Slide 1: Third Quarter 2016 Results
TSX: LUN OMX: LUMI Third Quarter 2016 Results October 27, 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 President & Paul Conibear Chief Executive Officer Senior Vice President & Marie Inkster Chief Financial Officer Peter Quinn Chief Operating Officer 3
Slide 4: 2016 Third Quarter Operating Highlights
2016 Third Quarter Operating Highlights Positioned to meet or exceed guidance on strong aggregate operating performance All mines continue to generate operating cash flow despite low commodity prices • Candelaria copper production midpoint guidance raised to reflect Copper year-to-date and plann
Slide 5: 2016 Third Quarter Revenue Breakdown
2016 Third Quarter Revenue Breakdown • Majority of sales were from Candelaria with improving contributions from Eagle • Increase in profit contribution from improved Neves zinc production and prices Q3 Sales Breakdown by Mine Q3 Sales Breakdown by Metal Zinkgruvan Lead Other 3% 3% 11% Gold 7% Nickel
Slide 6: 2016 Third Quarter Operating Earnings
2016 Third Quarter Operating Earnings • Operating earnings increased compared to the same period last year, primarily due to higher realized metal prices. Q3 2015 was impacted significantly by negative price adjustments $49.9M $2.6M $0.9M $4.5M $142.6M $94.1M $2.4M Q3 2015 Actual Volume Price & Adj.
Slide 7: Financial Highlights
Financial Highlights Q3 2016 Q3 2015 Realized Copper1 $2.17/lb $2.01/lb Realized Nickel1 $5.10/lb $3.98/lb Realized Zinc1 $1.07/lb $0.77/lb Revenue $375M $353M Operating Earnings $143M $94M ($11.4M) ($34.6M) Attributable Net Loss ($0.02/sh) ($0.05/sh) $59M $120M Operating Cash Flow2 $0.14/sh $0.08/s
Slide 8: Select Financial Items
Select Financial Items US$M Q3 2016 Q3 2015 Net loss attributable to shareholders ($11.4) ($34.6) Foreign exchange ($1.5) $5.7 Mark to market on securities (includes options) $0.9 ($1.1) Settlement of historical claims - ($7.0) Tax (on above items) $0.2 ($0.1) Tax valuation allowance adjustments - $
Slide 9: Balance Sheet Continues to Strengthen
Balance Sheet Continues to Strengthen • Net debt position improved by $33M during Q3 2016 to $309M • Cash position increased to $691M and working capital to $835M • $350M revolving credit facility amended at lower borrowing costs and extended to June 2020 Liquidity Position (Sep. 30, 2016) Cash and
Slide 10: 2016 Capital Expenditure and Exploration Guidance
2016 Capital Expenditure and Exploration Guidance Modest increase in capital expenditures for capitalized stripping and other minor items Capital Expenditures1 (US$M) 2016 • Capital expenditures for 2016 increased by $10M (from $185M) Total Capitalized Stripping2 35 Los Diques Tailings Capex 60 • Ex
Slide 11: 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%) 130,000 – 132,000 $1.35/lb Eagle 22,000 – 24,000 Neves-Corvo 48,000 – 51,000 $1.55/lb Copper Zinkgruvan 1,900 – 2,000 Tenke (@24%) 52,800 $1.26/lb Total attributable 254,700 – 261,800
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 Third Quarter Results and Outlook
Candelaria 2016 Third Quarter Results and Outlook Location Chile • Copper production of 31.3 kt (80%) and cash Ownership 80% costs of $1.34/lb were in line with plan 2016 Production 130,000-132,000 t Cu • Copper cash costs lower than Q3 2015 as a Guidance (80%) result of lower mine and milling costs
Slide 15: Los Diques Project Construction
Los Diques Project Construction • As of October 5, 2016 – Excavation of Underdrains Progress 15
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 2016 Third Quarter Results and Outlook
Eagle 2016 Third Quarter Results and Outlook • Production of 6.1 kt Ni and 5.8 kt Cu Location Michigan, USA Ownership 100% • Q3 cash cost of $2.15/lb; 2016 full year cost 2016 23,000–25,000 t Ni guidance lowered to $1.90/lb Production Guidance 22,000–24,000 t Cu • Eagle East Feasibility Study on sch
Slide 18: Neves-Corvo (Cu/Zn), Portugal
Neves-Corvo (Cu/Zn), Portugal Situated 220 km southeast of Lisbon 18
Slide 19: Neves-Corvo 2016 Third Quarter Results and Outlook
Neves-Corvo 2016 Third Quarter Results and Outlook • Zinc production of 17.6 kt with excellent Location Portugal recoveries due to improvements in zinc Ownership 100% plant operations 2016 Production 48,000–51,000 t Cu Guidance 70,000–73,000 t Zn • Copper production of 9.7 kt impacted by 2016 Cost G
Slide 20: Zinkgruvan (Zn/Pb/Cu), Sweden
Zinkgruvan (Zn/Pb/Cu), Sweden Situated 200 km southwest of Stockholm 20
Slide 21: Zinkgruvan 2016 Third Quarter Results and Outlook
Zinkgruvan 2016 Third Quarter Results and Outlook • Zinc production of 18.8 kt slightly higher Location Sweden quarter-over-quarter and in line with plan Ownership 100% 2016 Production 80,000–85,000 t Zn • Cash costs of $0.41/lb Zn in line with Guidance 1,900-2,000 t Cu corresponding period in 2015.
Slide 22: Tenke Fungurume (Cu/Co), DRC
Tenke Fungurume (Cu/Co), DRC Situated 175 km northwest of Lubumbashi 22
Slide 23: Tenke 2016 Third Quarter Results and Outlook
Tenke 2016 Third Quarter Results and Outlook • Copper production of 56.3 kt (100%) Location Democratic Republic of Congo benefited from mill throughput , high Ownership 24% head grade and excellent recoveries. 2016 Production Guidance 52,800 t Cu (attributable share) • Record copper production in Q3
Slide 24: Lundin Mining Well Positioned in Any Market
Lundin Mining Well Positioned in Any Market Diversified Base Metal Producer High Quality Competitive Mines Meaningful Production Scale Strong Cash Flow and Margins Conservative Balance Sheet 24
Slide 25: Questions?
TSX: LUN OMX: LUMI Questions?