Slide 1: 2012 Results
TSX: LUN OMX: LUMI 2012 Results February 22, 2013
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 / Questions
Presenter PAUL CONIBEAR PRESIDENT & CEO Questions MARIE INKSTER SR. VP & CFO STEVE GATLEY VP TECHNICAL SERVICES 3
Slide 4: 2012 Operational Highlights
2012 Operational Highlights Operations continue to consistently perform: Copper: Annual copper production achieved the high-end of the 2012 guidance range Actual Cu production of 102.0kt (vs. guidance range of 95.7kt – 102.2kt) Zinc: Annual zinc production slightly exceeded the high-end of the 2012
Slide 5: Full Year 2012 & Q4/12 Financial Highlights
Full Year 2012 & Q4/12 Financial Highlights Revenues: 2012: $721m; Q4/12: $176m Adjusted Net Income1: 2012: $185m ($0.32 p/s); Q4/12: $45m ($0.08 p/s) Operating CF: 2012: $194m ($0.33 p/s); Q4/12: $49m ($0.08 p/s) Excludes: Attributable Operating CF from Tenke: $146m for 2012 ($39m for Q4/12) which
Slide 6: Change in Production: 2012 vs. 2011
Change in Production: 2012 vs. 2011 Tonnes Tonnes Excluding Tenke 38,105 t attributable share Copper Lead Tonnes Tonnes Nickel Zinc 6
Slide 7: Cash Costs – 2012 & Q4/12
Cash Costs – 2012 & Q4/12 Cash Cost/lb (US dollars) Cash Cost/lb (US dollars) Full year ended Three months ended December 31 December 31 Current 2013 2012 2011 Q4/12 Q4/11 Guidance Neves-Corvo Gross cost $2.11 $1.83 $2.69 $1.46 By-product* -$0.32 -$0.07 -$0.52 -$0.04 Net Cost $/lb - Cu $1.79 $1.76 $
Slide 8: Normalized Earnings
Normalized Earnings Three months ended Year ended December 31, December 31, $ Millions 2012 2011 2012 2011 Reported Net Income (17.1) 36.2 123.2 183.8 Foreign exchange 3.5 (4.9) 5.1 (8.2) Mark to market on securities 0.8 (1.8) 2.3 3.9 Insurance proceeds (7.9) - (7.9) - Inventory write-down 9.1 - 9.1
Slide 9: Operations and Outlook
Operations and Outlook 9
Slide 10: 2013 Guidance Remains Unchanged – Expected to Be Largely In-Line with 2012 Results
2013 Guidance Remains Unchanged – Expected to Be Largely In-Line with 2012 Results 2012 Results 2013 Guidance Tonnes C1 Cost Tonnes C1 Cost a Copper Neves-Corvo 58,559 $1.79 50,000 – 55,000 $1.80 Zinkgruvan 3,059 2,500 – 3,500 Aguablanca 2,260 4,500 – 5,000 Wholly-owned 63,878 57,000 – 63,500 Tenke
Slide 11: 3 Year Outlook: 2013-2015
3 Year Outlook: 2013-2015 (k metric tonnes) Note – Assumes production near the mid-point of the guidance ranges for each year. *Includes Tenke attributable copper but does not account for any expansion potential past Freeport sales guidance figures for 2013. 11
Slide 12: Neves-Corvo – 2012 Results
Neves-Corvo – 2012 Results • Total production of 58.6kt copper & 30.0kt zinc • C1 costs of $1.79/lb Cu (net of by-product credits) • Annual average copper grades of 2.6% at recovery rate of 88% • Approximately 42% of copper ore milled was “out of reserve” material, profitable and extending mine life
Slide 13: Neves-Corvo – Outlook
Neves-Corvo – Outlook • Ramp up of zinc plant continues – record quarterly production achieved in Q4/12 • U/G drilling will increase significantly in 2013 to better define mineralization not currently in reserve models and mine plans • Minimum capital cases to access Semblana and lower Lombador mine
Slide 14: Zinkgruvan – 2012 Results
Zinkgruvan – 2012 Results • New annual production records achieved for zinc, lead and copper • Total production of 83.2kt zinc, 37.2kt lead & 3.0kt copper • C1 cash costs of $0.13/lb Zinc (net of by-product credits) • Annual average zinc grades of 9.1% at recovery rate of 92% • Annual average lead g
Slide 15: Zinkgruvan – Cost Competitiveness
Zinkgruvan – Cost Competitiveness Zinkgruvan’s 2012 C1 cost of $0.13/lb Zn - ranks it as one of the lowest-cost zinc mines in the world Zinkgruvan ($0.13/lb Zn) 15
Slide 16: Zinkgruvan – Outlook
Zinkgruvan – Outlook • Plant Modernization project - Zinc production expected to grow by 2015 with new plant front end • Expanded exploration program to extend zinc and copper resources 16
Slide 17: Aguablanca – 2012 Results and Outlook
Aguablanca – 2012 Results and Outlook • Produced 2.4kt nickel and 2.3kt copper; C1 cash cost of $6.76/lb Ni • Monitoring of the south pit wall instability continues, while mining of ore and waste remains restricted to the north side of pit • Earnings impacted by after-tax, non-cash impairment charge
Slide 18: Tenke Fungurume
w = S Sen =| oo = | LL Tenke
Slide 19: Tenke – 2012 Results
Tenke – 2012 Results • New copper production record set in 2012 • 2012 production (100%) of 158kt Cu and 11.7 kt Co @ $1.23/lb Cu • Copper and cobalt production increases significantly in 2013 with Phase II expansion on line • Phase II expansion substantially completed within budget • LUN’s share of
Slide 20: Tenke Outlook and Expansion Plans
Tenke Outlook and Expansion Plans Significant Cash Returns Expected to Be Received by LUN in 2013 • LUN expects to receive significant cash flows from Tenke in 2013 - 30% of all free cash flows • 2013 cash distribution to LUN could be in range of ~$130 million Future Expansion Plans • Pilot heap lea
Slide 21: Tenke Copper Production Outlook
Tenke Copper Production Outlook ?? Phase 4 Expansion >270 Phase 3 186 Expansion Phase 2 158 Expansion 120 127 70 Note: Freeport has provided 2013 sales guidance which has been assumed to approximate Tenke’s production for 2013. 21
Slide 22: Cobalt Refinery Acquisition
Cobalt Refinery Acquisition • Enhances market position as world’s largest producer of cobalt • Initial purchase consideration of $325mm • Potential for additional consideration of up to $110mm over three years, contingent on • Global market leader achieving certain revenue targets • Direct end-marke
Slide 23: Lundin Mining – Exploration Initiatives
Lundin Mining – Exploration Initiatives Exploration – 2013 investment of $40 million: • $18m budget for Neves-Corvo to advance exploration on various copper targets including Monte Branco • $5m budget for other high priority targets in Iberian Region • Expanding junior investment portfolio – Copper/
Slide 24: Lundin Mining - Summary
Lundin Mining - Summary Portfolio of high quality, long-life mines that are performing well Optimization opportunities and exploration potential at all existing assets No high risk major capital projects Disciplined growth initiatives supported by strong cash flows Strong balance sheet Neves-Corvo Z
Slide 25: Questions & Answers
TSX: LUN OMX: LUMI Questions & Answers