Lundin Mining Announces 2019 Production Guidance Achieved at All Operations
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NEWS RELEASE
Lundin Mining Announces 2019 Production Guidance Achieved at All Operations
Toronto, January 22, 2020 (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining”
or the “Company”) announces production results for the three and twelve months ended December 31, 2019 and
provides an update on operations and capital projects . The consolidated financial results for the year ended
December 31, 2019 will be published on February 20, 2020.
Highlights
• 2019 annual production guidance was achieved for all metals at all operations.
• Candelaria copper production increas ed 9% year-on-year and is well positioned to deliver a further
16% increase in 2020. The Candelaria Mill Optimization Project remains on-track to be complete in the
first quarter of 2020.
• Chapada copper and gold production exceeded and achieved guidance, respectively. Work continues
on optimization of the production schedule while options for mine and plant expansion advance in
parallel with a significant increase in exploration efforts.
• Eagle achieved nickel and copper production guidance . Nickel and copper production are forecast to
increase 22% and 15%, respectively, at the midpoint of the 2020 guidance range as higher grade Eagle
East ore contributes to the mill feed.
• Neves-Corvo achieved both copper and zinc production guidance. The Zinc Expansion Project (ZEP)
continued to advance on schedule and budget for a phased start-up in 2020. Zinc production at the
midpoint of the 2020 guidance range is forecast to increase 37% over that of 2019 as the ZEP ramps-
up during 2020.
• Zinkgruvan zinc, lead and copper production all increased year -on-year in 20 19. Increased zinc and
lead production were primarily a result of sustained improvements in recovery and ore head grades.
• Year-end net debt position was approximately $60 million, including $100 million in funds received
from Freeport Cobalt after the sale of the cobalt re finery in Finland and related cobalt cathode
precursor business.
Marie Inkster, President and CEO commented, “Our mines performed well in the fourth quarter, each achieving their
annual production guidance. Particular recognition is owed to our Candelaria team which remained poised and focused
on safe operations during a time of considerable unrest in the country.
We began to realize the benefits of the significant investments made over the last few years in our operations during the
second half of 2019. This p ositive momentum is expected to accelerate in 2020 with the Candelaria reinvestment
initiatives and development of Eagle East essentially complete, and as the ZEP ramps-up. Our annual copper production
is to increase over 20% this year, zinc production over 18% and nickel production over 22%. We are well positioned to
deliver multiple years of strong production, decreasing cash costs and free cash flow generation.”
Summary of 2019 Production
Q4 2019
Production
Full Year 2019
Production
2019 Production
Guidance1
Copper (t)
Candelaria (100% basis) 39,221 146,330 145,000 - 155,000
Chapada2 12,884 30,529 27,000 - 30,000
Eagle 3,626 14,297 13,000 - 15,000
Neves-Corvo 10,898 41,436 40,000 - 42,000
Zinkgruvan 502 2,906 2,000 - 3,000
Total Copper 67,131 235,498 227,000 - 245,000
Zinc (t)
Neves-Corvo 17,946 73,202 73,000 - 76,000
Zinkgruvan 20,979 78,313 76,000 - 81,000
Total Zinc 38,925 151,515 149,000 - 157,000
Nickel (t)
Eagle 2,651 13,494 12,000 - 14,000
Total Nickel 2,651 13,494 12,000 - 14,000
Chapada gold production was 54 koz for the period of Lundin Mining’s ownership, compared to guidance of
50,000-55,000 oz for the same period. Chapada Q4 2019 gold production was 20 koz.
Operations and Capital Projects Update
• Safety Performance: The 2019 Total Recordable Injury Frequency (TRIF) rate was 0.66 against a target of
0.60 per 200,000 person hours worked. While 2019 TRIF performance fell short of target, it represents a
modest improvement over the 2018 TRIF of 0.67 (vs. target of 0.70) . The 2019 safety performance
incorporates the acquisition of the Chapada mine and was impacted by project activities associated with
Candelaria, Neves-Corvo ZEP, Eagle East, and several significant planned maintenance downs. The 2020
Health and Safety Action Plan activities will focus on recordable injury prevention at each operation
through the elimination of similar or repeat incidents, and by enhancing workplace hazard recognition
and elimination processes.
• Candelaria: Copper production guidance was achieved for the year . Full year copper production
increased 9% year-on-year to 146,330 t in 2019 . Fourth quarter production was impacted by below plan
head grade, though was significantly above that of 2018 and the first half of 2019 as higher grade ore from
the open pit contributed the majority of mill feed.
The Candelaria South Sector underground mine was successfully transferred to operations in the third
quarter of 2019. Mine production from the Candelaria North and South Sector underground mines
increased to approximately 13,500 tonnes per day (tpd) in the fourth quarter, approaching the
14,000 tpd permitted.
Candelaria copper production is forecast to increase to approximately 190,000 tonnes per annum by 2022
and remain above this level through 2025 as the benefits of reinvestment initiatives undertaken over the
1 Guidance as disclosed in the Company’s Management Discussion and Analysis for the three and nine months ended September 30, 2019.
2 Production results and guidance are for the period of Lundin Mining’s ownership.
last two years are realized. At the midpoint of the guidance range, copper production is forecast to
increase by over 20,600 t (16%) year-over-year in 2020 to 165,000-175,000 t.
• Chapada: Copper and gold production exceeded and achieved guidance, respectively, for the period of
Lundin Mining’s ownership. As expected, fourth quarter production of copper and gold was less than that
of the particularly strong third quarter on planned maintenance downtime and head grade variation. The
Company is continuing to optimize the production schedule while advancing options for mine and plant
expansion in parallel with a significant increase in exploration.
Chapada is forecast to produce 51,000-56,000 t of copper and 90,000-95,000 oz of gold in 2020.
• Eagle: Full year nickel and copper production achieved guidance. First ore from Eagle East was mined in
the third quarter of 2019. During the fourth quarter mine development to support Eagle East production
continued, allowing for full access to the higher grade ores in 2020.
Eagle nickel production at the midpoint of the 2020 guidance range is forecast to increase more than
3,000 t (22%) over that of 2019, to 15,000-18,000 t, as higher grade Eagle East ore contributes to the mill
feed. Copper production at the midpoint of the 2020 guidance range is forecast to increase more than
2,200 t (15%) over that of 2019 to 15,000-18,000 t.
• Neves-Corvo: Both copper and zinc production achieved guidance. Fourth quarter zinc production was
lower year-on-year as an increased zinc concentrate grade was prioritized over total metal recovery to
maximize return in a more demanding concentrate market.
The ZEP continued to advance on schedule and budget in the fourth quarter for phased start -up and
production ramp- up in 2020. Installation of the 3.5 km of underground conveyor systems were well
advanced and the jaw crusher is nearing completion. The first phase of the hoisting shaft upgrade was
completed in December with installation of new higher -capacity skips and rope. Surface construction
continued with primary focus on mechanical piping, electrical and instrumentation installation.
Neves-Corvo zinc production at the midpoint of the 2020 guidance range is forecast to increase nearly
26,800 t (37%) over that of 2019, to 95,000-105,000 t, as the ZEP is commissioned and ramped-up during
the year. Copper production at the midpoint of the 2020 guidance range of 38,000-43,000 t is forecast to
be consistent with 2019.
• Zinkgruvan: Full year zinc and copper production achieved guidance. Zinc , lead and copper production
were higher year -on-year in 2019 as a result of sustained improvement in zinc ore head grades and
recoveries following continuation of focused planning and execution efforts to improve dilution and ore
loss.
Zinc production, at the midpoint of 77,000-82,000 t guidance, is expected to be at a similar level in 2020
as 2019. Copper production in 2020 is forecast to increase over that of 2019 to 3,000-4,000 t.
Fourth Quarter and Full Year 2019 Results Date
Results for the fourth quarter and full year ended December 31, 2019 will be published on Thursday
February 20, 2020.
The Company will hold a telephone conference call and webcast at 08:00 ET, 14:00 CET on Friday
February 21, 2020. Conference call details are pro vided below. Please call in 10 minutes before the conference
starts.
Call-in number for the conference call (North America): +1 647 778 4922
Call-in number for the conference call (North America Toll Free): +1 877 223 4471
Call-in number for the conference call (Sweden): 02 079 4343
To view the live webcast presentation, please log on using this direct link:
https://onlinexperiences.com/Launch/QReg/ShowUUID=BA8ACABE-EBC2-41CF-A224-18651E48DCB0
The presentation slideshow will also be available in PDF format on the Lundin Mining website
www.lundinmining.com before the conference call.
A replay of the telephone conference will be available after the completion of the call until March 6, 2020.
Call-in numbers for the replay are (North America): +1 800 585 8367 or +1 416 621 4642
The passcode for the replay is: 6676687
A replay of the webcast will be available by clicking on the direct link above.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining company with operations in Brazil, Chile, Portugal,
Sweden and the United States of America, primarily producing copper, zinc, gold and nickel.
The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market
Abuse Regulation. The information was submitted for publication, through the agency of the contact persons
set out below on January 22, 2020 at 17:00 Eastern Time.
For further information, please contact:
Mark Turner, Director, Business Valuations and Investor Relations: +1 416 342 5565
Brandon Throop, Manager, Investor Relations: +1 416 342 5583
Robert Eriksson, Investor Relations Sweden: +46 8 440 54 50
Cautionary Statement in Forward-Looking Information
Certain of the statements made and information contained herein is “forward- looking information” within the meaning of applicable Canadian securities laws. All
statements other than statements of historical facts included in this document constitute forwar d-looking information, including but not limited to statements
regarding the Company’s plans, prospects and business strategies; the Company’s guidance on the timing and amount of future production and its expectations
regarding the results of operations; expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any
Preliminary Economic Assessment, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimat es, and mine and mine closure plans;
anticipated market prices of metals, currency exchange rates, and interest rates; the development and implementation of the C ompany’s Responsible Mining
Management System; the Company’s ability to comply with contractual and permitting or other regulatory requirements; anticipated exploration and development
activities at the Company’s projects; and the Company’s integration of acquisitions (such as the Chapada mine) and any antici pated benefits thereof. Words such as
“believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “goal”, “aim”, “intend”, “continue”, “budget”, “estimate”, “may”, “will”, “can”, “could”, “should”, “schedule”
and similar expressions identify forward-looking statements.
Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management,
including that the Company can access financing, appropriate equipment and sufficient labour; assumed and future price of copper, nickel, zinc, gold and other
metals; anticipated costs; ability to achieve goals; the prompt and effective integration of acquisitions; that the political environment in which the Company operates
will continue to support the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and
assumptions are considered reasonable by Lundin Mining as at the date of this document in light of management’s experience and perception of current conditions
and expected developments, these statements are inherently subject to s ignificant business, economic and competitive uncertainties and contingencies. Known and
unknown factors could cause actual results to differ materially from those projected in the forward- looking statements and undue reliance should not be placed on
such statements and information. Such factors include, but are not limited to: risks inherent in and/or associated with operating in foreign countries; uncertain
political and economic environments; community activism, shareholder activism and risks related to negative publicity with respect to the Company or the mining
industry in general; changes in laws, regulations or policies including but not limited to those related to permitting and ap provals, environmental and tailings
management, labour, trade relation s, and transportation; delays or the inability to obtain necessary governmental approvals and/or permits; regulatory
investigations, enforcement, sanctions and/or related or other litigation; risks associated with business arrangements and partners over which the Company does not
have full control; risks associated with acquisitions and related integration efforts (including with respect to the Chapada mine), including the ability to achieve
anticipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration; competition; development or
mining results not being consistent with the Company’s expectations; estimates of future production and operations; operating , cash and all -in sustaining co st
estimates; allocation of resources and capital; litigation; uninsurable risks; volatility and fluctuations in metal and commodity prices; the estimation of asset carrying
values; funding requirements and availability of financing; indebtedness; foreign currency fluctuations; interest rate volatility; changes in the Company’s share price,
and equity markets, in general; changing taxation regimes; counterparty and credit risks; health and safety risks; risks rela ted to the environmental impact of the
Company’s operations and products and management thereof; unavailable or inaccessible infrastructure and risks related to ageing i nfrastructure; risks inherent in
mining including but not limited to risks to the environment, industrial accidents, catastrophic e quipment failures, unusual or unexpected geological formations or
unstable ground conditions; actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; ore processing efficiency;
risks relating to attr acting and retaining of highly skilled employees; ability to retain key personnel; the potential for and effects of labour di sputes or other
unanticipated difficulties with or shortages of labour or interruptions in production; the price and availability o f energy and key operating supplies or services; the
inherent uncertainty of exploration and development, and the potential for unexpected costs and expenses including, without l imitation, for mine closure and
reclamation at current and historical operations; risks associated with the estimation of Mineral Resources and Mineral Reserves and the geology, grade and continuity
of mineral deposits including but not limited to models relating thereto; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve
estimates; mine plans, and life of mine estimates; the possibility that future exploration, development or mining results wil l not be consistent with expectations;
natural phenomena such as earthquakes, flooding, and unusually severe weather; potential for the allegation of fraud and corruption involving the Company, its
customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights viol ations; security at the Company’s
operations; breach or compromise of key information technology systems; materially increased or unanticipated reclamation obligations; risks related to mine closure
activities; risks related to closed and historical sites; title risk and the potential of undetected encumbrances; risks associated with the structural stability of waste rock
dumps or tailings storage facilities; and other risks and uncertainties, including but not limited to those described in the “Risk and Uncertainties” section of the Annual
Information Form for the year ended December 31, 2018 and the “Managing Risks” section of the Company’s MD&A for the year ended December 31, 2018, which are
available on SEDAR at www.sedar.com under the Company’s profile. All of the forward- looking statements made in this document are qualified by these cautionary
statements. Although the Company has attempted to identify important factors that could cause actual results to differ materi ally from those contained in forward-
looking information, there may be other factors that cause results not to be as anticipated, estimated, forecast or intended and readers are cautioned that the
foregoing list is not exhaustive of all factors and assumptions which may have been used. Should one or more of these risks a nd uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from those described in forward- looking information. Accordingly, there can be no
assurance that forward-looking information will prove to be accurate and forward-looking information is not a guarantee of future performance. Readers are advised
not to place undue reliance on forward- looking information. The forward -looking information contained herein speaks only as of the date of this document. Th e
Company disclaims any intention or obligation to update or revise forward ‐looking information or to explain any material difference between such and subsequent
actual events, except as required by applicable law.