Lundin Mining Corporation · TSX:LUN
Lundin Mining — Q1 2014 Earnings Presentation
23 slides from Lundin Mining's earnings presentation, Apr 30, 2014
Slide 1: First Quarter Results
TSX: LUN OMX: LUMI First Quarter Results April 30, 2014
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: Presenter and Questions
Presenter PAUL CONIBEAR PRESIDENT & CEO Questions MARIE INKSTER SR. VP & CFO PAUL MCRAE SR. VP PROJECTS STEVE GATLEY VP TECHNICAL SERVICES 3
Slide 4: Q1 - 2014 Operational Highlights
Q1 - 2014 Operational Highlights Copper, Nickel and Lead production exceeded plan, with Zinc in-line Copper: Higher throughput at Neves-Corvo and improved grades and throughput at Aguablanca led to better than expected production Zinc: Production at Zinkgruvan met expectations. Production at Neves-C
Slide 5: Q1/14 Financial Highlights
Q1/14 Financial Highlights Revenues: 2014: $150m; Q1/13: $188m Net Income: 2014: $13m ($0.02 p/s); Q1/13: $50m ($0.09 p/s) Operating CF: 2014: $27m ($0.05 p/s); Q1/13: $46m ($0.09 p/s) Cash Returns from Tenke: $17m for 2014 ($45m for Q1/13) Net Debt: $148 million vs. $112 million at Dec. 31/13 Incre
Slide 6: Normalized Earnings
Normalized Earnings Normalized Earnings First quarter $ Millions 2014 2013 Reported Net Earnings 13.3 50.1 Foreign exchange - (1.4) Mark to market on securities (0.9) 1.0 Insurance proceeds - (15.1) Tax (on above items) 0.2 5.0 Adjusted Net Earnings 12.6 39.6 Adjusted Earnings per share $ 0.02 $ 0.0
Slide 7: Change in Production: Q1 2014 vs. 2013
Change in Production: Q1 2014 vs. 2013 Tonnes Tonnes Copper Lead Excluding Tenke 11,871 t attributable share Tonnes Tonnes Nickel Zinc 7
Slide 8: Operating Earnings – Q1 2014 vs. 2013
Operating Earnings – Q1 2014 vs. 2013 $ millions Lundin Mining - Consolidated 140.0 120.0 100.0 80.0 68.1 6.0 7.8 16.5 60.0 8.9 3.6 43.1 40.0 20.0 - Q1 2013 Sales Volume Price & Adj. Cost FX Q1 2014 Actual Mix Actual 8
Slide 9: Cash Costs – Q1 2014 vs. 2013
Cash Costs – Q1 2014 vs. 2013 1 By-product is after related TC/RC. 9
Slide 10: 2014 Production/Cash Costs Guidance
2014 Production/Cash Costs Guidance Guidance remains largely unchanged: • Slight decrease in Tenke copper production but lower cash costs forecast by FCX •Aguablanca expected to perform at the high end of guided production range (contained tonnes) Tonnes Cash Costsa Copper Neves-Corvo 50,000 - 55,00
Slide 11: Operations and Outlook
Operations and Outlook 11
Slide 12: Neves-Corvo – Q1 2014 Results
Neves-Corvo – Q1 2014 Results • Production of 12.8kt copper and 14.2kt zinc • C1 costs of $2.10/lb Cu, affected by foreign exchange but expected to meet full year guidance • Average copper grades of 2.3% with recovery rate of 81.9%. Copper grades and recoveries expected to improve over the remainder
Slide 13: Neves-Corvo – Outlook
Neves-Corvo – Outlook • Copper production and costs consistent with 2013. Zinc and lead production expected to be higher • Zinc ore mining rates will continue to increase from bulk stopes in upper Lombador resulting in an increased zinc production profile as the year progresses • Zinc expansion stud
Slide 14: Zinkgruvan – Q1 2014 Results
Zinkgruvan – Q1 2014 Results • Production of 19.2kt zinc, 9.1kt lead and 1.0kt copper; in-line with expectations • C1 costs of $0.45/lb Zn impacted by timing of by-product sales. Expect to meet full year guidance • Significant improvements have been made to the paste fill system stabilizing mine pro
Slide 15: Zinkgruvan – Outlook
Zinkgruvan – Outlook • Higher throughput should result in higher zinc production than 2013, with costs and by-product production generally in line with the prior year • Overall production profile expected to remain steady going forward • Progressive investments continue to be made in the paste backf
Slide 16: Aguablanca – Q1 2014 Results and Outlook
Aguablanca – Q1 2014 Results and Outlook • Production of 2.0kt nickel and 1.7kt copper; better than plan for the quarter • C1 costs of $2.98/lb Ni benefited from higher by-product volumes. Original C1 cost guidance maintained • Open pit mining expected to be complete towards year end or early Q1 201
Slide 17: Tenke – Q1 2014 Results
Tenke – Q1 2014 Results • Production (100% basis) of 49.5kt Cu and 3.0kt Co, largely in-line with expectations • Timing of sales impacted Q1 earnings • Cash costs of $0.89/lb benefited from high by-product credit (Co metal prices). Full year guidance reduced to $1.22/lb Cu • Cash distributions of $1
Slide 18: Tenke Outlook
Tenke Outlook Expansions and Investment Returns • New acid plant project progressing. Civil works started. New plant scheduled for startup in 2016 • Copper expansion contingent upon additional acid production, power supply, market conditions, and other factors • Cash distributions of $100-$130 milli
Slide 19: Eagle – Status Update
Eagle – Status Update • Overall construction continues on-time and on-budget • Construction approximately 80% completed • Mine surface facilities to be commissioned in Q2/2014 • Mill commissioning and first concentrate sales expected in Q4/2014 19
Slide 20: Eagle – Construction well advanced
Eagle – Construction well advanced Mine Portal Grinding area progress Mine site – backfill storage Flotation area progress 20
Slide 21: Eagle Operational Readiness
Eagle Operational Readiness • All key operations management in place • Mine contractor fully mobilized, advancing stope access and drift development. Ramping up on mill operator hiring • Concentrate off-take negotiations well advanced • Ore transport and concentrate shipping contracts in place 21
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 Proven disciplined growth approach Geographic and base metal diversification Neves-Corvo Zinkgru
Slide 23: Questions & Answers
TSX: LUN OMX: LUMI Questions & Answers