Lundin Mining Corporation · TSX:LUN
Lundin Mining — Investor Presentation (March 2016)
38 slides from Lundin Mining's investor presentation, March 2016
Slide 1: Corporate Update
TSX: LUN OMX: LUMI Corporate Update March 2016
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward-Looking Information and Non-GAAP Performance Measures 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 histor
Slide 3: Globally Diversified Portfolio
Globally Diversified Portfolio Zinkgruvan Freeport Cobalt1 Zinc-Lead-Copper Cobalt Refinery (Sweden) (Finland) Eagle Nickel-Copper (USA) Timok JV3 Copper-Gold Neves-Corvo (Serbia) Copper-Zinc (Portugal) Tenke Fungurume1 Copper-Cobalt (DRC) Candelaria2 Copper-Gold-Silver (Chile) • Operations: 6 under
Slide 4: Stable Operations and Balance Sheet
Stable Operations and Balance Sheet Strong Margins and Free Cash Flows • Financial results favourable despite lower commodity price environment • Continued focus on financial flexibility and maximizing cash flows going forward Operations Performed Well in 2015 • Achieved or exceeded annual productio
Slide 5: 2015 Revenue Breakdown by Mine and Metal
2015 Revenue Breakdown by Mine and Metal • 70% of sales were from Candelaria and Eagle operations • 66% of sales were derived from copper Sales Breakdown by Mine Sales Breakdown by Metal Aguablanca Other Lead 4% 4% Zinkgruvan Gold 3% 9% 6% Zinc 9% Neves-Corvo 17% Candelaria 53% Nickel Copper 12% 66%
Slide 6: Competitive Cash Costs in 2015
Competitive Cash Costs in 2015 Copper C1 Cash Cost Curve $3.5 $3.0 Candelaria $2.5 $1.25/lb $2.0 $/lb $1.5 $1.0 $0.5 Neves-Corvo Tenke $1.63/lb $0.0 $1.21/lb ($0.5) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Nickel C1 Cash Cost Curve Zinc C1 Cash Cost Curve $15.0 $2.50 $2.00 $10.0 Eagle $2.02/lb $1
Slide 7: Balance Sheet Remains Strong
Balance Sheet Remains Strong • Cash position has improved by $382M US$ (Millions) December 31, 2015 from $175M (2014) to $557M (2015) Cash and Cash Equivalents $557 • Net debt YTD – as of Feb. 18, 2016 was Net Debt1 $441 ~$458M Revolving Credit Facility $350 (Undrawn) Cash and Cash Equivalents $600
Slide 8: 2016 Production and Cash Cost Guidance
2016 Production and Cash Cost Guidance Metal and Mines Production (Tonnes)1 C1 Cash Costs2 Candelaria (80%) 118,000 – 123,000 $1.55/lb Eagle 20,000 – 23,000 Neves-Corvo 50,000 – 55,000 $1.65/lb Copper Zinkgruvan 3,500 – 4,000 Tenke (@24%)3 54,000 $1.32/lb Total attributable 245,500 – 259,000 Eagle 2
Slide 9: 2016 Capital Expenditure and Exploration Guidance
2016 Capital Expenditure and Exploration Guidance Capital Expenditures1 ($ millions) 2016 Total Capitalized Stripping2 35 Los Diques Tailings Capex3 70 Other Sustaining Capex 15 Total Candelaria (100% Basis) 120 Total Eagle 10 Total Neves-Corvo 55 Total Zinkgruvan 35 Total Capital Costs $ 220 • Capi
Slide 10: Operational Overview and Outlook
Operational Overview and Outlook Eagle (100%) Neves-Corvo (100%) Candelaria (80%) Zinkgruvan (100%) Tenke Fungurume (24%) 10
Slide 11: Candelaria (Cu/Au/Ag), Chile
Candelaria (Cu/Au/Ag), Chile Atacama Province, Region III, approximately 20 km south of Copiapó 11
Slide 12: Candelaria 2015 Results and Outlook
Candelaria 2015 Results and Outlook • Copper production of 145 kt (80%) exceeded Location Chile expectations due largely to higher throughput Ownership 80% 2016 Production • Copper cash costs of $1.25/lb were better than Guidance (80%) 118,000-123,000 t Cu guidance 2016 Cost Guidance $1.55/lb Cu › D
Slide 13: 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 13
Slide 14: Eagle 2015 Results and Outlook
Eagle 2015 Results and Outlook • Ni (27 kt) & Cu (24 kt) production targets Location Michigan, USA exceeded due to mill outperformance Ownership 100% • Nickel cash costs of $2.02/lb in first quartile 2016 21,000–24,000 t Ni Production Guidance 20,000–23,000 t Cu • Outlook consistent with original pl
Slide 15: Neves-Corvo (Cu/Zn), Portugal
Neves-Corvo (Cu/Zn), Portugal Situated 220 km southeast of Lisbon 15
Slide 16: Neves-Corvo 2015 Results and Outlook
Neves-Corvo 2015 Results and Outlook • Copper (56 kt) and zinc (62 kt) production Location Portugal targets achieved Ownership 100% › Higher copper grades and recoveries 2016 Production 50,000–55,000 t Cu Guidance 65,000–70,000 t Zn › Zinc plant performance improved 2016 Cost Guidance $1.65/lb Cu •
Slide 17: Zinkgruvan (Zn/Pb/Cu), Sweden
Zinkgruvan (Zn/Pb/Cu), Sweden Situated 200 km southwest of Stockholm 17
Slide 18: Zinkgruvan 2015 Results and Outlook
Zinkgruvan 2015 Results and Outlook • Zinc production of 83 kt a new record Location Sweden Ownership 100% › Mine ore production and plant throughput at record highs 2016 Production 80,000–85,000 t Zn Guidance 3,500-4,000 t Cu • Zinc cash costs of $0.37/lb below 2016 Cost Guidance $0.45/lb Zn guidan
Slide 19: Tenke Fungurume (Cu/Co), DRC
Tenke Fungurume (Cu/Co), DRC Situated 175 km northwest of Lubumbashi 19
Slide 20: Tenke 2015 Results and Outlook
Tenke 2015 Results and Outlook • Copper production of 49 kt (attributable) Democratic Location mostly in-line with guidance Republic of Congo Ownership 24% 2016 Production Guidance 54,000 t Cu • Cash costs of $1.21/lb affected by lower (attributable share) cobalt by-product credits 2016 Costs1 $1.32
Slide 21: Agreement to Acquire Stake in Timok Project, Serbia
Agreement to Acquire Stake in Timok Project, Serbia Situated 220 km southeast of Lisbon 21 Source: Freeport, Reservoir
Slide 22: Acquisition of Interest in High Grade Cu-Au Project
Acquisition of Interest in High Grade Cu-Au Project • Agreement to purchase interest in Freeport’s stake in the Timok project - Serbia • Reservoir Minerals (“Reservoir”) is a partner on the project • High grade copper-gold Cukaru Peki deposit - part of the Timok project properties › Upper Zone – Hig
Slide 23: Transaction Overview
Transaction Overview • Acquiring up to 75% of the Upper Zone (Reservoir 25%) post study delivery • Up to 21% contributing interest in the Lower Zone Transaction • Lundin retain up to 75% interest in all other assets of the Timok project except for new large mineral discoveries (>4 m tonnes Cu Eq.) f
Slide 24: Timok Project JV – Ownership Structure Post Closing
Timok Project JV – Ownership Structure Post Closing • Upon the completion of the • Following delivery of a transaction, Lundin will be feasibility study, Lundin’s appointed as operator and ownership interest will be: ownership interest will be: 55% of Upper Zone 75% of Upper Zone (Reservoir 45%), (R
Slide 25: Cukaru Peki deposits
Cukaru Peki deposits Source: Freeport 25
Slide 26: Lundin Mining – Investment Rationale
Lundin Mining – Investment Rationale High grade Cu-Au deposit overlying potential Tier 1 Lower Zone porphyry target Size, quality and stage of Upper Zone ideal match for Lundin core skills Staged development allows time to quantify and develop Lower Zone optimally Excellent local and regional infras
Slide 27: Lundin Mining Well Positioned in Any Market
Lundin Mining Well Positioned in Any Market High quality, competitively positioned mines Diversified base metals and geographic asset base Meaningful production scale Strong cash flows with focus on preservation of margins Conservative balance sheet with low leverage ratios Timok consist
Slide 28: Appendices
TSX: LUN OMX: LUMI Appendices
Slide 29: Production Outlook 2016-2018
Production Outlook 2016-2018 Attributable Production Outlook 2016 – 20181 (contained tonnes) 2016 2017 2018 Candelaria (80%) 118,000 – 123,000 120,000 – 125,000 113,000 – 120,000 Eagle 20,000 – 23,000 17,000 – 20,000 14,000 – 17,000 Copper Neves-Corvo 50,000 – 55,000 50,000 – 55,000 50,000 – 55,000
Slide 30: Candelaria Integrated Mining Complex
Candelaria Integrated Mining Complex Alcaparrosa • Successful operating Tierra Amarilla Mine track record • Large prospective Santos Mine regional mineral property position Candelaria near mine Norte Ojos-Plant PAC • Opportunity to continue to extend Candelaria Open Pit mine life with Magnetite Plan
Slide 31: Candelaria Complex LOM Production Profile
Candelaria Complex LOM Production Profile1 200 180 174 161 163 165 154 156 145 146 160 144 123 140 125 115 125 120 110 112 97 100 KT 80 60 60 40 20 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Cu (kt) - New Cu (kt) - Old • 2.4 Mt total copper production vs.
Slide 32: Candelaria Complex Mineral Reserves and Resources
Candelaria Complex Mineral Reserves and Resources June 30, 2015 (100% Basis) Grade Contained Metal Classification Quantity Copper (%) Gold (g/t) Silver (g/t) Copper (kt) Gold (koz) Silver (koz) Proven and Probable Open Pit 314,582 0.57 0.13 1.99 1,784 1,317 20,160 WIP 93,849 0.36 0.09 1.49 335 263 4
Slide 33: Eagle Mine and Eagle East Deposit Overviews
Eagle Mine and Eagle East Deposit Overviews Grade Ni Grade Cu Contained Ni Contained Cu K Tonnes (%) (%) (k tonnes) (k tonnes) P&P 4,488 2.9 2.4 129 109 M&I 4,261 3.5 2.9 149 123 Inferred 51 1.1 1.1 1 1 33
Slide 34: Neves-Corvo Site Overview
Neves-Corvo Site Overview Grade Contained Grade Contained Copper K Tonnes (%) (k tonnes) Zinc K Tonnes (%) (k tonnes) P&P 25,948 2.7 711 P&P 25,333 7.1 1,798 M&I 69,352 2.7 1,864 M&I 106,785 6.1 6,519 Inferred 13,375 1.7 233 Inferred 12,626 4.5 569 34
Slide 35: Zinkgruvan Site Overview
Zinkgruvan Site Overview Grade Zn Grade Pb Contained Zn Contained Pb K Tonnes (%) (%) (k tonnes) (k tonnes) P&P 11,719 8.2 3.3 962 385 M&I 16,947 9.6 3.9 1,620 661 Inferred 7,270 8.4 3.5 611 254 35
Slide 36: Tenke Fungurume Site Overview
Tenke Fungurume Site Overview Grade Cu Grade Co Contained Cu Contained Co (100% Basis) K Tonnes (%) (%) (k tonnes) (k tonnes) P&P 136,120 2.7 0.4 3,681 494 M&I 636,554 2.5 0.3 15,747 1,758 Inferred 392,750 2.0 0.2 8,004 916 36
Slide 37: NI 43-101 Compliance
NI 43-101 Compliance Unless otherwise indicated, Lundin Mining Corporation has prepared the technical information in this presentation (“Technical Information”) based on information contained in the technical reports and news releases (collectively the “Disclosure Documents”) available under Lundin
Slide 38: Thank You
TSX: LUN OMX: LUMI Thank You