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. Kalkine’s Growth Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~71.65% of the total shareholding. Newcrest Mining, Ltd. and Zebra Holdings and Investments (Guernsey), Ltd. hold a maximum stake in the company at ~­­­31.72% and ~16.20%, respectively.

1.4 Key Metrics:

In FY 2023, the company reported healthy financials, compared to the previous corresponding period, which is a key positive. Furthermore, it reported industry beating margins and sequentially rising volume of production and sold ounces. Additionally, the company also clocked decent cash flows, proving its resilience and agility.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of the company’s recent activities, here the company shared information regarding its mill processed numbers for Q1 2024 and upcoming financial numbers.

2.2 Insights on FY 2023 Financial Performance:

Section 3: Key Risks, Company Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed a downside of ~2.83% and an upside of 9.01% over the last 1 week and 1 month respectively. Moreover, the stock is trading above the average 52-week high price of CAD 19.57 and 52-week low price of CAD 14.23 providing an opportunity to ride the trend.

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 April 10, 2024. 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.

Note 4: Dividend Yield may vary as per the stock price movement. 

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.