Slide 1: Second Quarter 2015 Results
TSX: LUN OMX: LUMI Second Quarter 2015 Results July 30, 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 Paul McRae Senior VP Projects Steve Gatley VP Technical Services 3
Slide 4: Q2 2015 Operating Highlights
Q2 2015 Operating Highlights Operations Performed Well – meeting or exceeding expectations Copper Zinc Nickel (Cu) (Zn) (Ni) • Increased production • Largely met • Continued excellent guidance and lowered expectations with production performance cost outlook at strong results at at Eagle and Aguabla
Slide 5: Q2 2015 Operating Results
Q2 2015 Operating Results Sales volumes 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: Q2 2015 Revenue Breakdown by Mine and Metal
Q2 2015 Revenue Breakdown by Mine and Metal 68% of sales were from Candelaria and Eagle 66% of sales were from copper Sales Breakdown by Mine Sales Breakdown by Metal 6
Slide 7: YTD Cash Costs – Very Competitive
YTD Cash Costs – Very Competitive Source: Cost curves from Wood Mackenzie as of Q2 2015. * Cash cost curves are based on the expected annual costs for 2015, whereas YTD costs have been highlighted for LUN assets for illustrative purposes. 7
Slide 8: Q2 2015 Financial Highlights
Q2 2015 Financial Highlights Candelaria and Eagle acquisitions contributing significantly to y/y earnings growth $US (millions or /share) Q2/2015 Q2/2014 %Δ Revenue $501M $192M 161% Operating Earnings $243M $74M 227% $46M $40M 17% Net Income (attributable) $0.06/sh $0.07/sh ($0.01/sh) $263M $34M 677
Slide 9: Normalized Earnings Reconciliation
Normalized Earnings Reconciliation $ Millions Q2 2015 Q2 2014 Net earnings attributable to shareholders $46.4 $39.7 Foreign exchange $6.5 $0.3 Mark to market on securities $0.1 $4.3 Tax (on above items) ($1.7) ($1.5) Adjusted net earnings attributable to shareholders $51.3 $42.8 Adjusted earnings pe
Slide 10: Operating Earnings – Q2 2015 vs. Q2 2014
Operating Earnings – Q2 2015 vs. Q2 2014 • Significant improvement in operating earnings compared to the second quarter 2014 due to Candelaria and Eagle • Also positively impacted by favourable foreign exchange rates 10
Slide 11: Strong Financial Position
Strong Financial Position US$ M June 30, 2015 Cash and Cash Equivalents $507 Net Debt1 $497 Available Credit Facilities $360 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 last six months • Net debt has improved from $829M at y
Slide 12: 2015 Outlook – Guidance Improved
2015 Outlook – Guidance Improved • Raising copper and lead (contained tonnes) Revised Guidancea Tonnes Cash Costsb production guidance and Candelaria (80%) 135,000 – 140,000 $1.35/lb lowering copper cost outlook Eagle 20,000 – 23,000 Neves-Corvo 50,000 – 55,000 $1.55/lb Copper • Zinkgruvan outperfor
Slide 13: Operational Overview and Outlook
Operational Overview and Outlook Candelaria (80%) Neves-Corvo (100%) Eagle (100%) Zinkgruvan (100%) Tenke Fungurume Aguablanca (100%) (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 Q2 2015 Results and Outlook
Candelaria Q2 2015 Results and Outlook • Production (100% basis) of 46.7 kt exceeded Location Chile expectations as a result of higher Ownership 80% throughput and recoveries 2015 Production 135,000-140,000 t Cu • Cash costs averaged $1.21/lb due to lower Guidance (80%) mine/mill costs, FX and highe
Slide 16: Candelaria New Mine Plan
Candelaria New Mine Plan • Improved production and operating cost profile expected Production & C1 Costs: 2016E 2017E 2018E 2019E over next 5 years Copper Production kt 154 156 144 161 Cash Costs $/lb Cu 1.58 1.57 1.82 1.71 • Annual Cu production for 2016- (after precious metal stream) 2019 expected
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 Q2 2015 Results and Outlook
Eagle Q2 2015 Results and Outlook • Nickel production of 6.3 kt in-line, with Location Michigan, USA slightly lower throughput offset by Ownership 100% higher recoveries 2015 25,000–28,000 t Ni • Copper production of 5.4 kt benefitted Production Guidance 20,000–23,000 t Cu from higher grades and rec
Slide 19: Neves-Corvo (Cu/Zn), Portugal
Neves-Corvo (Cu/Zn), Portugal Situated 220 km southeast of Lisbon 19
Slide 20: Neves-Corvo Q2 2015 Results and Outlook
Neves-Corvo Q2 2015 Results and Outlook • Strong copper production (15.3 kt) Location Portugal reflects higher throughput and grades Ownership 100% 50,000–55,000 t Cu › Increased use of productive bulk 2015 Production 60,000–65,000 t Zn Guidance mining method resulted in more 4,000-5,000 t Pb copper
Slide 21: Zinc Expansion Project – Neves-Corvo
Zinc Expansion Project – Neves-Corvo • Feasibility Study for expansion of zinc substantially complete • Scope covers underground development of lower Lombador Zn deposits › Expansion of shaft capacity to 5.6 Mtpa › Zinc plant expansion to 2.5 Mtpa of ore throughput › Maximum zinc production nominall
Slide 22: Zinkgruvan (Zn/Pb/Cu), Sweden
Zinkgruvan (Zn/Pb/Cu), Sweden Situated 200 km southwest of Stockholm 22
Slide 23: Zinkgruvan Q2 2015 Results and Outlook
Zinkgruvan Q2 2015 Results and Outlook • Zinc production of 21.2 kt strong due to Location Sweden higher grades and recoveries Ownership 100% 80,000–85,000 t Zn › Record amount of ore mined 2015 Production 30,000–33,000 t Pb Guidance 2,000–3,000 t Cu • Lead production of 7.4 kt was impacted 2015 Cos
Slide 24: Aguablanca (Ni/Cu), Spain
Aguablanca (Ni/Cu), Spain Situated 80 km north of Seville 24
Slide 25: Aguablanca Q2 2015 Results and Outlook
Aguablanca Q2 2015 Results and Outlook • Nickel production (2.2 kt) and copper Location Spain production (2.0 kt) benefitted from Ownership 100% higher grades – outperforming YTD 2015 Production 7,000–7,500 t Ni Guidance 5,500–6,000 t Cu • Open pit mining completed in April, 2015 Cost Guidance $3.75
Slide 26: Tenke Fungurume (Cu/Co), DRC
Tenke Fungurume (Cu/Co), DRC Situated 175 km northwest of Lubumbashi 26
Slide 27: Tenke Q2 2015 Results and Outlook
Tenke Q2 2015 Results and Outlook • Copper production (100% basis) of Location Democratic Republic 52.3 kt was stronger due to higher of Congo throughput and recoveries Ownership 24% 2015 Production Guidance 50,000 t Cu • Cobalt production of 4.1 kt (attributable share) benefitted from higher grades
Slide 28: 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 28
Slide 29: Questions and Answers
TSX: LUN OMX: LUMI Questions and Answers