Lundin Mining Corporation

2017 - 2019 Production Guidance

Attributable Production Outlook 2017 - 20191

    2017   2018   2019  
Copper Tonnes   Tonnes   Tonnes  
Candelaria (80%) 145,000 - 150,000 131,000 - 136,000 126,000 - 131,000
Eagle 15,000 - 18,000 14,000 - 17,000 14,000 - 17,000
Neves-Corvo 41,000 - 46,000 42,000 - 47,000 45,000 - 50,000
Zinkgruvan 1,000 - 2,000 2,000 - 3,000 3,000 - 4,000
Total Attributable Copper 202,000 - 216,000   189,000 - 203,000   188,000 - 202,000
Neves-Corvo 72,000 - 77,000 70,000 - 75,000 66,000 - 71,000
Zinkgruvan 80,000 - 85,000 87,000 - 92,000 86,000 - 91,000
Total Zinc 152,000 - 162,000   157,000 - 167,000   152,000 - 162,000
Eagle 17,000 - 20,000 14,000 - 17,000 11,000 - 14,000
Total Nickel 17,000 - 20,000   14,000 - 17,000   11,000 - 14,000

  • Candelaria: The copper production profile for Candelaria has been improved over the three and five-year forecast periods compared with the prior three-year guidance from the Company and the September 2015 NI 43-101 Technical Report. Optimization of the open pit life-of-mine plan and inclusion of additional volumes of higher grade underground ore has led to improvement in the forecast mine and mill head grade profiles over the three and five-year periods. Our Candelaria attributable copper production guidance of 145,000 to 150,000 tonnes in 2017 is 25,000 tonnes greater (20%) than previous guidance and 17,500 tonnes greater (13%) than our expected 2016 production. Gold and silver production are expected to remain significant by-product credits.
Candelaria Five-Year Outlook

  • Eagle: Consistent with original expectations, year-over-year production levels of nickel and copper are expected to gradually decline as the highest grade ore is mined early in the mine plan, and prior to the potential development of the Eagle East deposit.
  • Neves-Corvo: Zinc production assumes plant capacity continues at current levels of 1.2 million tonnes per annum throughput and does not yet incorporate the ZEP which should approximately double zinc production within 28 months of full project approval. Overall average mill feed copper grade and recovery have been reassessed. Annual copper production is expected to increase throughout the forecast period back towards 50,000 tonnes per annum while maintaining significant zinc and lead by-product credits.
  • Zinkgruvan: Zinc production in 2017 is expected to be in line with 2016 guidance. The 1350 Zinc Expansion Project is expected to be commissioned mid-2017 and will increase zinc production by an additional 10%, providing between 85,000 - 92,000 tonnes per annum over the remainder of the outlook period.
  • Tenke Fungurume: Lundin Mining anticipates production from Tenke in 2017 to be largely consistent with that of the rates achieved in 2016, with the Company's attributable portion this year of approximately 50,000 tonnes of copper cathode. 2017 production guidance has not yet been provided by China Molybdenum Co., Ltd. the operation's majority owner. Lundin Mining has announced a definitive agreement to sell its indirect interest in TF Holdings Limited to an affiliate of BHR Partners. The Transaction is expected close in the first half of 2017.
2017 Cash Costs3
  • At Candelaria, estimated C1 cash costs are expected to approximate $1.20/lb Cu after by-product credits. By-product credits have been adjusted for the terms of the streaming agreement but exclude any allocation of upfront cash received.
  • At Eagle, estimated C1 cash costs are expected to approximate $2.45/lb Ni after by-product credits.
  • At Neves-Corvo, estimated C1 cash costs for 2017 are expected to approximate $1.35/lb Cu after zinc and lead by-product credits.
  • At Zinkgruvan, estimated C1 cash costs are expected to approximate $0.40/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.

1 Production Guidance is based on certain estimates and assumptions, including but not limited to; mineral resources and reserves, geological formations, grade and continuity of deposits and metallurgical characteristics.
2 Guidance does not include any amount for Tenke Fungurume. Guidance has not yet been provided by China Molybdenum Co., Ltd. the operation's majority owner.
3 C1 cash costs are based on various assumptions and estimates, including, but not limited to; production volumes, as noted above, commodity prices (2017 - Cu: $2.25/lb, Zn: $1.00/lb, Pb: $0.90/lb, Ni: $5.00/lb) foreign currency exchange rates (2017 - €/USD:1.15, USD/SEK:8.40, CLP/USD:650) and operating costs. All figures in are in $US unless otherwise noted.
4 68% of Candelaria's total gold and silver production are subject to a streaming agreement and as such C1 cash costs are calculated based on receipt of $400/oz and $4/oz, respectively, on gold and silver sales in the year. No consideration has been made for the upfront payment received in the calculation of C1 cash costs.