Lundin Mining Announces Eagle East Feasibility Study Results and Provides a Project Update
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NEWS RELEASE
LUNDIN MINING ANNOUNCES EAGLE EAST FEASIBILITY STUDY
RESULTS AND PROVIDES A PROJECT UPDATE
Toronto, April 10, 2017 (TSX: LUN; OMX: LUMI) Lundin Mining Corporation (“Lundin Mining” or the
“Company”) is pleased to announce the results of a Feasibility Study, including an updated Mineral Resource
estimate and a maiden Mineral Reserve estimate, on the high grade Eagle East nickel/copper mineralization,
as well as provide an update on the project progress.
(This news release contains forward-looking information about expected future events and financial and operating performance of the Company.
We refer to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 5. All currency figures
are in US$ unless otherwise stated.)
Highlights
The Feasibility Study demonstrates the viability of mining Eagle East as an extension of the current Eagle
Mine with an incremental estimated post-tax net present value (“NPV”) of $205 million at an 8% discount
rate and an estimated internal rate of return (“IRR”) of 47%. The estimated pre-production capital cost is
$102 million.
Given the robust results of the Feasibility Study, the Company has approved the full development of Eagle
East subject to the successful receipt of amendments to the mining permit.
An updated Mineral Resource estimate comprising 1.29 million tonnes classified as Indicated grading 5.2%
Ni and 4.2% Cu and an additional 0.29 million tonnes of Inferred grading 1.7 % Ni and 1.4% Cu.
The Feasibility Study indicates that these Mineral Resources can be mined with no significant changes to
the current mine, ore transport, mill, and tailings infrastructure.
Similar mining methods to Eagle are proposed and a maiden Probable Mineral Reserve of 1.54 Mt at 3.7%
Ni and 3.0% Cu has been estimated. Mining of this Mineral Reserve will significantly increase nickel and
copper production from 2020 and extend estimated mine life to at least 2023.
The Michigan Department of Environmental Quality has approved the initial Eagle East access ramp
development within the existing Eagle mine boundary. An application for a modification to the existing
Part 632 mining permit to al low the mining of Eagle East, with a supporting Environmental Impact
Assessment, was submitted in late March 2017 and a decision is expected prior to the end of 2017.
Eagle East exploration/access ramp development has progressed well since commencement in July 2016.
At the end of Q1 2017, a total of 938 metres of centreline advance had been completed together with the
purchase of additional mobile mining equipment and installation of mining infrastructure. Ongoing drilling
has enabled a Probable Reserve cla ssification, a mine plan update and improved forecast return on
investment.
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Mr. Paul Conibear, President and CEO of Lundin Mining stated, “The results of the Feasibility Study on Eagle
East confirm robust project economics and demonstrate significant incremental value to our Eagle Mine
operations. The successful permitting and development of Eagle East will extend the life of the operation to
the continuing benefit of our shareholders, employees, and local economy . Early decline ramp development
has progressed on schedule and within budget. We continue with exploration efforts to find additional
mineable mineralization”.
Mineral Resource Estimate
The Eagle East massive and semi-massive nickel-copper sulphide mineralization is located approximately two
kilometers east and 600 m below the Eagle Mine deposit. Since discovery of the Eagle East mineralization in
July 2014, over 108,000 m of diamond drilling have been completed in 96 holes to locate and define the deposit
which now has dimensions of approximately 550 m long, 40 to 50 m high and 30 to 40 m wide (see Figures 1
and 2). The estimation of Indicated and Inferred Mineral Resource is tabulated below. Exploration drilling is
continuing at Eagle to systematically test the Eagle East conduit and deep peridotite and gabbro targets.
Eagle East Mineral Resource Estimate, December 31, 2016, NSR cut-off $142/t,
Category Tonnes, 000s Ni (%) Cu (%) Co (%) Au (g/t) Ag (g/t) Pt (g/t) Pd (g/t)
Indicated 1,293 5.2 4.2 0.1 0.5 15.3 1.7 1.3
Inferred 290 1.7 1.4 - 0.2 6.0 0.5 0.3
Feasibility Study
Following the robust results from the Preliminary Economic Assessment on Eagle East in June 2016, a Feasibility
Study has now been completed refining and optimizing the development plans to a higher level of definition.
Access to Eagle East will be via a ramp initially spiraling down beneath Eagle Mine, making use of the existing
mine infrastructure, the n a twin ramp across to Eagle East followed by a further spiral section to the
mineralization (see Figure 3). The total centerline length of the ramp development is 6,669 metres. Ventilation
and secondary egress will be provided by dedicated raises and the twin ramp system. Additional geotechnical
studies have indicated that the same mining method as Eagle, transverse sub-level stoping with cemented
rockfill, can be employ ed and the estimated Mineral Reserves are tabulated below. The existing mine
infrastructure, power supply, temporary waste stockpiling and other facilities are expected to be sufficient to
support the mining of Eagle East. All waste from the access ramp development will be temporarily stored and
then used as backfill in both Eagle and Eagle East stopes.
Eagle East Mineral Reserve Estimate December 31, 2016, NSR cut-off $160/t
Category Tonnes, 000s Ni (%) Cu (%) Co (%) Au (g/t) Ag (g/t) Pt (g/t) Pd (g/t)
Probable 1,544 3.7 3.0 0.1 0.4 10.6 1.2 0.9
Advanced metallurgical testwork programmes have demonstrat ed that the Eagle East mineraliz ation has
equivalent performance in terms of grinding and flotation to Eagle, and no issues are foreseen with processing
the blended Eagle and Eagle East mineralization in the Humboldt processing plant. Eagle tailings are currently
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disposed of in the former Humboldt open pit and sufficient capacity exists for the additional tailings volume
created by Eagle East. No other additional surface infrastructure is anticipated.
The Feasibility Study has assumed that the Eagle East access ramp initiated in July 2016 continues as described
above and that initial ore production is achieved in the first quarter 2020. The high grade mineralization from
Eagle East will be blended with the lower grade from Eagle , significantly increasing nickel and copper
production and extending the estimated mine life until the third quarter of 2023 (see Figure 4). Total additional
nickel and copper in concentrate is estimated at 47.1 and 46.0k tonnes respectively.
The estimated pre-production capital cost for Eagle East is $102.0 million, including a 9% contingency, with the
majority of this expenditure for ramp access, ventilation raises, level developm ent and new mine equipment
and infrastructure. Mine operating costs have been estimated from the current Eagle contractor rates with
allowances for the increased haulage distance, ventilation and dewatering requirements for Eagle East.
Processing, mine to mill ore haulage and G&A costs are the same as the current Eagle operations.
The results of the Feasibility Study demonstrate the robust viability of mining Eagle East as an extension of the
current Eagle mine with an incremental estimated post-tax NPV of $205 million at an 8% discount rate and an
estimated IRR of 47% using long term metal prices of $ 7.50 and $ 8.00/lb Ni and $3.00/lb Cu. The forecast
payback period is approximately 1.5 years from production start and the forecast average combined C1 cash
cost during the combined Eagle and Eagle East production period is $0.49/lb Ni. The key results of the Feasibility
Study are tabulated below.
An independently authored National Instrument 43 -101 Technical Report on the Eagle Mine incorporating
Eagle East will be filed on the Company’s SEDAR profile at www.sedar.com within 45 days of this press release.
Feasibility Study Results Summary Unit Eagle East
Potential Production tonnes 000s 1,544
Head Grades Ni (%), Cu (%) 3.7, 3.0
Ni, Cu Metal Produced in Concentrate tonnes 000s 47.1, 46.0
Pre-Production Capital US$ millions 102.0
Sustaining Capital US$ millions 27.6
Metal Price Assumptions from 2020 $/lb Ni 7.50 (2020) then 8.00
$/lb Cu 3.00
Incremental Post Tax NPV8 US$ millions 205
Incremental Post Tax NPV0 US$ millions 337
IRR % 47
Average C1 Cash Cost1 $/lb Ni 0.49
Payback Years 1.5
Breakeven Ni Price, NPV8 = 02 $/lb Ni 3.16
1. C1 cash cost estimates are for Eagle and Eagle East combined during 2020 to 2023
2. Breakeven is for Eagle and Eagle East combined
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Permitting and Development Status
The Michigan Department of Environmental Quality has approved the initial Eagle East access ramp
development within the existing Eagle Mine boundary. An application for a modification to the existing Part
632 mining permit to allow the mining of Eagle East, with a supporting Environmental Impact Assessment, was
submitted in late March 2017 and a decision is expected by late 2017. While some additional permit
modifications are required for the continued minin g of Eagle, no other specific permits are required for the
mining of Eagle East.
Development of the Eagle East access ramp by contract miners has accelerated since starting in July 2016. At
the end of March 2017, total advance was 1,155 metres with 938 met res of centreline development in the
ramp. Supporting ventilation, power and pumping infrastructure has been extended from the existing Eagle
mine and new mine equipment on site to support the additional development. Total expenditure to date is
approximately $7.5 million.
Notes on the Mineral Resource, Mineral Reserve and Feasibility Study
The Mineral Resource and Mineral Reserve estimates in this news release have been prepared in accordance
with Canadian National Instrument 43 -101 - Standards of Disclosure for Mineral Projects (“NI 43 -101”),
classified in accordance with Canadian Institute of Mining Metallurgy and Petroleum’s “CIM Definition
Standards - For Mineral Resources and Mineral Reserves” 2014.
The Eagle East Mineral Resource and Mineral Reserve estimates have been prepared by or under the
supervision of Lundin Mining Qualified Persons as defined in NI 43-101 and audited by independent Qualified
Persons on behalf of Lundin Mining.
The Eagle East Mineral Resource and Mineral Reserve estimates are reported above fixed NSR cut -offs of
US$142/t and US$160/t respectively and are dated December 31, 2016. The NSR is calculated on a recovered
payable basis taking in to account nickel, copper, cobalt, gold and PGM grades, metallurgical recoveries, metal
prices and realization costs. The metal prices used for the NSR calculations are US$8.50/lb nickel, US$2.75/lb
copper, US1,000/oz gold , US$1,500 platinum, US$550/oz palladium and US$13.00/lb cobalt. The Indicated
Mineral Resource estimates are inclusive of those Mineral Resources modified to produce the Probable Mineral
Reserve estimates.
The Qualified Persons responsible for the Eagle and Eagle East Mineral Resource and Mineral Reserve estimates
are David Rennie, P.Eng., Associate Principal Geologist and Normand Lecuyer, P.Eng., Principal Mining
Engineer, respectively, both of Roscoe Postle Associates Inc.
The Qualified Persons who have reviewed and verified the data and estimates in the Eagle East Feasibility Study
are David Rennie, Normand Lecuyer, Graham Clow, P.Eng., Principal Mining Engineer and Brenna Scholey,
P.Eng., Principal Metallurgist, all of Roscoe Postle Associates Inc.
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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 Min ing 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
EU Market Abuse Regulation and the Swedish Securities Market Act. This information was publically
communicated on April 10, 2017 at 5:00 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 North America: +1-416-342-5583
Robert Eriksson, Investor Relations Sweden: +46 8 545 015 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 . Such statements include , but are not limited to, the results of the
Eagle East Feasibility Study, including, without limitation, Mineral Resource s, Mineral Reserves, economics (such as
net present value (or NPV), internal rate of return (or IRR) and C1 cash costs), payback and payback period, breakeven,
and life of mine, all of which are estimates (and the parameters and assumptions underlying, and realization of such
estimates); capital expenditure estimates; metal price assumptions; and permitting and development expectations,
and the results thereof. Words such as “assume”, “budget”, “concept”, “estimate”, “expect”, “feasibility”, “forecast”,
“foresee”, “indicate”, “schedule”, “study” and viability”, or variations of these terms or similar terminology or
statements that certain actions, events or results “may” or “will” occur or be achieved are intended to identify such
forward-looking information. Although the Company believes that the assumptions, estimates and expectations
reflected in the forward -looking information contained herein are reasonable, these statement s by thei r nature
involve risks and uncertainties, and are not guarantees of future performance. Forward-looking information is based
on a number of assumptions , and subject to a variety of risks and uncertainties which could cause actual events or
results to differ from those reflected in the forward-looking statements. Such risks and uncertainties include, without
limitation, those relating to foreign currency fluctuations; inherent in mining including environmental hazards,
industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; associated
with the estimation of Mineral Resources and Mineral Reserves, and the geology, grade and continuity of mineral
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 unanticipat ed 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 and volatility of metal prices ;
uncertain political and economic environments; and changes in laws or policies, foreign taxation, delays or the
inability to obtain necessary governmental permits, as well as other risks and uncertainties including but not limited
to those described in the Risks and Uncertainties section of the Company’s most recently filed Annual Information
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Form and in the Managing Risks section of each of the Company ’s 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 environment where the Company
operates will continue to support the development and operation of mining projects. Should one or more of these
risks and uncert ainties 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. The Company disclaims any intention or obligation to update or revise any
forward‐looking statements or to explain any material difference between subsequent actual events and such
forward‐ looking statements, except to the extent required by applicable law.
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Figure 1 – Eagle and Eagle East long section showing exploration drill hole traces and the route of the
proposed ramp to Eagle East
Figure 2 – Eagle East typical cross section showing massive (MSU) and semi -massive sulphide (SMSU)
mineralization and the peridotite (MPER)
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Figure 3 – Schematic looking north showing Eagle and Eagle East with the proposed twin ramp access making
use of the existing Eagle mine infrastructure