Lundin Mining Provides Operating Outlook for 2013-2015

Date : 12/06/2012 @ 7:30PM
Source : Marketwired
Stock : Lundin Mining Corp. (LUN)
Quote : 9.97  0.22 (2.26%) @ 4:15PM
Lundin Mining Corporation share price Chart

Lundin Mining Provides Operating Outlook for 2013-2015

Lundin Mining Corporation (TSX:LUN)
Historical Stock Chart

5 Years : From Oct 2012 to Oct 2017

Click Here for more Lundin Mining Corporation Charts.

Lundin Mining Corporation (TSX:LUN)(OMX:LUMI) ("Lundin Mining" or the "Company") provides the following production guidance for the three-year period of 2013 through 2015. Key highlights are as follows:

--  2013 to 2015 annual attributable copper production is expected to be in
    the range of 100-110kt assuming Tenke production remains flat at Phase
    II expansion nameplate levels. 
--  Zinc production is expected to continue to grow progressively year-over-
    year, as Neves-Corvo zinc production continues to ramp-up and plant
    modernization initiatives become operative at Zinkgruvan. 
--  Lead production is expected to continue to represent a valuable by-
    product credit for the Company. 
--  Aguablanca nickel and copper production forecasts reflect a conservative
    modified mine plan, pending results of ongoing investigations related to
    south pit wall instability. 

Commenting on the production guidance, Mr. Paul Conibear, President and CEO of Lundin Mining said, "We will continue to strive to optimize performance of our operations, to meet production targets and focus on profitability. Our assets offer attractive, low risk, near-term production growth with only modest capital investment required, maintaining a strong balance sheet to pursue future opportunities."

Production Outlook 2013 - 2015:

                                  2013               2014               2015
Copper:                         Tonnes             Tonnes             Tonnes
  Neves-Corvo          50,000 - 55,000    50,000 - 55,000    50,000 - 55,000
  Zinkgruvan             2,500 - 3,500      2,000 - 3,000      4,000 - 5,000
  Aguablanca             4,500 - 5,000      1,000 - 1,500                  -
  Copper wholly-                                                            
   owned operations    57,000 - 63,500    53,000 - 59,500    54,000 - 60,000
  Tenke(1) (24%)        approx. 47,000     approx. 47,000     approx. 47,000
Total Attributable                                                          
 Copper              104,000 - 110,500  100,000 - 106,500  101,000 - 107,000
  Neves-Corvo          45,000 - 50,000    57,000 - 62,000    75,000 - 80,000
  Zinkgruvan           73,000 - 78,000    80,000 - 85,000    85,000 - 90,000
Total Zinc           118,000 - 128,000  137,000 - 147,000  160,000 - 170,000
  Zinkgruvan           33,000 - 36,000    35,000 - 38,000    30,000 - 33,000
Total Lead             33,000 - 36,000    35,000 - 38,000    30,000 - 33,000
  Aguablanca             5,000 - 5,500      1,500 - 2,000                  -
Total Nickel             5,000 - 5,500      1,500 - 2,000                  -
(1)   Note - Tenke guidance has not yet been provided by operator, Freeport 
      McMoRan Copper and Gold Inc. ("Freeport"). Lundin Mining anticipates  
      production from Tenke in 2013 to be at least Phase II expansion       
      nameplate capacity of 195,000 tpa copper cathode.                     

--  Neves-Corvo: Copper production is expected to be maintained above 50,000
    tonnes per annum with an increasing zinc by-product credit. The zinc
    plant is expected to operate at full capacity in 2013 and beyond,
    initially processing approximately 1.0 million tonnes per annum ("Mtpa")
    of ore, and reaching 125% of nameplate capacity in 2015 with minor
    investment in plant debottlenecking, to take advantage of higher grade
    Lombador feed and expected improvements in zinc price. The production
    forecasts assume that the zinc plant will be used exclusively to process
    zinc ore over the next three years. This plant has been already proven
    to have the flexibility to process either zinc or copper ores and
    therefore the plan may be adjusted going forward in order to optimize
    the profitability of the operation depending on relative zinc and copper
    prices, and concentrate customer commitments. 
--  Zinkgruvan: Zinc production in 2013 is expected be in line with 2012 and
    grow in 2014 and 2015 reflecting potential new investment in the front
    end of the plant to modernize and increase total site processing
    capacity to approximately 1.5 Mtpa of ore. The copper plant is expected
    to reach its full throughput capacity of 300,000 tpa in 2015. 
--  Aguablanca: The mine has continued to experience south pit wall
    instability and this has resulted in restricted access to certain areas
    in the pit. The current production guidance reflects a reduction in the
    mineable reserve to only those areas not affected by the instability and
    assumes no additional investment to attempt to recover reserves in the
    affected area. Revised life of mine plan and reserves remain under
--  Tenke Fungurume:  2013 production guidance has not yet been provided by
    Freeport, the mine's operator. Lundin Mining anticipates production from
    Tenke in 2013 to be significantly greater than 2012, reflecting
    completion of the Phase II expansion project to 195,000 tpa of copper
    cathode (production on a 100%-basis). The three year outlook for Tenke
    does not reflect potential increases in copper production that could
    occur from Phase III expansion initiatives which could entail further
    plant debottlenecking and heap leach investment to fully utilize the
    270,000 tpa copper electro-winning capacity that has been installed as
    part of the Phase II project. The Lundin Mining estimate and comments do
    not represent the official guidance for the mine which will ultimately
    be provided by Freeport.  

2013 Cash Costs

--  At Neves-Corvo, estimated C1 cash costs for 2013 are expected to
    approximate $1.80/lb Cu after zinc by-product credits. Improvement on
    this estimated unit cost could occur if zinc prices are higher than
    internal assumptions and if increased productivity can be realized from
    the new continuous underground shift regime and recent projects targeted
    to improve operational efficiency. 
--  At Zinkgruvan, estimated C1 cash costs are expected to approximate
    $0.20/lb Zn after copper and lead by-product credits. Zinkgruvan is
    expected to remain one of the lower cost zinc producers for the
    foreseeable future. 
--  Aguablanca C1 cash cost for 2013 is estimated to be $5.00/lb Ni.  
--  For Tenke, cash cost guidance will be provided by Freeport in due

The 2013 cash cost estimates were calculated using the following metals price and exchange rate assumptions.

Cost Guidance Assumptions $/lb                                          2013
Copper                                                                 $3.50
Zinc                                                                   $0.95
Nickel                                                                 $8.00
Lead                                                                   $1.00
EUR/USD                                                                 1.30
USD/SEK                                                                 6.75

2013 Capital Expenditure Guidance

Capital expenditures for 2013 are expected to be $270 million (compared to an estimated $380 million in 2012) which includes:

--  Sustaining capital in European operations: $110 million, consisting of
    approximately $70 million for Neves-Corvo and $40 million for
--  New investment capital expenditures in European operations: $70 million,
    on the basis of: 
    --  Neves-Corvo Future Future Materials Handling Studies - significant
        work advanced during 2012 on multiple scenarios to consider
        potential economic merits of a major re-investment in underground
        access by a new shaft or large inclined ramp from surface. This new
        infrastructure would enable access to deeper deposits such as
        Semblana and lower portions of the Lombador deposits enabling large
        mine production rates (greater than 5.0 Mtpa) through new
        underground infrastructure and an expanded zinc processing plant.
        Results from these multi-year, large investment studies were
        compared to scenarios to access Semblana and Lombador Phase II
        mineralization using lower capital cost, lower risk, shorter
        schedule, lower tonnage approaches consisting of internal ramps from
        existing underground workings and hoisting up the existing main
        shaft. Merits of each scenario were found to be particularly
        sensitive to future zinc price assumptions. Given near term
        projected zinc prices remain weak, a decision has been made to
        suspend further new major infrastructure studies for the time being
        and focus on lower cost internal ramp investment until economic
        projections for new major underground infrastructure investment are
        more compelling. 
    --  Lombador Phase I ($30 million) - for underground development,
        improvements to the main surface substation, installation of surface
        power cables, and other items related to positioning for increased
        copper and zinc production from the Lombador ore bodies over the
        next several years. Portions of the underground investment for
        Lombador in 2013 are aimed at advancing greater copper production
        than previously envisioned taking preference over zinc for better
        returns. A preliminary economic assessment will also advance in 2013
        to assess the exploitation of deeper Lombador copper and zinc
        mineralization ("Lombador Phase II") using internal ramps and the
        existing mine hoisting infrastructure. In parallel a study is
        advancing to assess further de-bottlenecking of the existing shaft 
    --  Semblana ($8 million) - for engineering studies, drilling and access
        ramp development. The Semblana deposit lies within the Castro Verde
        exploration concession, adjacent to the Neves-Corvo mining permits.
        A preliminary economic assessment study is in progress based on
        Semblana's current inferred resource to support permitting,
        discussions with the government on conversion to a mining concession
        and as a basis for discussions with EDM, the Portuguese state entity
        that holds an option for a 15% contributing interest in discoveries
        made on the Castro Verde concessions. Subject to positive outcomes
        on those discussions it is the Company's intent to aggressively
        advance the Semblana twin access ramps to support underground infill
        drilling of the deposit. The main ramp, which commenced development
        in the first half of this year will facilitate infill drilling
        access but is sized for production haulage. A parallel ramp has now
        started to enable faster overall underground drilling access and for
        future ventilation and production capability.  
    --  Neves-Corvo industrial water dam ($9 million). Work was to have
        commenced in 2012 on this dam but was delayed until 2013 due to
        drilling on the Monte Branco copper discovery which lies beneath.  
    --  Zinkgruvan ore dressing plant ($13 million). During 2012, a pre-
        feasibility study was completed showing that with an approximately
        $52 million investment over 20 - 24 months, replacement of the
        current crushing, screening and grinding circuits would provide a
        number of advantages including higher plant availability, lower
        operating costs, improved noise and dust emissions and a significant
        increase in mine production - all with an economically attractive
        end result. A feasibility study is advancing with expected
        completion in the first half of 2013. Permitting of the plant
        modernization and tailings facility expansion is in progress and,
        subject to positive results of the study and permitting progress,
        investment will proceed in a fast track manner on the zinc plant
    --  Other improvement initiatives ($10 million). 
--  Tenke: Assuming substantial completion of the Phase II expansion by year
    end 2012, we contemplate our share of remaining Phase II expansion costs
    and sustaining capital funding to be in the range of $90 million for
    2013. All of the capital expenditures are expected to be self-funded by
    cash flow from Tenke operations. If current metal prices and operating
    conditions prevail it is reasonable to expect meaningful amounts of
    excess operating cashflows from Tenke to come back to the partners to
    repay initial capital investments on a 70/30 basis. 

2013 Exploration Investment

Exploration expenditures are expected to be in the range of $40 million in 2013 (2012 - estimated at $50 million). Approximately $18 million of this will be spent at Neves-Corvo where a large drilling program will advance exploration on various targets including the new copper discovery at Monte Branco. An additional $5 million will be spent on several high priority targets in the Iberian Region.

The Company continues to seek exploration investment opportunities. In November 2012, Lundin Mining signed an Option Agreement with Southern Hemisphere Mining (ASX:SUH) to earn up to 75% interest in the Llahuin Project in Chile by investing $35 million in development over 6 years; $6.9 million is expected to be spent in 2013. Other exploration opportunities, particularly in Eastern Europe and the Americas, will be pursued in the year ahead.

About Lundin Mining

Lundin Mining Corporation is a diversified Canadian base metals mining company with operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc, lead and nickel. In addition, Lundin Mining holds a development project pipeline which includes expansion projects at Neves-Corvo and Zinkgruvan mines along with its equity stake in the world class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo.

On Behalf of the Board,

Paul Conibear, President and CEO

Forward-Looking Statements

Certain of the statements made and information contained herein is "forward-looking information" within the meaning of the Ontario Securities Act. Forward-looking statements are 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, including, without limitation, risks and uncertainties relating to foreign currency fluctuations; risks inherent in mining including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; risks associated with the estimation of mineral resources and 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 unanticipated 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; uncertain political and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; and other risks and uncertainties, including those described under Risk Factors Relating to the Company's Business in the Company's Annual Information Form and in each 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 uncertainties 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.

Contacts: Lundin Mining Corporation Sophia Shane Investor Relations North America +1-604-689-7842 Lundin Mining Corporation John Miniotis Senior Business Analyst +1-416-342-5565 Lundin Mining Corporation Robert Eriksson Investor Relations Sweden +46 8 545 015 50

Latest TSX:LUN Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....

No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts
Your Recent History
Gulf Keyst..
FTSE 100
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P:43 V:us D:20171021 13:56:02