Slide 1: 2011 Results
TSX: LUN OMX: LUMI 2011 Results February 23, 2012
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 / Questions
Presenter PAUL CONIBEAR PRESIDENT & CEO Questions JOAO CARRELO EXEC. VP & COO MARIE INKSTER CFO 3
Slide 4: 2011 Highlights
2011 Highlights Financials: Net Income: $184 million ($0.32 p/s) vs. $306m ($0.53 p/s) in 2010 Operating CF: $309 million ($0.53 p/s) vs. $276m ($0.48 p/s) in 2010 Net Cash: $236 million vs. $159 million at Dec. 31/10 Operations: Copper: Strong fourth quarter resulted in higher than guided productio
Slide 5: Change in Production: 2011 vs. 2010
Change in Production: 2011 vs. 2010 Tonnes Copper Excluding Tenke 31,523 attributable share Tonnes Tonnes Lead Zinc 5
Slide 6: Change in Cash Costs: 2011 vs. 2010
Change in Cash Costs: 2011 vs. 2010 6
Slide 7: Change in Operating Earnings: 2011 vs. 2010
Change in Operating Earnings: 2011 vs. 2010 7
Slide 8: Normalized Earnings
Normalized Earnings $ Millions 2011 2010 Q4 '11 Q4 '10 Reported Net Income 183.8 306.3 42.5 146.1 Foreign exchange (8.2) 2.0 (4.9) 3.8 Corporate development (Inmet/Equinox) 6.8 - - - Mark to market on securities 3.9 (35.9) (2.0) (12.7) Gain on derivative contracts - (10.2) - - 2008 royalty adjustmen
Slide 9: Financial Position
Financial Position • Net cash at Dec 31, 2011 of $236 million, compared to $159 million at Dec 31, 2010 and $209 million at Sept 30, 2011 • Change in net cash during the year was negatively impacted by: – Sustaining capex ($127 million) – New investment capex ($52 million) – Tenke cash calls ($65 mi
Slide 10: Strong Financial Position
Strong Financial Position • Excellent Rebuilding of Balance Sheet Cash: +56% Debt: -91% Net Cash: +$382M 10
Slide 11: Operations and 2012 Outlook
Operations and 2012 Outlook 11
Slide 12: Corporate Initiatives
Corporate Initiatives • Enhance operations performance and debottlenecking • Aggressive exploration and development programs, in particular at Neves-Corvo • Restart open pit production at Aguablanca prior to year end • Promote value awareness and expansion at Tenke • Capital investment program: $95M
Slide 13: 2012 – 2014 Production Guidance
2012 – 2014 Production Guidance 13
Slide 14: Neves-Corvo – 2011 Results
Neves-Corvo – 2011 Results • Record tonnes mined and milled in 2011 • Copper production of 74,109 tonnes vs. 74,011 tonnes in 2010 • C1 Costs of $1.76/lb Cu (guidance - $1.80/lb) • Zinc expansion project (to 50ktpa Zn metal) completed on schedule and on budget. Proved to be flexible for both Zn & Cu
Slide 15: Neves-Corvo – 2012 Outlook
Neves-Corvo – 2012 Outlook • Multiple internal projects underway to improve operations • Significantly expanded zinc production - 2012, with new circuit • Capital investment: Sustaining $57M, New Projects $58M • Lombador Phase 1 underground project advancing on track • Expanded Semblana and “new tar
Slide 16: Neves-Corvo Production Outlook
Neves-Corvo Production Outlook Midpoint of guidance targets 16
Slide 17: Neves-Corvo Exploration Targets
Neves-Corvo Exploration Targets 17
Slide 18: Neves-Corvo Exploration Targets
Neves-Corvo Exploration Targets 18
Slide 19: Neves-Corvo Exploration Targets
Neves-Corvo Exploration Targets 19
Slide 20: Zinkgruvan – 2011 Results
Zinkgruvan – 2011 Results • Record tonnes mined and milled in 2011 • Zinc production of 75,147 tonnes (vs. guidance of 76,000 t) • C1 cost of $0.30/lb of zinc (guidance of $0.32/lb) • New ramp from surface highly successful. Mine continues to outpace mill capacity • New copper circuit proved flexibl
Slide 21: Zinkgruvan - Outlook
Zinkgruvan - Outlook • Pursuing several opportunities for incremental improvements • Debottlenecking of materials handling system • Increased investment in underground exploration 21
Slide 22: Zinkgruvan Production Outlook
Zinkgruvan Production Outlook Midpoint of guidance targets 22
Slide 23: Aguablanca – Update and Outlook
Aguablanca – Update and Outlook • Re-instatement of the ramp and pre-stripping progressing well • Restart nickel/copper production prior to year end • Underground study in progress targeting the addition of higher grade material in parallel to open pitting Location • Spain Ownership • 100% 2012 Prod
Slide 24: Tenke – Overview
Tenke – Overview • Entering fourth year of production • Attributable Cu prod’n of 31,546 tonnes in 2011 (vs. 29,750 in 2010) • Mineral reserves as at Dec 31, 2010 – 145.1 million tonnes @ 2.8% Cu; 0.3% Co • Mineral resources as at Dec 31, 2010 Measured & Indicated 455.7 million tonnes @ 2.7% Cu, 0.3
Slide 25: Production 2009-2013e
Production 2009-2013e Copper Cobalt (kMT) 25
Slide 26: Tenke Expansion Plans
Tenke Expansion Plans Phase II (Underway) • Oxide, agitated leach expansion from 130 to 195 ktpa Cu cathode, 15 ktpa Co • US$850M incremental expansion capex • Funding obligations split 70:30 FCX/LUN • Expected to be funded out of surplus cash from Tenke operations • Scheduled startup late 2012 • Pr
Slide 27: Growth Through Exploration
Growth Through Exploration Exploration budget increased to $50m in 2012 (from $43m in 2011) • Portugal - Semblana drilling continues to intersect thick sections of resource-grade Cu mineralization. Drilling ramped up on new 3D seismic targets. • Ireland - Clare (Zn-Pb-Ag) properties - Multiple targe
Slide 28: Fully-Funded Organic Growth Profile
Fully-Funded Organic Growth Profile • Strong Organic Growth Profile Based on Current Guidance (mid-point of guidance range graphed below) Copper: +26% Zinc: +28% Nickel: +767% 28
Slide 29: Lundin Mining - Summary
Lundin Mining - Summary • High quality, long life reserves; exploration upside • A stake in Tenke - a unique, world-class copper mine • Strong balance sheet and ongoing cash flows • Fully-funded organic growth profile • High leverage to copper and zinc • Very compelling valuation Neves-Corvo Zinkgru
Slide 30: Questions & Answers
TSX: LUN OMX: LUMI Questions & Answers