Slide 1: Second Quarter Results
TSX: LUN OMX: LUMI Second Quarter Results July 31, 2014
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward Looking Information 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 historical facts, but rather on current
Slide 3: Presenter and Questions
Presenter PAUL CONIBEAR PRESIDENT & CEO Questions MARIE INKSTER SR. VP & CFO PAUL MCRAE SR. VP PROJECTS STEVE GATLEY VP TECHNICAL SERVICES 3
Slide 4: Q2 - 2014 Operational Highlights
Q2 - 2014 Operational Highlights Nickel & lead production exceeded expectations with zinc & copper in-line Copper: Production at Neves-Corvo met expectations. Higher than expected throughput and grades at Aguablanca have enabled an increase in annual guidance Zinc: Production was higher than prior q
Slide 5: Q2/14 Financial Highlights
Q2/14 Financial Highlights Revenues: Q2/14: $192m; Q2/13: $176m Net Income: Q2/14: $40m ($0.07 p/s); Q2/13: $17m ($0.03 p/s) Operating CF: Q2/14: $34m ($0.06 p/s); Q2/13: $27m ($0.05 p/s) Cash Returns from Tenke: Q2/14: $23m; Q2/13: $27m Net Debt: $174 million vs. $155 million at Mar. 31/14 Increase
Slide 6: Normalized Earnings
Normalized Earnings Normalized Earnings Second quarter $ Millions 2014 2013 Reported Net Earnings 39.7 16.6 Foreign exchange 0.3 8.4 Mark to market on securities 4.3 3.2 Tax (on above items) (1.5) (3.4) Adjusted Net Earnings 42.8 24.8 Adjusted Earnings per share $ 0.07 $ 0.04 6
Slide 7: Change in Production: Q2 2014 vs. 2013
Change in Production: Q2 2014 vs. 2013 Tonnes Tonnes 33 790 1,382 640 2,048 17,000 16,182 14,000 16,065 12,000 10,692 224 16,000 10,250 10,000 Copper 15,000 Lead 14,000 8,000 13,000 6,000 12,000 Excluding Tenke 12,449 t 4,000 attributable share 11,000 2,000 10,000 - Prior Year Throughput Grade Recov
Slide 8: Operating Earnings – Q2 2014 vs. 2013
Operating Earnings – Q2 2014 vs. 2013 8
Slide 9: Cash Costs – Q2 2014 and YTD 2014
Cash Costs – Q2 2014 and YTD 2014 Three months ended June 30 Six months ended June 30 2014 2013 2014 2013 Cash cost/lb (US dollars) Cash cost/lb (US dollars) Neves-Corvo (Local in €) Gross cost 2.71 2.42 2.77 2.31 By-product 1 (1.09) (0.57) (0.92) (0.47) Net Cost - cost/lb Cu 1.62 1.85 1.85 1.84 Zin
Slide 10: Production & Cash Cost Guidance
Production & Cash Cost Guidance Copper, lead and nickel production guidance increased Cost guidance improved at Neves-Corvo, Aguablanca and Tenke 2014 Guidance Prior Guidance Revised Guidance (contained tonnes) Tonnes C1 Cost Tonnes C1 Costa Copper Neves-Corvo 50,000 – 55,000 $1.90/lb 50,000 – 55,00
Slide 11: Operations & Outlook
Operations & Outlook Neves-Corvo Zinkgruvan Aguablanca Tenke Fungurume Eagle 11
Slide 12: Neves-Corvo – Q2 2014 Results
Neves-Corvo – Q2 2014 Results Location Portugal • Production of 13.5kt copper and 17.9kt zinc 50,000–55,000 t Cu 2014 Production • C1 costs of $1.62/lb Cu due largely to higher Guidance 60,000–65,000 t Zn 3,500-4,500 t Pb zinc and lead by-product credits 2014 C1 Cost $1.85/lb Cu • Achieved record qu
Slide 13: Neves-Corvo Outlook
Neves-Corvo Outlook • Copper grades and recoveries expected to increase as the year progresses • Zinc expansion feasibility study progressing to plan with completion expected in Q1 2015 13
Slide 14: Zinkgruvan – Q2 2014 Results
Zinkgruvan – Q2 2014 Results • Production of 19.3kt zinc, 9.2kt lead and Location Sweden 0.9kt copper; in-line with expectations 2014 75,000–80,000 t Zn Production 29,000–32,000 t Pb • C1 costs of $0.17/lb Zn better than Guidance 3,000–4,000 t Cu guidance due to high lead sales volumes 2014 C1 Cost
Slide 15: Zinkgruvan Outlook
Zinkgruvan Outlook • Overall production profile expected to remain steady going forward • Progressive investments continue in the paste backfilling system to improve system availability 15
Slide 16: Aguablanca – Q2 2014 Results and Outlook
Aguablanca – Q2 2014 Results and Outlook • Production of 2.2kt nickel and 1.8kt Location Spain copper; surpassing expectations Ownership 100% 2014 • C1 costs of $5.05/lb Ni for the 7,500–8,500 t Ni Production 6,000–7,000 t Cu quarter and $4.05/lb Ni YTD Guidance 2014 C1 Cost • Open pit mining expect
Slide 17: Tenke – Q2 2014 Results
Tenke – Q2 2014 Results • Production (100% basis) of 51.9kt Cu Location Democratic Republic of Congo and 3.4kt Co, in-line with expectations Ownership 24% 2014 Sales • Cash costs of $1.18/lb benefited from Production 47,900 t Cu high cobalt by-product credits Guidance (attributable share) • Cash dis
Slide 18: Tenke Outlook
Tenke Outlook • For the year, cash distributions are expected to be in range of $80 - $100m • Expected distributions lower than previous guidance due to copper price uncertainty and higher working capital on hand • New acid plant scheduled to be completed in 2016 and is sized to support future expan
Slide 19: Eagle Mine - Update
Eagle Mine - Update • Overall construction continues on-time Location Michigan, USA and on-budget 2015-17 ~23,000t Ni Production • Mill construction approximately 90% ~20,000t Cu Guidance completed as of June 30, 2014 2015-17 C1 Costs ~$2.00/lb Ni • Capital costs remain on budget with Mine Life 8 ye
Slide 20: Eagle – Construction Well Advanced
Eagle – Construction Well Advanced Mine Site Humboldt Mill Roadwork Ball Mills 20
Slide 21: Eagle Operational Readiness
Eagle Operational Readiness • Mine and mill site operations fully staffed • Crushers and grinding mill motors energized and conveyors no load tested • Low grade ore for startup stockpiled at mine and mill site • Commissioning with material commencing in late August • Project substantial completion e
Slide 22: Lundin Mining Summary
Lundin Mining Summary Geographic and base metal diversification Portfolio of high quality, long-life mines Optimization opportunities and exploration potential at all existing assets No high risk major capital projects Proven disciplined growth approach
Slide 23: Questions & Answers
TSX: LUN OMX: LUMI Questions & Answers