Lundin Gold Inc.

Good morning, ladies and gentlemen, and welcome to London Guild's second quarter 2025 financial results conference call. At this time, all lines are in a lesson-only mode. Following the presentation, we will conduct a question-and-answer session. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference call over to Ron Hochstein, President and CEO of Please go ahead.

Thank you, operator, and good morning, everyone. Thank you all for joining us today. I'm joined by Terry Smith, Chief Operating Officer, and Chester See, our Chief Financial Officer. We're going to take you through our results for the second quarter of 2025. Please note, lending goals disclaimer is 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. This was another excellent quarter for Lending Gold. We produced over 139,000 ounces of gold. and sold more than 136,000 ounces. Our cost performance remained strong, with cash operating costs per ounce of $756 and all-in sustaining costs of $927 per ounce sold. This, combined with an average realized gold price of $3,361, resulted in an impressive all-in sustaining cost margin of 72%. With this strong operating performance in the first half of the year, we are updating our 2025 production guidance by raising the lower end of our range from 475,000 to 490,000 ounces, while maintaining our upper end at 525,000 ounces. Record gold prices have driven exceptional financial results, but they also have an impact on our costs. royalties, and statutory employee profit sharing are impacted by the gold price and are included in our cash operating costs and all in sustaining costs. Our original guidance was based on an average gold price of $2,500 per ounce. For every $100 increase in the gold price, we anticipated a roughly $10 increase in our costs. With our average realized price of $3,231 per ounce in the first half of the year, This translates to an approximate $70 per ounce increase in costs. Despite this pressure, our costs, our focus on operational excellence allows us to reaffirm our guidance. So we now expect to be at the high end of our cost ranges, largely due to the current gold prices. Supported by another quarter of strong operations and record gold prices, we generated a record $255 million in cash flow from operations, and $236 million in free cash flow. This robust free cash flow enables us to declare a total dividend of $0.79 per share, consisting of our fixed dividend of $0.30 and a variable dividend of $0.49 per share. Chester will provide more detail on this shortly. On the exploration front, we've had a very active quarter. We recently released two sets of exciting results from FD&S, FD&E, and the copper and gold porphyry systems at Tranquiloma and the newly discovered Sandia. Our conversion growing at FD&S is progressing well, and our engineering studies are on track to integrate it into our long-term mine fund as part of our reserves and resource update early next year. Turning to slide 5, you can see the power of both the strong gold price and our operational excellence in our year-over-year performance. In Q2, we saw significant growth across all key financial metrics. Compared to the same quarter in 2024, revenue surged 50% to $453 million. Debt income hit a record high of $197 million, up 65%. Earnings per share doubled, increasing by 100% to $0.82 per share. And free cash flow grew by a substantial 110% to $236 million. While we've certainly benefited from a rising gold price, we've also controlled our costs through continuous optimization and productivity improvements. This is a testament to our team's commitment to innovation and efficiency. Our oil and sustaining cost margin per ounce increased by 62% to $2,434 in Q2, reflecting our enhanced profitability. With that, I'd now like to turn the call over to Terry to discuss our operations in more detail. Thanks, Ron, and good morning, all. Turning to safety, I'm pleased with our Q2 and year-to-date performance. While it's nice to see a quarter with no recordable incidents and our overall incident rate drop compared to last year, our focus at FDN hasn't changed. From promoting hazard recognition and safe behaviors with visible leadership in the field, to fostering open, two-way communication, helping to improve the way we work, are making a real difference. I'm always inspired by the commitment of every single person on our team. This commitment will help us avoid complacency and continue to operate at the highest standard. Moving to operations, I'm pleased to report that we've had another strong quarter, delivering on our key strategic objectives. Last quarter, we discussed the successful completion of our plant expansion project. This quarter, we realized the benefits of that investment, achieving record throughput and recovery rates, meeting our operational targets for the expanded plant. The team has done an outstanding job of improving the new infrastructure, and it's already showing up in our results. As Ron mentioned earlier, this strong performance combined with our positive first quarter gives us confidence to tighten our 2025 production guidance. We are now raising the bottom end of our guidance range from 475 to a new range of 490 to 525,000 ounces. As we look ahead to the second half of the year, we expect a few things. As for our mine plan, we expect a moderation in the mill head grade. However, we also expect the continued increases in mill throughput as we optimize the mine and mill to work toward our medium-term goal of averaging 5,500 tons per day in 2026. Finally, you should expect to see our sustaining capital expenditures increase in the second half of the year. This will be driven by the ongoing ramp-up of our fifth tailings dam raise and other planned site infrastructure improvement projects. These are critical investments that will support our long-term production goals and operational stability. With that, I'd like to turn the call over to Chester to discuss our financial results. Thanks, Terry, and good morning, everyone. For the second quarter of 2025, Lundin Gold achieved record revenues of $453 million from the sale of approximately 137,000 ounces of gold at an average realized gold price of $3,361 per ounce. This average realized price includes $3,276 per ounce of gross price received and a favorable impact of $85 per ounce marked to market on provisionally priced sales. Our income from mining operations was $314 million, a significant increase from the same period last year, primarily driven by the higher gold price. This strong performance to adjusted earnings of $197 million or 82 cents per share and EBITDA of $319 million. Record free cash flow was generated in the second quarter of 2025 from strong gold sales and a strong gold price. We generated $255 million in net cash from operating activities and $236 million in free cash flow or 98 cents per share during the quarter compared to $112 million or $0.47 per share in the second quarter of 2024. We ended the quarter with a very strong cash position, $493 million, up from $349 million at the beginning of the year. We generated $449 million from operating activities, paid out $280 million in dividends, and reinvested $43 million back into the business in the first half of 2025. With a continued positive outlook on gold prices, combined with our production and cost guidance, I'm very optimistic that we will continue to generate significant free cash flow. Our financial performance year-to-date has been exceptional, driven by our operational excellence, as well as by the significant increase in the price of gold. However, it's important to note that this same increase to the gold price has also created upward pressure on our operating costs. Specifically, higher gold prices directly translate to increased expenses for both royalties and employee profit sharing. These costs directly impact our cash operating costs and our all-in sustaining costs. To put this into perspective, we've seen an impact of approximately $70 per ounce to our cash costs and all-in sustaining costs, due to the higher gold price when compared to the $2,500 gold price that we used for our 2025 guidance. In general, for every $100 per ounce increase in the gold price, we can expect our costs to rise by about $10 per ounce. Despite these pressures, our focus remains on operational efficiency. We're continuing to drive cost reduction and improve mill throughput across our operations. As a result of these ongoing efforts, we expect to remain within our cash operating costs and ASIC guidance for the year, albeit at the upper end of our guidance ranges. Now turning to our capital allocation strategy and dividend policy, I am very pleased to announce another strong dividend for our shareholders. Following a record quarter of free cash flow, Our board of directors has declared a quarterly dividend totaling $0.79 per share, comprised of our regular fixed dividends of $0.30 and a substantial variable dividend of $0.49 per share. This distribution, totaling approximately $190 million, is a direct reflection of our record Q2 performance. The variable dividend is based on a normalized free cash flow. which this quarter includes an add-back of $95 million in annual tax and profit sharing paid in Q2. This adjustment helps us smooth out these large one-time payments and minimizes significant swings in our quarterly dividend. This robust payout reflects our commitment to returning significant value to our shareholders while maintaining the flexibility to invest strategically in our long-term growth initiatives. For a more detailed discussion of our dividends and financial results, I encourage you to read our MD&A. Now I'd like to turn the call back over to Ron. Thanks, Chester. We're excited to share some significant updates on our exploration and growth initiatives. Over the past week, we've issued two releases detailing our progress, and I strongly encourage you to read them for the full picture. Our top priority remains FD&S, and our work here is twofold. growing the resource, and increasing our confidence in the inferred resource. Our conversion growing is yielding some of our highest-grade results yet, and we've also discovered a new mineralized vein just outside the existing inferred resource. This progress, combined with significant advancements in our engineering studies, keeps us on track to integration of coercion of the FDMS mineralization into FDM's long-term mine plan as part of our annual resource update early next year. Additionally, recent drill results from FD&E could continue to highlight its excellent exploration potential, especially given its proximity to our existing underground developments. Beyond our current operations, we're very excited about a new development, the emergence of a copper-gold forfeit corridor right next to FD&E. Follow-up drilling at Tricoloma has successfully confirmed the continuity of the at-surface copper-gold mineralization, with results pointing to significant expansion potential. This new geological understanding is further strengthened by the discovery of a new copper-gold porphyry system at the end. This system also hosts mineralization at the end of the surface and helps to define an emerging and highly prospective corridor that we've now delineated thus far as five kilometers long. and directly adjacent to FCN. Turning to slide 18, with respect to our 2025 objectives we set at the beginning of the year, we are well on track to meet or exceed them. Our top priority remains the health and safety of our people and the environmental performance of our operations. We continue to embed best practices across the organization. Our total recordable injury rate for H1 to 2025 was 0.10, and we are continuing to be diligent. We've seen the benefits of our plant expansion, with increased throughput and recovery. The focus for the second half of the year will be to continue optimizing recoveries and ramping up throughput to an average of 5,500 tons per day in 2026. Our strong performance led us to increase the low end of our 2025 production guidance to 490,000 to 525,000 ounces. We are also confirming our unit cost guidance, though we expect to be at the high end of the range due to the impact of our gold prices on royalties and profit sharing. Our largest ever exploration program is off to a great start, with 48,000 meters completed at a minimum of 108,000 meters. At FCNF, we're making excellent progress on conversion drilling, and our engineering studies are moving toward initial reserve as part of our annual statement early next year. For the discovery of Tranquiloma in Alcindia, we're looking at better understanding the geological environment between Honsa Shore and the expanding corporate corridor. Sustainability is integral to our success. We are actively working on a new five-year sustainability strategy aligned with global best practices. Finally, we are committed to returning value to our shareholders. Our initial target was to return $300 million via dividends. I'm pleased to say we've already exceeded that, having paid out and announced approximately $470 million year to date. In conclusion, we are delivering on our operational targets, advancing our key projects, and enhancing shareholder returns. We are confident in our ability to continue this positive momentum throughout the second half of the year, and beyond. Thank you all for joining us and for your continued support. And with that, I will now open the call to questions.

Thank you, ladies and gentlemen. We will now begin the question and answer session. If you have a question, please press the star followed by the one in the touch zone button. Should you wish to cancel your request, please press the star followed by the two. If you're using a secret zone, please lift the handset before pressing any keys. Once again, that is star one, trigger risk to ask a question. Your first question is from Fahad Tariq from Jefferies. Your line is now open.