Slide 1: TD Securities Mining Conference
TD Securities Mining Conference January 2015
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: Lundin - Diversified Portfolio of Operating Mines
Lundin - Diversified Portfolio of Operating Mines Base metals producer with global operations on four continents Zinkgruvan (100%) Freeport Cobalt (24%) (Sweden) (Finland) Eagle (100%) (USA) Zinc-Lead-Copper Cobalt Refinery Neves-Corvo (100%) Aguablanca (100%) (Portugal) (Spain) Nickel-Copper Copper
Slide 4: 2015 Production & Cash Cost Guidance
2015 Production & Cash Cost Guidance Stable portfolio of operating assets with competitive cash costs across all commodities (contained tonnes) Tonnes Cash Costsa Copper Neves-Corvo 50,000 - 55,000 $1.80/lb Zinkgruvan 3,500 - 4,000 Aguablanca 4,500 - 5,000 Eagle 20,000 - 23,000 Wholly-owned 78,000 -
Slide 5: 2015 Investment Outlook
2015 Investment Outlook Manageable capital requirements focused on sustaining capital & exploration growth 2015 $US M Sustaining Neves-Corvo $80 Zinkgruvan $45 Aguablanca $15 Candelaria a $300 Eagle $15 Total Sustaining $455 Total New Investment $15 Total Exploration b $75 a. Candelaria’s capital co
Slide 6: Stable Growth Profile in all Metals
Stable Growth Profile in all Metals Established growth profile with minimal new investment capex requirements 50.0 45.0 Nickel Production (kt) 40.0 35.0 31 – 35 30.0 27 – 30 23 – 26 300 Copper Production (kt) 25.0 258 – 272 20.0 250 234 – 242 238 – 252 226 – 245 15.0 10 – 12 10.0 8 200 5.0 - 150 201
Slide 7: Cost Competitive Across All Commodities
Cost Competitive Across All Commodities Competitive, Low Cost Producer of Copper, Zinc & Nickel 2015E Copper C1 Cash Cost Curve (Net of By-Products) Neves-Corvo ($/lb) $3.00 Tenke Fungurume a Weighted $1.80 $2.50 Average $1.16 $2.00 $1.53 $1.50 $1.55 $1.00 $0.50 Candelaria b -- -- 25% 50% 75% 100% 2
Slide 8: Excellent Base Metals & Geographic Diversification
Excellent Base Metals & Geographic Diversification Copper dominant with excellent base metals and geographic diversification 2015E Attributable Cu Eq. Production (1)(2) By Commodity By Country Cobalt Lead Spain 3% 3% Sweden 4% Zinc 10% 13% Chile 33% DRC 15% Nickel 17% Copper 64% Portugal 19% USA 19%
Slide 9: Strong Financial Position
Strong Financial Position Net Cash Balance Expected to Grow Rapidly From Strong Free Cash Flows US$ M As of Dec. 31, 2014 Long-Term Debt Amount Coupon Net Debt Balance $830 Maturities (US$ M) Available Credit $350 Notes Maturing $550 7.50% Facilities - 2020 Common Shares 718.1 Notes Maturing $450 7.
Slide 10: Priorities for 2015
Priorities for 2015 Focused on Cash Generation & Asset Optimization • Continue successful production ramp-up at Eagle • Re-optimize mine plan at Candelaria with aim on improving 5-yr production profile • Improve margins and free cash flow from European mines • Strong exploration focus at Candelaria,
Slide 11: Operations & Outlook
Operations & Outlook Candelaria (80%) Eagle (100%) Neves-Corvo (100%) Zinkgruvan (100%) Aguablanca (100%) Tenke Fungurume (24%) 11
Slide 12: Candelaria (Cu/Au/Ag), Chile
Candelaria (Cu/Au/Ag), Chile 12
Slide 13: Candelaria – Outlook
Candelaria – Outlook Location Chile • Attributable production expected to more Ownership 80% than double LUN’s current copper levels 2015 Production • 2015 forecast C1 costs of $1.55/lb Cu a, after 130,000-135,000 t Cu Guidance (80%) by-product credits & excludes capitalized 2015 Cost $1.55/lb Cu a
Slide 14: Candelaria – Exploration Potential
Candelaria – Exploration Potential • 2015 Exploration Budget • LUN company-wide (excl. Tenke): $75M • Candelaria: $40M 14
Slide 15: Candelaria – Excellent Infrastructure In Place
Candelaria – Excellent Infrastructure In Place Port with Excess Capacity Currently ship max of: 600k wmt per year Max Capacity of: 3,500 k wmt per year • Max. annual concentrate production of 600 ktpa (of 3.5 Mtpa total capacity) • Potential value in excess capacity New Desalination Plant Commission
Slide 16: Eagle Mine (Ni/Cu), Michigan, U.S.A.
Eagle Mine (Ni/Cu), Michigan, U.S.A. 50 km northwest of Marquette in the Upper Peninsula of Michigan 16
Slide 17: Eagle Mine – In Commercial Production
Eagle Mine – In Commercial Production • On Sept. 23, Eagle officially entered Location Michigan, USA operation ahead of schedule and below 2015 25,000–28,000 t Ni $400 m budget Production 20,000–23,000 t Cu Guidance • First shipment of saleable nickel and 2015 Cost $2.00/lb Ni copper concentrates to
Slide 18: Neves-Corvo (Cu/Zn), Portugal
Neves-Corvo (Cu/Zn), Portugal Situated 220 km southeast of Lisbon 18
Slide 19: Neves-Corvo – Outlook
Neves-Corvo – Outlook • Steady copper production at 50-55ktpa Location Portugal 50,000–55,000 t Cu • Zinc and lead production increasing due to 2015 Production 68,000–73,000 t Zn expected improvement in grades & recoveries Guidance 4,000-5,000 t Pb 2015 Cost • Increasing zinc profile a result of +50
Slide 20: Zinkgruvan (Zn/Pb/Cu), Sweden
Zinkgruvan (Zn/Pb/Cu), Sweden Situated 200 km southwest of Stockholm 20
Slide 21: Zinkgruvan – Outlook
Zinkgruvan – Outlook • Overall production profile expected to Location Sweden remain steady going forward 2015 78,000–82,000 t Zn Production 27,000–30,000 t Pb • In Q3/14 achieved a second consecutive Guidance 3,500–4,000 t Cu quarter of record mine production of zinc 2015 Cost $0.38/lb Zn ore Guida
Slide 22: Aguablanca (Ni/Cu), Spain
Aguablanca (Ni/Cu), Spain Situated 80 km north of Seville 22
Slide 23: Aguablanca – Outlook
Aguablanca – Outlook • Open pit mining expected to be Location Spain completed in early 2015 Ownership 100% 2015 • Production from underground 5,800–6,500 t Ni Production 4,500–5,000 t Cu commencing in Q1/15 Guidance 2015 Cost • Processing from large stockpile $5.00/lb Ni Guidance until underground
Slide 24: Tenke Fungurume (Cu/Co), DRC
Tenke Fungurume (Cu/Co), DRC Situated 175 km northwest of Lubumbashi 24
Slide 25: Tenke – Outlook
Tenke – Outlook Democratic Republic of Location • Steady copper and cobalt production Congo Ownership 24% • Milling rates continue to exceed 2015 Sales design capacity Production ~50,000 t Cu Guidance • 2014 cash distributions expected to be (attributable share) in range of $90 -$100m b 2014 Costs a
Slide 26: 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 capital projects Proven disciplined growth approach 26
Slide 27: e e e
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