Lundin Mining Corporation · TSX:LUN
Lundin Mining — Q1 2024 Earnings Presentation
24 slides from Lundin Mining's earnings presentation, May 2, 2024
Slide 1: Q1 Financial Results
Q1 Financial Results May 2024 TSX: LUN NASDAQ STOCKHOLM: LUMI
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward-Looking Information and Non-IFRS Performance Measures Certain of the statements made and information contained herein is “forward-looking information” within the meaning of applicable cybersecurity risks; risks associated with the estimation of Mineral
Slide 3: Participants on the Call
Participants on the Call Jack Lundin Teitur Poulsen Juan Andres Morel President & CEO CFO COO
Slide 4: Q1 2024 Highlights
Q1 2024 Highlights 88ktCu Quarterly Cu production in 20241 46ktZn Quarterly Zn production in 20241 33kozAu Quarterly Au production in 20241 $363M Adjusted EBITDA in Q1 20242 $68M FCF from Operations in Q1 20242 C$0.09/sh Quarterly dividend yield (annualized dividend of C$0.36/sh)3 1. Q1 2024 consoli
Slide 5: Production Highlights
Production Highlights Lundin Mining | Q1 Financial Results
Slide 6: Q1/24 Production Results
Q1/24 Production Results Copper Q1 production of 88 kt Annual Q1 Guidance Range 103 90 88 88 kt 366 kt 400 kt 60 Q2/23 Q3/23 Q4/23 Q1/24 Gold Q1 production of 33 koz Annual Q1 44 Guidance Range 34 35 33 33 koz 155 koz 170 koz Copper Cathode Q2/23 Q3/23 Q4/23 Q1/24 Lundin Mining | Q1 Financial Result
Slide 7: Q1/24 Copper Production
Q1/24 Copper Production Candelaria Caserones 1 Q1 production of 34 kt Q1 production of 33 kt 35 34 42 30 By Mine 37 34 33 ▪ Candelaria and Chapada are weighted to the second half of the year ▪ Unplanned shutdowns during the quarter Q2/23 Q3/23 Q4/23 Q1/24 Q2/23 Q3/23 Q4/23 Q1/24 at Caserones and Nev
Slide 8: Q1/24 Production Results
Q1/24 Production Results Zinc Annual Q1 production of 46 kt Guidance Range Q1 50 51 46 36 46 kt 195 kt 215 kt 19 26 Zinkgruvan Neves-Corvo Q2/23 Q3/23 Q4/23 Q1/24 Nickel Q1 production of 3.3 kt Annual Q1 Guidance Range 4.7 4.3 3.7 3.3 3.3 kt 10 kt 13 kt Q2/23 Q3/23 Q4/23 Q1/24 Zinkgruvan underground
Slide 9: Asset Optimization
Asset Optimization Full Potential Initiative ▪ Initiated comprehensive value optimization efforts across our Latin American sites ▪ Focus on productivity, process improvements Caserones and efficiencies to drive down costs, undertaking asset improvement studies at Chapada, Candelaria and Caserones C
Slide 10: Financial Performance
lundin mining Financial Performance
Slide 11: Q1/24 Revenue
Q1/24 Revenue Metal Mix By Mine Molybdenum Eagle Neves-Corvo 3% 6% $937M Other1 9% Nickel 5% Chapada Zinkgruvan 4% 11% 5% Gold Quarterly revenue 6% Zinc 6% Copper Caserones Candelaria 76% 35% 34% 1. Other metals include lead, cobalt, silver and PGM sales. Lundin Mining | Q1 Financial Results 11
Slide 12: Volume Sold and Realized Prices
Volume Sold and Realized Prices Copper Volume Sold Realized Pricing Revenue (kt) Cu | Zn ($/lb) of $937 million in Q1 Cu 86 $4.49 101 89 $3.98 $3.71 $3.82 57 $1,060M $937M 56 $3.37 $992M Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 $751M Zinc Volume Sold Zn $589M (kt) $1.39 $1.19 $1.16 $1.02 37 $0.83 40 44 43 30 Q
Slide 13: Q1 Production Costs
Q1 Production Costs ▪ Candelaria and Caserones benefited from a weaker Chilean Peso ▪ Improved costs at Chapada ▪ Costs tracking to full year guidance at all sites Consolidated Costs Asset Costs ($M or Cu $/lb net credits)1 Exc. Caserones $645 M $567M $615 M Candelaria $250 M 3.5 $250 M Caserones2 3
Slide 14: Capital Costs
Capital Costs Q1 2024 Capital Expenditure Sustaining Growth ▪ Candelaria spend profile front half Q1 Full Year Guidance Q1 Full Year Guidance weighted (Sustaining) (Growth) $213M $840M $56M $225M ▪ Over 50% of sustaining capital attributable to stripping, underground development and equipment $213M
Slide 15: Currency Hedging
Currency Hedging ▪ US$950M added to our Chilean Peso hedge position across 2024, 2025 and 2026 Hedging Position CLP/USD FX Rate 20241 2025 2026 1,042 CLP/USD 1,032 CLP/USD 1,060 CLP/USD 1050 Zero Cost 950 Collar Range 850 884 CLP/USD 872 CLP/USD 904 CLP/USD 750 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct
Slide 16: Commodity Hedging
Commodity Hedging 21,500 tonnes of copper hedged for May 2024 pricing ▪ Disproportionate copper volume expected to be priced in May ▪ Opportunistic hedge to partially protect downside pricing risk YTD Spot Copper Price (US$/lb) $5.00 $4.52/lb $4.50 Zero Cost Collar Range $4.00 for May $4.10/lb $3.50
Slide 17: Key Financial Metrics
Key Financial Metrics Adjusted EBITDA1 Adjusted Operating Cash Flow1 of $363 million in Q1 of $314 million in Q1 $415M $420M $363M $362M $314M $316M $337M $235M $192M $111M Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 1. For the three months ended March 31, 2024, net earnings were $58
Slide 18: Key Financial Metrics
Key Financial Metrics Free Cash Flow from Operations1 Adjusted Earnings (Loss)1 Net Debt / Adjusted EBITDA1,2 of $68 million in Q1 of $45 million in Q1 0.7X $137M $126M $117M $85M $80M $68M $71M LTM $45M $46M $21M Net debt of $981M2 $1,450M liquidity headroom Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Q1/23 Q2/2
Slide 19: Growth & Exploration
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Slide 20: Caserones
19% Call Option Caserones Near-term growth opportunity ▪ Option to increase ownership to 70% for $350M Copper & Cash Cost Outlook1,2 (100% basis; kt Cu, $/lb Cu net of by-product credits) 120 - 130 125 -135 125 - 135 65 $2.60 – $2.80/lb 2023A 2024 2025 2026 1. Guidance as announced by news release "
Slide 21: Josemaria Project
Vicuña District Josemaria Project ▪ Progressing through hydrology studies, tailings dam design and permit applications for road and powerlines ▪ Disciplined approach: Continuing to advance multiple discussions and avenues for financing, including traditional debt sources, joint ventures and off-take
Slide 22: Vicuña District Exploration
Vicuña District Exploration Cumbre Verde View to West ▪ Initial drilling completed (6 holes) Platform A ▪ Data will continue to be gathered and analyzed to help plan for the next drill program CVDH004 CVDH005b CVDH003b Platform B CVDH006 CVDH002 Cumbre Verde Drill Platforms Aproxímate Lundin Mining
Slide 23: Vicuña District Exploration
Vicuña District Exploration Caserones ▪ Targeting high-grade Cu Breccia structures within/below current resource Caserones ▪ Targeting Cu sulphides beneath Deposit Angélica the Angelica Cu Oxide deposit Target Deep Sulphides Known Cu Oxides Caserones Aproxímate Lundin Mining | Q1 Financial Results 2
Slide 24: Disciplined copper growth at scale
Disciplined copper growth at scale We have the team We have multiple We are well-positioned and conviction to opportunities to create to achieve our vision of deliver. meaningful growth in becoming a top-tier both near- and long- copper producer of term horizons. global scale. Lundin Mining | Q1 Fin