Lundin Gold (TSX: LUG) reported its first quarter 2025 financials, with net income of $153.5 million—nearly tripling year-on-year from $41.9 million.
This resulted from the company’s 57% jump in revenue to $356.3 million from $226.7 million in Q1 2024, powered by a steep rise in realized gold prices to $3,081 per ounce—up 44% from $2,141 per ounce a year ago. This is coupled with selling 117,641 ounces of gold.
Adjusted EBITDA more than doubled to $241.5 million from $111.6 million. However, cost metrics showed signs of slight erosion: cash operating costs climbed 8% to $792 per ounce, and AISC rose 5% to $909 per ounce.
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Operating cash flow nearly doubled to $194.3 million from $107.9 million, translating to free cash flow of $170.8 million—up 108% year-over-year. However, total dividends paid during the quarter reached $72.7 million, cutting into liquidity.
Going forward, the company has adopted a new variable dividend framework based on 50% of normalized free cash flow. The company declared a $0.41 per share special dividend, totaling approximately $100 million, in addition to the new variable dividend ($0.15 per share) and fixed quarterly dividend ($0.30 per share)—together amounting to $0.45 per share. Based on the current share price, the quarterly dividend yield reaches 4.2% annually.
As of March 31, Lundin held $452 million in cash, up from $349 million at year-end 2024, and maintained a debt-free balance sheet. Working capital rose to $551 million from $459 million over the same period.
Gold production rose 5% year-over-year to 117,313 ounces, with ore grades improving to 10.4 g/t from 9.5 g/t. Recoveries also improved marginally to 88.5%. March throughput averaged 5,076 tpd—up from the Q1 average of 4,424 tpd—indicating early benefits of the completed process plant expansion.
Capital expenditures reached $23.5 million in Q1 and are set to rise sharply. The company plans to spend $47 million in 2025 on its largest-ever drilling program around Fruta del Norte, with a combined 108,000 meters of conversion and near-mine drilling now budgeted.
Lundin reaffirmed 2025 guidance of 475,000–525,000 gold ounces at AISC of $935–$995 per ounce. However, sustaining capital is expected to weigh on AISC in coming quarters.
Lundin Gold last traded at $59.39 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
