Lundin Mining Corporation · TSX:LUN
Lundin Mining — 2015 BMO Canadian High Yield Conference
28 slides from Lundin Mining's conference presentation, October 2015
Slide 1: 2015 BMO Canadian High Yield Conference
TSX: LUN OMX: LUMI 2015 BMO Canadian High Yield Conference October 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 Mining – Globally Diversified Portfolio
Lundin Mining – Globally Diversified Portfolio Lundin Mining Head Office Lundin Mining Toronto, Canada UK Office West Sussex, UK Zinkgruvan (100%) Zinc-Lead-Copper Freeport Cobalt (24%) (Sweden) Cobalt Refinery (Finland) Eagle (100%) Nickel-Copper (USA) Neves-Corvo (100%) Aguablanca (100%) Nickel-Co
Slide 4: Operating Highlights
Operating Highlights Operations performing well – meeting or exceeding expectations Copper Zinc Nickel (Cu) (Zn) (Ni) • Strong performance in • Solid results at • Production at Eagle and first half of 2015 Zinkgruvan. Increased Aguablanca largely production guidance meeting or exceeding • Improved p
Slide 5: Sales Mix First Half 2015
Sales Mix First Half 2015 • 70% of sales were from Candelaria (Chile – Cu) and Eagle (U.S.A. – Ni/Cu) • 66% of sales were from copper Sales Breakdown by Mine Sales Breakdown by Metal Aguablanca Other 5% Gold 6% Zinkgruvan 6% 8% Zinc 8% Neves- Corvo 17% Candelaria Nickel 53% 14% Copper 66% Eagle 17%
Slide 6: H1/2015 Cash Costs – Very Competitive
H1/2015 Cash Costs – Very Competitive Source: Cost curves from Wood Mackenzie as of Q2 2015 6 * Cash cost curves are based on the expected annual costs for 2015, whereas YTD costs have been highlighted for LUN assets for illustrative purposes
Slide 7: Strong Financial Position
Strong Financial Position US$ M June 30, 2015 Cash and Cash Equivalents $507 Net Debt1 $497 Available Credit Facilities $350 Cash and Cash Equivalents 600 $507 400 $355 $US M 200 $175 - Q4/14 Q1/15 Q2/15 • Cash balance grew by over $300M in the first six months of the year • Net debt has improved fr
Slide 8: Financial Strategy Unchanged
Financial Strategy Unchanged • Capital Structure › Conservative capital structure with prudent debt levels › Targeted debt-to-capital ratio to remain below 30% • Shareholder Remuneration › No historical or current dividend has been paid, to date all cash has been reinvested › A nominal dividend was
Slide 9: 2015 Production and Cost Outlook
2015 Production and Cost Outlook Guidance • Raised copper and lead (contained tonnes) Tonnes Cash Costsa production guidance and Candelaria (80%) 135,000 – 140,000 $1.35/lb lowered copper cost outlook Eagle 20,000 – 23,000 Neves-Corvo 50,000 – 55,000 $1.55/lb Copper • Zinkgruvan outperforming, Zinkg
Slide 10: Operational Overview and Outlook
Operational Overview and Outlook Candelaria (80%) Neves-Corvo (100%) Eagle (100%) Zinkgruvan (100%) Tenke Fungurume Aguablanca (100%) (24%) 10
Slide 11: Candelaria (Cu/Au/Ag), Chile
Candelaria (Cu/Au/Ag), Chile Atacama Province, Region III, approximately 20 km south of Copiapó 11
Slide 12: Candelaria H1/15 Performance and Outlook
Candelaria H1/15 Performance and Outlook • Production (100% basis) of 96.0 kt in H1/15 Location Chile exceeded expectations as a result of higher Ownership 80% throughput and recoveries 2015 Production 135,000-140,000 t Cu • Cash costs of $1.20/lb YTD, below annual Guidance (80%) guidance due to ope
Slide 13: Candelaria New Mine Plan – Improved Production & Costs
Candelaria New Mine Plan – Improved Production & Costs • 25% increase in LOM copper production (2.4 Mt vs. 1.9 Mt) • Mine life extended to 2032 from 2028 • 5 year plan production profile significantly improved • Low cost operation with average LOM cash costs of $1.54/lb 200 174 COPPER PRODUCTION (00
Slide 14: 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 14
Slide 15: Eagle H1/15 Performance and Outlook
Eagle H1/15 Performance and Outlook • Nickel production of 13.7 kt and copper Location Michigan, USA production of 11.8 kt in H1/15 Ownership 100% › Meeting expectations in its first full 2015 25,000–28,000 t Ni year of production Production Guidance 20,000–23,000 t Cu 2015 Cost Guidance $2.00/lb Ni
Slide 16: Neves-Corvo (Cu/Zn), Portugal
Neves-Corvo (Cu/Zn), Portugal Situated 220 km southeast of Lisbon 16
Slide 17: Neves-Corvo H1/15 Performance and Outlook
Neves-Corvo H1/15 Performance and Outlook • Strong copper production of 30.8 kt in Location Portugal H1/15 Ownership 100% › higher throughput and better grades 50,000–55,000 t Cu 2015 Production 60,000–65,000 t Zn Guidance • Zinc production of 33.4 kt in H1/15 4,000-5,000 t Pb 2015 Cost Guidance $1.
Slide 18: Zinkgruvan (Zn/Pb/Cu), Sweden
Zinkgruvan (Zn/Pb/Cu), Sweden Situated 200 km southwest of Stockholm 18
Slide 19: Zinkgruvan H1/15 Performance and Outlook
Zinkgruvan H1/15 Performance and Outlook • Zinc production of 39.7 kt in H1/15 Location Sweden Ownership 100% › Higher throughput and recoveries 80,000–85,000 t Zn 2015 Production 30,000–33,000 t Pb Guidance • Lead production of 14.8 kt in H1/15 2,000–3,000 t Cu impacted by lower grades 2015 Cost Gu
Slide 20: Aguablanca (Ni/Cu), Spain
Aguablanca (Ni/Cu), Spain Situated 80 km north of Seville 20
Slide 21: Aguablanca H1/15 Performance and Outlook
Aguablanca H1/15 Performance and Outlook • Nickel production of 5.0 kt and copper Location Spain production of 4.1 kt Ownership 100% 2015 Production 7,000–7,500 t Ni › Consistent higher grades YTD with Guidance 5,500–6,000 t Cu lower throughput impacting Q2 only 2015 Cost Guidance $3.75/lb Ni • Nick
Slide 22: Tenke Fungurume (Cu/Co), DRC
Tenke Fungurume (Cu/Co), DRC Situated 175 km northwest of Lubumbashi 22
Slide 23: Tenke H1/15 Performance and Outlook
Tenke H1/15 Performance and Outlook • Copper production (100% basis) of Location Democratic Republic 105.0 kt in H1/15 of Congo Ownership 24% • Cobalt production (100% basis) of 7.5 kt 2015 Production Guidance 50,000 t Cu (attributable share) in H1/15 2015 Costs $1.12/lb Cu • Copper cash costs of $1
Slide 24: Well Positioned in Any Market
Well Positioned in Any Market High quality, diversified asset base Diversified metals exposure Meaningful production scale Strong free cash flow and good margins Conservative balance sheet 24
Slide 25: Appendices
TSX: LUN OMX: LUMI Appendices
Slide 26: Summary of Debt Terms
Summary of Debt Terms Senior Secured Notes Issuer: Lundin Mining Corporation Issue: Senior Secured Notes Rating Moody’s: Ba2 S&P: BB- First Lien on Chilean assets (pari passu with precious metals stream purchaser); Second Lien on all other assets Security: subject to the revolving credit facility (f
Slide 27: Debt Overview
Debt Overview Credit Facility Lending Syndicate • Borrower: Lundin Mining Corporation and Amount Lundin Mining AB Bank (US$M) % RT • Size: US$350M RT Bank of Nova Scotia 85 24% • Security: Secured ING Bank N.V. 80 23% Bank of Montreal 65 19% • Tenor: 4 years Export Development Canada 40 11% • Maturi
Slide 28: Thank You
TSX: LUN OMX: LUMI Thank You
Lundin Mining — 2015 BMO Canadian High Yield Conference on 6ix