Slide 1: Third Quarter Results 2013
TSX: LUN OMX: LUMI Third Quarter Results 2013 October 31, 2013
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: Q3/13 Operational Highlights
Q3/13 Operational Highlights Overall mine performance during the quarter achieved objectives Copper Production: Neves-Corvo in-line; better than expected at Aguablanca and Zinkgruvan Aguablanca grades and recoveries were better than expected, resulting in an increase in both copper and nickel produc
Slide 5: Q3/13 Operational Highlights (Cash Costs and Tenke)
Q3/13 Operational Highlights Cash Costs: Neves-Corvo – guidance increased to account for higher production costs and lower by-product metal prices (guidance $1.90/lb Cu from $1.80/lb Cu) Aguablanca – guidance lowered due to better than expected production (guidance $4.50/lb Ni from $5.00/lb Ni) Zink
Slide 6: Q3/13 Financial Highlights
Q3/13 Financial Highlights Revenues: $176m vs. $160m in Q3/12 Net Income: $28m ($0.05 p/s) vs. $38m ($0.07 p/s) in Q3/12 Operating CF (excluding change in non-cash wc and Tenke cash flows): $39m ($0.07 p/s) vs. $87m ($0.15 p/s) in Q3/12 Cash returns from Tenke: $38m ($0.07 p/s). Expect significant c
Slide 7: Change in Production: Q3/13 vs. Q3/12
Change in Production: Q3/13 vs. Q3/12 Excluding Tenke 11,890 t Tonnes Tonnes attributable share Copper Lead Tonnes Tonnes Nickel Zinc 7
Slide 8: Operating Earnings – Q3/13 vs. Q3/12
Operating Earnings – Q3/13 vs. Q3/12 8
Slide 9: Cash Costs – 2013 vs. 2012
Cash Costs – 2013 vs. 2012 Cash Cost/lb (US dollars) Cash Cost/lb (US dollars) Three months ended Nine months ended September 30 September 30 Current 2013 Q3/13 Q3/12 2013 2012 Guidance Neves-Corvo Gross cost $2.92 $2.15 $2.50 $1.95 By-product* ($0.69) ($0.28) ($0.54) ($0.27) Net Cost $/lb - Cu $2.2
Slide 10: Operations and Outlook
Operations and Outlook 10
Slide 11: Production and Cost Guidance - 2013
Production and Cost Guidance - 2013 • Production guidance modestly increased for copper, zinc and nickel Prior Guidance Revised Guidance Tonnes C1 Cost a Tonnes C1 Cost a Copper Neves-Corvo 50,000 – 55,000 $1.80 50,000 – 55,000 $1.90 Zinkgruvan 2,500 – 3,500 3,500 – 4,000 Aguablanca 5,000 – 5,500 5,
Slide 12: Neves-Corvo – Q3/13 Results
Neves-Corvo – Q3/13 Results • Production of 12.6kt copper & 14.7kt zinc • C1 costs of $2.23/lb Cu (net of by-product credits) higher than expected • Average copper grades of 2.4% with recovery rate of 81% • Zinc production achieved a new quarterly record with Lombador generating better than expected
Slide 13: Neves-Corvo – Outlook
Neves-Corvo – Outlook • Zinc ore mining rates will increase from bulk stopes in upper Lombador contributing to an increased zinc production profile • Preliminary investigation into expansion of shaft capacity appears promising and further studies advancing • Increasing U/G exploration activity – cop
Slide 14: Zinkgruvan – Q3/13 Results
Zinkgruvan – Q3/13 Results • Production of 18.7kt zinc, 8.7kt lead & 1.0kt copper • Zinc grades and production volumes were back on track and largely achieved planned levels for the quarter • Cash costs were at the lowest levels since 2007, primarily due to high lead sales for the quarter • Maintain
Slide 15: Zinkgruvan – Outlook
Zinkgruvan – Outlook • Interim measures to improve plant availability have accomplished measurable improvements • Capital investment for plant modernization deferred indefinitely 15
Slide 16: Aguablanca – Q3/13 Results and Outlook
Aguablanca – Q3/13 Results and Outlook • Produced 1.8kt nickel and 1.5kt copper at cash cost of $3.67/lb Ni; exceeding expectations for the quarter • Significant stockpile of ore is now available ahead of the processing plant as the rainy season approaches • Open pit mining is planned to continue un
Slide 17: Tenke – Q3/13 Results
Tenke – Q3/13 Results • Another excellent quarter in mining, milling and copper production • Total production (100%) of 49.5kt Cu and 3.7kt Co @ $1.23/lb Cu • Cash distributions of $38.4 million for the quarter and $110.7 million year-to-date • Copper production guidance increased slightly by Freepo
Slide 18: Tenke Outlook
Tenke Outlook Significant Cash returns Expected to Continue in 2013/2014 • Further expansion investment timing under review by operator Freeport • Addition of second sulphuric acid plant expected to be completed in 2016 • Lundin expects significant cash flows from Tenke to continue, assisting in bal
Slide 19: Eagle – Status Update
Eagle – Status Update • Project ramp-up proceeding well and on schedule • Capital cost forecast to complete maintained at $400M (from July 2013) • Mine surface facilities to be commissioned in Q2/2014 • Mill commissioning and first saleable concentrates expected in Q4/2014 19
Slide 20: Eagle – Construction Progress
Eagle – Construction Progress Mill site facilities Underground mine ramp Mill site facilities Mine site facilities 20
Slide 21: 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 Proven disciplined growth approach Geographic and base metal diversification Neves-Corvo Zinkgru
Slide 22: Questions & Answers
TSX: LUN OMX: LUMI Questions & Answers