Slide 1: Fourth Quarter and 2016 Year-End Results
TSX: LUN OMX: LUMI Fourth Quarter and 2016 Year-End Results February 23, 2017 Neves-Corvo, Portugal 1
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward-Looking Information and Non-GAAP Performance Measures 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 histo
Slide 3: Participants
President & Paul Conibear Chief Executive Officer Senior Vice President & Marie Inkster Chief Financial Officer Peter Quinn Chief Operating Officer 8 lundin mining
Slide 4: Lundin Mining: Strong Margins and Meaningful Scale
Lundin Mining Strong Margins and Meaningful Scale1 High Quality Competitive Mines (operating margin, %) - positive operating cash flows at all 70% operations through the low commodity price environment 60% Zinkgruvan 50% Meaningful Production Scale & Growth Eagle Candelaria - internal growth project
Slide 5: Operating Highlights – 2016 Full Year
Operating Highlights – 2016 Full Year Strong aggregate performance across all operations All mines generated operating cash flow through low commodity prices Candelaria copper production exceeded guidance on better than planned throughput and improving copper head grade Eagle achieved copper product
Slide 6: Revenue Breakdown – 2016 Full Year
Revenue Breakdown – 2016 Full Year 2016 sales of $1.55B Lead Other 4% 3% Gold 6% Zinkgruvan Majority of sales from 11% Nickel Candelaria 8% Eagle 16% Good contribution from each of Neves-Corvo, Candelaria 55% Zinc 13% Copper Eagle and Zinkgruvan Neves-Corvo 66% 18% Increasing contribution from zinc
Slide 7: Attributable Net Earnings from Continuing Operations
Attributable Net Earnings from Continuing Operations Net earnings from continuing operations attributable to Lundin Mining shareholders increased compared to the same period last year mainly due to comparative changes in impairment and depreciation $389.2M $1.4M $41.8M $20.5M $92.4M ($318.7M) $120.2
Slide 8: Operating Earnings – 2016 Full Year
Operating Earnings – 2016 Full Year Operating earnings decreased compared to the same period last year mainly due to lower volumes partially offset by price and adjustments $712.1M $66.9M $45.2M $19.8M $1.7M $18.1M $654.2M 2015 Volume Price & Adj. Cost FX and Other Aguablanca 2016 8
Slide 9: Financial Highlights – 2016 Full Year
Financial Highlights – 2016 Full Year 2016 2015 Δ Realized Metal Prices1 Copper $2.31/lb $2.26/lb 2% Nickel $4.44/lb $4.79/lb -7% Zinc $0.99/lb $0.84/lb 18% Revenue $1,546M $1,702M -9% Operating Earnings $654M $712M -8% Attributable Net (Loss) / Income from $92M ($319M) 129% Continuing Operations $0
Slide 10: Select Financial Items
Select Financial Items 2016 2015 Net (loss) / earnings ($630.2M) ($281.8M) Foreign exchange ($21.0M) $18.5M Mark to market on securities (includes options) $1.9M ($3.3M) Impairment and impairment reversals ($676.2M) ($286.7M) Loss on disposal of assets (Aguablanca) ($22.3M) - Settlement of historica
Slide 11: Balance Sheet Strength and Flexibility
Balance Sheet Strength and Flexibility 2016 capital costs, C1 and all-in sustaining costs came in better than budgeted Cash balance at February 20, 2017 of approximately $850M and net debt of approximately $150M Approved quarterly dividend policy and declared first quarterly dividend $350M revolving
Slide 12: 2017 Production and Cash Cost Guidance
2017 Production and Cash Cost Guidance Attributable Production1 and C1 Cash Cost2 (kt and $/lb, net of by-products) Copper Candelaria (80%) 145,000 – 150,000 $1.20/lb Eagle 15,000 – 18,000 Neves-Corvo 41,000 – 46,000 $1.35/lb Zinkgruvan 1,000 – 2,000 Total Attributable 202,000 – 216,000 Nickel Eagle
Slide 13: 2017 Capital Expenditure and Exploration Guidance
2017 Capital Expenditure and Exploration Guidance Los Diques Tailings Project – total costs Capital Expenditures1 (US$M) estimated at $295M. Remaining to be spent: Total Capitalized Stripping2 105 - $135M in 2017 Los Diques Facility 135 Other Candelaria Sustaining 25 - $30M in 2018 Total Candelaria
Slide 14: Candelaria
Candelaria Copper / Gold / Silver – Region III, Chile 14
Slide 15: Candelaria
Candelaria Copper Production & Cash Cost (100% basis; kt & $/lb Cu, net of by-product credits) 2016 copper production of 166.6 kt (100% basis) - exceeded target on mill throughput performance Last Five Quarters - $1.31/lb copper cash cost bettered guidance of $1.35/lb 49.1 39.8 41.5 39.1 36.9 $1.40
Slide 16: Candelaria LOM Production Profile
Candelaria LOM Production Profile Copper Production Profile1 (100% basis, kt Cu) 188 171 167 165 165 160 162 129 122 114 111 110 109 99 102 101 93 94 64 38 2016A 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 January 2017 Technical Report At Purchase (
Slide 17: Candelaria – Los Diques Construction
Candelaria – Los Diques Construction As at January 28, 2017 17
Slide 18: Eagle
Eagle Nickel / Copper / PGMs – Michigan, U.S.A. 18
Slide 19: Eagle
Eagle Nickel, Copper Production & Cash Cost (kt & $/lb Ni, net of by-product credits) 2016 production of 24.1 kt nickel and 23.4 kt copper Last Five Quarters - met guidance on continued robust performance 7.1 6.2 6.8 6.0 6.0 6.1 5.6 5.8 5.7 5.2 - excellent margins even at low nickel prices - cash co
Slide 20: Eagle and Eagle East Overview
Eagle and Eagle East Overview Eagle Decline & Development Eagle East Proposed Ramp 20
Slide 21: Neves-Corvo
Neves-Corvo Copper / Zinc – Portugal 21
Slide 22: Neves-Corvo
Neves-Corvo Copper, Zinc Production & Cash Cost (kt & $/lb Cu, net of by-product credits) 2016 production of 46.6 kt copper and 69.5 kt zinc - zinc plant stable with improved recoveries Last Five Quarters 17.7 18.3 17.6 - initiatives underway to improve copper recoveries in 15.9 complex ore zones 14
Slide 23: Zinkgruvan
Zinkgruvan 23 Zinc / Lead / Copper – Sweden
Slide 24: Zinkgruvan
Zinkgruvan Zinc, Lead Production & Cash Cost (kt & $/lb Zn, net of by-product credits) 2016 production of 78.5 kt zinc and 1.9 kt copper - cash cost of $0.40/lb zinc beat guidance of $0.37/lb zinc Last Five Quarters 25.3 22.7 Increased zinc production targeted for 2017 of 80-85 kt 17.3 18.8 19.8 10.
Slide 25: Tenke Fungurume
Tenke Fungurume 25 Copper / Cobalt – DRC
Slide 26: Tenke Fungurume
Tenke Fungurume 2016 production of 215.9 kt copper and 16.1 kt cobalt (100% basis) Copper, Cobalt Production & Cash Cost (100% basis; kt & $/lb Cu, net of by-product credits) - record copper production in 2016 Last Five Quarters - cash cost of $1.23/lb copper slightly bettered full year 56.3 guidanc
Slide 27: Questions?
Questions? TSX: LUN OMX: LUMI 27