upper end of cost guidance that were based on a gold price assumption of $1,900 per ounce. Cash operating costs and all in sustaining costs in the second quarter were $725 and $875 per ounce of gold sold, respectively. In the first half of 2024, cash operating costs and all-in sustaining costs were $730 and $872 per ounce of gold sold, respectively. The standing capital expenditures accounted for $95 per ounce sold in the second quarter, with highlights being the significant progress made on the mine dispatch system implementation, upgrades to the main haul road connecting the mine to the primary crusher, construction of a coffer dam at the TSF, and significant progress on a new tire shop for mobile maintenance. Other ongoing projects include the camp refurbishment, replacement of the concrete batch plant, as well as preliminary works for next year's TSF expansion. Due to the ongoing power crisis in Ecuador, we've elected to invest in additional power generation equipment, which will allow FDN to operate at reduced throughput rates independently of the grid. We expect to have additional generators installed and operational by early Q2 2025. In the interim, until the generators are installed, we're working with the Ecuadorian Power Authority to run our existing generators at periods to reduce our load and thus not be subject to blackouts. Some planned capital in the second half of the year was deferred to offset costs for this project. Our ability to maintain high production and low cost is illustrated in our previously announced three-year outlook. Looking to the future, 2024 gold production at FDN is projected to be between 450,000 to 500,000 ounces based on an average throughput rate of 4,500 tons per day, average recoveries of 89%, and average head grade of 9.9 grams per ton. Cash operating costs are estimated to average between $680 and $740 per ounce of gold sold in 2024, and all-in sustaining costs is expected to average between $820 and $890 per ounce of gold sold based on an assumed gold price of $1,900 per ounce and silver price of $2,250 per ounce that factor into government royalties with all-in sustaining costs. Sustaining capital will be lower this year because of construction of the fifth raise is not scheduled until 2025. Our conversion drilling program continues to be very successful. These costs are a component of our sustaining capital. The 2024 conversion drilling program continues converting inferred mineral resources to indicated in areas immediately beyond the current mineral reserve boundary and has been particularly successful along the northern sector of FDN. A total of 9,772 meters of underground drilling across 70 drill holes has been completed to date in 2024. Two rigs are currently turning under the conversion program, and as Ron mentioned earlier, we have expanded the conversion program, increasing from 9,815 meters to 14,000 meters in 2024. With that, I'll turn the call back to Ron now to discuss our exploration programs.