Lundin Mining Corporation · TSX:LUN
Lundin Mining — Investor Presentation (June 2013)
31 slides from Lundin Mining's investor presentation, June 2013
Slide 1: Corporate Presentation
TSX: LUN OMX: LUMI Corporate Presentation June 2013
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward Looking Statements This presentation contains forward‐looking statements. These forward‐looking statements are not based on historical facts, but rather on current expectations and projections about future events. events These forward forward‐looking l
Slide 3: Key Asset Overview
Key Asset Overview • European Assets • Tenke Fungurume • Growth Projects • Neves‐Corvo, Neves Corvo Portugal • Tier 1 Cu/Co asset • Eagle Mine* (Cu/Zn) • 24% interest • Lombador Phase I • Zinkgruvan, Sweden • Freeport‐McMoRan • Tenke Expansions (Zn/Pb/Cu) operator t • Aguablanca, Spain • Phase II ex
Slide 4: Lundin Highlights
Lundin Highlights Significant copper producer – majority of revenues from copper Leverage to zinc, lead, nickel and cobalt Wholly‐owned Wh ll d hi high h quality li assets – portfolio f li off llong lif life, relatively l i l low cost mines in stable jurisdictions Stake in Tenke – a world‐cl
Slide 5: Operations and Outlook
Operations and Outlook 5
Slide 6: 2013 Production and Cost Guidance
2013 Production and Cost Guidance 2013 Guidance Tonnes C1 Cost a Copper Neves‐Corvo 50,000 – 55,000 $1.80 Zinkgruvan 2,500 – 3,500 Aguablanca 4,500 – 5,000 Wholly‐owned Wholly owned 57,000 – 63,500 Tenke (@ 24%)b 47,300 $1.18 Total 104,300 – 110,800 Zinc N Neves‐Corvo C 45 000 – 50,000 45,000 50 000
Slide 7: Neves-Corvo
Neves‐Corvo 7
Slide 8: Neves-Corvo – Snapshot
Neves‐Corvo – Snapshot • Underground copper and zinc mine located in Portugal • 220km southeast so theast of Lisbon in the western estern part of the Iberian Pyrite P rite Belt • Active mining in five major ore bodies underground • Excellent infrastructure with dedicated rail link into Portuguese ra
Slide 9: Neves-Corvo Mine – Mineral Deposits
Neves‐Corvo Mine – Mineral Deposits 1 1K 1.1Km 9 3D Projection Looking South‐East
Slide 10: Neves-Corvo Production Outlook
Neves‐Corvo Production Outlook Midpoint of guidance range assumed for 2013 ‐ 2015 10
Slide 11: Zinkgruvan
2 zi eee nkgruvan a Pape en be~ J 11
Slide 12: Zinkgruvan – Snapshot
Zinkgruvan – Snapshot • Underground zinc/lead/copper mine located 200km southwest of Stockholm • High quality zinc concentrate sought after by European smelters • Lowest quartile cost producer due to high zinc grades and strong by‐product credits • Upside potential with plant modernization initiativ
Slide 13: Zinkgruvan Production Profile
Zinkgruvan Production Profile Midpoint of guidance range assumed for 2013 ‐ 2015 13
Slide 14: Aguablanca
Aguablanca 14
Slide 15: Aguablanca – Snapshot
Aguablanca – Snapshot • Open‐pit nickel/copper mine located 100km north of Seville, Spain • Operations going very well, good margins • Studies well‐advanced on pit life extension into 2015 Location • Spain Ownership • 100% 2013 Production • 5,000 – 5,500 t Ni Guidance • 4,500 – 5,000 t Cu 2013 C1 Co
Slide 16: Tenke Fungurume
Tenke Fungurume 16
Slide 17: Tenke – Snapshot
Tenke – Snapshot • One of the world’s largest known copper‐cobalt resources located in Katanga Province, DRC • Operated by Freeport‐McMoRan – Lundin 24% equity interest • Ph Phase 2 Expansion E i completed, l d increasing i i capacity i to at least l 195,000 tpa of copper cathode and 15,000 tpa of c
Slide 18: Tenke Outlook and Expansion Plans
Tenke Outlook and Expansion Plans Significant Cash Returns Expected to Continue to be Received in 2013 • LUN expects to continue to receive significant cash flows from Tenke in 2013 ‐ 30% of all free cash flows • 2013 cash distribution to LUN could be in range of ~$130 $130 million (at $3.50/lb copp
Slide 19: Tenke Copper Production Outlook
Tenke Copper Production Outlook ?? Phase 4 Expansion >270 Phase 3 197 Expansion Phase 2 158 Expansion 120 127 70 Note: Freeport has provided 2013 sales guidance which has been assumed to approximate Tenke’s production for 2013. 19
Slide 20: Cobalt Chemical Refinery Acquisition
Cobalt Chemical Refinery Acquisition • Acquisition completed in Q1/13 • Enhances market position as world’s largest producer of cobalt • Initial purchase consideration of $355M, including $34M of acquired cash • Potential for additional • Global market leader consideration of up to $110mm • Direct e
Slide 21: Acquisition of Eagle Mine (Michigan, USA)
Acquisition of Eagle Mine (Michigan, (Michigan USA) 21
Slide 22: Eagle Mine Site
Eagle Mine Site 22
Slide 23: Eagle Mill Site
Eagle Mill Site 23
Slide 24: Eagle Mine - Acquisition Summary
Eagle Mine ‐ Acquisition Summary • Acquiring the high grade Eagle nickel/copper mine from Rio Tinto for approximately i t l $325 million illi – Consisting of $250 million asset purchase amount, plus ~$75 million Jan 1st 2013 until transaction closing repayment of project expenditures from Jan. • Adv
Slide 25: Eagle Mine Overview
Eagle Mine Overview • JORC Reserves of 5.18Mt @ 2.93% Ni, 2.49% Cu with gold, cobalt, platinum & p p palladium credits • Project well advanced (construction just over 50% complete) – Initial production in late 2014 2014. Full commercial production by mid mid‐2015 2015 – ~$400M remaining capex to be
Slide 26: For Lundin Mining – Eagle Mine is Perfect Fit
For Lundin Mining – Eagle Mine is Perfect Fit STATED ACQUISITION CRITERIA EAGLE Incremental growth – add producing or near near‐ producing asset High g Qualityy & Low Cost Copper pp or Polymetallic y Asset Manageable size, adds operational depth and excellent cash h fl flows Meaningful additional pr
Slide 27: Lundin Mining Growth Profile – Including Eagle
Lundin Mining Growth Profile – Including Eagle Pro Forma Production Profile ‐ Copper Pro Forma Production d Profile f l ‐ Nickel k l Pro Forma Production Profile ‐ Zinc 27 Notes: LUN production profile based on 3‐yr guidance provided in Dec‐2012. Copper profile does not include any future expansions
Slide 28: Lundin Mining - Low-Cost Operations Cu & Zn
Lundin Mining ‐ Low‐Cost Operations Cu & Zn 2013 C1 Copper Cost Curve, Grouped by Mine ($/lb) $3 00 $3.00 $2.50 Neves‐Corvo $2.00 Weighted Average Tenke Fungurume $1.50 As Tenke $1.00 production increases, Lundin $0.50 will move down the cost curve $0.00 ‐‐ 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% C
Slide 29: Eagle – Low-Cost Nickel Project
Eagle – Low‐Cost Nickel Project • We estimate Eagle LOM C1 cash cost at $2.55/lb, which is in the lowest o est cost quartile qua t e Eagle (est.) 29
Slide 30: Lundin Mining - Summary
Lundin Mining ‐ Summary Portfolio of high quality, long‐life mines that are performing well Optimization opportunities and exploration potential at all existing assets No high risk major capital projects Disciplined growth initiatives supported by strong cash flows Strong financial position Neves‐Co
Slide 31: TSX: LUN OMX: LUMI
TSX: LUN OMX: LUMI