Slide 1: First Quarter Results 2013
TSX: LUN OMX: LUMI First Quarter Results 2013 April 25, 2013
Slide 2: Cautionary Statements
Cautionary Statements Caution Regarding Forward Looking Statements This presentation contains forward-looking statements. These forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events. These forward- looking statements are
Slide 3: Presenter and Questions
Presenter PAUL CONIBEAR PRESIDENT & CEO Questions MARIE INKSTER SR. VP & CFO STEVE GATLEY VP TECHNICAL SERVICES 3
Slide 4: Q1/13 Operational Highlights
Q1/13 Operational Highlights Operations remain on track to meet annual production guidance Copper: In-line with expectations Neves-Corvo copper production was on target with excellent plant recoveries New copper production record set at Zinkgruvan Zinc: Below expectations for the quarter Issues with
Slide 5: Q1/13 Financial Highlights
Q1/13 Financial Highlights Revenues: $188m vs. $213m in Q1/12 Net Income: $50m ($0.09 p/s) vs. $58m ($0.10 p/s) in Q1/12 Operating CF (not including Tenke cash flows): $46m ($0.08 p/s) vs. $51m ($0.09 p/s) in Q1/12 Cash returns from Tenke: $45 million in Q1/13. Expect to continue to receive signific
Slide 6: Copper: Change in Production Q1/13 vs. Q1/12
Change in Production: Q1/13 vs. Q1/12 Excluding Tenke 13,071 t Tonnes Tonnes attributable share Copper Lead Tonnes Tonnes Nickel Zinc 6
Slide 7: Operating Earnings - Q1/13 vs. Q1/12
Operating Earnings - Q1/13 vs. Q1/12 7
Slide 8: Normalized Earnings
Normalized Earnings Three months ended March 31, $ Millions 2013 2012 Reported Net Income 50.1 58.3 Foreign exchange (1.4) 9.5 Mark to market on securities 1.0 (0.6) Insurance proceeds (15.1) - Tax (on above items) 5.0 (3.6) Adjusted Net Income 39.6 63.6 Adjusted Earnings per share $ 0.07 $ 0.11 8
Slide 9: Cash Costs – Q1/13 vs. Q1/12
Cash Costs – Q1/13 vs. Q1/12 Cash Cost/lb (US dollars) Three months ended March 31 Current 2013 Q1/13 Q1/12 Guidance Neves-Corvo Gross cost $2.20 $1.90 By-product* ($0.37) ($0.27) Net Cost $/lb - Cu $1.83 $1.63 $1.80 Zinkgruvan Gross cost $1.01 $0.87 By-product* ($0.59) ($0.65) Net Cost $/lb - Zn $0
Slide 10: Operations and Outlook
Operations and Outlook 10
Slide 11: 2013 Guidance Unchanged at European Operations – Tenke Guidance Increased
2013 Guidance Unchanged at European Operations – Tenke Production and Cost Guidance Increased 2013 Guidance Tonnes C1 Cost a Copper Neves-Corvo 50,000 – 55,000 $1.80 Zinkgruvan 2,500 – 3,500 Aguablanca 4,500 – 5,000 Wholly-owned 57,000 – 63,500 Tenke (@ 24%)b 47,300 $1.18 Total 104,300 – 110,800 Zin
Slide 12: Neves-Corvo – Q1/13 Results
Neves-Corvo – Q1/13 Results • Production of 14.3kt copper & 10.3kt zinc • C1 costs of $1.83/lb Cu (net of by-product credits) • Average copper grades of 2.7% with excellent recovery rates of 91% • Zinc production achieved a quarterly record. Recoveries continue to show consistent improvement – avera
Slide 13: Neves-Corvo – Outlook
Neves-Corvo – Outlook • Bringing forward initial higher grade zinc production from Lombador area - with first stope blasts to commence in July 2013 • Improvement in productivity resulting from new shift rosters is resulting in greater efficiency across mining operations • Reviewing options for expan
Slide 14: Zinkgruvan – Q1/13 Results
Zinkgruvan – Q1/13 Results • Production of 15.7kt zinc, 6.6kt lead & 1.1kt copper • Production impacted by delays in paste backfilling in previous quarter, resulting in mining directed to lower grade areas • A new backfill line has been installed and backfilling accelerated allowing a return to mini
Slide 15: Zinkgruvan – Outlook
Zinkgruvan – Outlook • A number of enhancements have already been made to improve dust and noise emissions and plant availability • Internal feasibility study on modernizing the surface crushing and screening circuit expected to be completed by mid-year 15
Slide 16: Aguablanca – Q1/13 Results and Outlook
Aguablanca – Q1/13 Results and Outlook • Produced 1.8kt nickel and 1.6kt copper at cash cost of $4.66/lb Ni; exceeding expectations for the quarter • Decision regarding future configuration of pit is expected in Q2/13 • During Q1, insurance proceeds of $15.1 million were recorded. Proceeds were in a
Slide 17: Tenke Fungurume
w = S Sen =| oo = | LL Tenke
Slide 18: Tenke – Q1/13 Results
Tenke – Q1/13 Results • Quarterly record in mining, milling and copper production • Total production (100%) of 54.5kt Cu and 2.5kt Co @ $1.23/lb Cu • Average throughput of 14.6ktpd exceeded Phase II nameplate design capacity of 14.0ktpd • Cash distribution of $45 million received by Lundin during qu
Slide 19: Tenke Outlook and Expansion Plans
Tenke Outlook and Expansion Plans Significant Cash Returns Expected to Continue to be Received in 2013 • LUN expects to continue to receive significant cash flows from Tenke in 2013 - 30% of all free cash flows • 2013 cash distribution to LUN could be in range of ~$130 million (at $3.50/lb copper) F
Slide 20: Tenke Copper Production Outlook
Tenke Copper Production Outlook ?? Phase 4 Expansion >270 Phase 3 197 Expansion Phase 2 158 Expansion 120 127 70 Note: Freeport has provided 2013 sales guidance which has been assumed to approximate Tenke’s production for 2013. 20
Slide 21: Cobalt Chemical Refinery Acquisition
Cobalt Chemical Refinery Acquisition • Acquisition completed in Q1/13 • Enhances market position as world’s largest producer of cobalt • Initial purchase consideration of $355M, including $34M of acquired cash • Potential for additional • Global market leader consideration of up to $110mm • Direct e
Slide 22: Lundin Mining - Summary
Lundin Mining - Summary Portfolio of high quality, long-life mines that are performing well Optimization opportunities and exploration potential at all existing assets No high risk major capital projects Disciplined growth initiatives supported by strong cash flows Strong balance sheet Neves-Corvo Z
Slide 23: Questions & Answers
TSX: LUN OMX: LUMI Questions & Answers