Lundin Mining First Quarter Results
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NEWS RELEASE
Lundin Mining First Quarter Results
Toronto, April 28, 2021 (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin
Mining” or the “Company”) today reported cash flows of $158.7 million generated from operations in its first
quarter 2021. Adjusted operating cash flow2 for the quarter was $279.8 million ($0.38 per share). Net earnings
attributable to Lundin Mining shareholders for the quarter was $135.2 million ($0.18 per share) and adjusted
earnings2 was $144.4 million ($0.20 per share). Adjusted EBITDA2 was $354.4 million for the quarter.
Marie Inkster, President and CEO commented, “Our operations performed well in the first quarter. Candelaria and
Chapada significantly increased mill throughput quarter-over-quarter and a new record for zinc ore was set at Zinkgruvan.
With increasing ore grades at Candelaria and Chapada, we are well positioned to deliver our annual guidance.
While first quarter financial results were impacted by timing with a shipment from Chapada pushed into early April, we
generated significant operating cash flow. Eagle achieved a cash cost2 of negative $1.62/lb nickel and contributed over
$75 million of operating cash flow. The Zinc Expansion Project at Neves-Corvo restarted in early January and is on-track
for commissioning later this year. Lastly, in early April, at Chapada we were successful in the acquisition of 23 highly
prospective near-mine exploration claims through government auction, increasing our overall land position by 80%.
We continue to expect 2021 to be an exciting and rewarding year for Lundin Mining, as we benefit from the recent
investments made in our operations to take full advantage of the favourable metal price environment and to generate
meaningful free cash flow for our shareholders.”
Summary Financial Results
Three months ended
March 31
US$ Millions (except per share amounts) 2021 2020
Revenue 681.5 378.0
Gross profit (loss) 252.5 (22.7)
Attributable net earnings (loss)1 135.2 (111.5)
Net earnings (loss) 154.2 (113.6)
Adjusted earnings (loss)2 144.4 (40.6)
Adjusted EBITDA2 354.4 90.3
Basic and diluted earnings (loss) per share1 0.18 (0.15)
Basic and diluted adjusted earnings (loss) per share2 0.20 (0.06)
Cash flow from operations 158.7 83.4
Adjusted operating cash flow2 279.8 27.9
Adjusted operating cash flow per share2 0.38 0.04
Cash and cash equivalents 181.3 366.9
Net debt2 8.1 117.7
1 Attributable to shareholders of Lundin Mining Corporation.
2 This is a non-GAAP measure. Please refer to the Company's discussion of non-GAAP measures in its Management's Discussion and Analysis for the three
months ended March 31, 2021.
1 This is a non-GAAP measure. Please refer to the Company’s discussion of non-GAAP measures in its Management’s Discussion and Analysis for the three
months ended March 31, 2021.
Highlights
Operational Performance
Operations performed well during the quarter with production in-line with expectations. Full-year metal production at all
mines remains on track to achieve or exceed previously reported guidance. Cash costs are also trending at or better than
previously reported guidance.
The Company continues to manage and respond to the COVID-19 pandemic and has implemented preventative measures
to ensure the safety of its workforce, local communities and other key stakeholders. Candelaria and Chapada have
experienced a recent increase in case levels as infection rates in Brazil and Chile have been increasing. The sites have
reinforced safety procedures and implemented additional controls and mass testing to identify and control further
spread. To date, production disruptions as a result of COVID-19 have been minimal and there has been no significant
disruption in the delivery or receipt of goods at our operations.
Candelaria (80% owned): Candelaria produced 34,203 tonnes of copper, and approximately 21,000 ounces of gold in
concentrate on a 100% basis in the quarter. While mill throughput was higher than the prior year quarter, copper
production was lower primarily due to planned lower grades in the current year quarter. Gold production was comparable
to the prior year quarter. Copper cash costs1 of $1.65/lb for the quarter were higher than the prior year comparable
quarter largely owing to the impact of lower sales volumes.
Chapada (100% owned): Chapada produced 9,841 tonnes of copper and approximately 13,000 ounces of gold in
concentrate. Copper and gold production for the quarter were lower than the prior year quarter primarily due to planned
lower grades and recoveries. Processed ore of over 5.8 million tonnes was the second highest quarterly throughput
achieved since acquisition. Copper cash costs of $1.33/lb for the quarter were higher than the prior year quarter due
mainly to lower sales volumes, impacted by timing of sales.
Eagle (100% owned): Eagle produced 5,354 tonnes of nickel and 5,391 tonnes of copper during the quarter. Nickel and
copper production were higher than the prior year quarter as a result of a greater proportion of mining in the higher
grade Eagle East orebody. By-product credits, aided by rising copper prices, exceeded gross cash costs in the quarter
resulting in nickel cash costs of negative $1.62/lb.
Neves-Corvo (100% owned): Neves-Corvo produced 7,441 tonnes of copper and 14,710 tonnes of zinc for the quarter.
Copper and zinc production were lower than the prior year quarter due to lower mill throughput and grades. Copper cash
costs of $2.61/lb for the quarter were higher than the prior year quarter primarily due to lower sales volumes.
The Zinc Expansion Project (“ZEP”) officially restarted in January 2021, following proactive suspension in March 2020 due
to the COVID-19 pandemic. It is expected that the project construction will be substantially completed by the end of 2021
with commissioning of the mine materials handling systems, shaft upgrade and the expanded zinc processing plant.
Zinkgruvan (100% owned): Zinc production of 18,655 tonnes was comparable with the prior year quarter. Lead
production of 4,709 tonnes was lower than the prior year quarter due to lower feed grades. Zinc cash costs of $0.76/lb
were higher than the prior year quarter as a result of lower by-product credits.
Total Production
(Contained metal in concentrate)
2021 2020
Q1 Total Q4 Q3 Q2 Q1
Copper (t)a 57,354 230,781 41,885 61,444 65,285 62,167
Zinc (t) 33,365 142,744 41,428 32,787 31,582 36,947
Gold (koz)a 34 163 35 45 44 39
Nickel (t) 5,354 16,718 4,909 4,854 3,380 3,575
a - Candelaria's production is on a 100% basis.
Corporate Highlights
• On February 18, 2021, the Company announced a 50% increase in its cash dividend, to C$0.06 per share or C$0.24
per share annualized, compared to the quarterly dividend paid in 2020.
Financial Performance
• Gross profit for the quarter ended March 31, 2021 was $252.5 million, an increase in gross profit of $275.2 million
compared to the first quarter of 2020. The increase was primarily due to highe r revenues driven by higher metal
prices and price adjustments ($331.0 million), partially offset by lower copper sales volumes.
• Net earnings for the current quarter were $154.2 million, a $267.8 million increase over the net loss from the first
quarter of 2020. The increase was primarily attributable to higher gross profit.
• Adjusted earnings for the quarter were $144.4 million, compared to adjusted loss of $40.6 million in the prior year
quarter and reflects higher gross profit partially offset by higher income taxes and non-controlling interest.
Financial Position and Financing
• Cash and cash equivalents increased by $39.9 million during the quarter ended March 31, 2021 to $181.3 million.
Cash flow from operations of $158.7 million exceeded capital expenditures of $112.5 million, partially offset by
the effects of foreign exchange on cash balances.
• Net debt as at March 31, 2021 was $8.1 million, a decrease of $55.1 million from the net debt balance as at
December 31, 2020. The decrease in net debt is attributable to the positive cash flow impacts previously described.
• As of April 28, 2021, the Company had a cash and net cash balance of approximately $ 215.0 million and
$25.0 million, respectively.
Outlook
Annual nickel production guidance has been increased, reflecting excellent first quarter 2021 results from Eagle. All
other production guidance for 2021 remains unchanged from that previously provided.
Cash cost guidance for Eagle has been improved given the first quarter performance and the expectation of continued
favourable copper by-product metal prices. Cash cost guidance for all other operations are unchanged from those
previously provided.
While the Company has not experienced significant disruptions to production, shipments of concentrate, or its supply
chain due to COVID-19, we continue to caution that a localized outbreak at the operations may require the need to
implement increased isolation and containment measures which could impact production, delay maintenance
activities or disrupt supply chains. Given the uncertainty of the duration and magnitude of the impact of COVID-19,
production and cash cost estimates are subject to a higher than normal degree of uncertainty. The guidance below
does not reflect any potential for additional suspensions or other significant disruption to operations due to COVID-
19.
2021 Production and Cash Cost Guidance
Previous Guidancea Revised Guidance
Production Cash Costs Production Cash Costsb
Copper (t) Candelaria
172,000 - 182,000 $1.35/lb 172,000 - 182,000 $1.35/lbc
Chapada 48,000 - 53,000 $1.10/lb 48,000 - 53,000 $1.10/lbd
Eagle 17,000 - 20,000 17,000 - 20,000
Neves-Corvo 35,000 - 40,000 $2.20/lb 35,000 - 40,000 $2.20/lbc
Zinkgruvan 3,000 - 4,000 3,000 - 4,000
Total 275,000 - 299,000 275,000 - 299,000
Zinc (t) Neves-Corvo 70,000 - 75,000 70,000 - 75,000
Zinkgruvan 71,000 - 76,000 $0.65/lb 71,000 - 76,000 $0.65/lbc
Total 141,000 - 151,000 141,000 - 151,000
Gold (oz) Candelaria
95,000 - 100,000 95,000 - 100,000
Chapada 75,000 - 80,000 75,000 - 80,000
Total 170,000 - 180,000 170,000 - 180,000
Nickel (t) Eagle 15,000 - 18,000 $0.50/lb 17,000 - 20,000 $(0.25)/lb
a. Guidance as outlined in the Management's Discussion and Analysis for the year ended December 31, 2020.
b. Cash costs are based on various assumptions and estimates, including but not limited to: production volumes, as noted abov e, commodity
prices (Cu: $3.75/lb, Zn: $1.15/lb, Pb: $0.85/lb, Au: $1,700/oz), foreign exchange rates (€/USD:1.2 0, USD/SEK:8.20, USD/CLP:700, USD/BRL:5.10)
and operating costs for the remaining of 2021.
c. 68% of Candelaria's total gold and silver production are subject to a streaming agreement and silver production at Zinkgr uvan and Neves-
Corvo are also subject to streaming agreements. Cash costs are calculated based on the receipt of approximately $4.16/oz gold $4.16/oz to
$4.48/oz silver.
d. Chapada cash costs are calculated on a by-product basis and do not include the effects of its copper stream agreements. Effects of copper
stream agreements are reflected in copper revenue and will impact realized revenue per pound.
2021 Capital Expenditure Guidance
Capital expenditures, excluding capitalized interest, are outlined below.
2021 Exploration Investment Guidance
Total planned exploration expenditures are expected to be $40.0 million in 2021, unchanged from previous
guidance. Approximately $38.0 million will be spent supporting significant in-mine and near-mine targets at our
operations ($14.0 million at Candelaria, $6.0 million at Zinkgruvan, $14.0 million at Chapada, and $4.0 million at
Neves-Corvo). The remaining amount is planned to advance activities on exploration stage and new business
development projects.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining company with operations in Brazil, Chile, Portugal, Sweden
and the United States of America, primarily producing copper, zinc, gold and nickel.
The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse
Regulation. The information was submitted for publication, through the agency of the contact persons set out below
on April 28, 2021 at 17:00 Eastern Time.
For further information, please contact:
Mark Turner, Director, Business Valuations and Investor Relations: +1-416-342-5565
Brandon Throop, Manager, Investor Relations: +1‐416‐342‐5583
Robert Eriksson, Investor Relations Sweden: +46 8 440 54 50
2020 Guidance ($millions) Previous Guidancea Revisions Revised Guidance
Sustaining Capital
Candelaria (100% basis) 345 345
Chapada 65 65
Eagle 15 5 20
Neves-Corvo 65 65
Zinkgruvan 50 50
Total Sustaining Capital 540 5 545
Zinc Expansion Project (Neves-Corvo) 70 70
Total Capital Expenditures 610 5 615
a. Guidance as outlined in the Management's Discussion and Analysis for the year ended December 31, 2020.
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 in cluded 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 guida nce 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 Reserv e estimations, 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 Company’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 and any anticipated benefits thereof. Wor ds su ch 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 a nd 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 significant business, economic and competitive uncertainties and contingencies. Known and
unknown factors could cause actual results to differ materially from t hose 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 prices; the threat associated with outbreaks of viruses and infectious diseases, including the COVID -19
virus; changing taxation regimes; reliance on a single asset; delays or the inability to obtain, retain or comply with permits; risks related to
negative publicity with respect to the Company or the mining industry in general; health and safety risks; exploration, development or mining
results not being consistent with the Company’s expectations; unavailable or inaccessible infrastructure and risks related to ageing
infrastructure; 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; 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; ore processing
efficiency; community and stakeholder opposition; information technology and cybersecurity risks; potential for the allegatio n of fraud and
corruption involving the Company, its customers , suppliers or employees, or the allegation of improper or discriminatory employment
practices, or human rights violations; regulatory investigations, enforcement, sanctions and/or related or other litigation; uncertain political
and economic environments, including in Brazil and Chile; risks associated with the structural stability of waste rock dumps or tailings storage
facilities; estimates of future production and operations; estimates of operating, cash and all- in sustaining cost estimates; civil disruption in
Chile; the potential for and effects of labor disputes or other unanticipated difficulties with or shortages of labor or interruptions in production;
risks related to the environmental regulation and environmental impact of the Company’s operations and products and management thereof;
exchange rate fluctuations; reliance on third parties and consultants in foreign jurisdictions; climate change; risks relating to attracting and
retaining of highly skilled employees; compliance with environmental, he alth and safety laws; counterparty and credit risks and customer
concentration; litigation; risks inherent in and/or associated with operating in foreign countries and emerging markets; risks related to mine
closure activities and closed and historical sit es; 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; interna l controls;
challenges or defects in title; the estimation of asset carrying values; historical environmental liabilities and ongoing reclamation obligations;
the price and availability of key operating supplies or services; competition; indebtedness; compliance with foreign laws; existence of significant
shareholders; liquidity risks and limited financial resources; funding requirements and availability of financing; enforcing legal rights in foreign
jurisdictions; dilution; risks relating to dividends; risks associated with acquisitions and related integration efforts, including the ability to
achieve anticipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on
integration; activist shareholders and proxy solicitation matters; and other risks and uncertainties, including but not limited to those described
in the “Risk and Uncertainties” section of the Annual Information Form and the “Managing Risks” section of the Company’s MD&A for the year
ended December 31, 2020, 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 act ual results to differ materially 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 and 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. The Company disclaims any intention or obligation to update or revise for ward-looking
information or to explain any material difference between such and subsequent actual events, except as required by applicable law.