Lundin Mining (TSX: LUN) Posts 18.7% Revenue Growth to $963.9M in Q1 2025

Lundin Mining (TSX:LUN) has reported its earnings for the first quarter of 2025. The company's revenue came in at $963.9 million, an 18.7% increase compared to Q1 2024's $812.3 million. This rise can be attributed to higher realized prices for copper ($4.63 per pound vs $4.20 per pound last year) and gold ($3,349 per ounce vs $2,400 per ounce last year), along with solid volumes from Candelaria and Caserones. Including discontinued operations, total revenue hit $1.14 billion, a jump from last year's $937.0 million.

Gross profit from continuing operations showed a substantial 56.4% increase to $308.9 million, up from $197.5 million a year earlier. Discontinued operations also swung into profitability with a $69.9 million gross profit, contrasting with a $12.1 million loss in Q1 2024. However, no depreciation was recorded for the discontinued operations due to their held-for-sale classification.

Net earnings from continuing operations surged by 118% to reach $181.4 million, more than double Q1 2024's $83.0 million. In total, net earnings amounted to $138.1 million, showing a 260% increase from last year's $38.3 million. Adjusted earnings from continuing operations also saw a significant rise to $93.9 million, a 66.5% increment from $56.4 million.

Adjusted EBITDA from continuing operations reached $387.9 million, a 15% increase compared to last year's $338.5 million. Consolidated EBITDA came in at $450.8 million, up from last year's $362.9 million. Adjusted EPS from continuing operations climbed to $0.11, compared to $0.07 last year.

Cash provided by operating activities from continuing operations showed a steep 47.3% decline to $122.3 million, contrasting with Q1 2024's $232.2 million. This decline was mainly driven by a massive $214.7 million negative change in working capital. The company highlighted shipment timing at Caserones and increased trade receivables at quarter-end as key contributors to this change.

Free cash flow from continuing operations cratered to just $21.6 million, a 67.5% reduction compared to last year's $66.5 million. In total, free cash flow turned deeply negative with an outflow of $47.5 million, contrasting with an outflow of $1.7 million last year.

As of March 31, 2025, net debt excluding lease liabilities stood at $1.44 billion, a significant increase compared to Q1 2024's $981.4 million. Including leases, net debt reached $1.70 billion, contrasting with last year's $1.24 billion.

However, subsequent to quarter-end, Lundin used proceeds from its $1.4 billion sale of Neves-Corvo and Zinkgruvan to pay off a $1.15 billion term loan, reducing net debt excluding leases to approximately $279.6 million as of May 7, 2025.

Cash and cash equivalents at quarter-end stood at $341.6 million, showing a decrease from last year's $365.5 million. The company also reclassified $1.44 billion of assets and $407.2 million of liabilities as “held for sale.”

Copper production from continuing operations came in at 76,774 tonnes, slightly lower than the 79,395 tonnes produced in Q1 2024. Gold output remained flat at 32,000 ounces. Nickel production, however, saw a sharp decrease to 2,296 tonnes from last year's 3,255 tonnes.

In terms of costs, Candelaria improved its cash cost to $1.75 per pound, compared to $1.89 per pound in the same period last year. Chapaa also reduced its cash cost to $1.47 per pound, down from $2.01 per pound.

On the other hand, Caserones' cost performance deteriorated with an increase to $2.52 per pound, up from $2.14 per pound, mainly due to higher contractor and maintenance expenses. Meanwhile, Eagle's nickel cash cost decreased