Lundin Mining Corporation · TSX:LUN
Lundin Mining — TD Mining Conference 2018
39 slides from Lundin Mining's conference presentation, Jan 18, 2018
Slide 1: TD Mining Conference
TSX: LUN OMX: LUMI TD Mining Conference January 18, 2018 1 Candelaria, Region III, Chile
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward-Looking Information and Non-GAAP Performance Measures All statements, other than statements of historical fact, made and information contained or incorporated by reference in or made in giving this presentation and responses to questions is "forward-lo
Slide 3: Lundin Mining
Lundin Mining High Quality Meaningful Scale Financial Strength Competitive Mines Growth Oriented – strong margins at all – exploration upside and – proven track record for operations high value expansion rigorous investment projects underway approach, focused on – demonstrated operational value crea
Slide 4: Lundin Mining: Objective and Operations
Lundin Mining Objective Operations Freeport Cobalt1 Operate, upgrade and grow a Cobalt Refinery (Finland) base metal portfolio that provides leading returns for our Eagle Zinkgruvan shareholders throughout the cycle Nickel-Copper-PGMs (USA) Zinc-Lead-Copper (Sweden) – copper dominant Neves-Corvo Cop
Slide 5: Strong Performance Across Portfolio
Strong Performance Across Portfolio Robust Margins and Meaningful Scale1 2017 Full Year Production (operating margin Q1-Q3/17, %) 202,989 t of copper (attributable) 80% 149,319 t of zinc 70% 22,081 t of nickel Zinkgruvan 60% Candelaria Eagle First Nine Months of 2017 50% $1,544M in sales 40% Neves-C
Slide 6: Focus on Disciplined Growth
Focus on Disciplined Growth Liquidity Position (December 31, 2017) Invest in low-risk, high-return brownfield expansion projects and exploration 18% Cash and Equivalents Service regular dividend $2.0B Undrawn Credit Facility Prudent and accretive management of debt and 82% cash positions Keep flexib
Slide 7: Three-Year Production Outlook
Three-Year Production Outlook1 (kt attributable) Copper Zinc Nickel Increasing primarily on improved ~60% increase primarily on Neves-Corvo Eagle East on-line in 2020 Candelaria mine plan Zinc Expansion Project 244 17 201 16 234 183 187 13 173 14 13 169 176 159 10 154 166 144 2018 2019 2020 2018 201
Slide 8: 2018 Production and Cash Cost Guidance
2018 Production and Cash Cost Guidance Attributable Production1 and C1 Cash Cost2 (t and $/lb, net of by-products) Copper Candelaria (80%) 104,000 – 109,000 $1.70/lb Eagle 15,000 – 18,000 Neves-Corvo 39,000 – 44,000 $1.30/lb Zinkgruvan 1,000 – 2,000 Total Attributable 159,000 – 173,000 Nickel Eagle
Slide 9: 2018 Capital Expenditure Guidance
2018 Capital Expenditure Guidance Capital Expenditures1 (US$M) Candelaria Total Capitalized Stripping2 200 – investment in low-risk, high-return initiatives in mines Los Diques Facility 60 and mill improving the life-of-mine production profile New Mine Fleet Investment 75 – re-phasing of open pit an
Slide 10: 2018 Exploration Expenditure Guidance
2018 Exploration Expenditure Guidance Results-Driven Exploration Programs – $83M to be invested in 2018 in exploration programs company-wide – over 227,500 meters of planned drilling – $34M at Candelaria and $18M at Eagle reflect aggressive in-mine and near-mine exploration programs – $13M at Zinkgr
Slide 11: Responsible Mining
Responsible Mining Safety Performance Environmental Performance TRIF per 200,000 person hours worked – excellent track record and improving performance each year – increased reporting and disclosure practices 5.6 Community & Social – focused on proactively managing social risks and opportunities and
Slide 12: Candelaria
Candelaria 12 Candelaria Mill – Copper / Gold / Silver – Region III, Chile
Slide 13: Candelaria
Candelaria Improved 2017 Life-of-Mine Plan – copper production profile increased 290kt (+20%) over next 10 years and 410kt (+19%) life-of-mine from previous plan – increased operational flexibility and life-of-mine cash flow Copper Production & Cash Cost Outlook (100% basis; kt & $/lb Cu, net of by-
Slide 14: Candelaria Copper Production Profile
Candelaria Copper Production Profile1 (kt; 100% basis) 189 189 184 178 174 172 167 165 156 159 152 147 137 137 127 115 103 94 66 57 2016A 2017A 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 December 2017 Technical Report January 2017 Technical Report At Pu
Slide 15: Candelaria – Mine Fleet Investment
Candelaria – Mine Fleet Investment Significantly Increased Production Profile and Extended Mine Life on Exploration Success – 20-year LOM when the open pit began production in 1994; most open pit equipment dates back to when operation opened – Mineral Reserve estimates now support mine life to 2035
Slide 16: Candelaria – Plant Optimization
Candelaria – Plant Optimization Low-Risk Investments to Increase Metal Production, Reduce Costs and Improve Safety – primary crusher motor upgrade – ball mill re-powering – cyclone and feed pump upgrades – flotation circuit upgrades – pebble circuit upgrade – front-end desalination plant and pipelin
Slide 17: Candelaria – Underground Mine Expansion
Candelaria – Underground Mine Expansion South Sector Significant Underground Exploration Looking west Success Under Lundin Mining Ownership – Candelaria North and South sectors underground Mineral Reserve estimate now 65.7Mt at 0.89% copper – South sector significantly under-drilled Increasing Under
Slide 18: Candelaria – Los Diques Tailings Project
Candelaria – Los Diques Tailings Project Commissioning Underway – first tailings deposited on January 8, 2017 – Phase 0 completed on budget and ahead of schedule – total forecast capital cost unchanged at $295M with $45M to be spent in 2018 Advancing Future Phases – pulled forward to benefit from op
Slide 19: Eagle
Eagle Humboldt Mill – Nickel / Copper / PGMs – Michigan, U.S.A. 19
Slide 20: Eagle
Eagle Eagle East Advancing on Schedule and on Budget – initial production target for early 2020 – final approval of permit amendments to develop and mine Eagle East received in Q4/17 Nickel, Copper Production & Cash Cost Outlook – permit amendment for additional tailings at Humboldt mill (kt & $/lb
Slide 21: Eagle East Project
Eagle East Project Existing Access Ramp Eagle Mine Advancing both declines Eagle East Deposit 1,000 m 1621
Slide 22: Neves-Corvo
Neves-Corvo 22 Copper / Zinc / Lead – Portugal
Slide 23: Neves-Corvo
Neves-Corvo Zinc Expansion Project (ZEP) – doubling of current zinc production levels forecast by H2/19 – initial capex of €260M with $190M (€158M) to be invested in 2018 – surface plant construction permit (RECAPE) received as anticipated on January 15, 2018 Copper, Zinc Production & Cash Cost Outl
Slide 24: Neves-Corvo Overview
Neves-Corvo Overview Zinc Plant Expansion New Conveyor Ramp 24
Slide 25: Zinkgruvan
Zinkgruvan 25 Zinc / Lead / Copper – Sweden
Slide 26: Zinkgruvan
Zinkgruvan 1350 Zinc Expansion Project Ramp-up Completed – record quarterly throughput in Q4/17 and record annual throughput of 1,263,000 tonnes achieved in 2017 – increasing three-year production profile on grade expectations Zinc Production & Cash Cost Outlook (kt & $/lb Zn, net of by-product cred
Slide 27: Zinkgruvan Exploration Areas
Zinkgruvan Exploration areas 27
Slide 28: Appendices
TSX: LUN OMX: LUMI Appendices 28
Slide 29: Three-Year Production Outlook
Three-Year Production Outlook1 2018 2019 2020 Copper Candelaria (80%) 104,000 – 109,000 116,000 – 121,000 132,000 – 137,000 Eagle 15,000 – 18,000 12,000 – 15,000 12,000 – 15,000 Neves-Corvo 39,000 – 44,000 40,000 – 45,000 41,000 – 46,000 Zinkgruvan 1,000 – 2,000 1,000 – 2,000 2,000 – 3,000 Total Att
Slide 30: Candelaria – Underground Expansion
Candelaria – Underground Expansion1 Candelaria Norte 30 1. For more information please refer to the Company’s Technical Report for the Candelaria Copper Mining Complex, November 30, 2017
Slide 31: Candelaria Complex – Mineral Resources and Mineral Reserves
Candelaria Complex – Mineral Resources and Mineral Reserves1 Ownership 80% Location Region III, Chile Mine life +15 years 2018 exploration budget ~$34M P&P Copper Mineral Reserves 2,785 kt contained (497,484 kt at 0.6%) M&I Copper Mineral Resources 5,153 kt contained (740,895 kt at 0.7%) Inferred Co
Slide 32: Candelaria Exploration Extension Potential
Candelaria Exploration Extension Potential1 SW NE Candelaria Pit Candelaria Norte Alcaparrosa Surface Topography 3rd Party Property Section Location Drillhole Trace Alcaparrosa Interpreted Prospective Horizons Santos > 0.4 % Cu Drillhole Samples Candelaria $34M 2018 exploration program 1,000 m 32 1.
Slide 33: Eagle Mine and Eagle East – Mineral Resources and Mineral Reserves
Eagle Mine and Eagle East – Mineral Resources and Mineral Reserves1 Ownership 100% Location Michigan, USA Mine life 7 years 2018 exploration budget ~$18M P&P Nickel Mineral Reserves 130 kt contained (4,734 kt at 2.7%) M&I Nickel Mineral Resources 158 kt contained (4,449 kt at 3.6%) P&P Copper Minera
Slide 34: Eagle East – Meaningful Addition to Production Profile
Eagle East – Meaningful Addition to Production Profile Nickel Production Profile1 Copper Production Profile1 (kt) (kt) 25 25 20 20 15 15 10 10 5 5 0 0 2016A 2017A 2018 2019 2020 2021 2022 2023 2016A 2017A 2018 2019 2020 2021 2022 2023 Eagle Eagle East Eagle Eagle East 1. Refer to the April 10, 2017
Slide 35: Neves-Corvo – Mineral Resources and Mineral Reserves
Neves-Corvo – Mineral Resources and Mineral Reserves1 Ownership 100% Location Alentejo region, Portugal Mine life +10 years 2018 exploration budget ~$5M P&P Zinc Mineral Reserves 2,337 kt contained (30,409 kt at 7.7%) M&I Zinc Mineral Resources 6,458 kt contained (106,511 kt at 6.1%) Inferred Zinc M
Slide 36: Zinc Expansion Project Neves-Corvo
Zinc Expansion Project Neves-Corvo1 – average annual zinc production of approximately 150,000 tpa post Neves-Corvo with ZEP, and Base Case (BC) without ZEP expansion – estimated life-of-mine C1 cash cost of $0.28/lb copper net of by-product credits, or alternatively, $0.29/lb zinc net of by-product
Slide 37: Zinkgruvan – Mineral Resources and Mineral Reserves
Zinkgruvan – Mineral Resources and Mineral Reserves1 Ownership 100% Location Askersund, Sweden Mine life +10 years 2018 exploration budget ~$13M P&P Zinc Mineral Reserves 855 kt contained (11,901 kt at 7.2%) M&I Zinc Mineral Resources 1,458 kt contained (15,668 kt at 9.3%) Inferred Zinc Mineral Reso
Slide 38: NI 43-101 Compliance
NI 43-101 Compliance Unless otherwise indicated, Lundin Mining Corporation (the “Company”) has prepared the technical information in this presentation including Mineral Reserve and Mineral Resource estimates (“Technical Information”) based on information contained in the technical reports and news r
Slide 39: TSX: LUN OMX: LUMI
TSX: LUN OMX: LUMI 40