Guidance & Outlook

2020 - 2022 Production Guidance & Outlook1

(metal contained in concentrate)

 

2020 Cash Cost Guidance3

Candelaria’s C1 cash costs are expected to reduce year-on-year to $1.45/lb4 copper in 2020, after by-product credits. By-product credits have been adjusted for the terms of the streaming agreement.

At Chapada, C1 cash costs are expected to approximate $1.15/lb copper after significant gold by-product credits. Effects of copper stream agreements are to be reflected in the realized copper revenue.

Eagle’s C1 cash costs in 2020 are expected to reduce year-on-year to $1.00/lb nickel after by-product credits as higher grades from Eagle East reduce per pound unit costs.

At Neves-Corvo, C1 cash costs for 2020 are expected to approximate $1.80/lb copper after zinc and lead by-product credits. 

Zinkgruvan’s C1 cash costs are expected to approximate $0.55/lb zinc after copper and lead by-product credits.

 

2020 Capital Expenditure Guidance5

 

2020 Exploration Expenditure Guidance

Exploration expenditures are planned to be $65 million in 2020. Approximately $55 million will be spent supporting significant in-mine and near-mine targets at our operations ($20 million at Candelaria, $15 million at Zinkgruvan, $10 million at Chapada, and $10 million at Neves-Corvo). The remaining $10 million is planned to advance activities on exploration stage projects, primarily in South America.

 

1 Production guidance is based on certain estimates and assumptions, including but not limited to: Mineral Resources and Mineral Reserves, geological formations, grade and continuity of deposits and metallurgical characteristics.

2  68% of Candelaria’s total gold and silver production are subject to a streaming agreement.

3 C1 cash costs are based on various assumptions and estimates, including, but not limited to: production volumes, as noted above, commodity prices (2020 - Cu: $2.70/lb, Zn: $1.10/lb, Ni: $6.00/lb, Pb: $0.90/lb, Au: $1,350/oz) foreign currency exchange rates (2020 - €/USD:1.20, USD/SEK:8.50, CLP/USD:675, SD/BRL:3.75) and operating costs. All figures in are in US$ 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 $412/oz and $4.12/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.

5 Forecast capital expenditures have been reported on a cash basis. Discrepancies may exist with other external reports which have been reported on an accrual basis.

Lundin Mining Corporation

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