Operating earnings is a non‐GAAP measure defined as sales, less operating costs (excluding depreciation) and general and administrative costs. 2 Attributable to shareholders of Lundin Mining Corporation. 3 Basic and diluted earnings / (loss) per share attributable to shareholders of Lundin Mining Co
1
Operating earnings is a non‐GAAP measure defined as sales, less operating costs (excluding depreciation) and general and administrative costs.
2
Attributable to shareholders of Lundin Mining Corporation.
3
Basic and diluted earnings / (loss) per share attributable to shareholders of Lundin Mining Corporation.
4
Net cash / (debt) is a non‐GAAP measure defined as cash and cash equivalents, less long‐term debt and finance leases, before deferred financing fees.
1
NEWS RELEASE
Lundin Mining Second Quarter Results
Toronto, July 26, 2017 (TSX: LUN; OMX: LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”)
today reported cash flows of $179.2 million generated from operations in its second quarter of the year, with
net earnings from continuing operations attributable to Lundin Mining shareholders of $49.0 million ($0.07 per
share) for the quarter ended June 30, 2017.
Mr. Paul Conibear, President and CEO commented, “Our operations delivered another quarter of strong
aggregate performance including excellent production from Candelaria and Eagle that surpassed plan. Copper
production guidance has been updated and tightened, and nickel production and cash cost guidance improved.
All growth projects are on schedule and budget including the Neves‐Corvo Zinc Expansion Project which recently
received preliminary Environmental Impact Assessment approval following a timely and efficient review process
with Portuguese authorities.
We remain focused on value creation through disciplined investment in our existing assets and potential external
acquisition initiatives. As part of a multi‐year reinvestment program at Candelaria we have increased the
sustaining capital expenditure program this year to purchase new and larger equipment aimed at improving
operating capacity, efficiency, and profitability, and to bring forward underground development in support of
planned near term production increases. Further, on success, we have increased our Company‐wide 2017
exploration budget to $75 million in support of expanded near‐mine programs.”
Summary financial results for the quarter and year‐to‐date:
Three months ended Six months ended
June 30, June 30,
US$ Millions (except per share amounts) 2017 2016 2017 2016
Sales 454.7 342.3 942.5 711.9
Operating costs (209.5) (202.2) (423.6) (412.5)
Operating earnings1 236.2 134.5 500.7 286.3
Impairment reversals / (impairment) 13.3 (772.1) 21.9 (772.1)
Continuing, attributable net earnings / (loss) 2 49.0 (19.8) 106.6 (37.5)
Attributable net earnings / (loss) 2 70.0 (791.2) 161.7 (813.3)
Net earnings / (loss) 85.0 (787.9) 191.5 (803.4)
Basic and diluted earnings / (loss) per share3 0.10 (1.10) 0.22 (1.13)
Cash flow from operations 179.2 153.2 423.9 196.1
Cash and cash equivalents 2,050.7 657.6 2,050.7 657.6
Net cash / (debt)4 1,045.1 (341.9) 1,045.1 (341.9)
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
1
Cash cost/lb of copper, zinc and nickel are non‐GAAP measures defined as all cash costs directly attributable to mining operations, less
royalties and by‐product credits.
2
Highlights
Operational Performance
Overall production for the second quarter of 2017 was consistent with expectations, with excellent
copper production from Candelaria in the quarter making up for lower production from Neves‐Corvo.
Nickel and zinc production were less than that realized in the second quarter of 2016, but remain in‐line
with expectations and full year guidance. Cash costs1 for the quarter are consistent with or lower than
those realized in the second quarter of 2016, benefitting from higher by‐product metal prices.
Candelaria (80% owned): The Candelaria operations produced, on a 100% basis, 52,846 tonnes of
copper, approximately 30,000 ounces of gold and 540,000 ounces of silver in concentrate during the
quarter. Copper production for the quarter was slightly higher than expectations and the prior year
comparable period due primarily to higher grades and recoveries. Copper cash costs of $1.08/lb for the
quarter were lower than the prior year and are expected to meet guidance over the full year.
Construction of the Los Diques tailings dam facility continues on schedule and on budget. Total forecast
spend on the project remains unchanged at $295 million, of which approximately $115 million remains
to be spent as of June 30, 2017, $85 million in the second half of 2017 and $30 million in 2018.
Eagle (100% owned): Eagle had another strong quarter of production, exceeding expectations by
generating 5,822 tonnes of nickel and 5,674 tonnes of copper. Amounts were less than the same period
in 2016 as a result of planned lower head grades. Nickel cash costs of $1.02/lb for the quarter benefited
from higher by‐product sales than the comparable period in the prior year.
The Eagle East ramp is advancing ahead of schedule with formal amendment permit approval, for the
mining of Eagle East, expected prior to year‐end.
Neves‐Corvo (100% owned): Neves‐Corvo produced 8,098 tonnes of copper and 18,011 tonnes of zinc in
the quarter. Zinc production was consistent with the prior year comparable period, while copper
production was lower due to lower throughput and grades. Copper cash costs of $1.38/lb for the
quarter remain significantly lower than the prior year comparable period and full year guidance, aided
by higher by‐product zinc prices.
The Zinc Expansion Project (“ZEP”) investment to double zinc production at Neves‐Corvo was approved
by the Company’s Board during the quarter. Underground material handling development for ZEP
commenced and environmental permitting is advancing according to plan. Project activities were
highlighted by the receipt of preliminary Environmental Impact Assessment approval on July 6, 2017
from Portuguese authorities.
Zinkgruvan (100% owned): Zinc and lead production in the second quarter of 2017 was consistent with
the mine plan and overall guidance expectations. Zinc production, aided by higher throughput, exceeded
the prior year comparable period, while lower lead grades in the current period negatively impacted its
production. Cash costs for zinc of $0.34/lb for the quarter were consistent with the prior year
comparable period and below full year guidance.
During the quarter, the 1350 Project, a process plant investment increasing production capacity by 10%,
was successfully commissioned, on schedule and on budget.
D
3
Financial Performance
Sales for the quarter ended June 30, 2017 were $454.7 million, an increase of $112.4 million in
comparison to the second quarter of the prior year ($342.3 million). The increase was mainly due to
higher metal prices, net of price adjustments ($73.6 million) and higher sales volumes ($31.8
million).
On a year‐to‐date basis, sales were $942.5 million, an increase of $230.6 million in comparison to
the first six months of 2016 ($711.9 million). The increase was mainly due to higher metal prices, net
of price adjustments ($202.2 million) and higher sales volumes ($23.5 million).
Operating costs (excluding depreciation) for the quarter ended June 30, 2017 were $209.5 million,
an increase of $7.3 million in comparison to the second quarter of the prior year ($202.2 million).
The increase was largely due to higher overall sales volumes ($22.5 million), partially offset by lower
per unit operating costs ($14.2 million).
On a year‐to‐date basis, operating costs (excluding depreciation) were $423.6 million, an increase of
$11.1 million in comparison to the six months ended June 30, 2016 ($412.5 million). The increase
was largely due to higher sales volumes ($13.4 million).
Operating earnings for the quarter ended June 30, 2017 were $236.2 million, an increase of $101.7
million in comparison to the second quarter of the prior year ($134.5 million). The increase was
primarily due to higher metal prices, net of price adjustments ($73.6 million), higher sales ($9.2
million) and lower per unit operating costs ($14.2 million).
On a year‐to‐date basis, operating earnings were $500.7 million, an increase of $214.4 million in
comparison to the first six months of 2016 ($286.3 million). The increase was primarily due to higher
metal prices in the current year, net of price adjustments ($202.2 million) and higher sales volumes
($10.1 million).
Net earnings from continuing operations for the quarter ended June 30, 2017 were $64.0 million
compared to net loss of $16.5 million in the second quarter of the prior year. Comparative earnings
were higher due to:
‐ higher operating earnings ($101.7 million); partially offset by
‐ higher net tax expense ($26.2 million).
On a year‐to‐date basis, the Company reported a net earnings from continuing operations of $136.4
million compared to a net loss of $27.6 million for the six months ended June 30, 2016. Comparative
earnings, in the current year, were higher due to:
‐ higher operating earnings ($214.4 million); and
‐ lower net interest expense ($14.8 million); partially offset by
‐ higher net tax expense ($67.0 million).
4
Corporate Highlights
The Company announced it completed the sale of its indirect interest in TF Holdings Limited (“TF
Holdings”) to an affiliate of BHR Partners for $1.1 billion on April 19, 2017.
Lundin Mining’s effective 24% interest in Tenke Fungurume Mining S.A. (“Tenke”) was held through
its 30% indirect interest in TF Holdings.
On April 27, 2017, the Company filed an updated technical report for the Eagle mine. The Technical
Report incorporates updates to Eagle mine’s operations and the results of a Feasibility Study on the
high‐grade Eagle East nickel/copper mineralization. A copy of the Technical Report can be found
under the Company’s profile on www.sedar.com.
On May 11, 2017, the Company announced the results of a Feasibility Study on the Zinc Expansion
Project at its Neves‐Corvo mine. Refer to the news release entitled “Lundin Mining Announces
Neves‐Corvo Zinc Expansion Project Feasibility Study Results” on the Company’s website
(www.lundinmining.com). An updated Technical Report for the Neves‐Corvo Mine, incorporating the
ZEP, was filed on June 23, 2017 and can be found under the Company’s profile on www.sedar.com.
Financial Position and Financing
Cash and cash equivalents increased $1,121.9 million during the quarter from $928.8 million at
March 31, 2017 to $2,050.7 million at June 30, 2017. The increase is primarily from the sale of Tenke
($1.1 billion), cash generated from operating activities of $179.2 million, partially offset by
investments in mineral properties, plant and equipment of $84.5 million, payments to non‐
controlling interests of $34.0 million, shareholder dividends of $32.9 million and interest paid of
$38.3 million.
For the six months ended June 30, 2017, cash increased by $1,335.4 million due primarily to
operating cash flows of $423.9 million, proceeds from the sale of and distributions from Tenke of
$1.1 billion and $58.3 million, respectively, partially offset by investments in mineral properties,
plant and equipment of $163.6 million, shareholder dividends of $32.9 million and interest paid of
$38.3 million.
Net cash position at June 30, 2017 was $1,045.1 million compared to a net debt position of $284.1
million at December 31, 2016 and $71.3 million at March 31, 2017.
The Company has a revolving credit facility available for borrowing up to $350 million. As at June 30,
2017, the Company had no amount drawn on the credit facility, only letters of credit in the amount
of $25.9 million.
As at July 26, 2017, cash and net cash were approximately $2.1 billion and $1.1 billion, respectively.
5
Outlook
Production, cash cost, capital expenditure and exploration guidance for 2017 have been updated
from that disclosed in our Management’s Discussion and Analysis for the three months ended March
31, 2017.
2017 Production and Cost Guidance
2017 Guidance Previous Guidancea Revised Guidanceb
(contained tonnes) Tonnes C1 Cost Tonnes C1 Cost
Copper Candelaria (80%) 145,000 ‐ 150,000 $1.20/lb 147,000 ‐ 151,000 $1.20/lb
Eagle 15,000 ‐ 18,000 19,000 ‐ 22,000
Neves‐Corvo 41,000 ‐ 46,000 $1.00/lb 36,000 ‐ 39,000 $1.00/lb
Zinkgruvan 1,000 ‐ 2,000 1,000 ‐ 2,000
Total attributable 202,000 ‐ 216,000 203,000 ‐ 214,000
Nickel Eagle 17,000 ‐ 20,000 $2.00/lb 20,000 ‐ 23,000 $1.35/lb
Zinc Neves‐Corvo 72,000 ‐ 77,000 72,000 ‐ 77,000
Zinkgruvan 80,000 ‐ 85,000 $0.40/lb 80,000 ‐ 85,000 $0.40/lb
Total 152,000 ‐ 162,000 152,000 ‐ 162,000
a. Guidance as outlined in our Management's Discussion and Analysis for the three months ended March 31, 2017.
b. Cash costs are dependent upon exchange rates (forecast at €/USD:1.10, USD/SEK:8.40, USD/CLP:675) and metal prices (forecast at Cu: $2.50/lb, Ni:
$4.25/lb, Zn: $1.15/lb, Pb: $0.90/lb, Au: $1,250/oz, Ag: $16.50/oz).
2017 Capital Expenditure and Exploration Guidance
Capital expenditures, excluding capitalized interest, are expected to be $490 million (prior guidance
$390 million), as outlined below.
The Los Diques tailings project remains on schedule and the project’s overall capital cost forecast
remains unchanged, although the expected timing of certain payments have resulted in $15 million of
expenditures expected in 2018 that will now be paid in 2017.
Following expansion of Mineral Reserves and life of mine plans, previously announced production level
increases, cost restraint driven deferrals in purchases of mobile equipment in 2015 and 2016 and
commencement of an initiative to self‐perform some underground mining currently done by contractor,
management has undergone an intensive review of Candelaria’s mobile equipment and identified a
number of areas where operating capacity, efficiency and profitability could be improved with the
purchase of new additional and larger equipment. As part of this multi‐year re‐investment program, $45
million is expected to be spent in 2017.
In addition, $10 million in capital infrastructure has been brought forward to further develop
Candelaria’s underground mines and provide access to new sectors, ensuring ore access in support of
near term increased underground mine production plans.
Neves‐Corvo’s €260 million Zinc Expansion Project was approved by the Board in the second quarter of
2017, with $30 million expected to be spent in 2017.
Exploration spend is expected to increase to $75 million, from $65 million previously guided, in support
of expanded near mine exploration programs.
6
Revised Capital Expenditure Guidance
($ millions)
Previous
Guidancea
Revisions
Revised
Guidance
Candelaria
Capitalized Stripping 105 5 110
Los Diques Tailings 120 15 135
Other Sustaining 25 55 80
250 75 325
Eagle 10 ‐ 10
Neves‐Corvo 50 ‐ 50
Zinkgruvan 40 ‐ 40
Total Sustaining Capital 350 75 425
Eagle East 35 (5) 30
Zinc Expansion (Neves‐Corvo) ‐ 30 30
Zinkgruvan Expansion (1350) 5 ‐ 5
Total Expansionary Capital 40 25 65
Total Capital Expenditures 390 100 490
a. Guidance as outlined in our Management's Discussion and Analysis for the three months ended March 31, 2017.
The information in this release is subject to the disclosure requirements of Lundin Mining under the EU
Market Abuse Regulation. This information was publically communicated on July 26, 2017 at 6:00 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: +1‐416‐342‐5583
Robert Eriksson, Investor Relations Sweden: +46 8 545 015 50
7
Cautionary Statement in Forward‐Looking Information and Non‐GAAP performance measures
Certain of the statements made and information contained or incorporated by reference in this news release is "forward‐looking
information" within the meaning of applicable Canadian securities laws. All statements other than statements of historical facts in
this news release constitute forward‐looking information based on current expectations, estimates, forecasts and projections as
well as beliefs and assumptions made by the Company’s management. Such forward‐looking statements include but are not
limited to those regarding the Company’s outlook and guidance on estimated metal production, costs, exploration and capital
expenditures; any Feasibility Study and its results; and projects, within the “Corporate Highlights” and “Outlook” sections of this
news release and elsewhere herein. Words such as “aim”, “anticipate”, “assume”, “believe”, “budget”, “develop”, “estimate,
“expect”, “exploration”, “feasibility”, “focus”, “forecast”, “forward”, “guidance”, “initiative”, “opportunity”, “outlook”, “plan”,
“potential”, “preliminary”, “program”, “project”, “schedule”, “study” or “ZEP”, or variations of or similar such terms, or statements
that certain actions, events or results could, may, might or will be taken or occur or be achieved, identify forward‐looking
information. Although the Company believes that the expectations reflected in the forward‐looking information herein are
reasonable, these statements by their nature involve risks and uncertainties and are not guarantees of future performance. These
estimates, expectations and other forward‐looking statements are based on a number of assumptions and are subject to a variety
of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward‐looking
statements. Such risks and uncertainties include, without limitation, risks and uncertainties inherent in and/or relating to:
estimates of future production and operations, cash and all‐in sustaining costs; metal and commodity price fluctuations; foreign
currency fluctuations; mining operations including but not limited to environmental hazards, industrial accidents, ground control
problems and flooding; geology including, but not limited to, unusual or unexpected geological formations, estimation and
modelling of grade, tonnes, metallurgy continuity of mineral deposits, dilution, and mineral resources and mineral reserves, and
actual ore mined and/or metal recoveries varying from such estimates; mine plans , and life of mine estimates; the possibility that
future exploration, development or mining results will not be consistent with expectations; the potential for and effects of labour
disputes, shortages or other unanticipated difficulties with or interruptions in production; potential for unexpected costs and
expenses including, without limitation, for mine closure and reclamation at current and historical operations; uncertain political
and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental
approvals and/or permits; regulatory investigations, enforcement, sanctions and/or related or other litigation; and other risks and
uncertainties, including but not limited to those described in the “Managing Risks” section of the Company’s Management’s
Discussion and Analysis for the period ending June 30, 2017 and the “Risks and Uncertainties” section of our most recently filed
Annual Information Form. In addition, forward‐looking information is based on various assumptions including, without limitation,
the expectations and beliefs of management; assumed prices of copper, nickel, zinc and other metals; 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 uncertainties
materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward‐
looking statements. Accordingly, there can be no assurance that forward‐looking information will prove to be accurate, and
readers should not place undue reliance on forward‐looking statements. The Company disclaims any intention or obligation to
update or revise forward‐looking statements or to explain any material difference between such and subsequent actual events,
except as required by applicable law.
Certain financial measures contained herein, such as operating earnings, net debt and cash costs, have no meaning within
generally accepted accounting principles under IFRS and therefore amounts presented may not be comparable to similar data
presented by other mining companies. This data is intended to provide additional information and should not be considered in
isolation or as a substitute for measures or performance prepared in accordance with IFRS.