Slide 1: First Quarter 2016 Results
TSX: LUN OMX: LUMI First Quarter 2016 Results April 28, 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: Participants
Participants Presenters and Questions/Answers President & Paul Conibear Chief Executive Officer Senior Vice President & Marie Inkster Chief Financial Officer Peter Quinn Chief Operating Officer 3
Slide 4: 2016 First Quarter Operating Highlights
2016 First Quarter Operating Highlights Operational results were excellent due to production optimization and continued spending restraint measures. On track to meet or exceed full-year guidance Safety performance for the first quarter was an all time record for the Company • Candelaria outperfo
Slide 5: 2016 First Quarter Revenue Breakdown
2016 First Quarter Revenue Breakdown • Over 50% of sales were from Candelaria with good contributions from Neves- Corvo, Eagle and Zinkgruvan • 70% of sales were derived from copper Sales Breakdown by Mine Sales Breakdown by Metal Zinkgruvan 0% Lead Other 11% 3% Gold 4% 6% Zinc 11% Neves-Corvo 19% C
Slide 6: Operating Earnings Decline on Weaker Metal Prices
Operating Earnings Decline on Weaker Metal Prices • Operating earnings declined compared to the same period last year, due to lower metal prices and sales volumes, and the closure of Aguablanca operations • Partially offsetting results were favourable foreign exchange rates $300 274.0 28.6 79.9 $250
Slide 7: Financial Highlights
Financial Highlights Q1 2016 Q1 2015 Realized Copper (US$/lb)1 $2.20 $2.51 Realized Nickel (US$/lb)1 $3.55 $5.79 Realized Zinc (US$/lb)1 $0.81 $0.89 Revenue ($US,M) $370M $532M Operating Earnings ($US,M) $152M $274M Net (Loss)/Earnings ($US,M) ($22M) $72M (attributable) ($0.03/sh) $0.10/sh Operating
Slide 8: Normalized Earnings Reconciliation
Normalized Earnings Reconciliation US$ (Millions) Q1 2016 Q1 2015 Net (loss)/earnings attributable to shareholders ($22.1) $71.8 Foreign exchange $4.8 ($17.3) Mark to market on securities (includes options) ($2.7) $1.3 Tax (on above items) ($0.6) $4.3 Tax valuation allowance adjustments1 $8.4 - Adju
Slide 9: Balance Sheet Remains Strong
Balance Sheet Remains Strong • All mines operating with healthy margins US$ (Millions) March 31, 2016 • Cash position has improved significantly Cash and Cash Equivalents $561 from $355M (Q1/15) to $561M (Q1/16) Net Debt1 $438 Revolving Credit Facility • No amount drawn on credit facility (Undrawn)
Slide 10: 2016 Revised Production and Cash Cost Guidance
2016 Revised Production and Cash Cost Guidance Metal and Mines Production (Tonnes)1 C1 Cash Costs2 Candelaria (80%) 124,000 – 128,000 $1.45/lb Eagle 20,000 – 23,000 Neves-Corvo 50,000 – 55,000 $1.60/lb Copper Zinkgruvan 2,500 – 3,000 Tenke (@24%)3 52,800 $1.32/lb Total attributable 249,300 – 261,800
Slide 11: 2016 Capital Expenditure and Exploration Guidance
2016 Capital Expenditure and Exploration Guidance Significant reduction in total cost ($75 million) to complete Los Diques tailings project to be spent over 2016-2018 Capital Expenditures1 (US$ Millions) 2016 • Capital expenditures for 2016 unchanged at $220 million Total Capitalized Stripping2 30 L
Slide 12: Operational Overview and Outlook
Operational Overview and Outlook Eagle (100%) Neves-Corvo (100%) Candelaria (80%) Zinkgruvan (100%) Tenke Fungurume (24%) 12
Slide 13: Candelaria (Cu/Au/Ag), Chile
Candelaria (Cu/Au/Ag), Chile Atacama Province, Region III, approximately 20 km south of Copiapó 13
Slide 14: Candelaria 2016 First Quarter Results and Outlook
Candelaria 2016 First Quarter Results and Outlook • Copper production of 33 kt (80%) and cash Location Chile costs of $1.22/lb were better than expected Ownership 80% 2016 Production • Improved production guidance reflects quarter Guidance (80%) 124,000-128,000 t Cu results and optimized pit and und
Slide 15: 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 15
Slide 16: Eagle 2016 First Quarter Results and Outlook
Eagle 2016 First Quarter Results and Outlook • Production of 6.0 kt Ni & 6.2 kt Cu better Location Michigan, USA than expected Ownership 100% • Low cash costs of $1.61/lb Ni in first 2016 21,000–24,000 t Ni quartile. Cost forecast lowered for 2016 Production Guidance 20,000–23,000 t Cu 2016 Cost Gui
Slide 17: Neves-Corvo (Cu/Zn), Portugal
Neves-Corvo (Cu/Zn), Portugal Situated 220 km southeast of Lisbon 17
Slide 18: Neves-Corvo 2016 First Quarter Results and Outlook
Neves-Corvo 2016 First Quarter Results and Outlook • Copper production of 14 kt met mine plan Location Portugal expectations Ownership 100% 2016 Production 50,000–55,000 t Cu • Zinc production of 18 kt was in-line, plant Guidance 65,000–70,000 t Zn recoveries stable 2016 Cost Guidance $1.60/lb Cu Mi
Slide 19: Zinkgruvan (Zn/Pb/Cu), Sweden
Zinkgruvan (Zn/Pb/Cu), Sweden Situated 200 km southwest of Stockholm 19
Slide 20: Zinkgruvan 2016 First Quarter Results and Outlook
Zinkgruvan 2016 First Quarter Results and Outlook • Zinc production of 23 kt near record levels Location Sweden Ownership 100% › Benefitted from higher mill throughput and favourable grades 2016 Production 80,000–85,000 t Zn Guidance 2,500-3,000 t Cu • Zinc cash costs of $0.36/lb lower than 2016 Cos
Slide 21: Tenke Fungurume (Cu/Co), DRC
Tenke Fungurume (Cu/Co), DRC Situated 175 km northwest of Lubumbashi 21
Slide 22: Tenke 2016 First Quarter Results and Outlook
Tenke 2016 First Quarter Results and Outlook • Copper production of 50 kt (100%) Democratic Location affected by lower grades Republic of Congo Ownership 24% • Cobalt production of 4.3 kt (100%) 2016 Production Guidance 52,800 t Cu (attributable share) benefitted from higher grades 2016 Costs1 $1.32
Slide 23: 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 23
Slide 24: Questions?
TSX: LUN OMX: LUMI Questions?