Slide 1: First Quarter Results 2012
TSX: LUN OMX: LUMI First Quarter Results 2012 April 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 CFO JOAO CARRELO EXEC. VP & COO NEIL O’BRIEN SR. VP EXPLORATION & BD 3
Slide 4: Q1/12 Highlights
Q1/12 Highlights Financials: Net Income: $58 million ($0.10 p/s) vs. $71m ($0.12 p/s) in Q1/11 Operating CF (b/f non-cash WC): $64m ($0.11 p/s) vs. $69m ($0.12 p/s) in Q1/11 Attributable Operating CF from Tenke: $31 million which was used to fund sustaining capex and expansion initiatives Ne
Slide 5: Change in Production: Q1/12 vs. Q1/11
Change in Production: Q1/12 vs. Q1/11 Tonnes Copper Excluding Tenke 7,696 attributable share Tonnes Tonnes Lead Zinc 5
Slide 6: Change in Cash Costs: Q1/12 vs. Q1/11
Change in Cash Costs: Q1/12 vs. Q1/11 Cash cost / lb Cash cost / lb (US dollars) (local currency) Three months ended March 31 Three months ended March 31 2012 2011 2012 2011 Neves-Corvo (Local in €) Gross cost 1.90 1.62 1.44 1.18 By-product * (0.27) (0.07) (0.21) (0.05) Net Cost – Cu/lb 1.63 1.55 1.
Slide 7: Normalized Earnings
Normalized Earnings $ Millions Q1/12 Q1/11 Reported Net Income 58.3 71.2 Foreign exchange 9.5 16.1 Corporate development (Inmet/Equinox) - 4.8 Mark to market on securities (0.6) (2.2) Tax (on above items) (3.3) - (4.9) - Impairment Adjusted of goodwill Net Income 63.9 85.0 Adjusted Earnings per shar
Slide 8: Operations and Outlook
Operations and Outlook 8
Slide 9: Corporate Initiatives – Progress Report
Corporate Initiatives – Progress Report • Enhance operations performance and debottlenecking • Aggressive exploration program: Neves-Corvo • Restart production at Aguablanca prior to year end • Promote value awareness and expansion at Tenke • Capital investment: $130M sustaining capex and $280M new
Slide 10: Strong Financial Position
Strong Financial Position • Excellent Rebuilding of Balance Sheet Cash: +434% Debt: -90% Net Cash: +$502M 10
Slide 11: 2012 – Guidance
2012 – Guidance Tonnes (contained metal) Previous Guidance C1 Cost a,b, Neves-Corvo Cu 52,500 – 57,000 52,500 – 57,000 $ 1.80 Zn 30,000 – 40,000 30,000 – 40,000 Zinkgruvan Zn 75,000 – 81,000 75,000 – 81,000 $ 0.25 Pb 34,000 – 39,000 34,000 – 39,000 Cu 2,000 – 3,000 2,000 – 3,000 Galmoy c Zn 7,000 –
Slide 12: Neves-Corvo – Q1/12 Results
Neves-Corvo – Q1/12 Results • Production of 16,609 tonnes copper at C1 costs of $1.63/lb Cu • Copper grades at 2.9% and record recovery rate of 91% • Zinc production of 7kt – increasing by-product credit • Zinc circuit (50ktpa Zn metal capacity) working well - flexible for both Zn & Cu processing wi
Slide 13: Neves-Corvo – 2012 Outlook
Neves-Corvo – 2012 Outlook • Copper production increases possible depending on price • Capital investment: Sustaining $57M, New Projects $63M • Internal ramp to explore/access Semblana commenced • Lombador Phase 1 underground project advancing on track • Semblana and “new target” drilling program pr
Slide 14: Neves-Corvo Production – Three Year Forecast
Neves-Corvo Production – Three Year Forecast Midpoint of guidance targets 14
Slide 15: Zinkgruvan – Q1/12
Zinkgruvan – Q1/12 • Another record achieved on tonnes milled during quarter • Q1/12 production of 20.4kt Zn, 10.3kt Pb, 0.5kt Cu • Q1/12 cash cost of $0.22/lb zinc – low cost producer • Mine continues to outpace mill capacity • New copper circuit proved flexible to process either Cu or Zn Location
Slide 16: Zinkgruvan - Outlook
Zinkgruvan - Outlook • Pursuing several opportunities for incremental improvements • Debottlenecking of materials handling system • Increased investment in underground exploration 16
Slide 17: Zinkgruvan Production - Three Year Forecast
Zinkgruvan Production - Three Year Forecast Midpoint of guidance targets 17
Slide 18: Aguablanca – Update and Outlook
Aguablanca – Update and Outlook • Re-instatement of the ramp and pre-stripping progressing well • Restart nickel/copper production prior to year end • Pursuing other regional opportunities – copper focused exploration Location • Spain Ownership • 100% 2012 Production • 500 – 1,000 t Ni Guidance • 50
Slide 19: Aguablanca Production - Three Year Forecast
Aguablanca Production - Three Year Forecast Note: Operations were suspended in late-2010 following a pit-slope failure Midpoint of guidance targets 19
Slide 20: Tenke – Q1/12 Results
Tenke – Q1/12 Results • Production of 36,130 tonnes copper and 2,727 tonnes cobalt • C1 cash cost of $1.25/lb Cu, after by-product credits • Equity income of $26m for the quarter • Attributable operating CF of $31m was retained by the operation to fund sustaining capex, exploration and Phase 2 expan
Slide 21: Growth – Existing Assets and Projects
Growth – Existing Assets and Projects • 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) Copper: +24% Zinc: +25% Nickel: restart 21
Slide 22: Touro Copper Project - Overview
Touro Copper Project - Overview • Located in Galicia region in northwest Spain • Production of copper in 1970’s and 1980’s • Production ceased in 1986 due to depressed copper prices • Historical resource of 196 Mt @ 0.39% Cu (at 0.2% Cu cut-off) • Exclusive option agreement until Oct ‘12 to acquire
Slide 23: Lundin Assets - Growth Through Exploration
Lundin Assets - Growth Through Exploration Exploration: • Portugal - Semblana drilling continues to intersect thick sections of resource-grade Cu mineralization. Drilling ramped up on new 3D seismic targets. • Ireland - Clare (Zn-Pb-Ag) properties - Multiple targets being drilled. New greenfields Zn
Slide 24: Lundin Mining - Summary
Lundin Mining - Summary • High quality, long life reserves; exploration upside • A stake in Tenke - a unique, world-class copper mine • Strong balance sheet and ongoing cash flows • Fully-funded organic growth profile • High leverage to copper and zinc • Very compelling valuation Neves-Corvo Zinkgru
Slide 25: Questions & Answers
TSX: LUN OMX: LUMI Questions & Answers