Guidance & Outlook

2021 - 2023 Production Guidance & Outlook1

(metal contained in concentrate)

 

2021 Cash Cost Guidance3

At Candelaria, C1 cash costs are expected to reduce year-on-year to $1.35/lb4 copper in 2021, 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 $1.10/lb5 copper in 2021 after significant gold by-product credits. Effects of copper stream agreements are reflected in the realized copper revenue. 

Eagle is expected to maintain the first quartile C1 cash costs of ($0.25)/lb nickel in 2021, after by-product credits, as higher grades from Eagle East reduce per pound unit costs.

At Neves-Corvo, C1 cash costs for 2021 are expected to approximate $2.20/lb6 copper, after zinc and lead by-product credits.

Zinkgruvan’s C1 C1 cash costs for 2021 are expected to approximate $0.65/lb6 zinc after copper and lead by-product credits.

 

2021 Capital Expenditure Guidance7

 

2021 Exploration Expenditure Guidance

Exploration expenditures are planned to be $40 million in 2021. Approximately $38 million will be spent supporting significant in-mine and near-mine targets at our operations ($14 million at Candelaria, $6 million at Zinkgruvan, $14 million at Chapada, and $4 million at Neves-Corvo). The remaining amount is planned to advance activities on exploration stage projects and new business development projects.

 

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 (2021 - Cu: $3.75/lb, Zn: $1.15/lb, Pb: $0.85/lb, and Au: $1,700/oz) foreign currency exchange rates (2021 - €/USD:1.20, USD/SEK: 8.20, CLP/USD: 700 and USD/BRL: 5.10) and operating costs. All figures in are in US$ 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 $416/oz and $4.16/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. Chapada cash costs are calculated on a by-product basis and do not include the effects of copper stream agreements. Effects of copper stream agreements are reflected in copper revenue and will impact realized revenue per pound.  

6. Silver production at Zinkgruvan and Neves-Corvo are also subject to streaming agreements, and cash costs are calculated based on approximately $4.40/oz and $4.30/oz. 

7. 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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