Mr. Ron Hochstein reports

LUNDIN GOLD REPORTS FIRST QUARTER OF 2023 RESULTS

Lundin Gold Inc. has released its results for the first quarter of 2023, highlighted by all-time high gold production of 140,021 ounces (oz) and gold sales of 134,691 oz at a cash operating cost of $644 per oz sold and all-in sustaining cost (AISC) of $728 per oz sold. Although the robust performance provides a strong start for the year, the company's production guidance for 2023 remains unchanged as grade and gold production are expected to vary over the coming quarters. Due to the ramp-up of sustaining capital activities starting in the second quarter, the most significant being the construction of the fourth tailings dam raise, the company also maintains its AISC guidance. All amounts are in United States dollars unless otherwise indicated.

As at March 31, 2023, the company maintained a strong cash balance of $210-million compared with $363-million as at Dec. 31, 2022, with the decrease being driven by the use of cash for debt reduction initiatives and dividends to shareholders. During the three months ended March 31, 2023, the company utilized cash to optimize its balance sheet through the full repayment of the gold prepay facility (GPP) of $208-million which provides the company with greater exposure to the positive outlook on gold price. This one-time transaction resulted in additional interest and finance charges of $129-million with a resultant first quarter free cash flow of $(11.7-million).

Ron Hochstein, president and chief executive officer, commented: "Our strong operating and financial results were achieved while maintaining our outstanding safety record. On the heels of an excellent quarter, the operations team at FDN recently reached the milestone of four million hours worked without a lost-time incident or medical aid incident. We continue to realize increased cash flows from Fruta del Norte as a result of our commitment to operational excellence and the full repayment of the gold prepay at the start of the year. The team at FDN is doing a great job, and I expect this positive momentum to continue."

Operating and financial results summary

The next two attached tables provide an overview of key operating and financial results.

First quarter highlights

Financial results -- strong cash flow from operations underlines inherent strength of FDN

• First quarter sales of 134,691 ounces gold, consisting of 85,122 oz in concentrate and 49,569 oz as dore, at an average realized gold price1 of $1,952 per oz for total gross revenues from gold sales of $263-million.
• Net of treatment and refining charges, revenues in the first quarter were $257-million.
• Cash operating costs and AISC for the quarter were $644 and $728 per oz of gold sold, respectively. Sustaining capital is expected to increase significantly in future periods with the start of the fourth tailings dam raise and ramp-up of other site infrastructure and improvement projects which is expected to result in higher AISC for the remainder of the year.
• The company generated cash flow of $144-million from operations and negative free cash flow of $(11.7-million) or (five cents) per share. Free cash flow was impacted by the full repayment of the GPP which resulted in additional interest and finance charge paid during the period of $129-million.
• Notwithstanding the payment of $208-million to extinguish the GPP, the company ended the quarter with a cash balance of $210-million.
• Earnings before interest, taxes, depreciation, and amortization (EBITDA) and adjusted EBITDA were $144-million and $159-million, respectively. The difference is the derivative loss of $15.4-million in the quarter.
• Net income was $51.5-million including a derivative loss of $15.4-million, and net of corporate, exploration, finance costs and associated taxes on earnings. Adjusted earnings, which exclude the derivative loss, were $67.0-million, or 28 cents per share.

Production results -- all-time highs across the board

• Gold production during the first quarter totalled 140,021 oz, comprising 88,236 oz of concentrate and 51,785 oz of dore.
• Mine production ramped up to 427,735 tonnes of ore at an average grade of 11.7 grams per tonne.
• The mill processed 392,332 tonnes of ore at an average throughput rate of 4,359 tonnes per day (tpd). The throughput rate was below the guided average for the year of 4,400 tpd due to the completion of the relining of the SAG and ball mills late in the quarter.
• The average grade of ore milled was 12.3 grams per tonne with average recovery at 90.6 per cent. Recoveries were positively impacted by processing high-grade ore and an ore blending strategy that improved flotation recoveries.

Liquidity and capital resources

At the end of the first quarter of 2023, the company is in a strong financial position.

The change in cash during the first quarter of 2023 was primarily due to the full repayment of the GPP of $208-million; principal repayments, interest and finance charges, including associated taxes, under the stream credit facility totalling $21.0-million; interest and principal repayments under the senior debt of $42.8-million; dividends of $23.6-million; and cash outflows of $7.2-million for sustaining capital expenditures. This is offset by cash generated from operating activities of $144-million and proceeds from the exercise of stock options and anti-dilution rights of $4.0-million.

Corporate

The company paid its quarterly dividend of 10 cents per share on March 31, 2023 (April 4 for shares trading on Nasdaq Stockholm), based on a record date of March 13, 2023, for a total of $23.6-million. With the release of its first quarter 2023 results, the company has declared a cash dividend of 10 cents per share, which is payable on June 27, 2023 (June 30 for shares trading on Nasdaq Stockholm), to shareholders of record on June 13, 2023.

Several board and management changes were also made in the first quarter. At the end of the quarter, one of Newcrest's representatives, Robert Thiele, resigned from the board of directors, and Jill Terry was appointed as his replacement. The company also appointed Terry Smith as chief operating officer and Chester See as Interim chief financial officer during the quarter, concurrent with the retirement of Alessandro Bitelli, executive vice-president and chief financial officer. In April, 2023, the company announced that Mr. Kololian was hired as the company's chief financial officer and is expected to commence in the role on July 1, 2023. Mr. See will continue in the role of senior vice-president, finance.

Outlook -- positioned to generate strong shareholder value for years to come

Consistent with previously announced guidance, gold production at FDN for 2023 is estimated to be between 425,000 to 475,000 oz based on an average throughput rate of 4,400 tonnes per day, an increase from the average throughput of 4,274 tpd achieved in 2022. The head grade is estimated to average 9.67 g/t, with fluctuations expected during the year as different sections of the ore body are mined. Average mill recovery for the year is estimated at 90 per cent.

Lundin Gold's performance in the first quarter of 2023 provides a strong foundation for the rest of the year, and the company's production guidance of 425,000 to 475,000 oz and AISC of $870 to $940 for 2023 remain unchanged.

Sustaining capital is expected to increase over the remaining quarters of 2023 with construction of the fourth raise of the tailings dam starting in the second quarter as well as several other capital projects. In addition, the conversion drilling program, aiming to convert inferred to indicated mineral resources is planned to continue.

Exploration drilling, on the near-mine program, is planned to increase from 15,500 metres to 23,000 metres of drilling for 2023 as a result of positive results recently received. The near-mine drilling program will continue to advance exploration of the recently identified FDNS, Bonza Sur and Castillo targets near FDN. Another rig is planned to be incorporated in the second quarter, bringing the total number of surface rigs to four. The regional drilling program is planned to focus on the southern Suarez basin, advancing along the eastern and western borders of the basin. Its objective is to follow up on the numerous target areas identified during the 2022 program and test new and unexplored targets. The regional drilling program is planned to comprise a total of 12,500 metres for the year, with one rig currently operating. The estimated exploration budget for 2023 is anticipated to increase from $21.1-million to $24.6-million.

The company anticipates declaring quarterly dividends of at least 10 cents per share, equivalent to approximately $100-million annually, based on currently issued and outstanding shares.

Qualified persons

The technical information relating to FDN contained in this news release has been reviewed and approved by Ron Hochstein, PEng, Lundin Gold's president and chief executive officer, who is a qualified person under National Instrument 43-101. The disclosure of exploration information contained in this press release was prepared by Andre Oliveira, PGeo, Lundin Gold's vice-president of exploration, who is a qualified person in accordance with the requirements of NI 43-101.

Webcast and conference call

The company will host a conference call and webcast to discuss its results on Thursday, May 11, at 7 a.m. PT, 10 a.m. ET, 4 p.m. CT.

Conference call dial-in numbers:

Participant dial-in North America:   1-416-764-8659

Toll-free participant dial-in North America:  1-888-664-6392

Participant dial-in Sweden:  0200899189

Conference ID:  Lundin Gold/42623507

A link to the webcast will be available on the company's website.

A replay of the conference call will be available two hours after the completion of the call until Thursday, May 25, 2023.

Toll-free North America replay number:  1-888-390-0541

International replay number:   1-416-764-8677

Replay pass code:  623507 followed by the pound key

About Lundin Gold Inc.

Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador. Fruta del Norte is among the highest-grade operating gold mines in the world.

The company's board and management team have extensive expertise in mine operations and are dedicated to advancing Fruta del Norte responsibly. The company operates with transparency and in accordance with international best practices. Lundin Gold is committed to delivering value to its shareholders while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace, and minimizing the environmental impact. The company believes that the value created through the development of Fruta del Norte will benefit its shareholders, the government and the citizens of Ecuador.

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