Slide 1: 2014 Fourth Quarter & Full Year Results
2014 Fourth Quarter & Full Year Results February 19, 2015
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward-Looking Information This presentation contains forward-looking information, including, but not limited to, guidance on estimated annual production and cash costs. This forward-looking information is not based on historical facts, but rather on current
Slide 3: Presenters
Presenters PAUL CONIBEAR PRESIDENT & CEO MARIE INKSTER SENIOR VP & CFO Questions PAUL McRAE SENIOR VP PROJECTS STEVE GATLEY VP TECHNICAL SERVICES 3
Slide 4: 2014 Operational Highlights
2014 Operational Highlights All Operations Performed In-Line With Guidance Copper: Production in-line; strong Q4 from Neves-Corvo aided by higher grades Actual Cu production excl. Candelaria of 115kt (vs. guidance range of 109kt – 117kt) Zinc: High end of guidance; record tonnes mined and milled at
Slide 5: 2014 Production and Outlook
2014 Production and Outlook Results Outperformed Guidance in 2014 Significant Production Growth Expected in 2015 2014 Guidance a 2014 Actual 2015 Guidance (contained tonnes) Tonnes Tonnes Tonnes Copper Total 109,400 - 117,400 137,636 b 256,400 – 270,400 Zinc Total 135,000 - 145,000 145,091 146,000 -
Slide 6: Change in Production: 2014 vs. 2013
Change in Production: 2014 vs. 2013 Increased Production From All Metals in 2014 vs. Prior Year Tonnes Tonnes 22,872 89,000 816 32 12,931 90,000 14,000 4,573 85,000 12,000 80,000 10,000 Copper Nickel 75,000 7,574 2,678 20 2,816 8,000 70,000 66,246 6,000 65,000 Excluding Tenke 48,636 t 4,000 60,000 a
Slide 7: 2014 Financial Highlights
2014 Financial Highlights Strong Financial Results and Flexible Balance Sheet $US M or 2014 2013 ($/share) Revenues $951M $728M Net Income $123M $137M ($0.19/sh) ($0.23/sh) Operating CF $187M $154M ($0.31/sh) ($0.26/sh) Tenke $86M $142M Distributions Net Debt: $829 million as at December 31, 2014 Ne
Slide 8: Normalized Earnings
Normalized Earnings Year-to-date Fourth Quarter $ Millions 2014 2013 2014 2013 Net Earnings Attributable to Shareholders 112.6 136.7 25.8 42.1 Foreign exchange (20.3) 13.8 (10.2) 6.0 Mark to market on securities 1.4 9.4 2.8 2.9 Realized loss on sale of securities 4.9 - Insurance proceeds (3.7) (15.1
Slide 9: 2014 Cash Costs – In-Line with Expectations
2014 Cash Costs – In-Line with Expectations Favourable F/X Rate Movements are Expected to Positively Impact Costs in 2015 • 2015 cost guidance will be reviewed in Q1/15 2014 2014 2015 Guidance Actual Guidance Candelaria 1 n/a $1.49 $1.55 ($/lb Cu) Eagle n/a $2.79 $2.00 ($/lb Ni) Neves-Corvo $1.85 $1
Slide 10: Operating Earnings – 2014 vs. 2013
Operating Earnings – 2014 vs. 2013 Inclusion of Eagle & Candelaria in late-2014 Provided Earnings Boost Lundin Mining - Consolidated 400.0 350.0 67.8 304.3 300.0 243.1 24.2 28.5 250.0 5.6 7.6 11.2 1.7 $millions 200.0 150.0 100.0 50.0 - YTD Dec Volume Price & Adj. Cost FX Galmoy Eagle Candelaria YTD
Slide 11: 2015 Investment Spending Restraint
2015 Investment Spending Restraint Pro-Active Spending Reductions Aimed at Protecting Free Cash Flow • Reduced Exploration & Capital Expenditures by $85 million 600 $545M 500 $460M Sustaining Capex (excl capitalized stripping) 400 295 Candelaria - Capitalized 230 Stripping $ Millions 300 New Investm
Slide 12: Priorities for 2015 – Focus on Operations
Priorities for 2015 – Focus on Operations Focused on Cash Generation & Asset Optimization • Continue successful production ramp-up at Eagle • Ensure smooth transition at Candelaria and improve 5-year production profile • Foster improved margins at European operations • Exploration focus at Candelari
Slide 13: Operations & Outlook
Operations & Outlook Candelaria (80%) Eagle (100%) Neves-Corvo (100%) Zinkgruvan (100%) Aguablanca (100%) Tenke Fungurume (24%) 13
Slide 14: Candelaria (Cu/Au/Ag), Chile
Candelaria (Cu/Au/Ag), Chile 14
Slide 15: Candelaria – 2014 Results & Outlook
Candelaria – 2014 Results & Outlook Location Chile • Production & costs in-line with expectations Ownership 80% for period of ownership starting on Nov. 3rd 2015 Production • Softer ore feed in Q4 resulted in better than 130,000-135,000 t Cu Guidance (80%) average throughput 2015 Cost $1.55/lb Cu a
Slide 16: Eagle Mine (Ni/Cu), Michigan, U.S.A.
Eagle Mine (Ni/Cu), Michigan, U.S.A. 50 km northwest of Marquette in the Upper Peninsula of Michigan 16
Slide 17: Eagle Mine – 2014 Results & Outlook
Eagle Mine – 2014 Results & Outlook • Commercial production declared in Nov. Location Michigan, USA 2014, well ahead of Q1/15 target 2015 25,000–28,000 t Ni Production • Production ramp-up significantly 20,000–23,000 t Cu Guidance exceeded 2014 expectations 2015 Cost $2.00/lb Ni Guidance • Q4/14 rec
Slide 18: Neves-Corvo (Cu/Zn), Portugal
Neves-Corvo (Cu/Zn), Portugal Situated 220 km southeast of Lisbon 18
Slide 19: Neves-Corvo – 2014 Results & Outlook
Neves-Corvo – 2014 Results & Outlook • Production of 51kt copper and 67kt zinc at Location Portugal cash costs of $1.85/lb Cu 50,000–55,000 t Cu 2015 Production 68,000–73,000 t Zn Guidance • Copper production met guidance for the 4,000-5,000 t Pb year despite lower than expected recoveries 2015 Cost
Slide 20: Zinkgruvan (Zn/Pb/Cu), Sweden
Zinkgruvan (Zn/Pb/Cu), Sweden Situated 200 km southwest of Stockholm 20
Slide 21: Zinkgruvan – 2014 Results & Outlook
Zinkgruvan – 2014 Results & Outlook • Production of 78kt zinc and 32kt lead at Location Sweden cash costs of $0.37/lb Zn 2015 78,000–82,000 t Zn Production 27,000–30,000 t Pb • Achieved a new milestone with annual Guidance 3,500–4,000 t Cu record tonnage of ore mined and milled 2015 Cost $0.38/lb Zn
Slide 22: Aguablanca (Ni/Cu), Spain
Aguablanca (Ni/Cu), Spain Situated 80 km north of Seville 22
Slide 23: Aguablanca – 2014 Results & Outlook
Aguablanca – 2014 Results & Outlook Location Spain • Production of 8.6kt nickel and 7.4kt Ownership 100% copper at cash costs of $4.38/lb Ni 2015 5,800–6,500 t Ni Production • Production from open pit to be 4,500–5,000 t Cu Guidance completed in Q1/15 2015 Cost $5.00/lb Ni Guidance • Underground sto
Slide 24: Tenke Fungurume (Cu/Co), DRC
Tenke Fungurume (Cu/Co), DRC Situated 175 km northwest of Lubumbashi 24
Slide 25: Tenke – 2014 Results & Outlook
Tenke – 2014 Results & Outlook Democratic Republic of Location • Production (100% basis) of 203kt copper Congo and 13kt cobalt at cost of $1.15/lb Cu Ownership 24% 2015 Production • Milling facilities continue to exceed Guidance 48,400 t Cu design capacity, averaging 14,700tpd (attributable share) 2
Slide 26: Lundin Mining Summary
Lundin Mining Summary Geographic and base metal diversification Portfolio of high quality, long-life mines Exploration potential at all existing assets No high risk capital projects Priorities for 2015 – optimize current operations 26
Slide 27: WN -XINO
WN -XINO NN1:XSL