Welcome to the annual general meeting of the shareholders of Lundin Gold Inc. I am Ron Hochstein, President and CEO of the company, and I will act as the chair of the meeting. This year, the meeting is being held virtually. This virtual meeting offers shareholders the opportunity to participate, submit questions, and vote at the meeting through the Lumi platform. As this meeting is being held virtually via live audio cast, we think it is necessary to set out a few rules for the orderly conduct of the meeting. For the purposes of this meeting, voting on all matters will be conducted by electronic ballot through the Lumi system. Only registered shareholders and registered proxy holders are able to vote by electronic ballot. Note that any votes cast by a poll during the meeting will supersede any votes previously submitted by proxy.
Therefore, we recommend that shareholders that have already voted by proxy do not vote on polls taken during the meeting. Those in attendance who have registered as guests are not able to move motions, vote, or take any other action. During management's presentation, however, guests are welcome to ask questions. For efficiency, we will be opening the polls on all matters to be voted on at the beginning of the meeting once quorum is established. When you're asked to vote on the Lumi platform, you will receive a message on the virtual interface requesting you to register your votes. Electronic balloting will be open throughout the meeting, and once closed, the voting page will disappear and your votes will automatically be submitted. I will provide you with a 30-second warning prior to the polls closing towards the end of the meeting.
We will provide you with all voting results for all resolutions at the end of the meeting. For specific vote tabulations, please see the company's report of voting results, which will be posted to the company's SEDAR profile at www.sedar, SEDAR, .com shortly after the meeting. Questions or objections in respect of a motion can be submitted by any registered shareholder or registered proxyholder using the instant messaging service of the Lumi interface. Throughout the meeting, we will pause and provide you with a few seconds to ask your questions using the instant messaging service on the Lumi interface. If you feel that not enough time has been provided, please indicate that you have a question using the instant messaging service, and we will pause the meeting until you have had an opportunity to ask your question.
Although questions can be submitted throughout the meeting, they will be addressed at the appropriate time during the meeting. Please limit your questions to topics relating to today's subject matter and keep your questions short and to the point. For each question we answer, we will read the question and provide an oral response. Any questions which were already answered or that are redundant or repetitive will not be answered. Unless there is an objection, Sheila Colman, Vice President, Legal and Corporate Secretary, will act as Secretary of the meeting, and Marissa Bentima of Computershare Investor Services Inc. will act as scrutineer of the meeting. If you have an objection or question regarding the appointment of the secretary and scrutineer, you now have a few moments to submit your objection via the message link.
No objections have been received.
As no objections have been received, I will now move to the constitution of the meeting. Will the secretary please assure us that the meeting has been properly called?
The notice calling this meeting, together with a form of proxy and management information circular, have been sent to each director of the company, the auditors of the company and each intermediary and registered holder of common shares of the company of record on March 23, 2023, which was the record date for the meeting. These documents are available for any shareholder to read. Mr. Chair, this meeting has been properly called.
Unless there are any objections, we will dispense with the reading of the Notice of meeting.
No objections have been received.
As no objections have been received, I dispense with the reading of the notice and will now move to the scrutineer's report and quorum of the meeting. A quorum for the transaction of business at a meeting of shareholders is two shareholders present, including by duly appointed proxy, together holding or representing not less than 25% of the shares entitled to be voted at the meeting. I'm advised that according to the report of the scrutineer, a quorum is present. The final scrutineer's report will be included with the minutes of this meeting. I now declare that this meeting is regularly called and properly constituted for the transaction of business. I further declare that the polls are now open. As a reminder, you may vote on all items of business at any time throughout the meeting.
However, note that any votes cast by electronic ballot will supersede any votes previously submitted by proxy. Therefore, we recommend that shareholders that have already voted by proxy do not vote on the polls taken during the meeting. The minutes of last year's annual general meeting of the shareholders of the company held on May 5th, 2022, are available for inspection by any shareholder. I now ask for a motion to dispense with the reading of the minutes of the last annual general meeting.
Moved.
Is there any discussion on this motion?
No objections have been received.
I will proceed to the next item of business. As the next item of business, I now present the audited financial statements of the company and the report of the auditors thereon for the year ended December 31, 2022. The audited financial statements and auditors report have been previously distributed to shareholders who requested such statements. Are there any questions dealing with financial statements or the auditors reports? You have a few moments to submit your question via the message link starting now. As previously indicated, if you need more than 15 seconds to submit your question, please indicate using the message link that you have a question, and I will pause the meeting until you've had a chance to ask your question.
No questions have been received.
As there are no questions, I will proceed to the next item of business. The next item of business is the appointment of auditors of the company for the ensuing year, and to authorize the directors of the company to fix the remuneration of the auditors. It's proposed that PricewaterhouseCoopers LLP be appointed as the auditors of the company. Accordingly, I ask for a motion that PricewaterhouseCoopers LLP be appointed auditors of the company until the next annual meeting of shareholders, and that the board be authorized to fix their remuneration.
Moved.
Are there any questions? You have a few moments to submit your question via the message link starting now.
No questions have been received.
As there are no questions, I will now ask those shareholders and proxy holders who have not already done so to vote via the electronic ballot. The results of today's voting will be announced at the end of the meeting. It is now in order to proceed with the election of directors for the coming year. The information circular, which was mailed to shareholders, contains the names of and information about management's nominees to the board of directors. I now declare the meeting open for nominations for directors.
I nominate Carmel Daniele, Gillian Davidson, Ian Gibbs, Ashley Heppenstall, Ron Hochstein, Craig Jones, Jack Lundin, Angelina Mehta, and Jill Terry, all to be directors of the company to hold office until the next annual meeting of shareholders or until their successors are elected, subject to the provisions of the company's bylaws. According to the company's bylaws, the company must receive advance notice of nominations of directors by shareholders. The company did not receive notice of any director nominations in connection with this year's meeting within the time periods prescribed by the bylaws. Accordingly, the only persons eligible to be nominated for election to the board are the nominees named in the information circular.
Thank you, Sheila. I now ask for a motion that the proposed nominees be elected as directors of the company.
moved.
The vote on the election for directors is to be conducted by way of ballot. I would now ask those shareholders and proxy holders who have not already done so to vote via the electronic ballot. As noted earlier, voting results for all resolutions will be summarized at the end of the meeting. The next item of business is to consider and, if thought fit, approve a non-binding advisory resolution approving the company's approach to executive compensation. The company's compensation discussion and analysis is set out on pages 51 through 76 of the information circular. The full text of the resolution is set out on page 14 of the information circular. I'll now ask for a motion to approve the non-binding advisory resolution approving the company's approach to executive compensation.
Moved.
Are there any questions? You have a few seconds to submit your question via the message link starting now.
No questions have been received.
As there are no questions, I will now ask those shareholders and proxy holders who have not already done so to vote via electronic ballot. As noted earlier, voting results for all resolutions will be summarized at the end of the meeting. That concludes the items of business set out in the notice of meeting. The polls are still open, and if you area a registered shareholder or proxy holder and have not submitted your vote by ballot or proxy, please do so now by selecting the applicable voting option on the voting panel. We will pause for a period to permit voting before closing the polls on all items of business. Voting on all motions has now closed.
I have been advised by the scrutineer that the proxies deposited for the meeting have been voted in favor of all resolutions and that the represent majorities have been obtained for the election of the nominated directors and the appointment of auditors. In addition, the shareholders have voted for, on a non-binding advisory basis, the company's approach to executive compensation as set out in the management information circular. Rather than hold up the business of the meeting for the final tabulation of the votes cast, I direct that the results of the polls taken be included with the minutes of this meeting and be posted on the company's SEDAR profile at www.sedar.com after this meeting. The formal terms, items of business for this meeting have now been dealt with. Is there any further business?
If you would like to raise any further business in the meeting, you can do so using the message link. You have a few moments to submit any further business using the message link.
No further business has been received.
As there is no further business, unless there's any objection from those in attendance at this meeting, I shall now declare the formal meeting terminated. As there are no objections, the meeting is now terminated. I would like now to give you a presentation on the company. Again, thank you everyone for attending today. I'll be like to give you a brief update on the activities of the company this past year and some very exciting activities going forward. I will be making some forward-looking statements. When you have appropriate time, I would encourage you to read our cautionary note regarding forward-looking information and statements available on our website. Lundin Gold is focused on creating shareholder value. We do this through three main pillars underlain by a foundation of strong ESG. Operational excellence is our first pillar.
Through operational excellence, we continue to drive increased throughput, reduced operating costs, which as a result is generating significant cash flow. Through that cash flow, we have started to return capital to shareholders and also have really focused on cleaning up the balance sheet of the company. In addition to such significant cash flow, we are pursuing several growth initiatives. I'll speak a little more about those in a few minutes. Again, as I stated, none of this would be possible without a very strong ESG platform. Last year was a great year for Lundin Gold. In 2022, we beat our gold production and all-in sustaining costs or basic guidance. For this year, we're guiding for increased throughput of 4,400 tons per day based on the work that we did through 2022.
We generated just under $270 million in free cash flow, paid our inaugural dividend. We completed finally the self-ventilation raise, which now has opened up the entire mine for mining. We did significant drilling on our conversion program, which resulted in a significant replacement of reserves, which I'll speak about shortly. We published our inaugural climate change report, and in terms of cleaning up the balance sheet, we exercised our right to repay the gold prepay facility effective January fifth of this year. In the first quarter of this year, the team at site continued to do a great job. We did have higher grade material than anticipated, but this enabled us to produce just over 140,000 ounces in the quarter.
Well on our way for a guidance of 425,000-475,000 ounces for the year. We did this also at an industry-leading all-in sustaining costs of $728 per ounce. This puts us in a very low decile in the company overall. The graph you see here is the what's called the gold cost curve of all operations in the world producing gold. The only operations that are below us also produce copper, so they have a large copper by-product credit. As you can see, we're well on our way in terms of meeting our guidance of $870-$940 per ounce.
I've stated what our goals are for 2023 in terms of production and all-in sustaining. You can see the next two years are also increasing production and resulting in further costs as we continue to focus on operational excellence. This past year, it really shows the cash flow that Fruta del Norte can generate. We started the year with just over $360 million on the balance sheet in terms of cash. Generated $144 million in operating cash flows in the first quarter. Paid down the gold prepay, $208 million. Further debt payments on the stream of $21 million. On senior debt of an additional $42 million, and dividends of $23 million.
We started the year at $363 million, and with, even with all of that focus on the balance sheet and paying dividends, we still ended the quarter at $210 million in the bank. The debt focus you can see here was with cash flow, organic growth, which I'll speak about shortly, debt payment and dividends. Again, focusing on shareholder value. You can see at the end of the fourth quarter. Sorry, this should be first quarter of 2023. First quarter, long-term debt of $434 million. Just a typo at the top there of the slide. Again, shareholders, this is first quarter of 2023.
Significant reduction in our debt from the start of the year. Currently, we have two forms of debt, the stream credit facility and the senior debt facility. The senior debt has only $135 million remaining. The stream at $269 million still has some time, but we do have an option in June of next year to pay down, pay back or buy back, sorry, 50% of the stream for $150 million. That is definitely something the company is considering. At current gold prices and looking at our current production, we could even have the senior debt repaid back in full by the end of this year. Now let's talk about growth. First of all, exploration. This is organic growth. We have three programs underway.
Conversion drilling, which is focusing on upgrading our inferred resources to bring more in from resources into reserves. Our near mine program, which is drilling right around Fruta del Norte. Its target is to add reserves. Finally, the regional program, which is further, a little further away, we're still only talking about 10-15 kilometers away from Fruta del Norte, is to find a new Fruta del Norte. If you think about these programs in time and impact for you as shareholders, the conversion drilling is near-term, the near mine is mid-term, and regional is a little longer term. On the conversion drilling, we started drilling back in 2021 and well into 2022. Results of that drilling you can see on this graphic here.
Our technical report, which was actually done before the mine even started construction, we had 4.82 million ounces. We had mined 1.38 million ounces. Through the conversion program, we've added 1.58 million ounces, so we've replaced everything we've mined, plus a little bit more. With that said, we still have 3.5 million ounces in resources that can be moved into reserves, and that's what our current conversion drilling program is focusing on. In this graphic here, you can see the various areas within the resource model where we're drilling. These areas are not in the current reserve, and that's where we really want to focus on, in particular, the areas in green and then follow it up by later this year and early next year, the areas in purple.
Let's talk about the near mine program. In this graphic, you can see Fruta del Norte tucked between 2 faults, the East Fault and the West Fault. Where we're drilling the near mine is from underground, targeting areas, very prospective areas to the East Fault and the West Fault, and then surface drilling as we move further south. This program only started in Q3 of last year and has already resulted in some very significant new discoveries. On this graphic, these are some results that we just recently announced within the last couple of weeks. FDN South is just at the southern end of the current FDN resources. Barbasco Sur, which is a little bit further south, is drilling a large gold anomaly that was surface anomaly that was identified by Kinross but never had a drill hole in it. We've now popped two into there with some very interesting results.
Castillo is kinda tucked in between. You can see a very prospective trend in just now, essentially nine months of drilling is really starting to come to fruition. On the regional program, this is a little bit more, I wouldn't say grassroots, but it's a little bit more, we're working just off of surface anomalies and everything, and we've had some very exciting drill holes here. No gold mineralization yet, but certainly drill holes that show the signs of epithermal gold systems. We're continuing to focus on, particularly Corbato La Negra and generate new prospects further down, a little bit further south of Puma. You can see from this graphic, which shows the exploration drill meters carried out each year since the original claims were put together by the company Aurelian. The biggest year was 2007.
That was following the discovery of Fruta del Norte in 2006. You can see now in 2021 and 2022, we've really started to ramp up drilling. In fact, we announced just last week that we've increased the near mine program by about 7,000 meters to plan on drilling a total of just over 35,000 in the near mine and regional programs, an additional 7,000 meters in the conversion program. This will be the third highest most drilling ever carried out on these packages, getting close to the most drilling done back in 2007. The key to exploration is have a pipeline of projects. This graphic shows it well.
We all know that you need a lot of prospects at the bottom of that triangle, and the odds are then you need those more and more prospects in order to get to that ultimately pinnacle of that triangle. FDN South is that very prospective area, along with Bonza- Sur, Castillo, and we're generating more at the base of the triangle. Sustainability strategy is one thing that is so key to all of our success. In 2021, we prepared a five-year sustainability strategy. Excuse me. Based on these eight pillars: climate change, community infrastructure, community well-being, environmental stewardship, health and safety, human rights, lasting economic opportunities, and responsible resource governance. We focus on every one of these.
In climate change, we are one of the lower emitters based on our 2021 results. We will be issuing a new TCFD report within the next couple of weeks. On Health and safety, our team at site just recently surpassed the milestone of working 4 million hours without either a lost time or medical incident. Really outstanding. This is in a country that very little large scale mining has taken place before. The team at site are doing an amazing job. With regards to lasting economic opportunities, community well-being, et cetera, community infrastructure, we just recently completed a survey. Within the communities, the acceptance of mining is higher around in the local communities than you would see in countries like Chile, Peru, et cetera. In closing, we focus on creating value for you as shareholders by focusing on operational excellence.
Fruta del Norte is an amazing deposit. That doesn't mean we can rest on our laurels. We have to continue to reduce our costs and produce more. By doing that, we're generating significant cash flow, which we can then move to clean up our balance sheet, return capital to our shareholders, and use capital for growth, primarily exploration, but also looking at M&A opportunities. Again, we cannot lose the focus on ESG, that is, as it is so key. With that, I'd like to thank you for attending Lundin Gold's 2023 AGM. I look forward to speaking in the future on more developments with the company. Thank you very much.