Lundin Mining Corporation · TSX:LUN
Lundin Mining — Investor Presentation (April 2023)
53 slides from Lundin Mining's investor presentation, April 2023
Slide 1: Copper growth to supply our world's transition
Copper growth to supply our world’s transition April 2023 Corporate Presentation TSX: LUN NASDAQ STOCKHOLM: LUMI
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward-Looking Information and Non-IFRS Performance Measures Certain of the statements made and information contained herein is “forward-looking information” within the meaning of applicable Canadian securities laws. All statements other than statements of hi
Slide 3: Copper growth to supply our world's transition
Copper growth to supply our world’s transition We mine metals We produce at a We have the essential today and meaningful global financial strength for the world’s shift scale and are and operational to a lower carbon positioned for expertise to deliver future material growth on our goals
Slide 4: Our focus is base metals
Our focus is base metals The world now classifies them as critical Creating sustainable value. Our strategy: ▪ operate, upgrade and grow a base metals portfolio that provides leading returns for our shareholders throughout the cycle Candelaria, Chile ▪ copper dominant portfolio ▪ long-life and cost-
Slide 5: High Quality Operations, Meaningful Scale
High Quality Meaningful Scale Financial Strength Operations & Material Growth 2022 Production Mineral Reserves3 Shareholder Returns 250 kt 17.1 Blb 5.6 Blb C$0.36/sh ~3.4% Copper copper zinc regular dividend yield4 400 kt 123 Mlb 12.7 Moz $275M $60M copper-equivalent1 nickel gold dividends paid shar
Slide 6: Future focused: a leader in responsible mining
Future focused: a leader in responsible mining Committed Ambitious but achievable: our goal is to reduce assurance Scope 1 & 2 GHG absolute emissions 35% by 20301 framework to promote the responsible production of copper Zinkgruvan Candelaria, Punta Padrones Port & Desalination Plant, Chile 1. Compa
Slide 7: Acquisition of a Majority Interest in the Caserones Copper
Acquisition of a Majority Interest in the Caserones Copper Future focused: Mine a leader in responsible mining 7
Slide 8: Highly Complementary
Highly Complementary Totoralillo Acquisition of 51% of Caserones Copper Mine Pro Forma FY 2022 Metal Mix Revenue by Metal1, 2 Caldera ~105 km CHILE Moly Other Copiapó Other Gold Gold Zinc Zinc Over Candelaria Over $4.1B Punta Padrones Port and Desalination Plant, Caldera $3.0B in Revenue in Revenue
Slide 9: Transaction Rationale
Transaction Rationale Caserones is a large-scale producer that provides copper growth while leveraging mutual synergies, infrastructure and efficiencies • ~50% pro forma increase in 2022 copper output • immediately accretive on key financial metrics • significant untapped exploration potential • pos
Slide 10: Transaction Summary
Transaction Summary Lundin Mining to acquire a 51% equity interest in SCM Minera Lumina Copper Chile (“Lumina Copper”) Transaction • Lumina Copper operates the Caserones copper-molybdenum mine in Chile Upfront cash consideration of US$800M paid at closing, subject to any adjustments from the effecti
Slide 11: Ideal Operator of Caserones
Ideal Operator of Caserones We know the region and its true potential very well Since Lundin Mining’s 2014 Acquisition of Candelaria: Mine life Nearly Over extended 160% 175% and production profile improved1 in forecast copper production in M&I Mineral Resource1,2 over the life-of-mine (2016-2046)1
Slide 12: Enhances Production Profile
Enhances Production Profile Pro Forma Impact to 2022 Actual Production1 Copper Nickel Zinc Gold Silver Lead Molybdenum Copper Molybdenum Copper Equivalent kt Cu kt Mo kt CuEq2 557 3 374 +34% CuEq +50% Cu 417 250 374 374 250 250 - + + + 1. Production shown on a 100% basis for Candelaria and Caserones
Slide 13: Strategic Copper Asset in Chile
Strategic Copper Asset in Chile Historical Copper Production & Cost Profile1 Caserones Overview kt Cu | US$/lb ▪ large-scale, open-pit mine located in the highly prospective Atacama region in Chile 25 5-Yr Average: 129kt Cu - ~800 km north of Santiago and ~160 km southeast 28 from the Copiapó airpor
Slide 14: Caserones Site Overview
Caserones Site Overview access to paved roads • linked to Copiapó via Site ~160 km asphalt/gravel Access road • easy access to ports Primary Crusher from Copiapó Mine Pit Dump Leaching Pad reliable power supply • 220 kV highly-reinforced Grinding Plant power line connected to Power the national grid
Slide 15: Highly Prospective Land Package
Highly Prospective Land Package Lundin Mining will aim to achieve exploration success similar to Candelaria The acquired land package is within a well-known and highly prospective area: 58,525 hectares of total land area covered by granted and applied for mining concessions Map of Mining and Surface
Slide 16: Balance Sheet Remains Strong
Balance Sheet Remains Strong Net Debt1 Net Leverage US$15M as of February 22, 2023 Net Debt to 2022A EBITDA1,2 Lundin Adjusted EBITDA Only $1,750M 0.63x Lundin + Caserones Adjusted EBITDA2 Availability 0.46x post Acquisition $815M $15M 0.01x Revolving + Credit + Facility Note: Assumes a US$800M incr
Slide 17: FY2022 Key Financial Metrics
FY2022 Key Financial Metrics Revenue1,2 Adjusted EBITDA1,2 Adjusted Earnings1,2 of over $4.1B of nearly $1.8B of over $550M $4,104 $1,769 $551 $483 $68 $1,063 $477 $3,041 $1,293 $483 $483 $3,041 $3,041 $1,293 $1,293 LUN Pro Forma LUN Pro Forma LUN Pro Forma Adjusted Operating Cash Flow1,2 Free Cash
Slide 18: 2023 Guidance Summary
2023 Guidance Summary Capital Expenditures2 Production ($M) (t, oz; contained metal in conc.) Cu 236,000 – 260,000 Total Sustaining Capital 700 Copper Zn 180,000 – 195,000 Josemaria Project 400 Zinc Au Total Capital 140,000 – 150,000 1,100 Gold Expenditures Ni 13,000 – 16,000 Nickel $45M to be inves
Slide 19: Mining the metals essential today and for the world's shift to a lower carbon future
Eagle Zinkgruvan Mining the Cu 2022A u/g Zn Cu 2022A 48 kt CuEq3 u/g 10+ years metals essential Ni Ag Co PGM 67 kt CuEq3 4+ years today and for the world’s shift to a lower carbon future Chapada 2022A Neves-Corvo Cu Au o/p Cu Zn 2022A u/g Ag 60 kt CuEq3 30+ years Pb Ag 68 kt CuEq3 10+ years Caserone
Slide 20: High Quality Operations, Meaningful Scale & Financial Strength
High Quality Meaningful Scale & Financial Operations Material Growth Strength TSX: LUN NASDAQ STOCKHOLM: LUMI
Slide 21: Appendix
Appendix :.... lundin mining
Slide 22: Positive Outlook for Copper
Positive Outlook for Copper • 3rd most consumed metal globally Cu • ~3/4 of usage today is for power transmission and generation, building wiring, telecommunication, and electrical and electronics Copper • positive outlook largely driven by importance in the energy transition and inelastic mine supp
Slide 23: Zinc & Nickel are Essential to Modern Life
Zinc & Nickel are Essential to Modern Life • 4th most consumed metal with uses ranging from metal products to rubber and medicines Zn • ~3/4 of usage today is to protect from corrosion in galvanizing steel, diecasting alloys, etc. ~1/4 is consumed by rubber, chemical and agricultural industries Zinc
Slide 24: Copper
Copper Cu Meaningful Scale Production Profile2 (kt) Copper & Material Growth + Caserones production Chapada CUGEP Expansion / Saúva 256 - 280 236 - 260 238 - 262 250 Long-Life and Cost-Competitive Assets Josemaria Project Candelaria • updated Technical Report extends LOM to 2046 • base case which do
Slide 25: Zinc
Zinc Zn Production Growth Production Profile2 (kt) Zinc Ramping Up 225 - 240 215 - 230 Top-15 Global Producer of Zinc in Concentrate 180 - 195 Neves-Corvo 159 • updated Technical Report underpins current guidance; does not yet consider development of Semblana copper Mineral Resource1 • full ZEP mini
Slide 26: Nickel Gold
Nickel Gold Ni Low-Cost Au Significant Nickel Producer Gold By-Product Credits Eagle • significant gold production growth with development of Josemaria2, potential • only primary nickel mine in the U.S.A. expansion at Chapada and development of Saúva • produces high-quality nickel concentrate contai
Slide 27: 2022 Summary Production Results
2022 Summary Production Results Copper Nickel production of 250 kt production of 17 kt 65,081 64,096 63,930 4,719 4,281 4,379 56,552 4,096 • Chapada and Eagle met copper production guidance; Zinkgruvan exceeded • Candelaria and Neves-Corvo copper • achieved near the top end of production modestly be
Slide 28: 2022 Operating and Capital Cost Drivers
2022 Operating and Capital Cost Drivers Candelaria Chapada Eagle Neves-Corvo Zinkgruvan Production costs $697M $324M $193M $329M $116M Cash cost1 $1.96/lb of copper $2.08/lb of copper $0.79/lb of nickel $2.27/lb of copper $0.32/lb of zinc Sustaining capex $390M $105M $16M $71M $48M • successful earl
Slide 29: Key Financial Metrics
Key Financial Metrics Revenue Adjusted EBITDA1 Adjusted Earnings (Loss)1 of over $3B in 2022 of $1.3B in 2022 of over $480M in 2022 $623M $1,019M $991M $588M $811M $296M $282M $354M $649M $192M $590M $202M $149M Q2/22 $31M Q4/21 Q1/22 ($35M) Q3/22 Q4/22 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q4/21 Q1/22 Q2/2
Slide 30: Strong Cash Flows from Operations
Strong Cash Flows from Operations Key Changes in Cash $116M $993M $640M $203M $594M $181M $102M $275M $59M $191M $23M YE 2021 Adjusted Working Sustaining Expansion Josemaria Net Debt Shareholder Share Other YE 2022 Cash Operating Capital Capex Capex Acquisition Proceeds Dividends Buyback Cash Cash F
Slide 31: 2023 Guidance
2023 Guidance1 Production (t, oz; contained metal in conc.) Cash Cost2,3 Capital Expenditures2 ($M) Candelaria (100%) 145,000 - 155,000 $1.80 - $1.95 Sustaining Capital Chapada 43,000 - 48,000 $2.55 - $2.75 Candelaria (100% basis) 400 Cu Eagle 12,000 - 15,000 Chapada 70 Copper Neves-Corvo 33,000 - 3
Slide 32: Responsible Mining
Responsible Mining ✓ leading ISS Environment & Social Quality Scores ✓ CDP score of ‘B’, above industry and North American averages ✓ Candelaria’s operational water requirements met through reuse and make- up water from owned sea water desalination facility ✓ renewables increased to a minimum of 80%
Slide 33: Focused on the Future
Focused on the Future 35% Reduction in 7 Years • Scope 1 & 2 GHG absolute emissions reduction target of 35% by 2030 compared to our 2019 baseline year Embedding our Target 2022-2023 • baseline data is established and has been verified since 2014 • work is underway to ensure governance processes and
Slide 34: Responsible Mining – Tailings Management
Responsible Mining – Tailings Management • employ a comprehensive and integrated approach to tailings management. This provides confidence that potential environmental and social impacts can be reliably identified and minimized • our Responsible Mining Policy and Responsible Mining Management System
Slide 35: Responsible Mining – Climate Change
Responsible Mining – Climate Change Climate Change, Energy and CHG Emissions • recognize the need for effective approaches to managing climate-related responsibilities, especially in consideration of the remote locations in which we operate, the energy-intensive nature of our industry, and the somet
Slide 36: Responsible Mining – Water Stewardship
Responsible Mining – Water Stewardship • continue to make water stewardship gains, achieving measurable reductions in freshwater use and increases in water re-use • committed to improvements in water assessment and management practices, evaluating water-use efficiency, initiatives to prevent unneces
Slide 37: Candelaria
Candelaria 2023 Production & Cash Cost Copper, Gold Production & Cash Cost Outlook1 (100% basis; kt Cu, koz Au & $/lb Cu, net of by-product credits) • ore mining from the open pit is to be primarily from the upper benches of Phase 11 • cash cost to benefit from lower YOY electricity rate and consuma
Slide 38: Chapada
Chapada 2023 Production & Cash Cost Copper, Gold Production & Cash Cost Outlook1 • copper and gold production to be weighted to H2, due to the forecast grade (100% basis; kt Cu, koz Au & $/lb Cu, net of by-product credits) profiles and seasonal operating considerations • ore mining is planned from t
Slide 39: Copper-Gold Saúva Deposit
Copper-Gold Saúva Deposit Highlight Assay Results Received in Q4/22 N FOR-231: 25.9 m at 0.60% Cu, 0.65 g/t Au or 0.98% CuEq, from 9.1 m v including: 6.0 m at 0.99% Cu, 1.21 g/t Au or 1.70% CuEq, from 9.1 m and: 64.0 m at 0.82% Cu, 1.40 g/t Au or 1.63% CuEq, from 86.0 m including: 20.0 m at 1.20% Cu
Slide 40: Eagle
Eagle 2023 Production & Cash Cost Nickel, Copper Production & Cash Cost Outlook1 • ore mining to continue from the Eagle and Eagle East orebodies with priority on (kt & $/lb Ni, net of by-product credits) increasing ore sourced from Eagle East during H2 • forecast cash cost increase compared to 2022
Slide 41: Neves-Corvo
Neves-Corvo 2023 Production & Cash Cost Copper, Zinc Production & Cash Cost Outlook2 (kt & $/lb Cu, net of by-product credits) • copper production is forecast to be equally weighted throughout the year • zinc production is forecast to increase over the course of 2023 as initiatives to enable ZEP to
Slide 42: Zinkgruvan
Zinkgruvan 2023 Production & Cash Cost Zinc Production & Cash Cost Outlook1 • zinc and copper production are forecast to be modestly H2 weighted (kt & $/lb Zn, net of by-product credits) • metal recovery rates and concentrate grades are anticipated to improve with completion of the sequential flotat
Slide 43: Josemaria Project
Josemaria Project Advancing Towards Development • progressing through establishment of an updated capital cost estimate and project execution schedule • updated Technical Report remains on-track for completion in H2/23 • 2023 expansionary capex1 guidance of $400M in support of advancing the project
Slide 44: Josemaría Exploration Potential
Josemaría Exploration Potential • significant potential to further increase value over the longer-term the Vicuña district leveraging Lundin Mining’s copper-focused exploration expertise • Josemaría is positioned to be the potential center of future development and Los expansion within the highly pr
Slide 45: Josemaria Mineral Reserves Support Long Life
Josemaria Mineral Reserves 1 Support Long Life Mineral Reserve Statement Long Section of Pit Phase Designs Contained Metal Tonnes Copper Gold Silver Copper Gold Silver Category (Mt) % g/t g/t (M lb) (M oz) (M oz) Proven 197 0.43 0.34 1.33 1,844 2.14 8.43 Probable 815 0.27 0.19 0.85 4,861 4.87 22.29
Slide 46: Josemaria Mineral Resources Offer Upside Potential
Josemaria Mineral Resources 1 Offer Upside Potential Sulphide Mineral Resource Statement at 0.1% Copper Equivalent Cut-Off Oxide Mineral Resource Statement at 0.2 g/t Gold Cut-Off Contained Metal Contained Metal Tonnes Copper Gold Silver Copper Gold Silver Tonnes Gold Silver Gold Silver Category (Mt
Slide 47: Caserones Historical Estimates
Caserones Historical Estimates Caserones Historical Estimates1 Tonnes Grade Contained (As of April 2021) (Mt) (% CuT) (ppm Mo) (CuT kt) (Mo kt) Proven 419 0.35% -- 1,467 -- Probable 473 0.31% -- 1,466 -- 2P Reserves 892 0.33% -- 2,933 -- Measured 486 0.34% 129 1,659 63 Indicated 1,109 0.26% 97 2,924
Slide 48: Non-GAAP and Other Performance Measures
Non-GAAP and Other Performance Measures Adjusted EBITDA, Adjusted Earnings Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) and adjusted earnings are non-GAAP measures and are not a standardized financial measure under IFRS, the financial reporting framewor
Slide 49: Non-GAAP and Other Performance Measures cont.
Non-GAAP and Other Performance Measures cont. Net (Debt) Cash and Net (Debt) Cash / Adjusted EBITDA Net (debt) cash is a performance measure used by the Company to assess its financial position. Management believes that in addition to conventional performance measures prepared in accordance with IFR
Slide 50: Non-GAAP and Other Performance Measures cont.
Non-GAAP and Other Performance Measures cont. Adjusted Operating Cash Flow Free Cash Flow from Operations Adjusted operating cash flow per share is a performance measure used by the Free cash flow from operations is indicative of the Company’s ability to generate cash Company to assess its ability t
Slide 51: Non-GAAP and Other Performance Measures cont.
Non-GAAP and Other Performance Measures cont. C1 Cash Cost C1 Cash Cost and All-in Sustaining Cost can be reconciled to Lumina Copper’s cost of sales as follows: Copper, zinc and nickel cash costs per pound are key performance measures that management uses to For the Year Ended December 31, 2022 (fi
Slide 52: NI 43-101 technical information notice
NI 43-101 Unless otherwise indicated, Lundin Mining Corporation (the “Company”) has prepared the technical information in this presentation including Mineral Reserve and Mineral Resource estimates (“Technical Information”) based on information contained in the technical reports and news releases (co
Slide 53: www.lundinmining.com
www.lundinmining.com | TSX: LUN | Nasdaq Stockholm: LUMI