Lundin Gold (TSX:LUG) - Share price, News & Analysis

Q: What is the Fair Price of LUG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

LUG (CA$10.38) is trading below our estimate of [[fair value]] (CA$21.62)

LUG fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	3/6
Financial Health	5/6
Dividends	2/6

LUG Stock Overview

Lundin Gold Inc. operates as a mining company in Canada.

Rewards

Trading at 52% below our estimate of its fair value

Earnings grew by 1.3% over the past year

Analysts in good agreement that stock price will rise by 30.3%

Risk Analysis

Earnings are forecast to decline by an average of 17.4% per year for the next 3 years

Unstable dividend track record

Lundin Gold Competitors

Triple Flag Precious Metals

TSX:TFPM

CA$2.7b

SSR Mining

TSX:SSRM

CA$4.2b

K92 Mining

TSX:KNT

CA$1.9b

Endeavour Mining

TSX:EDV

CA$6.2b

Price History & Performance

Summary of all time highs, changes and price drops for Lundin Gold
Historical stock prices
Current Share Price	CA$10.38
52 Week High	CA$12.73
52 Week Low	CA$7.80
Beta	0.98
1 Month Change	17.02%
3 Month Change	21.69%
1 Year Change	6.14%
3 Year Change	27.21%
5 Year Change	94.75%
Change since IPO	-81.16%

Recent News & Updates

Sep 27

Here's Why Lundin Gold (TSE:LUG) Can Manage Its Debt Responsibly

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Aug 30

We Like Lundin Gold's (TSE:LUG) Returns And Here's How They're Trending

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Typically, we'll want to notice a...

Shareholder Returns

	LUG	CA Metals and Mining	CA Market
7D	21.8%	12.9%	5.7%
1Y	6.1%	-5.0%	-2.5%

Return vs Industry: LUG exceeded the Canadian Metals and Mining industry which returned -6% over the past year.

Return vs Market: LUG exceeded the Canadian Market which returned -4% over the past year.

Price Volatility

Is LUG's price volatile compared to industry and market?
LUG volatility
LUG Average Weekly Movement	6.1%
Metals and Mining Industry Average Movement	11.8%
Market Average Movement	10.1%
10% most volatile stocks in CA Market	18.3%
10% least volatile stocks in CA Market	3.8%

Stable Share Price: LUG is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: LUG's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1986	n/a	Ron Hochstein	https://www.lundingold.com

Lundin Gold Inc. operates as a mining company in Canada. The company holds interests in 27 metallic mineral concessions and three construction material concessions covering an area of approximately 64,270 hectares located in Southeast Ecuador. It primary holds interests in the Fruta del Norte gold project comprising seven concessions covering an area of approximately 5,566 hectares located near the city of Loja in Ecuador.

Lundin Gold Fundamentals Summary

How do Lundin Gold's earnings and revenue compare to its market cap?
LUG fundamental statistics
Market Cap	CA$2.44b
Earnings (TTM)	CA$223.21m
Revenue (TTM)	CA$1.05b

10.9x

P/E Ratio

2.3x

P/S Ratio

Is LUG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LUG income statement (TTM)
Revenue	US$771.47m
Cost of Revenue	US$281.76m
Gross Profit	US$489.71m
Other Expenses	US$325.10m
Earnings	US$164.61m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Nov 08, 2022

Earnings per share (EPS)	0.70
Gross Margin	63.48%
Net Profit Margin	21.34%
Debt/Equity Ratio	70.9%

How did LUG perform over the long term?

See historical performance and comparison

Dividends

5.2%

Current Dividend Yield

n/a

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is LUG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LUG?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for LUG. This is calculated by dividing LUG's market cap by their current preferred multiple.
What is LUG's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.80b

LUG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.8x
Enterprise Value/EBITDA	4.7x
PEG Ratio	-0.6x

Price to Earnings Ratio vs Peers

How does LUG's PE Ratio compare to its peers?

LUG PE Ratio vs Peers

The above table shows the PE ratio for LUG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	30.3x
TFPM Triple Flag Precious Metals	44.2x	6.9%	CA$2.7b
SSRM SSR Mining	10x	1.1%	CA$4.2b
KNT K92 Mining	35.2x	43.7%	CA$1.9b
EDV Endeavour Mining	31.8x	24.7%	CA$6.2b
LUG Lundin Gold	10.9x	-17.4%	CA$2.4b

Price-To-Earnings vs Peers: LUG is good value based on its Price-To-Earnings Ratio (10.9x) compared to the peer average (30.3x).

Price to Earnings Ratio vs Industry

How does LUG's PE Ratio compare vs other companies in the CA Metals and Mining Industry?

Price-To-Earnings vs Industry: LUG is expensive based on its Price-To-Earnings Ratio (10.9x) compared to the Canadian Metals and Mining industry average (9.5x)

Price to Earnings Ratio vs Fair Ratio

What is LUG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LUG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.9x
Fair PE Ratio	7x

Price-To-Earnings vs Fair Ratio: LUG is expensive based on its Price-To-Earnings Ratio (10.9x) compared to the estimated Fair Price-To-Earnings Ratio (7x).

Share Price vs Fair Value

What is the Fair Price of LUG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LUG (CA$10.38) is trading below our estimate of fair value (CA$21.62)

Significantly Below Fair Value: LUG is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Lundin Gold forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-17.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LUG's earnings are forecast to decline over the next 3 years (-17.4% per year).

Earnings vs Market: LUG's earnings are forecast to decline over the next 3 years (-17.4% per year).

High Growth Earnings: LUG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: LUG's revenue is expected to decline over the next 3 years (-3.1% per year).

High Growth Revenue: LUG's revenue is forecast to decline over the next 3 years (-3.1% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if LUG's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Lundin Gold performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

50.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LUG has high quality earnings.

Growing Profit Margin: LUG's current net profit margins (21.3%) are lower than last year (24.5%).

Past Earnings Growth Analysis

Earnings Trend: LUG has become profitable over the past 5 years, growing earnings by 50.1% per year.

Accelerating Growth: LUG's earnings growth over the past year (1.3%) is below its 5-year average (50.1% per year).

Earnings vs Industry: LUG earnings growth over the past year (1.3%) exceeded the Metals and Mining industry -7.3%.

Return on Equity

High ROE: LUG's Return on Equity (18.1%) is considered low.

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Financial Health

How is Lundin Gold's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LUG's short term assets ($569.3M) exceed its short term liabilities ($315.4M).

Long Term Liabilities: LUG's short term assets ($569.3M) exceed its long term liabilities ($438.4M).

Debt to Equity History and Analysis

Debt Level: LUG's net debt to equity ratio (37.9%) is considered satisfactory.

Reducing Debt: LUG's debt to equity ratio has increased from 67.5% to 70.9% over the past 5 years.

Debt Coverage: LUG's debt is well covered by operating cash flow (60.2%).

Interest Coverage: LUG's interest payments on its debt are well covered by EBIT (9.6x coverage).

Balance Sheet

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Dividend

What is Lundin Gold current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

5.23%

Current Dividend Yield

Dividend Yield vs Market

Lundin Gold Dividend Yield vs Market

How does Lundin Gold dividend yield compare to the market?
Segment	Dividend Yield
Company (Lundin Gold)	5.2%
Market Bottom 25% (CA)	1.9%
Market Top 25% (CA)	5.9%
Industry Average (Metals and Mining)	2.5%
Analyst forecast in 3 Years (Lundin Gold)	3.9%

Notable Dividend: LUG's dividend (5.23%) is higher than the bottom 25% of dividend payers in the Canadian market (1.95%).

High Dividend: LUG's dividend (5.23%) is low compared to the top 25% of dividend payers in the Canadian market (5.99%).

Stability and Growth of Payments

Stable Dividend: Too early to tell whether LUG's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if LUG's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (28%), LUG's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

6.8yrs

Average management tenure

CEO

Ron Hochstein (61 yo)

18.33yrs

Tenure

US$2,272,718

Compensation

Mr. Ronald F. Hochstein, also known as Ron, MBA, P.Eng., B.Sc. (Mineral Process Engineering), serves as an Independent Chairman of the Board of Directors of Denison Mines Corp. since May 2021. He serves as...

CEO Compensation Analysis

Ron Hochstein's Compensation vs Lundin Gold Earnings

How has Ron Hochstein's remuneration changed compared to Lundin Gold's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	US$165m
Mar 31 2022	n/a	n/a	US$159m
Dec 31 2021	US$2m	US$535k	US$221m
Sep 30 2021	n/a	n/a	US$191m
Jun 30 2021	n/a	n/a	US$163m
Mar 31 2021	n/a	n/a	US$48m
Dec 31 2020	US$3m	US$499k	-US$47m
Sep 30 2020	n/a	n/a	-US$87m
Jun 30 2020	n/a	n/a	-US$154m
Mar 31 2020	n/a	n/a	-US$121m
Dec 31 2019	US$2m	US$505k	-US$119m
Sep 30 2019	n/a	n/a	-US$102m
Jun 30 2019	n/a	n/a	-US$55m
Mar 31 2019	n/a	n/a	-US$4m
Dec 31 2018	US$1m	US$464k	-US$22m
Sep 30 2018	n/a	n/a	-US$18m
Jun 30 2018	n/a	n/a	-US$41m
Mar 31 2018	n/a	n/a	-US$60m
Dec 31 2017	US$1m	US$358k	-US$41m
Sep 30 2017	n/a	n/a	-US$46m
Jun 30 2017	n/a	n/a	-US$41m
Mar 31 2017	n/a	n/a	-US$54m
Dec 31 2016	US$851k	US$302k	-US$63m
Sep 30 2016	n/a	n/a	-US$52m
Jun 30 2016	n/a	n/a	-US$52m
Mar 31 2016	n/a	n/a	-US$55m
Dec 31 2015	US$1m	US$274k	-US$45m

Compensation vs Market: Ron's total compensation ($USD2.27M) is about average for companies of similar size in the Canadian market ($USD2.27M).

Compensation vs Earnings: Ron's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: LUG's management team is seasoned and experienced (6.8 years average tenure).

Board Members

Experienced Board: LUG's board of directors are considered experienced (5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: LUG insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

TSX:LUG Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
20 Sep 22	BuyCA$155,856	Ronald Hochstein	Individual	16,235	CA$9.60
02 Sep 22	BuyCA$1,928,498	Lorito Holdings S.à R.L.	Company	220,000	CA$8.77
01 Sep 22	BuyCA$395,497	Jack O. Lundin	Individual	44,700	CA$8.85
31 Aug 22	BuyCA$1,590,936	Lorito Holdings S.à R.L.	Company	181,000	CA$8.79
19 May 22	BuyCA$4,485,831	Newcrest Mining Limited	Company	430,502	CA$10.42
13 May 22	BuyCA$2,290,797	Charles Ashley Heppenstall	Individual	235,800	CA$9.72
13 May 22	SellCA$2,290,797	Charles Ashley Heppenstall	Individual	235,800	CA$9.72
21 Mar 22	BuyCA$524,157	Newcrest Mining Limited	Company	46,758	CA$11.21
11 Mar 22	SellCA$254,150	Ian Gibbs	Individual	23,000	CA$11.05
04 Mar 22	SellCA$262,338	David Dicaire	Individual	25,000	CA$10.99
01 Mar 22	SellCA$303,536	David Dicaire	Individual	30,000	CA$10.22
24 Nov 21	BuyCA$2,408,409	Newcrest Mining Limited	Company	202,728	CA$11.88

Ownership Breakdown

What is the ownership structure of LUG?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	1,693,380	0.7%
General Public	30,319,516	12.9%
Private Companies	62,239,121	26.5%
Institutions	65,682,190	27.9%
Public Companies	75,231,577	32.0%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 84.36% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
31.99%	Newcrest Mining Limited	75,231,577	$780.9m	0.58%	no data
16.39%	Zebra Holdings And Investments S.à R.L.	38,537,214	$400.0m	0%	no data
10.02%	Nemesia S.À R.L.	23,551,907	$244.5m	0%	no data
6.2%	BlackRock, Inc.	14,584,187	$151.4m	0%	no data
4.53%	CD Capital Asset Management Ltd.	10,660,000	$110.7m	0%	84.83%
4.15%	Orion Resource Partners	9,748,726	$101.2m	0%	10.54%
2.15%	Van Eck Associates Corporation	5,051,849	$52.4m	1.54%	0.07%
1.95%	Invesco Ltd.	4,577,962	$47.5m	0%	0.01%
1.23%	Jupiter Fund Management Plc	2,893,013	$30.0m	0%	0.07%
0.85%	FMR LLC	2,001,732	$20.8m	0.02%	no data
0.6%	Fidelity International Ltd	1,411,952	$14.7m	0%	0.01%
0.58%	Orion Mine Finance Management II Limited	1,371,974	$14.2m	0%	no data
0.47%	GAMCO Investors, Inc.	1,110,000	$11.5m	9.9%	0.03%
0.39%	Deutsche Asset & Wealth Management	916,887	$9.5m	16.78%	no data
0.39%	ALPS Advisors, Inc.	909,222	$9.4m	17%	0.05%
0.38%	Rothschild & Cie Gestion	882,009	$9.2m	141.42%	0.18%
0.29%	1832 Asset Management L.P.	683,600	$7.1m	0%	0.01%
0.29%	IG Investment Management, Ltd.	676,453	$7.0m	0%	0.02%
0.25%	Mackenzie Financial Corporation	587,453	$6.1m	0.78%	0.01%
0.25%	Ronald Hochstein	585,835	$6.1m	2.85%	no data
0.23%	Dimensional Fund Advisors LP	548,667	$5.7m	12.95%	no data
0.23%	American Century Investment Management Inc	545,426	$5.7m	8.37%	no data
0.2%	GADD & Cie Luxembourg S.A.	475,823	$4.9m	0%	2.69%
0.19%	Charles Ashley Heppenstall	435,800	$4.5m	12.96%	no data
0.17%	BMO Asset Management Corp.	404,640	$4.2m	-0.01%	no data

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
LUG	TSX (The Toronto Stock Exchange)	Yes	Common Shares	CA	CAD	Jan 1989
F1YN	DB (Deutsche Boerse AG)	Yes	Common Shares	DE	EUR	Jan 1989
LUGD.F	OTCPK (Pink Sheets LLC)	Yes	Common Shares	US	USD	Jan 1989
LUG	OM (OMX Nordic Exchange Stockholm)	Yes	Common Shares	SE	SEK	Jan 1989
0R4M	LSE (London Stock Exchange)	Yes	Common Shares	GB	SEK	Jan 1989
LUGS	BATS-CHIXE (BATS 'Chi-X Europe')	Yes	Common Shares	GB	SEK	Jan 1989

Data	Last Updated (UTC time)
Company Analysis	2022/10/04 00:00
End of Day Share Price	2022/10/04 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31