The Marie Inkster Effect: How a whip-smart CEO from a Nova Scotia fishing village made Lundin Mining (TSX: LUN) a kinder, smarter more valuable company
VANCOUVER, BC, March 4, 2021 /CNW/ - Born and raised in the hard-scrabble fishing village of Canso, Nova Scotia (pop. 809), Marie Inkster became the CEO of Lundin Mining (TSX: LUN) in July 2018, when she was 47-years old.
"At Lundin, Ms. Inkster will guide a company worth $5.4 billion that employs around 9,000 people," reported the Globe and Mail on July 25, 2018.
Two and a half years later - under the guidance of Ms. Inkster - Lundin's market cap has almost doubled to $10.6 billion.
"We operate in diverse locations with distinctive cultures and our values are what connect us all," Inkster told EY early in her tenure as CEO, "When our people feel valued, they bring their best selves to work".
"Copper is our primary focus," confirmed Inkster in 2018 when copper was trading at $2.69/lb, "The market appears to be transitioning from a period of surplus into deficit."
"We want to get more mines," confirmed Inkster, "We are looking for an asset that will support its debt with cash flow."
On July 5, 2019 Lundin announced that it had purchased a 100% ownership stake in the Chapada copper-gold mine located in Brazil - a traditional truck & shovel operation with three active pits.
Lundin paid at USD $800 million for Chapada, funded by cash-on-hand and a $550 million revolving credit facility.
Three months later, Lundin reported that "during the period of Lundin Mining's ownership, Chapada produced 17,645 tonnes of copper and approximately 34,000 ounces of gold and 81,000 ounces of silver."
"Copper cash costs of $0.35/lb were better than expected," reported LUN, "with lower operating costs, favourable exchange rate and higher precious metal credits".
By February 23, 2021 copper hit $4.23/lb, Lundin Mining reported 2020 cash flows of $565.9 million, with adjusted EBITDA of $856.9 million for the year.
2020 Highlights:
In Chile: Candelaria (80% owned): produced - on a 100% basis - 126,702 tonnes of copper, 76,000 ounces of gold and 1.1 million ounces of silver. Copper cash costs were $1.45/lb.
In Brazil: Chapada (100% owned): produced 50,038 tonnes of copper and 87,000 ounces of gold, with copper cash costs of $0.29/lb.
In USA: Eagle (100% owned): produced 16,718 tonnes of nickel, 18,663 tonnes of copper, with nickel cash costs of $0.10/lb.
In Portugal: Neves-Corvo (100% owned): produced 32,032 tonnes of copper, 69,143 tonnes of zinc, with copper cash costs of $2.09/lb.
In Sweden: Zinkgruvan (100% owned): produced 73,601 tonnes zinc, 3,346 tonnes of copper, with zinc cash costs of $0.52/lb.
On February 18, 2021 Lundin declared a 50% increase in quarterly cash dividend from .04 to .06.
Mining is notoriously dangerous. Every year, an estimated 12,000 miners perish on the job site.
On September 25, 2020 Lundin reported a single fatality at its Neves-Corvo mine in Portugal.
Typically, these negative events are swept under the carpet.
"The loss of our colleague at Neves-Corvo in the third quarter remains top of mind within our organizations," stated Inkster – five months later - on a February 19, 2021 earnings call.
Although ESG (Environmental/Social/Governance) funds captured $51 billion in new money in 2020, no mining CEO is going to keep his or her job by simply "bringing their best self to work."
2020 LUN gross profit was $498.1 million, an increase of $57.7 million over the previous year.
On December 31, 2020, Lundin Mining had $141.4 million in cash and cash equivalents.
"Lundin Mining is positioned to benefit from the current commodity price environment," stated Inkster on the earnings call, "with multiple years of production growth, decreasing cash costs and free cash flow generation ahead."
"Copper inventories at the London Metal Exchange (LME) are currently 75,700 tonnes – a 15-year-low," observed Global Stocks News CEO Guy Bennett, "most metal analysts believe copper will be in deficit in 2021, as Inkster predicted 3 years ago".
SOURCE Global Stocks News
Guy Bennett, ph: 604 780 0434, [email protected]
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