Mr. Ron Hochstein reports

LUNDIN GOLD REPORTS THIRD QUARTER 2023 RESULTS AND ELECTS TO FULLY REPAY ITS SENIOR DEBT FACILITY

Lundin Gold Inc. today released its results for the third quarter of 2023, highlighted by Q3 production of 112,212 ounces (oz) of gold and sales of 112,711 oz, at a cash operating cost of $704 per oz sold and all-in sustaining cost (AISC) of $907 per oz sold. All amounts are in United States dollars unless otherwise indicated.

Lundin Gold's track record of generating strong free cash flow continued during the third quarter of 2023 with free cash flow of $80.9-million or 34 cents per share achieved resulting in a cash balance of $302-million at Sept. 30, 2023. Given this robust cash balance at quarter-end and forecasted cash requirements, the company has elected to fully repay the remaining principal balance of $70.5-million plus accrued interest under its senior debt facility on Nov. 14, 2023, well in advance of the original maturity date of June, 2026. Upon completion of this repayment, the company will have extinguished two of its project finance facilities, being the gold prepay credit facility and senior facility, which had an original combined principal amount of $500-million, after only three years of operations.

Ron Hochstein, president and chief executive officer, commented: "After another strong quarter of free cash flow generation, we are advancing our debt reduction strategy with the repayment in full of the remaining balance of our senior debt facility. We are firmly on track to meet our revised AISC guidance of $820 to $870 per oz sold and expect to be near the upper end of our revised production guidance of 450,000 to 485,000 oz. I am also very excited about the continued expansion of our near-mine exploration program, which is yielding very positive results going into 2024."

Operating and financial results summary

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

Third quarter highlights

Financial results -- strong free cash flow generation enables deleveraging strategy

• Gold sales of 112,711 oz of gold, consisting of 70,981 oz in concentrate and 41,730 oz as dore, resulted in gross revenues of $218-million at an average realized gold price of $1,931 per oz. Net of treatment and refining charges, revenues were $211-million.
• Cash operating costs1 and AISC (all-in sustaining costs) were $704 and $907 per oz of gold sold, respectively, which are both higher than previous periods albeit in line with expectations. Cash operating costs per oz sold was impacted by lower gold production due to expected lower grade and recoveries partially offset by increased mill throughput, while the higher AISC also reflects the increase in sustaining capital activities during the quarter.
• The company generated cash from operating activities of $120-million and free cash flow of $80.9-million or 34 cents per share resulting in a cash balance of $302-million at Sept. 30, 2023.
• Earnings before interest, taxes, depreciation, and amortization (EBITDA) and adjusted EBITDA were $133-million and $121-million, respectively, with the difference resulting from derivative gains recognized in the quarter.
• Net income was $53.8-million including a derivative gain of $11.7-million, and net of corporate, exploration, finance costs and associated taxes. Adjusted earnings, which exclude the derivative gain and related taxes, were $44.7-million, or 19 cents per share.

Production results -- focusing on improving recoveries

• Mine ore production was 397,702 tonnes at an average grade of 9.3 grams per tonne, a reduction in production compared with previous periods, which was planned in order to reduce the ore stockpiled on surface.
• The mill processed 416,072 tonnes of ore at an average throughput rate of 4,523 tpd (tonnes per day) which is consistent with the throughput rate achieved during the second quarter.
• The average grade of ore milled was 9.7 grams per tonne with average recovery at 86.5 per cent. Recoveries were affected this quarter by processing of ore from sectors that contain higher levels of finely disseminated sulphide minerals which are impacting flotation recovery.
• Gold production was 112,212 oz which was comprised of 71,902 oz in concentrate and 40,310 oz as dore.

Liquidity and capital resources

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

As at Sept. 30, 2023, the company had cash of $302-million and a working capital balance of $314-million compared with cash of $363-million and a working capital balance of $195-million at Dec. 31, 2022. The change in cash during the nine months ended Sept. 30, 2023, was primarily due to the full repayment of the gold prepay credit facility of $208-million; principal repayments, interest and finance charges, including associated taxes, under the stream credit facility totalling $61.2-million; interest and principal repayments under the senior facility of $121-million; dividends of $71.1-million; and cash outflows of $39.7-million relating to sustaining capital expenditures. This is offset by cash generated from operating activities of $427-million and proceeds from the exercise of stock options and anti-dilution rights totalling $12.6-million.

The senior facility had a principal balance of $70.5-million and accrued interest of $900,000 as at Sept. 30, 2023. With the strong liquidity position of Lundin Gold, the company has exercised its right to fully repay this remaining balance on Nov. 14, 2023, leaving the stream credit facility as the last remaining debt on its balance sheet. The company has the option to repay (i) 50 per cent of the stream facility outstanding on June 30, 2024, for $150-million and/or (ii) the other 50 per cent outstanding on June 30, 2026, for $225-million.

Capital expenditures

Sustaining capital

• Significant progress was made on the construction of the fourth raise of the tailings dam with completion expected in the latter half of the fourth quarter.
• Commissioning of the underground mine maintenance facility has commenced, which is expected to provide additional efficiencies and cost savings.
• Other sustaining capital projects such as extending two underground levels to the south for the 2024 conversion drill program, implementation of a mine dispatch system, upgrades to the sewage treatment plants, purchase of mobile equipment and other efficiency improvement projects are expected to ramp up during the remainder of the year, with some projects carrying over to 2024.
• The 2023 conversion drilling program continued to advance during the third quarter in distinct sectors of the FDN deposit. The program focused on the northern-central and southern extension with approximately 6,203 metres across 46 holes completed. During the nine months ended Sept. 30, 2023, 10,814 metres across 74 holes have been completed.
  • In the southern sector, 27 drill holes were completed and mostly intercepted the mineralized zones associated with manganoan carbonate, chalcedony veins and sulphides.
  • In the north-central sector, 19 drill holes were completed and positive assay results are associated with zones of hydrothermal breccias along the downdip extension of FDN.

Outlook -- on track for annual production to be near the upper end of revised guidance

Operating performance during the nine months ended Sept. 30, 2023, puts the company on track to achieve full year production near the upper end of its revised guidance of 450,000 to 485,000 oz and firmly on track to meet its revised AISC guidance of $820 to $870 per oz sold. Solutions to improve mill recoveries continued to be evaluated. Some operational modifications are being made and detailed engineering is under way for the installation of new flotation technology to deal with the finely disseminated sulphide minerals. The modifications to the flotation circuit are anticipated to be completed within the next 12 months. The company completed basic engineering at quarter-end and is moving forward to detailed engineering for a possible expansion to further increase mill throughput to 5,000 tpd.

The near mine drilling program is expected to continue to delineate the Bonza Sur target, where the recently discovered epithermal system remains open. Two rigs are expected to continue to be dedicated to the detailing and expansion of the mineralized zones at depth and along strike at this target. The near mine drilling program will also continue to explore the extension of FDN mineralization along the south-southwestern and north directions. The underground drilling program is expected to continue to explore for new discoveries and extensions of the FDN resource envelope.

In light of continued success of the near-mine program, the company has expanded the program twice during the nine months ended Sept. 30, 2023. The near-mine program was originally planned for 15,500 metres and was most recently expanded in the third quarter to drill 30,000 metres in 2023. Six rigs (one underground and five on surface) are currently operating on the near-mine program.

The regional drilling program continues to focus on the southern Suarez basin, advancing along the eastern and western borders of the basin. A second rig was added to the program to advance on the follow up of numerous target areas identified during previous quarters. The regional drilling program is now expected to complete a minimum of 9,000 metres for the year, with two rigs currently operating.

A minimum of 50,000 metres of drilling is planned across the conversion, near-mine and regional programs in 2023. This represents the largest drill program in the district since FDN's discovery. As a result of improved productivities in the field, the expanded near-mine and regional drilling programs are expected to be completed within the revised total budget of $24.6-million announced earlier this year.

The company has elected to fully repay the remaining principal balance of $70.5-million plus accrued interest under its senior facility on Nov. 14, 2023. The extinguishment of the senior facility, which had an original principal amount of $350-million and a maturity date of June, 2026, is intended to provide Lundin Gold with improved free cash flow margins and increased capital allocation flexibility for the benefit of the company and its shareholders.

The company anticipates continuing to declare quarterly dividends of 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 National Instrument 43-101.

Webcast and conference call

The company will host a conference call and webcast to discuss its results on Thursday, Nov. 9, at 7 a.m. PT, 10 a.m. ET, 4 p.m. CET.

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/52687438

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 its completion until Nov. 23, 2023.

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

International replay number:   1-416-764-8677

Replay pass code:  687438 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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