Slide 1: Second Quarter Results 2010
1 July 28, 2010 TSX: LUN TSX OMX: LUMI Second Quarter Results 2010
Slide 2: Cautionary Statements
2 Cautionary Statements Caution Regarding Forward Looking Statements This presentation contains forward-looking statements. These forward-looking statements are not based on historical facts, facts but rather on current expectations and projections about future events. events These forward- looking
Slide 3: Presenters
3 Presenter PHIL WRIGHT PRESIDENT & CEO Questions JOAO CARRELO EXEC. VP & COO MARIE INKSTER CFO PAUL CONIBEAR SVP CORP DEVELOPMENT Corporate Operations Projects Exploration Growth
Slide 4: Q2 Highlights
4 Q2 Highlights Metal prices 30% to 70% higher than same quarter last year, Euro 7% weaker against US dollar, SEK 5% stronger Production P d i recovering i wellll from f Q1 issues. i A Aguablanca bl still ill hhas some challenges Net Income $75 $75.66 million or $0 $0.13 13 p/share p/share, im
Slide 5: Normalized Earnings
5 Normalized Earnings $ Millions Q2 '10 10 Q2 '09 09 Q1 '10 10 Reported Net Income 75.6 43.5 74% 38.0 Derivative (gains) losses pre-tax (11.2) 9.2 0.5 AFS securities iti (gains) ( i ) pre-tax t (32 4) (32.4) - (0 6) (0.6) Tax on above 7.7 (2.4) (0.1) 1,2 Non recurring tax adjustments Non-recurring 1
Slide 6: Financial Position
6 Financial Position Net cash at June 30, 2010 of $107.8 million, an increase of $97.6 million for the quarter The change in net cash during the quarter is after: $32.4 million of capital expenditure; $6.8 million advanced in respect of Tenke; and includes $59.9 million from the sale of in
Slide 7: Change in Production: Q2 '10 and Q2 '09
7 Change in Production: Q2 ‘10 and Q2 ‘09 1,960 Tonnes Tonnes 30 000 30,000 2 000 2,000 474 23,992 1,416 4,311 21,774 109 1,715 25,000 676 1,800 121 pper Nicckel Cop 20 000 20,000 1 600 1,600 15,000 Excluding Tenke 7,038t 1,400 attributable share 10 000 10,000 1 200 1,200 Q2 2009 Throughput Grade Re
Slide 8: Cash Costs: Q2 2010 and Q2 2009
8 Cash Costs: Q2 2010 and Q2 2009 Cash cost per lb of primar primary metal (US cents) (local currency) Q2 '10 Q2 '09 Q2 '10 Q2 '09 Neves-Corvo Gross cost 127 112 101 82 (Local in € cents) By-product* (7) (2) (5) (2) Copper Net cost 120 110 96 80 Zinkgruvan Gross cost 69 63 530 498 (Local in SEK) By
Slide 9: Copper Dominant, Zinc Leverage
9 Copper Dominant, Zinc Leverage Q2 ‘10 Revenue Contribution by Metal Q2 ‘09 Revenue Contribution by Metal Note: This analysis does not include Tenke. Inclusion of Tenke in the above would substantially increase the contribution of copper. copper Corporate Operations Projects Exploration Growth
Slide 10: Change in Prices: Q2 '10 & Q2 '09
10 Change in Prices: Q2 ‘10 & Q2 ‘09 Average LME Q2 '10 Q2 '09 Q1 '10 Copper pp $/lb 3.18 2.12 50% 3.29 -3% Zinc $/lb 0.92 0.67 37% 1.04 -12% Lead $/lb 0.88 0.68 29% 1.01 -13% Nickel $/lb 10 15 10.15 5 89 5.89 72% 9 11 11% 9.11 EUR/USD (Qtr Avg) 1 27 1.27 1 36 1.36 -7% 7% 11.38 38 -8% 8% SEK/USD. ((
Slide 11: Financial Results
11 Financial Results Selected Financial Information: $ Millions Q2 '10 Q2 '09 Q1 '10 Sales 183.1 194.8 -6% 141.7 Operating costs including ARO (97.1) (94.6) 3% (72.3) SG&A and stock-based stock based compensation (5 2) (5.2) (9.2) (9 2) -43% 43% (4 8) (4.8) Operating Earnings 80.8 91.0 -11% 64.6 Add
Slide 12: Change in Operating Earnings: Q2 '10 & Q2 '09
12 Change in Operating Earnings: Q2 ‘10 & Q2 ‘09 16.5 19.1 105.0 US$ millions 5.1 6.3 8.8 95 0 95.0 91 0 91.0 80.8 85.0 75.0 Q2 2009 Volume Price & Cost FX Closures Q2 2010 Adj. Actual Corporate Operations Projects Exploration Growth
Slide 13: Tenke Production
13 Tenke Production 100% basis: Lundin attributable 24.75% Q2 '10 Q Q2 '09 Q Q1 '10 Q Copper cathode (tonnes) Production 28,438 16,483 28,769 S l Sales 24 997 24,997 11 894 11,894 29 772 29,772 Average realized price/lb $ 2.96 $ 2.20 $ 3.26 Cobalt (contained tonnes) Production 1,651 n/a 2,231 Sales
Slide 14: Tenke Investment
14 Tenke Investment $ Millions Q2 '10 10 Q2 '09 09 Q1 '10 10 Income (loss) from investment 8.3 (3.4) 17.2 Excess Overrun Facilityy Change during quarter (26.8) 42.3 (11.4) Closing balance 188.9 196.1 215.7 Production issues in April, throughput now consistently above design capacity Freeport con
Slide 15: Lombador South: Advancing to Feasibility
Lombador South: Advancing to Feasibility Feasibility study underway. underway Expected completion Q1 ‘11. Technical report will be filed following completion of this study. Phase I of Lombador: Lift zinc at Neves-Corvo from a nominal 50 000 tpa to 140 50,000 140,000 000 tpa Capital cost of a
Slide 16: Outlook
16 Revised Guidance Prior guidance Outlook Tonnes C1 Tonnes C1 Comment Neves-Corvo Neves Corvo Cu 77 000 $ 1.25 77,000 1 25 77,000 77 000 $ 1 25 1.25 No change Zn 6,000 6,000 Zinkgruvan Zn 75,000 $ 0.30 75,000 $ 0.30 No change Pb 36 000 36,000 36 000 36,000 Cu 1,000 1,000 Aguablanca g Ni 7,500 , $ 6
Slide 17: Outlook
17 Outlook Guidance for 2010, as ggiven at the end of the first qquarter, is maintained for all operations, except Aguablanca Aguablanca is still dealing with the effects of heavy rain which has contributed to the zones of instability in the pit. pit Aguablanca also notified of possible rolling
Slide 18: Questions
18 Questions PHIL WRIGHT PRESIDENT & CEO JOAO CARRELO EXEC. VP & COO MARIE INKSTER CFO PAUL CONIBEAR SVP CORP DEVELOPMENT Corporate Operations Projects Exploration Growth