Lundin Mining Announces 2022 Production Results & Provides 2023 Guidance
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NEWS RELEASE
Lundin Mining Announces 2022 Production Results & Provides 2023 Guidance
Toronto, January 12, 2023 (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining”
or the “Company”) announces production results for the year ended December 31, 2022 and provides production
guidance for the three-year period of 2023 through 2025, as well as cash cost, capital and exploration expenditure
forecasts for 2023. The Company will hold a conference call and webcast on January 13, 2023, to answer investor
and analyst questions.
This news release contains non-GAAP measures and forward-looking information about expected future events and financial
and operating performance of the Company. Please refer to the Historical Non-GAAP Measure Comparatives section and the
risks and assumptions set out in our Cautionary Statement on Forwa rd-Looking Information section of this press release . All
dollar amounts are expressed in U.S. dollars, unless otherwise noted.
2022 Production Highlights
• Guidance was substantially achieved on a consolidated basis for copper, nickel, and gold. Nickel and gold
production achieved the top end of the guidance ranges.
• 2022 consolidated copper production was approximately 250,000 t, and total copper -equivalent
consolidated production was over 390,000 t.1
• Candelaria copper production of 152,042 t was modestly below guidance, while gold production of
86,000 oz achieved the top end of the guidance range.
• Chapada copper production of 45,739 t achieved guidance and gold production of 68,000 oz exceeded
the top end of the guidance range.
• Eagle nickel production of 17,475 t and copper production of 15,895 t both achieved guidance.
Summary of 2022 Production
Q4 2022
Production
Full Year 2022
Production
2022 Production
Guidance2
Copper (t)
Candelaria (100% basis) 34,398 152,042 155,000 - 165,000
Chapada 11,306 45,739 45,000 - 50,000
Eagle 3,081 15,895 15,000 - 18,000
Neves-Corvo 7,160 31,906 33,000 - 38,000
Zinkgruvan 607 4,077 2,000 - 3,000
Total Copper 56,552 249,659 250,000 - 274,000
1 Calculated based on the ratios of 2022 average metal prices of Cu: $3.99/lb, Zn: $1.56/lb, Ni: $11.62/lb, Pb: $0.97/lb and Au: $1,802/oz.
2 Guidance as most recently disclosed in the Company’s Management Discussion and Analysis for the three and six months ended June 30, 2022, with trending
commentary in the Company’s MD&A for the three and nine months ended September 30, 2022.
Q4 2022 Full Year 2022 2022 Production
Production Production Guidance3
Zinc (t)
Neves-Corvo 24,523 82,435 90,000 - 100,000
Zinkgruvan 19,785 76,503 78,000 - 83,000
Total Zinc 44,308 158,938 168,000 - 183,000
Gold (oz)
Candelaria (100% basis) 20,000 86,000 83,000 - 88,000
Chapada 16,000 68,000 62,000 - 67,000
Total Gold 36,000 154,000 145,000 - 155,000
Nickel (t)
Eagle 4,096 17,475 15,000 - 18,000
Total Nickel 4,096 17,475 15,000 - 18,000
Three-Year Production Outlook
• Copper production is forecast to be 236,000-260,000 t on a consolidated basis in 2023. Higher consolidated
copper production of 256,000-280,000 t is forecast for 2024 due mainly to mine sequencing and the planned
copper grade profile at Candelaria.
• Zinc production is forecast to increase to 180,000-195,000 t on a consolidated basis in 202 3, increasing
further over the three-year period to reach 225,000-240,000 t in 2025. The increasing zinc production profile
is primarily due to the ramp up of the Neves-Corvo Zinc Expansion Project ( “ZEP”), which is expected t o
consistently achieve nameplate capacity during 2024.
• Consolidated gold production is forecast to be 1 40,000-150,000 oz in 202 3 and to be relatively constant
through the three-year outlook period.
• Nickel production is to be 13,000-16,000 t in 2023 and to moderate over the three-year period driven by the
planned mine sequencing and nickel grade as the Eagle East and Upper Keel orebodies at Eagle are mined.
Production Outlook4
2023 2024 2025
Copper (t)
Candelaria (100% basis) 145,000 - 155,000 165,000 - 175,000 150,000 - 160,000
Chapada 43,000 - 48,000 43,000 - 48,000 45,000 - 50,000
Eagle 12,000 - 15,000 9,000 - 12,000 5,000 - 8,000
Neves-Corvo 33,000 - 38,000 35,000 - 40,000 35,000 - 40,000
Zinkgruvan 3,000 - 4,000 4,000 - 5,000 3,000 - 4,000
Total Copper 236,000 - 260,000 256,000 - 280,000 238,000 - 262,000
Zinc (t)
Neves-Corvo 100,000 - 110,000 130,000 - 140,000 140,000 - 150,000
Zinkgruvan 80,000 - 85,000 85,000 - 90,000 85,000 - 90,000
Total Zinc 180,000 - 195,000 215,000 - 230,000 225,000 - 240,000
3 Guidance as most recently disclosed in the Company’s Management Discussion and Analysis for the three and six months ended June 30, 2022, with trending
commentary in the Company’s MD&A for the three and nine months ended September 30, 2022.
4 Production guidance is based on certain estimates and assumptions, including but not limited to Mineral Resources and Mineral Reserves, geological formations,
grade and continuity of deposits and metallurgical characteristics.
2023 2024 2025
Gold (oz)
Candelaria (100% basis) 5 85,000 - 90,000 95,000 - 100,000 85,000 - 90,000
Chapada 55,000 - 60,000 55,000 - 60,000 45,000 - 55,000
Total Gold 140,000 - 150,000 150,000 - 160,000 130,000 - 145,000
Nickel (t)
Eagle 13,000 - 16,000 10,000 - 13,000 5,000 - 8,000
Total Nickel 13,000 - 16,000 10,000 - 13,000 5,000 - 8,000
• Candelaria: Annual fluctuations in copper and gold production forecasts for the next three years are mainly
due to sequencing of the Candelaria open pit. Ore mining from the open pit is to be primarily from the upper
benches of Phase 11 in 2023, mining towards lower benches in 2024. Mining of Phase 10 is to complete and
initial ore from Phase 12 is to commence in 2024.
Over the guidance period, total mill throughput is forecast to range between 27 -29 million tonnes per
annum (“Mtpa”). Debottlenecking initiatives of the Candelaria plant pebble crushing circuit are planned to
begin increasing mill capacity starting late 2023. B ased on the planned mill feed blend and the ore
hardness throughput model, annual throughput is expected to approximate 29 Mtpa commencing
in 2025.
Candelaria’s 2023 copper and gold production are forecast to be modestly weighted to the first half of the
year, primarily owing to mine sequencing and the resultant grade profiles.
• Chapada: Production guidance is based on the current throughput capacity of approximately 23.5 Mtpa
over the three-year period with annual fluctuations primarily due to mine sequencing and the forecast
copper and gold grade profiles.
Ore mining is planned from the Chapada South, Southwest, Central and North pits through 2023, followed
by mining of the Baru and Chapada Northeast orebodies commencing in 2024, and the North Buriti
orebody commencing in 2025.
Chapada’s 2023 copper and gold production are forecast to be weighted to the second half of the year
due to the forecast grade profiles and seasonal operating considerations. All of Chapada’s gold production
remains unencumbered and is to receive full market pricing.
• Eagle: Guidance incorporates mining of the Upper Keel zone in production plans, with first ore anticipated
in 2024 following development in 2023. Ore mining is to continue from the Eagle and Eagle East orebodies
in 2023 with priority on increasing ore from Eagle East during the second half of the year. Eagle’s 2023
nickel and copper production are forecast to be modestly weighted to the first half of the year, primarily
owing to mine sequencing and the resultant grade profiles.
• Neves-Corvo: Copper production guidance for the three-year period is consistent with prior expectations.
The zinc production guidance reflects the slower than anticipated ramp-up to date of ZEP. Several projects
are underway to enable ZEP to consistently achieve the nameplate processing capacity of 2.5 Mtpa. These
include mine development, additions to increase mine ventilation capacity, and installation of a redundant
SAG feeder, amongst other initiatives. Full ZEP mining and processing rates are expected to be achieved
during 2024.
Neves-Corvo’s 2023 copper production is forecast to be equally weighted throughout the year . Zinc
production is forecast to increase over the course of the year as initiatives to enable ZEP to consistently
5 68% of Candelaria’s total gold and silver production are subject to a streaming agreement.
achieve nameplate capacity are executed and expected to result in improved overall throughput and
metal recovery rates.
• Zinkgruvan: Zinc production is forecast to increase over the three -year period with refinement of
operating plans. Zinc head grades are expected to increase over the period on mine sequencing, and
metal recovery rates and concentrate grades are anticipated to improve with completion of the sequential
flotation project in mid-2023. Zinkgruvan’s 2023 zinc and copper production are foreca st to be modestly
weighted to the second half of the year, primarily owing to mine sequencing and the resultant grade
profiles.
2023 Cash Cost6 Guidance
• Candelaria: cash cost is forecast to be $1.80/lb – $1.95/lb of
copper, after by-product credits. The cash cost is expected
to benefit from an approximately 50% reduction in
electricity rates as a new Power Purchase Agreement (PPA)
commenced at the beginning of the year. The PPA also
ensures a minimum of 80% renewables in the energy mix,
prioritizing wind and solar . By -product credits have been
adjusted for the terms of the streaming agreement.
• Chapada: cash cost is forecast to be $2.55/lb – $2.75/lb of
copper in 202 3, after unencumbered gold by-product
credits. The forecast increase in Chapada’s cash cost s
compared to 2022 reflects mainly higher consumable costs
and lower production volumes . Effects of copper stream
agreements are reflected in the realized copper revenue.
• Eagle: cash cost is forecast to be $1.50/lb – $1.65/lb of nickel in 2023, after by-product copper credits. The
forecast increase compared to 2022 is primarily a reflection of planned lower production volumes.
• Neves-Corvo: cash cost is forecast to be $2.10/lb – $2.30/lb of copper in 2023, after zinc and lead by-product
credits. The cash cost is expected to continue to improve as zinc and lead production volumes increase.
• Zinkgruvan: cash cost is forecast to be $0.60/lb – $0.65/lb of zinc, after copper and lead by-product credits,
consistent with 2022 levels.
6 This is a non-GAAP measure. For equivalent historical non-GAAP financial measure comparatives see the Historical Non-GAAP Measure Comparatives section of this
press release. Please also see the Management’s Discussion and Analysis for the year ended December 31, 2021, for discussion of non-GAAP measures under the
heading “Non-GAAP and Other Performance Measures” on page 26, which is incorporated by reference herein.
7 2023 cash costs are based on various assumptions and estimates, including, but not limited to: production volumes, commodity prices (2023 - Cu: $3.75/lb, Zn:
$1.30/lb, Pb: $0.90/lb, Au: $1,750/oz: Ag: $22.00/oz) foreign currency exchange rates (2023- €/USD:1.00, USD/SEK:10.50, CLP/USD:850, USD/BRL:5.00) and operating
costs.
8 68% of Candelaria’s total gold and silver production are subject to a streaming agreement and as such cash costs are calculated based on receipt of $425/oz and
$4.25/oz, respectively, on gold and silver sales in the year.
Cash Cost 20237
Copper
Candelaria8 $1.80/lb - $1.95/lb
Chapada $2.55/lb - $2.75/lb
Neves-Corvo $2.10/lb - $2.30/lb
Zinc
Zinkgruvan $0.60/lb - $0.65/lb
Nickel
Eagle $1.50/lb - $1.65/lb
2023 Capital Expenditure Guidance
• Capital expenditures are forecast to total $1,100 million on a 100% basis , including expansionary capital
expenditures9 on the Josemaria Project . The majority of sustaining capital expenditures are for open pit
waste stripping, underground mine development , tailings storage facility (“TSF”) and water ma nagement
works.
Capital Expenditures ($ millions) 202310
Sustaining Capital
Candelaria (100% basis) 400
Chapada 70
Eagle 20
Neves-Corvo 130
Zinkgruvan 70
Other 10
Total Sustaining Capital 700
Josemaria Project 400
Total Capital Expenditures 1,100
• Candelaria: Capital expenditures at Candelaria in 2023 are forecast to total $400 million. Of this, capitalized
waste stripping is forecast to be $185 million, and underground mine development, including ramp works,
to be approximately $ 55 million. Capital expenditure for mobile and mine equipment is forecast to be
$55 million, and $55 million is estimated for the continued building of the Los Diques TSF. Pebble crushing
debottlenecking capital expenditures are forecast to be approximately $8 million in 2023 and completed
during the year.
• Chapada: Capital expenditures at Chapada in 202 3 are forecast to total $ 70 million. This includes
approximately $2 5 million for capitalized waste stripping, $ 15 million for TSF and water management
systems, and $5 million for mine and mobile equipment.
• Eagle: Capital expenditures a t Eagle in 2023 are forecast to total $ 20 million in 202 3, composed of
underground mine development, of which approximately $8 million is for development of the Upper Keel
zone, and for mine and mill sustaining initiatives.
• Neves-Corvo: Capital expenditures at Neves -Corvo in 2023 are estimated to total $ 130 million in 202 3.
Approximately $50 million is forecast for underground mine development, including infill drilling, $60 million
for projects to enable ZEP to consistently achieve nameplate capacity, and $10 million for mine and mobile
equipment. Projects to enable ZEP to consistently achieve its 2.5 Mtpa processing capacity include raise and
chiller additions to increase capacity of the ventilation system , installation of a redundant SAG feeder,
expansion of the TSF, and process water treatment plant works.
• Zinkgruvan: Capital expenditures at Zinkgruvan are forecast to total $ 70 million in 202 3, of which
approximately $35 million is for underground development, including development of the Dalby orebody.
9 Expansionary capital expenditure is a non-GAAP measure. For historical comparatives see the Historical Non-GAAP Measure Comparatives section of this press
release. Please also see the Management’s Discussion and Analysis for the year ended December 31, 2021, for discussion of non-GAAP measures. Capital expenditures
have been reported on a cash basis.
10 Capital expenditures are based on various assumptions and estimates, including, but not limited to foreign currency exchange rates (2023- €/USD:1.00,
USD/SEK:10.50, CLP/USD:850, USD/BRL:5.00).
Expenditure on the sequential flotation project, to improve concentrate grades and metal recovery rates, is
forecast to be $8 million. The remainder of the sustaining capital expenditure is primarily for TSF works,
reduced emissions and energy saving programs and other improvement initiatives.
• Josemaria Project: Capital expenditures are estimated to be approximately $400 million in 2023 in support
of advancing the project prior to a potential construction decision. An updated initial capital cost estimate
and project schedule review are progressing well with the updated Technical Report on-track for publication
in the second half of 2023. Capital expenditures primarily include continuation of detail engine ering,
procurement of long -lead equipment, and preconstruction activities such as road upgrades and
geotechnical work.
2023 Exploration Investment Guidance
Exploration expenditures are planned to be $ 45 million in 2023 primarily for in-mine and near-mine targets at
our operations . The largest portion of the planned expenditure is to be at Candelaria and Chapada with the
remaining operations and new business development activities comprising the balance.
Conference Call
The Company will hold a conference call and webcast at 08:00 am ET, 14:00 CET on Friday, January 13, 2023, to
answer analyst and investor questions. Conference call details are provided below. Please dial-in 15 minutes
prior to the call start to ensure placement into the conference on time.
Call-in number for the conference call (North America): +1 416 764 8658
Call-in number for the conference call (North America Toll Free): +1 888 886 7786
Call-in number for the conference call (Sweden): 020 089 9189
To view the live webcast presentation, please log on using this direct link:
https://viavid.webcasts.com/starthere.jsp?ei=1592975&tp_key=12653d08de.
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 through January 13, 2024.
Call-in numbers for the replay are (North America): +1 888 886 7786 or (internationally) +1 416 764 8658.
The passcode for the replay is: 352670
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 and projects in Argentina,
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 12, 2023 at 18:00 Eastern Time.
For Further Information, Please Contact:
Mark Turner, Vice President, Business Valuations and Investor Relations: +1 416 342 5565
Irina Kuznetsova, Manager, Investor Relations: +1 416 342 5583
Robert Eriksson, Investor Relations Sweden: +46 8 440 54 50
Other Information
The Technical Information in this press release has been prepared in accordance with NI 43 -101 and has been reviewed and approved by Arman Barha, P.Eng., Vice
President, Technical Services of the Company, a "Qualified Person" under NI 43-101. Mr. Barha has verified the data disclosed in this release and no limitations were
imposed on his verification process.
Historical Non-GAAP Measure Comparatives
Cash Cost and Sustaini ng and Expansionary Expenditures are non -GAAP financial measures and are not
standardized financial measures under generally accepted accounting principles under IFRS and, therefore,
amounts presented may not be comparable to similar data presented by other mining companies.
Cash Cost – Year Ended December 31, 2021
Operations Candelaria Chapada Eagle Neves-Corvo Zinkgruvan
($ thousands, unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn) Total
Sales volumes (Payable metal contained metal in concentrate):
Tonnes 148,213 47,123 15,012 36,618 64,056
Pounds (000s) 326,753 103,888 33,096 80,729 141,219
Production costs 1,436,278
Less: Royalties and other (57,887)
Ore stockpile inventory write-down (65,025)
1,313,366
Deduct: By-product credits (646,950)
Add: Treatment and refining charges 122,330
Cash cost 494,213 108,782 (40,883) 152,416 74,218 788,746
Cash cost per pound ($/lb) 1.51 1.05 (1.24) 1.89 0.53
Cash cost is a non-GAAP measure. See the Management’s Discussion and Analysis for the year ended December 31, 2021, for discussion of non -GAAP
measures under the heading “Non-GAAP and Other Performance Measures” on page 26 which is incorporated by referenc e herein.
Capital Expenditures – Year Ended December 31, 2021
($ thousands) Sustaining Expansionary
Capitalized
Interest Total
Candelaria 312,388 - - 312,388
Chapada 52,275 - - 52,275
Eagle 16,279 - - 16,279
Neves-Corvo 52,552 56,388 336 109,276
Zinkgruvan 41,325 - - 41,325
Other 554 - - 554
475,373 56,388 336 532,097
Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows.
Expansionary capital expenditures are non-GAAP measures. See the Management’s Discussion and Analysis for
the year ended December 31, 2021, for discussion of non -GAAP measures heading “Non-GAAP and Other
Performance Measures” on page 26 which is incorporated by reference herein.
Cautionary Statement on 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 forward -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 p roduction 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 estimati ons, life of mine estimates, 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; the Company’s integration of acquisitions and any anticipated benefits thereof; and exp ectations for other economic, business,
and/or competitive factors. 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 labor; 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 environ ment 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 facto rs and assumptions
are considered reasonable by Lundin Mining as at the date of this document in light of management’s experience a nd perception of current conditions and expected
developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors
could cause actual results to differ materia lly 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 mining including but not limited to risks to the environment, industrial accidents,
catastrophic equipment failures, unusual or unexpected geological formations or unstable ground conditions, and natural phenomena such as earthquakes, flooding
or unusually severe weather; uninsurable risks; global financial conditions and inflation; changes in the Company’s share price, and volatility in the equity markets in
general; volatility and fluctuations in metal and commodity demand and prices; changing taxation regimes; delays or the inabi lity to obtain, retain or compl y with
permits; reliance on a single asset; unavailable or inaccessible infrastructure, infrastructure failures, and risks related to ageing infrastructure; risks related to negative
publicity with respect to the Company or the mining industry in general; health and safety risks; pricing and availability of key supplies and services; the threat
associated with outbreaks of viruses and infectious diseases, including the COVID -19 virus; exchange rate fluctuations; risks relating to attracting and retaining of
highly skilled employees; risks inherent in and/or associated with operating in foreign countries and emerging markets; clima te change; regulatory investigations,
enforcement, sanctions and/or related or other litigation; existence of significant shareholders; uncertain political and economic environments, including in Argentina,
Brazil and Chile; risks associated with acquisitions and related integration efforts, including the ability to achieve antici pated benefits, unanticipated difficulties or
expenditures relating to integration and diversion of management time on integration; indebtedness; liquidity risks and limited finan cial resources; funding
requirements and availability of financing; exploration, development or mining results not being consistent with the Company’s expectations; risks related to the
environmental regulation and environmental impact of the Company’s operations and products and management thereof; activist shareholders and proxy solicitation
matters; reliance on key personnel and re porting and oversight systems, as well as third parties and consultants in foreign jurisdictions; historical environmental
liabilities and ongoing reclamation obligations; information technology and cybersecurity risks; risks related to mine closur e activities, reclamation obligations, and
closed and historical sites; social and political unrest, including civil disruption in Chile; the inability to effectively c ompete in the industry; financial projections,
including estimates of future expenditures and ca sh costs, and estimates of future production may be unreliable; actual ore mined and/or metal recoveries varying
from Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing
efficiency; 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; enforcing legal rights in foreign jurisdictions; community and stakeholder opposition; changes in laws, regulations or policies
including but not limited to those related to mining regimes, permitting and approvals, environmental and tailings management , labor, trade relations, and
transportation; risks associated with the structural stability of waste rock dumps or tailings storage facilities; dilution; risks relating to dividends; conflicts of interest;
counterparty and credit risks and customer concentration; the estimation of asset car rying values; challenges or defects in title; internal controls; relationships with
employees and contractors, and the potential for and effects of labor disputes or other unanticipated difficulties with or sh ortages of labor or interruptions in
production; compliance with foreign laws; potential for the allegation of fraud and corruption involving the Company, its customers, su ppliers or employees, or the
allegation of improper or discriminatory employment practices, or human rights violations; compliance with environmental, health and safety regulations and laws;
and other risks and uncertainties, including but not limited to those described in the “Risk and Uncertainties” section of th e Company’s AIF and the “Managing Risks”
section of the Company’s MD&A for the year ended December 31, 2021, which are available on SEDAR at www.sedar.com under the Company’s profile. All of the