Lundin Mining Announces 2016 Production Results
NEWS RELEASE
Lundin Mining Announces 2016 Production Results
Toronto, Ontario (January 12, 2017) - Lundin Mining Corporation (TSX:LUN) (OMX:LUMI) ("Lundin Mining"
or the "Company") announces production results for the three and twelve months end ed December 31,
2016. The Company also provides a capital project update and announces the disposal of Aguablanca Mine.
2016 Highlights:
• The Company a chieved annual production guidance for copper and nickel. Zinc production was
marginally below the most recent guidance.
• Candelaria’s fourth quarter capped a strong operating year with the highest quarterl y copper
production of the year. Eagle production met full year guidance on continued robust performance.
Neves-Corvo’s zinc plant demonstrated stability with continued zinc recovery improvements, while
Zinkgruvan’s performance was impacted by lower than planned zinc head grades in the final quarter.
• Operations safety performance in 2016 saw the fourth straight year -over-year improvement with a
Total Recordable Injury Frequency (“TRIF”) rate of 0.60 achieved at year-end.
• Year-end net debt balance was approximately $290 million, including cash and cash equivalents of
approximately $710 million. Tenke Fungurume related distributions totalled approximately $70
million for the year, better than previously guided.
(contained tonnes)
Q4 2016
Production
Results
Full Year 2016
Production
Results
2016 Production
Guidance1
Copper Candelaria (80%) 39,258 133,274 130,000 - 132,000
Eagle 5,742 23,417 22,000 - 24,000
Neves-Corvo 10,975 46,557 48,000 - 51,000
Zinkgruvan 0 1,906 1,900 - 2,000
Wholly-owned 55,975 205,154 201,900 – 209,000
Tenke (24%)2 n/a n/a 52,800
Total attributable n/a n/a 254,700 – 261,800
Nickel Eagle 5,249 24,114
23,000 - 25,000
Total 5,249 24,114
23,000 - 25,000
Zinc Neves-Corvo 15,886 69,527 70,000 - 73,000
Zinkgruvan 19,773 78,523 80,000 - 85,000
Total 35,659 148,050 150,000 - 158,000
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1 Guidance as presented in the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2016.
2 Production results for Tenke have not yet been released by the operator
Corporate Office
150 King Street West, Suite 1500
P.O. Box 38
Toronto, ON M5H 1J9
Phone: +1 416 342 5560
Fax: +1 416 348 0303
UK Office
Ground Floor Hayworthe House, 2
Market Place, Haywards Heath
West Sussex, RH16 1DB
United Kingdom
Phone: +44 (0) 1444 411 900
Fax: +44 (0) 1444 456 901
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Mr. Paul Conibear, President and CEO commented: “We are pleased with our aggregate performance across
all of our mines in the challenging metal price environment of 2016 and expect to build upon this
performance in the year ahead . Responding to market conditions that persisted over the majority of last
year, the Company focused on discretionary spending restraint, deferring of non -essential sustaining capital
and maximizing cash flow . Lundin Mining is in the desirable position of having one of the strongest balance
sheets in our sector enabling us great financial flexibility to advance our internal growth projects, return
capital to shareholders, and take advantage of potential external growth opportunities.”
Operational Commentary
Production guidance for the three-year period of 2017 through 2019, and 2017 cash cost guidance remain
unchanged from figures previously disclosed on November 30, 2016.
• Safety and environmental performance: 2016 was a Company record year, with a TRIF rate of 0.60
achieved at year-end (measured per 200,000 person hours worked). This marks the fourth straight
year-over-year improvement and was capped by a Lundin Mining record of zero recordable injuries
during the month of December.
Environmental performance met expectations with no Level 3 incidents experienced. The Company
received the International Green Apple Award for best environmental practice related to the Galmoy
mine closure wetlands reclamation project on the former mine tailings site in Ireland.
• Candelaria: Fourth quarter copper production of 49,072 tonnes on a 100% basis was the highest
quarterly rate of the year. Total annual copper production at Candelaria exceeded the most recent
guidance on strong mill throughput and increased head grades.
A NI 43-101 Technical Report is expected to be filed within the month supporting the five-year outlook
provided on November 30, 2016, and further detailing the life of mine improvements made at Candelaria
over the last year.
• Eagle: Production of both nickel and copper met target during the fourth quarter and achieved the most
recent full year guidance on continued robust performance across the operation.
• Neves-Corvo: Full year zinc and copper production were modestly below the most recent guidance
range. Zinc recovery rates continued to demonstrate improvement over prior year performance.
Increased production definition drilling is being undertaken in the copper stockwork mineralization to
better predict near term variation in ore grade and complex copper ore characteristics that impacted
2016 copper recovery and overall copper production. 2016 actual copper plant performance has been
factored into 2017 production guidance.
• Zinkgruvan: Full year zinc production was near to target. Fourth quarter equipment availability and mine
sequencing impacted ore delivery and the planned zinc head grade. No copper ore was campaigned
through the plant, as planned, to maximize processing of the higher value zinc/lead ore.
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Capital Projects Update
Expected capital expenditure and the exploration budget for 2017 remain unchanged from figures previously
disclosed on November 30, 2016.
• Candelaria Los Diques Tailings Storage Facility: Construction continues to progress on time and on
budget, while sustaining a perfect safety record. First tailings deposition remains on schedule for the first
quarter of 2018. Owner self-perform construction successes of the main embankment and civil works
continue, the last of the major contracts have been awarded, and all construction permits have been
received. Originally budgeted at approximately $400 million, total project costs are now estimated at
approximately $295 million with $135 million expected to be spent in 2017 and $30 million in 2018.
• Candelaria Consolidation Project (CCP): Conceptual studies into underground production expansion and
further optimization of the life-of-mine plan at the operation continue to advance. Feasibility Study level
work is examining a potential mill debottlenecking expansion to add approximately 15-20% throughput
with increased ore feed from the underground deposits. This work continues to be supported by ongoing
underground exploration success. The 2017 exploration budget at Candelaria has been approximately
doubled over that of 2016 to $32 million.
• Neves-Corvo Zinc Expansion Project (ZEP): The Environmental Impact Assessment (EIA) was submitted to
the regulatory authorities in the fourth quarter of 2016. The 2015 Feasibility Study capital cost estimates
are being updated and early works and project critical path items are being assessed in the anticipation
of fast tracking the project once EIA approvals and subsequent full project expenditure approvals are in
hand. The approximately €250 million initial project investment targets doubling of current zinc
production levels within 28 months of full project approval, adding about 80,000 tpa zinc production to
Neves Corvo.
• Eagle East: Exploration r amp development is progressing on plan while the Eagle East project is
advancing in the permitting phase. The Eagle East Feasibility Study has progressed with the completion of
stope and mine infrastructure design as well as geotechnical, hydrogeological and metallurgical
investigation programs. Exploration drilling continued in the fourth quarter of 2016 systematically testing
the Eagle East conduit and deep peridot ite and gabbro targets. Growth capital of $35 million for project
advancement and exploration ramp development and $16 million for ongoing exploration is budgeted for
2017.
• Zinkgruvan 1350 Expansion Project: This investment increase s plant capacity by 10 % and remains on
schedule for a mid -2017 commissioning. The remaining approximately $5 million of project capital
expenditure is expected to be incurred in H1 2017.
• Zinkgruvan Enemossen Tailings Facility: Expansion of the existing facility is advancing on schedule and
budget, with the first phase of the new dam expected to be complete Q3 2017. A major milestone was
reached in November 2016 with material completion of the embankment to the final height.
Additionally, during the fourth quarter, the Company disposed of the Aguablanca Mine in Spain through the
transfer of all of the shares of Rio Narcea Recursos S.A. (“RNR”) to Valoriza Mineria, a subsidiary of Grupo
Sacyr. The assets of RNR included the Aguablanca mine and other exploration licenses. Grupo S acyr is a
multinational infrastructures and services company, operating in 29 countries and headquartered in Madrid,
Spain. The Company transferred approximately €30 million to RNR prior to the transfer in order to ensure
that all of the environmental, employee and other liabilities were fully funded.
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About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining company with operations in Chile, the USA,
Portugal, and Sweden, primarily producing copper, nickel and zinc. In addition, until its announced sale has
been concluded, Lundin Mining holds an indirect 24% equity stake in the world -class Tenke Fungurume
copper/cobalt mine in the Democratic Republic of Congo and in the Freeport Cobalt Oy business, which
includes a cobalt refinery located in Kokkola, Finland.
On Behalf of the Board,
Paul Conibear, President and CEO
The information in this release is subject to the disclosure requirements of Lundin Mining under the E U
Market Abuse Regulation and the Swedish Securities Market Act. T his information was publicly
communicated on January 12, 2017 at 5:30 p.m. Eastern Time.
For further information, please contact:
Mark Turner
Director, Business Valuations and Investor Relations
+1-416-342-5565
Sonia Tercas
Senior Associate, Investor Relations
+1-416-342-5583
Robert Eriksson
Investor Relations Sweden
+46 8 545 015 50
Forward Looking Statements
Certain of the statements made and information contained herein is “forward -looking information” within the
meaning of the applicable Canadian securities legislation including, without limitation, with respect to the timing
and amount of future dividends . Forward -looking information includes, but is not limited to information with
respect to the Company’s strategy, plans or future financial or operating performance. Forward -looking statements
are characterized by words such as “plan,” “expect”, “budget”, “target”, “project”, “intend”, “believe”, “anticipate”,
“estimate” and other similar words, or statements that certain events or conditions “may ” or “will” occur.
Forward -looking statements are based on the opinions, assumptions and estimates of management considered
reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties
and other known a nd unknown factors that could cause actual events or results to differ from those reflected in the
forward-looking statements, including, without limitation: uncertain political and economic environments; foreign
currency fluctuations; risks inherent in mi ning including environmental hazards, industrial accidents, unusual or
unexpected geological formations, ground control problems and flooding; risks associated with the estimation of
mineral resources and reserves and the geology, grade and continuity of m ineral deposits; the possibility that future
exploration, development or mining results will not be consistent with the Company’s expectations; the potential
for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in
production; actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other
characteristics; the inherent uncertainty of production and cost estimates and the potential for unexpected costs
and expenses, commodity price fluctuations; changes in laws or policies, foreign taxation, delays or the inability to
obtain necessary governmental permits; and other risks and uncertainties, including those described under Risk
Factors Relating to the Company’s Busine ss in the Company’s Annual Information Form and in each management
discussion and analysis. Forward -looking information is in addition based on various assumptions including, without
limitation, the expectations and beliefs of management, the assumed long term price of copper, nickel, lead and
zinc; that the Company can access financing, appropriate equipment and sufficient labour and that the political
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environment where the Company operates will continue to support the development and operation of mining
projects. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in forward -looking statements. Accordingly,
readers are advised not to place undue reliance on forward- looking statements .
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2016 Operating Statistics
Details of operating statistics by mine, by quarter and for the year are summarized below:
(100% Basis) Total Q4 Q3 Q2 Q1
Ore mined (000s tonnes) 30,915 8,877 6,817 5,910 9,311
Ore milled (000s tonnes) 31,938 8,097 7,794 7,890 8,157
Grade
Copper (%) 0.57 0.67 0.55 0.52 0.55
Recovery
Copper (%) 91.8 93.1 90.5 90.7 92.7
Production (contained metal)
Copper (tonnes) 166,592 49,072 39,106 36,907 41,507
Gold (000 oz) 97 27 24 22 24
Silver (000 oz) 1,665 466 381 345 473
Total Q4 Q3 Q2 Q1
Ore mined (000s tonnes) 745 183 189 188 185
Ore milled (000s tonnes) 748 190 188 184 186
Grade
Nickel (%) 3.9 3.4 3.9 4.3 3.8
Copper (%) 3.2 3.0 3.2 3.1 3.4
Recovery
Nickel (%) 84.8 86.0 84.1 85.4 83.6
Copper (%) 97.7 98.3 97.1 97.5 97.7
Production (contained metal)
Nickel (tonnes) 24,114 5,249 6,085 6,812 5,968
Copper (tonnes) 23,417 5,742 5,796 5,639 6,240
Total Q4 Q3 Q2 Q1
Ore mined, copper (000 tonnes) 2,351 598 557 594 602
Ore mined, zinc (000 tonnes) 1,041 247 254 272 268
Ore milled, copper (000 tonnes) 2,386 598 560 602 626
Ore milled, zinc (000 tonnes) 1,039 237 257 270 275
Grade
Copper (%) 2.5 2.4 2.3 2.6 2.8
Zinc (%) 8.2 8.0 8.3 8.3 8.2
Recovery
Copper (%) 76.5 75.5 76.3 77.1 77.2
Zinc (%) 78.5 80.3 81.0 77.4 75.9
Copper (tonnes) 46,557 10,975 9,691 12,146 13,745
Zinc (tonnes) 69,527 15,886 17,642 18,272 17,727
Lead (tonnes) 4,126 1,142 833 1,245 906
Silver (000 oz) 1,242 313 279 331 319
2016
Production (contained metal)
Candelaria
2016
2016
Eagle
Neves-Corvo
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Total Q4 Q3 Q2 Q1
Ore mined, zinc (000 tonnes) 1,057 294 211 264 288
Ore mined, copper (000 tonnes) 107 nil 46 48 13
Ore milled, zinc (000 tonnes) 1,093 296 256 237 304
Ore milled, copper (000 tonnes) 107 nil 56 51 nil
Grade
Zinc (%) 8.0 7.4 8.1 8.2 8.3
Lead (%) 3.5 3.0 3.1 3.6 4.3
Copper (%) 2.0 nil 1.7 2.3 nil
Recovery
Zinc (%) 89.8 89.8 90.7 89.3 90.0
Lead (%) 82.3 83.0 80.9 81.6 83.8
Copper (%) 91.6 nil 90.5 92.4 nil
Zinc (tonnes) 78,523 19,773 18,808 17,286 22,656
Lead (tonnes) 31,661 7,363 6,406 7,063 10,829
Copper (tonnes) 1,906 nil 855 1,051 nil
Silver (000 oz) 2,159 556 449 495 659
Zinkgruvan
2016
Production (contained metal)