Slide 1: Third Quarter 2015 Results
TSX: LUN OMX: LUMI Third Quarter 2015 Results October 29, 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: Participants
Participants Presenters Paul Conibear President & CEO Marie Inkster Senior VP & CFO Questions Peter Quinn Chief Operating Officer Steve Gatley VP Technical Services 3
Slide 4: Q3 2015 Operating Highlights
Q3 2015 Operating Highlights Strong operating results, company on-track to meet 2015 guidance • Higher throughput at Candelaria supported strong Copper production, cash costs on track to meet full year guidance (Cu) • Copper production at Neves-Corvo benefitted from higher grades, cash costs higher
Slide 5: Q3 2015 Operating Results
Q3 2015 Operating Results Sales volumes remain healthy across the portfolio 1. Sales results for Candelaria are shown on a 100% basis and are for the period of Lundin Mining's ownership, commencing November 3, 2014. 5
Slide 6: Q3 2015 Revenue Breakdown by Mine and Metal
Q3 2015 Revenue Breakdown by Mine and Metal • 71% of sales from Candelaria and Eagle • 66% of sales from copper Sales Breakdown by Mine Sales Breakdown by Metal Aguablanca Other Lead Zinkgruvan 3% 4% 3% 10% Gold 7% Zinc 9% Neves-Corvo 16% Candelaria Nickel Copper 54% 11% 66% Eagle 17% 6
Slide 7: 2015 YTD Cash Costs Remain Competitive
2015 YTD Cash Costs Remain Competitive $4.00 2015 Copper C1 Cash Cost Curve $3.00 Candelaria $1.27/lb $2.00 $/lb $1.00 Neves Corvo Tenke $1.53/lb $0.00 $1.17/lb ($1.00) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $15.00 $1.80 2015 Nickel C1 Cash Cost Curve 2015 Zinc C1 Cash Cost Curve $1.50 $10.00 A
Slide 8: Q3 2015 Financial Highlights
Q3 2015 Financial Highlights Q3/2015 Q3/2014 %Δ Realized Copper (US$/lb)1 2.01 2.96 -32% Realized Nickel (US$/lb)1 3.98 6.89 -42% Realized Zinc (US$/lb)1 0.77 1.07 -28% Revenue ($US M) $353M $167M 112% Operating Earnings ($US M) $94M $43M 119% Net (Loss)/Income ($US M) ($35M) $34M nmf2 (attributable
Slide 9: Normalized Earnings Reconciliation
Normalized Earnings Reconciliation $ Millions Q3 2015 Q3 2014 Net (loss)/earnings attributable to shareholders ($34.6) $33.7 Foreign exchange ($5.7) ($10.4) Mark to market on securities $0.7 ($4.8) Community Development Agreement (Tierra Amarilla) $7.0 - Realized loss on sale of securities $4.9 Tax
Slide 10: Operating Earnings – Q3 2015 vs. Q3 2014
Operating Earnings – Q3 2015 vs. Q3 2014 • Operating earnings improved significantly when compared to the third quarter of 2014 due to contributions from Candelaria and Eagle, and foreign exchange • Lower commodity prices vs. last year, resulted in a $58M decrease in operating earnings $160 18.5 58.
Slide 11: Strong Balance Sheet
Strong Balance Sheet US$ M September 30, 2015 Cash and Cash Equivalents $550 Net Debt1 $454 Revolving Credit Facility (Undrawn) $350 Cash and Cash Equivalents $600 550 507 355 $US M $300 175 $0 Q4/14 Q1/15 Q2/15 Q3/15 • Net debt has improved by $375M from $829M (YE 2014) to $454M (end-Q3/15) • Net d
Slide 12: 2015 Outlook
2015 Outlook • Production guidance ranges Revised Guidancea (contained tonnes) Tonnes Cash Costsb refined to reflect YTD Candelaria (80%) 138,000 – 141,000 $1.35/lb performance Eagle 23,000 – 24,000 Neves-Corvo 54,000 – 56,000 $1.60/lb Copper • Cost guidance at Neves-Corvo Zinkgruvan 2,000 increased
Slide 13: Operational Overview and Outlook
Operational Overview and Outlook Candelaria (80%) Eagle (100%) Neves-Corvo (100%) Zinkgruvan (100%) Aguablanca (100%) Tenke Fungurume (24%) 13
Slide 14: Candelaria (Cu/Au/Ag), Chile
Candelaria (Cu/Au/Ag), Chile Atacama Province, Region III, approximately 20 km south of Copiapó 14
Slide 15: Candelaria Q3 2015 Results and Outlook
Candelaria Q3 2015 Results and Outlook • Production (100% basis) of 45.2 kt exceeded Location Chile expectations due to higher plant throughput Ownership 80% • Cash costs of $1.44/lb Cu in-line with 2015 Production 138,000-141,000 t Cu expectations Guidance (80%) 2015 Cost Guidance $1.35/lb Cu • Sig
Slide 16: 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; underground drilling advancing targeted to improve mid-term production profile • Low cost
Slide 17: 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 17
Slide 18: Eagle Q3 2015 Results and Outlook
Eagle Q3 2015 Results and Outlook • Nickel production of 6.4 kt and copper Location Michigan, USA production of 6.5 kt met expectations Ownership 100% › Higher recoveries and throughput 2015 26,000–27,000 t Ni Production Guidance 23,000–24,000 t Cu • Cash costs of $2.38/lb Ni impacted by 2015 Cost G
Slide 19: Neves-Corvo (Cu/Zn), Portugal
Neves-Corvo (Cu/Zn), Portugal Situated 220 km southeast of Lisbon 19
Slide 20: Neves-Corvo Q3 2015 Results and Outlook
Neves-Corvo Q3 2015 Results and Outlook • Copper production of 13.9 kt benefitted Location Portugal from higher grades Ownership 100% 54,000–56,000 t Cu 2015 Production • Zinc production of 14.4 kt impacted by Guidance 59,000–62,000 t Zn 3,000-3,500 t Pb lower grades and recovery rates 2015 Cost Gui
Slide 21: Zinkgruvan (Zn/Pb/Cu), Sweden
Zinkgruvan (Zn/Pb/Cu), Sweden Situated 200 km southwest of Stockholm 21
Slide 22: Zinkgruvan Q3 2015 Results and Outlook
Zinkgruvan Q3 2015 Results and Outlook • Zinc production of 18.5 kt and lead Location Sweden production of 8.6 kt Ownership 100% 82,000–85,000 t Zn 2015 Production • Copper production of 0.5 kt reflects lower Guidance 31,000–33,000 t Pb 2,000 t Cu grades and recoveries 2015 Cost Guidance $0.40/lb Zn
Slide 23: Aguablanca (Ni/Cu), Spain
Aguablanca (Ni/Cu), Spain Situated 80 km north of Seville 23
Slide 24: Aguablanca Q3 2015 Results and Outlook
Aguablanca Q3 2015 Results and Outlook • Nickel production of 1.7 kt and copper Location Spain production of 1.7 kt impacted by: Ownership 100% 2015 Production 7,100 t Ni › Lower throughput, grades and Guidance 6,100 t Cu recoveries from stockpiled ore 2015 Cost Guidance $2.60/lb Ni • Cash costs of
Slide 25: Tenke Fungurume (Cu/Co), DRC
Tenke Fungurume (Cu/Co), DRC Situated 175 km northwest of Lubumbashi 25
Slide 26: Tenke Q3 2015 Results and Outlook
Tenke Q3 2015 Results and Outlook • Copper production (100% basis) of 49.0 Democratic Republic kt impacted by lower mill throughput Location of Congo Ownership 24% › Cobalt production of 4.0 kt 2015 Production Guidance 50,600 t Cu benefitted from higher ore grades (attributable share) 2015 Costs $1.
Slide 27: Well Positioned in Any Market
Well Positioned in Any Market High quality, competitively positioned mines Diversified base metals and geographic asset base Meaningful production scale Strong free cash flow and good margins Conservative balance sheet 27
Slide 28: Questions and Answers
TSX: LUN OMX: LUMI Questions and Answers