Section1: Company Overview and Fundamental Insights

1.1 Company Overview:

Lundin Gold Inc. (TSX: LUG) is a Canada based company focused on its Fruta del Norte gold operation and developing its portfolio of mineral concessions in Ecuador. The Fruta del Norte deposit is located within a 150 km long copper-gold metallogenic sub-province located in the Cordillera del Condor region in southeastern Ecuador.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~77.39% of the total shareholding. Newcrest Mining, Ltd., and Zebra Holdings and Investments (Guernsey), Ltd. holds a maximum stake in the company at ~­­­31.74% and ~16.39%, respectively.

1.4 Key Metrics:

The company has reported higher average realized gold sales prices, increased production & sales volumes, and improved outlook. The group managed to outperform the profitability ratios as compared to the industry media and maintained a higher liquidity ratio.  

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of its recent activities, such as Q3FY22 production and sales updates, and detailed Q3 FY22 results declaration: 

2.2 Insights of Q2 2022 Financial Performance:

Section 3: Key Risks, Company Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 26, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

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