Good morning. My name is Grant, and I'll be the operator for today's call. At this time, I would like to welcome everyone to Lundin Gold's fourth quarter and year-end 2021 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then number one on your telephone keypad. If you would like to withdraw your question, please press star, then number two. Thank you. Mr. Hochstein, you may now begin your conference.
Thank you, Grant, and good morning, everyone. Thank you for joining us on this conference call today, where Alessandro Bitelli, Executive Vice President and Chief Financial Officer, and myself are going to take you through our results for the fourth quarter and full year 2021. To begin with, I will provide an overview of several key milestones achieved in 2021. Next, discuss our ESG activities, and then give an update on operations at Fruta del Norte and our ongoing exploration program. After that, Alessandro will discuss our financial results in more detail before I finish things off with my concluding remarks. We will then open the call for questions. Please note Lundin Gold's disclaimers on this slide. This discussion includes forward-looking information.
Actual future results may differ from expected results for a variety of reasons described in the Caution Regarding Forward-Looking Information and Statements section of our press release. Lundin Gold is a U.S. dollar reporting entity, and all amounts in this presentation refer to U.S. dollars unless otherwise indicated. 2021, our first full year of operations, was an excellent year for Lundin Gold. Our operating and financial results have consistently highlighted what a fantastic tier one asset Fruta del Norte is. These operational results are underpinned by numerous key milestones achieved, including expansion of the mine and mill throughput from 3,500 tonnes per day to 4,200 tonnes per day, on time and on budget. A focus on recoveries, which have steadily improved and which we will continue to focus on.
Not only did we beat 2021 guidance, but we're now generating substantial free cash flow. With completion achieved under our senior debt facilities, we have greater flexibility to use this cash flow in a variety of different ways. On exploration, we advanced our regional exploration program in 2021, which began in the first quarter and resulted in over 11,000 m drilled at our high priority targets, Barbasco and Puente-Princesa, located 7 km south of Fruta del Norte within the 16-km-long Suarez Pull-Apart Basin structure. Results from the 2021 drilling program are very encouraging and have guided the development of an expanded program for 2022. The company has continued to successfully face challenges in response to the COVID-19 pandemic. Lundin Gold has been flexible in evolving a strategy as a result of the ever-changing situation.
The health and safety of personnel at site is of paramount importance, and stringent procedures remain in place to minimize the impact of COVID-19 on the workforce. Through vaccination campaigns by Ecuador's Ministry of Public Health, 99.9% of the company's employees and on-site contractors are fully vaccinated. As at February 21st, over 51% have received a booster shot. As a result of the dedication and understanding of our team during these challenging times, no COVID-19 related work stoppages occurred during the year. Omicron was evident at site in January 2022, and although we had a lot of cases and a number of personnel unable to work, we were able to maintain our production goals and are now seeing the number of cases drop as significantly as it rose several weeks ago.
Over the past year, we've remained steadfast in our commitment to industrial safety. Our total recordable incident rate for 2021 was 0.46, and by year-end, we had reached 4 million hours worked without a lost time incident. We will continue to identify areas where we can strengthen our safety performance as we work towards our overarching objective of zero harm. I want to touch upon two more key projects that were completed in 2021. The first is the Estamos Conectados internet connectivity project, whose initial phase was completed in October. As an integral part of our sustainability program, Lundin Gold has long prioritized actions to improve the quality of local education, particularly in Fruta del Norte's area of influence. The Estamos Conectados initiative aims to provide critical access to online education for students in rural communities close to Fruta del Norte.
With this milestone achieved, teachers now have high-speed internet connection in the school. Students in local communities are equipped with a tablet, and internet connection in 21 communities has been established or upgraded using fiber-optic infrastructure. We are grateful to a number of service providers and financial supporters of the company for their contributions to this project. I also want to shine a light on the construction of our bridge over the Zamora River, which was completed and inaugurated during the second quarter of 2021, and is now being used to access the site. The Zamora River Bridge enables a far more efficient and shorter route for trucks and vehicles to come in and out of Fruta del Norte.
Before the bridge was available, the route was about 32 km longer on roads that were in poor condition and went through several villages. The new route allows vehicles to remain on the national highway before turning off to cross the bridge, and then shortly thereafter, joining our north access road. The bridge not only reduces our transportation costs, but also reduces risks associated with passing through the local villages. This bridge is available for public use and greatly facilitates transportation for people in the local communities. I've had the opportunity to drive over the bridge numerous times now, and I'm always in awe of what a fantastic upgrade this has provided for both Lundin Gold and local communities. We also want to shine an even brighter light on our award-winning ESG program this year.
With our transition operations, it is essential that our approach to sustainability evolve to reflect new challenges and opportunities. As such, we established a five-year sustainability strategy which guides our efforts to drive sustainable development in Zamora-Chinchipe and beyond. In line with this, we have placed greater emphasis on several emerging themes such as climate change and resource governance, and have created a measurement framework to better understand the true impacts of FDN and the projects we implement. With the transition to operations, Lundin Gold is working to better understand climate-related risks and opportunities facing our business, as well as assessing our contribution to climate change. Lundin Gold recognizes that climate change will result in impacts and opportunities for our operations and for Ecuador as a nation.
As we have done in other areas of sustainability in Ecuador, Lundin Gold seeks to demonstrate leadership in the Ecuadorian mining sector by reducing the emissions intensity of our gold mining operations. Climate change is a key pillar in Lundin Gold's five-year sustainability strategy, and the company is committed to fulfilling the recommendations of the Task Force on Climate-Related Financial Disclosures, or TCFD. In line with this, during 2021, we advanced work under each of the four themes in the TCFD framework, namely governance, strategy, risk management, and metrics. Having done significant groundwork to better understand our climate-related risks and opportunities in various scenarios, Lundin Gold plans to establish an emission target this year and to develop a strategy to improve Lundin Gold's resilience in an uncertain future.
Lundin Gold built and brought into production the first large-scale underground gold mine in Ecuador, and I'm proud of what the team has achieved. I'm also immensely proud of what Fruta del Norte has been able to provide local communities, benefiting them both economically and socially. We believe that responsible mining is a catalyst for sustainable economic development, and we have focused and continue to focus on three key areas, local hiring, procurement, and economic diversification. Our sustainability performance is inextricably intertwined with our overall success. Within these areas, Lundin Gold spent $31 million on local procurement in Zamora-Chinchipe in 2021, and a total of $193 million in Ecuador during the same year.
Over $20 million has been invested in domestic economic strengthening projects between 2015 and 2020, while investment in community infrastructure in 2021 of $4.7 million included a new public bridge, road maintenance, and tourism infrastructure. At the end of 2021, Lundin Gold's workforce was made up of 1,690 direct employees, 50% of whom are from Zamora-Chinchipe. 15% of the workforce is female, and we maintain a strong engagement with local indigenous peoples and communities in Fruta del Norte's area of influence. Now let's turn our attention to Lundin Gold's results for the fourth quarter and full year 2021. Much like the previous three quarters of 2021, operating results continued to be strong in the fourth quarter.
Gold production during the fourth quarter totaled 107,915 oz, comprised of approximately 75,300 oz of concentrate and 32,620 oz as doré. The strong Q4 ultimately resulted in total production for the year of 428,500 oz of gold, comprised of 289,500 oz in concentrate and 139,015 oz as doré, beating guidance of 380,000-420,000 oz.
The mine performed very well during 2021, and to cap off the year, delivered record performance in the fourth quarter with 412,080 tonnes of ore mined, or 4,479 tonnes per day, resulting in a total of 1,557,900 tonnes of ore mined in 2021. Underground mine development continues as planned with over 2,200 m of development completed during the quarter. For 2021, development exceeded budget with nearly 9,200 m of development completed. As we all know, staying ahead on your development in an underground mine is critical.
During the latter half of 2021, mine and mill operations ramped up as part of the expansion project to increase throughput from 3,500 to 4,200 tonnes per day. During the fourth quarter, the mill processed 379,200 tonnes of ore at an average throughput of 4,120 tonnes per day, resulting in 1,415,600 tonnes of ore processed during the year. The average ore grade milled in the fourth quarter was 9.9 g/t , with average recovery at 89.7%, which continued to improve quarter by quarter. For 2021, the average grade of ore milled was 10.6 g/t , with an average recovery at 88.6%.
Operationally, Fruta del Norte delivered another strong quarter to close out 2021 and continues to exceed expectations. I believe that exceeding the upper end of our gold production guidance and an AISC below the lower end of our guidance, as Alessandro will discuss later, is a testament to the hard work and dedication of the Lundin Gold team, and I want to thank everyone involved for their hard work this year. With our first full year of operations now behind us, the company is focused on continuing to deliver strong operating results again in 2022 by continuing to optimize and further improve our operations. For 2022, gold production at Fruta del Norte is estimated between 405,000 oz and 445,000 oz based on an average throughput rate of 4,200 tonnes per day.
The head grade is estimated to average 9.8 g/t , with fluctuations expected during the year as different sections of the ore body are mined. Average mill recovery for the year is estimated at 89%. Mill performance in December and January have exceeded these levels with higher grade material. Cash operating costs are estimated to range between $710 and $780 per oz of gold sold in 2022, with variability expected during the year. AISC for the year is expected to range between $860 and $930 per oz of gold sold based on an assumed gold price of $1,750 per oz.
The projected increase in all-in sustaining costs in 2022 can be attributed principally to one, an approximate 7% increase in operating costs compared to 2021 due to higher transportation, increased maintenance for mining equipment, and general inflationary pressures experienced to date on various consumables. Two, higher sustaining capital, mainly due to the planned construction of the third raise of the tailings dam, which is larger than the initial two raises completed in 2021. These increases are expected to be partially offset by higher throughput and reduced COVID-19 related costs compared to 2021, and lower royalties based on the assumed gold price. Total sustaining capital in 2022 is estimated at $40 million-$45 million, of which $23 million is for this tailings dam construction.
$7.4 million for surface infrastructure, inclusive of new warehouse and expanded ore pad, and $3.6 million for replacement of mobile equipment and $2.5 million for the continuing resource expansion drilling program. The remainder is for underground infrastructure, technology, efficiency improvements, and additional small projects in the plant. To provide more transparency, Lundin Gold also published initial guidance for 2023 and 2024. The company's outlook for production, sustaining capital, and AISC for the next three years is provided in this slide, highlighted by gold production outlook exceeding 400,000 oz annually. The variability in gold production is mainly impacted by the grade of ore mined and recoveries.
Except for variations in gold price and possible continuing inflationary pressure which impact cash operating cost and all-in sustaining cost, the other significant factor affecting AISC is sustaining capital, which is higher in 2022 and 2023 when the tailings dam lift is planned. Within the scope of our original construction plan, the self-ventilation raise, or SVR, is the last remaining item. The work plan for the SVR was revised during the year to include a smaller diameter 2.1 m raise, followed by slashing to 5.1 m and concrete lining. Raise boring and reaming of the 2.1 m raise was completed in early Q4. The contractor for the slash and line is mobilized and set up is complete, as can be seen from photos on this slide. First blast is scheduled for tomorrow.
Although we lost a month due to delays in transporting the contractor's materials to site, we are still anticipating completion of the SVR near the end of the second quarter of 2022. Lundin Gold is not only focused on operations at Fruta del Norte, but also on the ongoing regional exploration program on the two high priority targets, Barbasco and Puente-Princesa. In 2021, the company completed 11,140 m of drilling over a total of 12 holes, with six holes at Barbasco along the eastern margin of the basin, and six holes at Puente-Princesa along the western basin margin.
While drilling in 2021 only intersected relatively narrow low-grade vein mineralization, the drilling has been very encouraging as it has confirmed that gold-bearing hydrothermal fluids circulated in the southern basin contemporaneously as Fruta del Norte was forming further north. The 2021 program has advanced the company's understanding of the southern basin and provided direction for the 2022 program, which will move into completely covered areas with the aim of locating areas where mineralizing fluid flow was more focused. The 2022 regional exploration program is underway at Puente-Princesa with two drill rigs currently turning, testing for buried mineralization along the western Suarez Basin margin. Drilling at this target will continue in the marked red circle on this map.
Following completion of one of the holes, one rig will move to Barbasco so that we have rigs turning on both prospects. Exploration of the southern basin has been challenging due to topography and the thickness of the cover rocks. Within this part of the basement, roughly 20 sq km in area and mostly covered by post-mineral lithologies. During the year, Lundin Gold will continue its regional exploration drilling program, an estimated cost of $14 million, and is planning 16,500 m of drilling at Barbasco and Puente-Princesa. Now I'd like to turn the call over to Alessandro for a more detailed look at the financial results. Alessandro?
Thank you, Ron, and good morning, everyone. 2021 marks the first full year of operations at Fruta del Norte, which resulted in net revenues of $733 million from the sale of 427,000 oz of gold, consisting of 285,000 oz of concentrate and 142,000 oz of doré at an average realized gold price of $1,772 per oz. Income from mining operations totaled $356 million. In comparison, 2020 was impacted by the start of commercial production effective March 1st, 2020, which was shortly followed by the suspension of operations for all of the second quarter of 2020 due to the COVID-19 pandemic.
As a result, lower net revenues of $358 million from sales of 199,000 oz of gold and income from mining operations of $172 million were recognized in 2020. During 2021, Lundin Gold generated net income of $221 million compared to a net loss of $47 million during 2020. The net income is recorded after deducting finance, corporate exploration and other costs of $88 million, derivative losses of $11 million, and income taxes of $36 million from income from mining operations.
The net loss during 2020 was principally a result of costs of $29 million incurred during the suspension of operations in the second quarter of 2020, and a derivative loss of $137 million due to a change in the fair value of the company's gold prepay and stream credit facilities. Derivative losses are a non-cash item, and the volatile nature of these, derivative gains or losses, also seen in prior quarters, is expected to continue given the volatility of forward gold prices. Our 2021 MD&A provide a more detailed explanation of the impact of fair value accounting of these two credit facilities and the determination of derivative gains or losses.
Net revenues achieved by the company in the fourth quarter totaled $186 million and resulting from 188,000 oz of gold sold consisting of 77,000 oz of concentrate and almost 32,000 oz of doré at an average realized gold price of $1,779 per oz. This is offset by cost of goods sold of $95 million, which is comprised of operating expenses of $57 million, royalties of $11 million, and depletion and amortization of $27 million, resulting in income from mining operations of $92 million. During the same period in 2020, revenues of $89 million were recognized from the sale of 106,000 oz of gold, resulting in income from mining operations of $95 million.
Net income in the fourth quarter of 2021 was generated from the recognition of revenues and income from mining operations and deferred income tax assets of $24 million. This was offset by a derivative loss of $36 million and finance expense of $16 million, as well as a one-time special levy of $10 million by the government of Ecuador to fund the country's COVID-19 response. This regulation, enacted in Ecuador in November 2021, requires large companies to pay a one-time contribution to aid in the funding of the country's COVID-19 response, calculated based on a company's net equity at the end of 2020. The company fully expensed $10 million on accounts of this special levy in 2021. Although it is payable in two installments in 2022 and 2023.
Adjusted earnings exclude specific items that are significant but not reflective of the underlying operating activities of the company. As a result, excluding the derivative loss of $11 million, one-time special government levy of $10 million, and the portion of the income tax expense related to derivative losses recorded in accumulated other comprehensive income of $7 million, adjusted earnings of $249 million were realized in 2021, or $1.07 per share. On the same basis, adjusted earnings achieved in 2020 were $106 million or $0.47 per share. During the fourth quarter, adjusted earnings amounted to $78 million or $0.33 per share. In 2021, Lundin Gold generated earnings before income taxes, depreciation, and amortization, and adjusted EBITDA of $460 million and $436 million, respectively.
EBITDA is a non-IFRS metric used to better understand the financial performance of the company by computing earnings from business operations without including the effects of its capital structure, taxes, and depreciation. Adjusted EBITDA is EBITDA excluding items which are considered not indicative of underlying business operations, and its adjustments are consistent to the adjustment made for adjusted earnings. The EBITDA and adjusted EBITDA generated in the fourth quarter were $63 million and $109 million, respectively. Cash operating costs and all-in sustaining costs for the fourth quarter were $625 and $716 per oz of gold sold, respectively, resulting in cash operating costs and AISC for 2021 of $632 and $762 per oz. We calculate these non-IFRS measures based on gold oz sold.
For reference, all-in sustaining costs include operating costs, royalties, corporate social responsibility costs, treatment and refining charges, accretion of restoration provisions, and sustaining capital net of silver revenues. Importantly, we not only beat our 2021 production guidance, but also achieved costs below the low end of our 2021 cost guidance range of $770-$830 per oz. Truly a fantastic achievement. Cash flow is now a fundamental element of Lundin Gold's value proposition. Free cash flow is indicative of the company's ability to generate cash from operations. We define free cash flow as cash flow provided by operating activities, less cash used for investment activities and interest paid.
In the fourth quarter, Lundin Gold generated free cash flow of $75 million or $0.32 per share, resulting in the generation of $268 million in free cash flow or $1.16 per share in 2021. We expect Lundin Gold to continue to generate substantial free cash flow in 2022 and for many years to come, based on its production and AISC guidance at current gold prices. As of December 31, 2021, Lundin Gold had cash of $263 million and a working capital of $224 million compared to cash of $80 million and a working capital balance of $57 million at December 31, 2020.
The change in cash during 2021 was primarily due to cash generated from operating activities of $480 million and proceeds from the exercise of stock options and anti-dilution rights of $19 million. This is offset by principal, interest, and finance charges paid under the loan facilities, totaling $190 million and cash outflow of $63 million for capital expenditures, which include costs for remaining initial construction activities, expansion projects, and sustaining capital. Monthly payments under the stream facilities are based on the 7.75% and 100% of gold and silver ounces sold respectively, calculated at current gold and silver prices at the end of each month, less $404 per oz, respectively.
Quarterly payments under the gold prepay facilities are expected to be based on 9,775 oz of gold calculated at the then current gold prices at the end of each quarter. The senior debt facility is repayable in variable quarterly installments and matures in June 2026. Project completion, as defined under the company's senior debt facilities, was achieved during the fourth quarter of 2021. Under these facilities, Lundin Gold's operating subsidiary, Aurelian Ecuador, was required, among other things, to effectively complete construction at Fruta del Norte, operate the mine on plan for a 90-day period at specific optimal levels, and maintain predetermined quality of concentrate for sale under its off-take contracts. Reaching completion represents a key operational accomplishment.
Starting in 2022, it will allow us to accelerate the scheduled repayment of the senior debt to the cash sweep mechanism. By achieving this milestone, we can now pursue a variety of opportunities, including future growth, further debt reduction, and shareholder distributions as we continue to generate free cash flow at forecast production level and current gold prices. In summary, an excellent year for Lundin Gold, highlighted by our best financial results that are underpinned by continued operational excellence. We are generating significant free cash flow and expect to continue to do so in 2022 and for many years to come. A more detailed discussion of our financial results can be found in the MD&A, and I refer you to this document for more information. Now, I'd like to turn the call back over to Ron.
Thank you, Alessandro. While there have been many achievements in 2021 to be proud of, I'm particularly pleased about our strong free cash flow generation. What does all this free cash flow give Lundin Gold? To me, it gives us flexibility and capital freedom. This strong free cash flow can support further mine and mill expansions, increased FDN and regional exploration programs, other growth opportunities, accelerated debt repayments, and shareholder distributions. We're in a very strong position to continue creating value at Lundin Gold, and I'm optimistic that our next steps will be the right ones. Looking towards the future, we at Lundin Gold have identified several key areas to drive shareholder value. The first and always will be operational excellence.
Consistent with previously announced guidance, gold production at Fruta del Norte for 2022 is estimated to be between 405,000 oz and 445,000 oz. Cash operating costs are estimated to range between $710 and $780 per oz of gold sold in 2022. AISC for 2022 is expected to range between $860 and $930 per oz of gold sold based on an assumed gold price of $1,750 per oz. In line with our focus on operational excellence, we will continue to push on our recoveries and reduce cash operating and all-in-sustaining capital costs. Generating incremental value through growth is also a key focus as we move into 2022.
We see this coming from multiple channels, including further throughput expansion to 4,500 tonnes per day by de-bottlenecking and further expansion, for which evaluation studies have begun. In addition, we continue to pursue growth with the drill bit through conversion expansion drilling at FDN and regional exploration. In addition to these growth opportunities and continued evaluation of M&A opportunities, we're also looking at reduction of debt and shareholder distribution as potential options given the significant cash flow generation. At current gold prices, we expect to generate significant amounts of free cash flow for years to come, which will give us flexibility to explore numerous potential value accretive initiatives for our shareholders. With Fruta del Norte continuing to show what a remarkable and world-class asset it is, and adding a strong cash flow generation, the future is very bright for Lundin Gold.
Finally, but not least, our focus on ESG will continue to be a strong part of our corporate culture and considered in every aspect of our activities. Our five-year sustainability strategy will continue to guide us in our efforts to drive sustainable development in Zamora-Chinchipe and Ecuador as a whole, and we are committed to fulfilling the recommendation of the TCFD within the area of climate change. As I bring this presentation to an end, following the recent announcement of his retirement as both Chairman and non-executive Director of the board, I want to thank Lukas Lundin on behalf of everyone at Lundin Gold for his dedication and invaluable contribution to the company over the past eight years. Under his leadership, Lundin Gold acquired the Fruta del Norte deposit in Ecuador and then developed it into one of the highest grade producing gold mines in the world today.
From acquisition of this deposit with only preliminary studies completed, the first goal in just under five years. As chairman, his vision, strategic leadership, and guidance have been a great benefit to all of us. Lundin Gold's board of directors has developed a succession plan to ensure a smooth transition and expects to name a new chair of the board following the annual meeting. Another long-standing director, Paul McRae, will be retiring this year in accordance with the board's mandatory retirement policy. On behalf of the Lundin Gold team, we would like to thank Paul for his service on the board, particularly with regards to many technical matters for which his expertise was critical during the development of Fruta del Norte. With that, I will now open the call to questions. Over to you, Grant.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch- tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be polled in the order that they are received. Should you wish to decline from the cold polling process, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Don DeMarco from the National Bank. Please go ahead. Don, you can now start.
Thank you, operator, and congratulations, gentlemen, on a strong finish to the year. Just one question. With regard to the senior debt facility repayment in 2022, with the 30% of the cash flow component kicking in, can you give us an idea of what the repayment schedule might look like? Quarter-over-quarter?
Yeah, you can probably quarter-over-quarter, no, I can't give you that off the top of my head, but I can certainly provide it to you later. If you look at the financial statements, the current portion of the long-term debt on the balance sheet will give you a good idea of what the expected repayments will be including of the cash sweep on all three facilities.
Okay. Okay, that's all for me. Thank you.
Thanks, Don.
Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the one. There are no further questions at this time. Please proceed.
Thank you, Grant. Thank you, everybody, for attending this call. Again, I want to thank the team for a great quarter and a great year. Again, thank Lukas and Paul McRae for all their contributions. They will certainly be missed on the board. Thank you, everybody, and have a great day, and have a great weekend.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.