Slide 1: Second Quarter Results 2012
TSX: LUN OMX: LUMI Second Quarter Results 2012 July 26, 2012
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward Looking Statements This presentation contains forward-looking statements. These forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events. These forward- looking statements are
Slide 3: Presenter and Questions
Presenter PAUL CONIBEAR PRESIDENT & CEO Questions MARIE INKSTER SR. VP & CFO NEIL O’BRIEN SR. VP EXPLORATION & BD PAUL McRAE SR. VP PROJECTS STEVE GATLEY VP TECHNICAL SERVICES 3
Slide 4: Q2/12 Highlights – Another Strong Performance
Q2/12 Highlights – Another Strong Performance Financials: Net Income: $44m ($0.08 p/s) vs. $60m ($0.10 p/s) in Q2/11 Operating CF : $119m ($0.20 p/s) vs. $99m ($0.17 p/s) in Q2/11 Attributable Operating CF from Tenke: $50 million Net Cash: $313 million vs. $236 million at Dec. 31/11 Operations: Copp
Slide 5: Copper: Change in Production Q2/12 vs. Q2/11
Change in Production: Q2/12 vs. Q2/11 +22% Tonnes Copper Tonnes -5% Excluding Tenke 8,632 t attributable share Lead +18% Tonnes Zinc 5
Slide 6: Change in Cash Costs: Q2/12 vs. Q2/11
Change in Cash Costs: Q2/12 vs. Q2/11 Cash cost/lb (US dollars) Cash cost/lb (local currency) Three months ended Three months ended June 30 June 30 2012 2011 2012 2011 Neves-Corvo (Local in €) Gross cost 1.86 2.17 1.46 1.51 * By-product (0.25) (0.04) (0.20) (0.03) Net Cost - Cu/lb 1.61 2.13 1.26 1.4
Slide 7: Normalized Earnings
Normalized Earnings Six months Three months ended June 30, ended June 30, $ Millions 2012 2011 2012 2011 Reported Net Income 102.4 131.2 44.1 60.1 Foreign exchange (5.9) 16.2 (15.4) 0.1 Corporate development 4.5 5.7 2.9 0.8 Mark to market on securities 4.0 (0.4) 4.6 2.0 Prior period tax accrual* 7.3
Slide 8: Strong Balance Sheet Continues To Improve
Strong Balance Sheet Continues To Improve Cash: +119% Debt: -96% Net Cash: +$424M 8
Slide 9: Operations and Outlook
Operations and Outlook 9
Slide 10: 2012 Updated Guidance – Reflects Better Than Expected Results YTD
2012 Updated Guidance – Reflects Better Than Expected Results YTD Prior Guidance Revised Guidance Tonnes C1 Cost a,b Tonnes C1 Cost a,b, Neves-Corvo Cu 52,500 – 57,000 $ 1.80 55,000 – 60,000 $ 1.70 Zn 30,000 – 40,000 25,000 – 30,000 Zinkgruvan Zn 75,000 – 81,000 $ 0.25 77,000 – 83,000 $ 0.20 Pb 34,0
Slide 11: Neves-Corvo – Q2/12 Results
Neves-Corvo – Q2/12 Results • Production of 15,950 tonnes copper at C1 costs of $1.61/lb Cu • Copper grades at 2.8% and excellent recovery rate of 90% • Zinc production of 7,619 tonnes – recoveries approaching 80% • Lombador Phase I ramp development remains on schedule to be completed in Q2/13 – con
Slide 12: Neves-Corvo – Outlook
Neves-Corvo – Outlook • Preliminary results of U/G Materials Handling Study favours the inclined ramp option over shaft. Optimization work continues. • In parallel, work has begun on studies to assess a shorter schedule, lower capex means of accessing Semblana & lower Lombador through expansion of e
Slide 13: Zinkgruvan – Q2/12
Zinkgruvan – Q2/12 • Zinc and copper production achieved all-time quarterly record • Zinc production exceeded expectations due to exceptionally high grades of 10.7% Zn, good recoveries and high throughput rates • Lead production also remained strong and together with copper production these are cont
Slide 14: Zinkgruvan – Outlook
Zinkgruvan – Outlook • Pursuing several opportunities for incremental improvements • Initial plant modernization study complete. Replacement of front end appears to be cost effective. • Underground exploration to convert resources to reserves and a new exploration ramp advancing with priority. 14
Slide 15: Aguablanca – Update and Outlook
Aguablanca – Update and Outlook • Pre-stripping accelerated during quarter with good contractor productivity • Ore stockpile of over 200,000 tonnes has now been established • Restart of nickel/copper production to commence towards the end of Q3/12 • Copper and nickel production guidance increased –
Slide 16: Tenke – Q2/12 Results
Tenke – Q2/12 Results • Milling facilities continue to perform well above capacity, averaging 12.9ktpd in Q2/12 (vs. design rate of 10ktpd) • Copper production of 35,965 tonnes @ C1 costs of $1.22/lb • Equity income of $25m for the quarter • Attributable operating CF of $50m was retained by the oper
Slide 17: Tenke Expansion Plans
Tenke Expansion Plans Phase II - partial startup ahead of schedule • First copper was produced in June ahead of schedule - a significant milestone • Full expansion on schedule for substantial completion by end of 2012 • No cash calls during first half of 2012 – funded entirely from Tenke surplus cas
Slide 18: Tenke Copper Production Outlook
Tenke Copper Production Outlook ?? Phase 4 Expansion >270 Phase 3 200 Expansion Phase 2 120 127 140 Expansion 70 Note: Production guidance for 2013 is a LUN estimate and does not represent official guidance by operator Freeport McMoran Copper and Gold Inc. (“Freeport”) 18
Slide 19: Touro Copper Project (Spain)
Touro Copper Project (Spain) • Exclusive option agreement until Oct 1, 2012 to acquire 80% interest. • Completed a twin hole drill program confirming historical results. Step-out program targeting significant additional resources. • Conceptual level PEA underway for September option decision • Poten
Slide 20: Fully-Funded Organic Growth Profile
Fully-Funded Organic Growth Profile • Internal Asset Growth Profile Based on Current Guidance (Mid-point of guidance range graphed below, not including expansions of Tenke past Phase II. Does not include Touro Copper Project) 20
Slide 21: Lundin Mining - Summary
Lundin Mining - Summary • Portfolio of high quality, long-life mines that are performing well • A stake in Tenke - a unique, world-class copper mine • Strong balance sheet and operating cash flows • Fully-funded organic growth profile • Exploration upside on all assets • Good leverage to copper and
Slide 22: Questions & Answers
TSX: LUN OMX: LUMI Questions & Answers