Lundin Mining Corporation

Ladies and gentlemen, thank you for standing by and welcome to the Lundeen Mining third quarter results conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Marie Inkster, President, NCEO. Thank you, please go ahead.

Thank you, Operator, and thank you everyone for joining London Mining's third quarter 2020 results call. I would like to draw your attention to the cautionary statements on the second slide. We will be making several forward-looking statements throughout the course of this presentation and in the Q&A to follow. On the call today, To assist with the presentation and answering questions are Jinhee McGee, our Senior Vice President and Chief Financial Officer, and Peter Richardson, our Senior Vice President and Chief Operating Officer. As you are all aware, we had a fatality in our underground operations at Nevis Corvo in late September. The pictures you see on this slide are from some of the safety stand-downs that we held at every operation and at our head office to reflect on that loss to remind ourselves of the measures we can take to protect ourselves and one another from injury, and to reconfirm our shared commitment to zero harm. On slide four, I highlight safety as a key aspect of London Mining's commitment to responsible mining. Safety is the foremost of our company's values, along with respect, integrity, and excellence. Our belief is that all occupational injuries and work-related illnesses are preventable. This is why our goal is zero harm. We will continue to pursue this goal, and what motivates us is that when we succeed, we send every person home safe and free from injury, every shift, every day. Following the fatal accident, we immediately initiated our own internal as well as a third party root cause investigation, which is expected to be completed in the coming weeks. Safety lessons learned will be shared across our workforce to try to prevent such an accident from occurring again. It is also important to recognize the achievement, dedication, and commitment of all of our employees and contractors throughout London Mining. As a company, we are on track for our lowest ever injury rates on almost all leading and lagging indicators tracked, including the total reportable injury frequency rate presented in the chart on this page. In the third quarter, the Alcaparosa Mine at Candelaria and Eagle Mine were both recognized by national governing bodies for their outstanding safety records in 2019. Alcaparosa was recognized as the safest Category A large underground mine by Cernagio Min, competing against the largest operations in Chile. Eagle was awarded the Sentinels of Safety as the safest small sector underground metal mine in the U.S. by the National Mining Association. The Eagle is continuing on an impressive record, approaching one year without a recordable injury. Lastly, I wanted to highlight the Nevis Corvo and Chapada Emergency Response Team for both having provided critical off-site firefighting support this past quarter. These efforts typically go unreported and under the radar of the financial community, but they are certainly valued and recognized in our communities and by those assisted. I encourage everyone to visit our website for additional information on our approach to health and safety and responsible mining, or reach out to us with any questions. I will now turn the call over to Jin He, to run through the summary results of the quarter.

Thank you, Marie. During the third quarter, our operations produced over 105,000 tons of base metals and approximately 45,000 ounces of gold. We sold nearly 99,000 tons of payable base metals and approximately 39,000 ounces of payable gold, generating revenue of over $600 million. As the market price for the core metals we produced continued to recover, there was an aggregate positive pricing adjustment this quarter. The positive impact on revenue from prior period sales was nearly $40 million. We continued to be predominantly leveraged to copper, which generated 66% of the quarter's revenue. This is down from 71% in the second quarter on a relative basis as the contribution of nickel and zinc revenues both increased to 9% each on increasing volumes and prices. Despite the increased price, gold contributed 11% to revenues in Q3, down slightly from the 13% in the second quarter as nickel and zinc gained. Slide 6 presents a summary of the quarter's financial results. We realized a copper price of $3.24 per pound in the quarter, above the average market price, largely reflecting $0.25 per pound of prior period adjustments. Third quarter revenue was 12% above that of the same quarter last year, while growth profit increased 54%. Attributable net earnings from operations were 17 cents per share, and adjusted earnings were 14 cents per share for the quarter, well above the same quarter last year. Details of the adjustments, including the deferred tax expenses in Brazil arising from foreign exchange translation, tax asset revaluations in Chile, and prior period tax refunds in Portugal are broken down in our MD&A. With our operations performing well, we generated adjusted EBITDA of over $300 million, up 34% from the same quarter last year. Cash flow from operations was over $270 million, and adjusted operating cash flow before changes in non-cash working capital items was over $260 million, or $0.36 per share. Third quarter capital expenditures on a cash basis were approximately $90 million, bringing the total year-to-date spend to approximately $330 million. Our Board of Directors has again declared a regular quarterly dividend of $0.04 Canadian per share or $0.16 Canadian per share on an annualized basis, maintaining the increase from earlier this year. Lending Mining is in strong financial position with a net debt position at quarter end of $124 million including cash and equivalents of approximately $222 million and available credit of approximately $580 million under the company's credit facility excluding the $200 million accordion. The net debt position has improved further since the end of the third quarter and is now approximately $65 million. I will now turn the call back to Marie to discuss her operations.