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Lundin Mining: LUNDIN MINING PROVIDES OPERATING OUTLOOK FOR 2012-2014

Publicerad 2011-12-12 08:22

Toronto, December 12, 2011 (TSX: LUN; OMX: LUMI) Lundin Mining Corporation
(?Lundin Mining? or the ?Company?), subsequent to its annual budget Board
meeting held today, provides the following operating guidance for the
three-year period of 2012 through 2014. Guidance for 2011 remains unchanged
for the year as noted in our Third Quarter release and therefore has not been
included below. Key highlights are as follows:

* 2012 guidance noted below is consistent with early guidance included in our
Third Quarter news release.
* 2013 and 2014 total attributable copper production is expected to be in the
range of 107-117kt, an increase of approximately 25% from 2012 levels.
* Zinc production is expected to continue to grow progressively
year-over-year, as Neves-Corvo zinc production continues to ramp-up and
incremental production initiatives become operative at Zinkgruvan.
* Lead production is expected to continue to represent a valuable by-product
credit for the company.
* Nickel production will increase in 2013, as Aguablanca resumes full-scale
production in late 2012.

Commenting on the production guidance, Mr. Paul Conibear, President and CEO of
Lundin Mining said ?We are very focused on improving our performance and
meeting and improving on current production and cost targets. We have added
depth both corporately and at the operations to facilitate better reliability
from our mines. Lundin Mining is in a unique position as we offer meaningful
near-term production growth to copper, zinc and nickel, all of which is
expected to be fully-funded from operational cash flow going forward.?

Production Outlook 2012 - 2014:

----------------------------------------------------------------------------------------
| 2012 2013 2014 |
|Copper: Tonnes Tonnes Tonnes |
|Neves-Corvo 52,500 ? 57,000 50,000 ? 57,000 50,000 ? 57,000 |
|Zinkgruvan 2,000 ? 3,000 5,000 ? 6,000 5,000 ? 6,000 |
|Aguablanca 500 ? 1000 5,000 ? 7,000 6,000 ? 7,000 |
|Copper wholly-owned operations 55,000 ? 61,000 60,000 ? 70,000 61,000 ? 70,000 |
|Tenke1 24% >31,000 ~47,000 ~47,000 |
|Total Attributable Copper 86,000 ? 92,000 107,000 ? 117,000 108,000 ? 117,000 |
| |
|Zinc: |
|Neves-Corvo 30,000 ? 40,000 50,000 - 55,000 60,000 ? 65,000 |
|Zinkgruvan 75,000 ? 81,000 75,000 ? 80,000 85,000 ? 90,000 |
|Galmoy (50%) 4,000 ? 4,500 - - |
|Total Zinc 109,000 ? 125,500 125,000 ? 135,000 145,000 ? 155,000 |
| |
|Lead: |
|Zinkgruvan 34,000 ? 39,000 32,000 ? 35,000 32,000 ? 35,000 |
|Galmoy (50%) 500 ? 1,000 - - |
|Total Lead 34,500 ? 40,000 32,000 ? 35,000 32,000 ? 35,000 |
| |
|Nickel: |
|Aguablanca 500 ? 1,000 5,000 ? 7,000 6,000 ? 7,000 |
|Total Nickel 500 ? 1,000 5,000 ? 7,000 6,000 ? 7,000 |
----------------------------------------------------------------------------------------

1 Note ?Tenke 2012 guidance has not yet been provided by Operator Freeport
McMoRan Copper and Gold Inc. ("Freeport"). Lundin Mining anticipates
production from Tenke in 2012 to be greater than 2011 guidance, and
anticipates the Phase 2 expansion to be completed by 2013.

* Neves-Corvo - Copper: For the next few years copper production is expected
to remain similar to 2012 levels. The copper plant is expected to have
excess milling capacity next year, thereby providing the operation with
flexibility to process additional copper from lower-grade stopes, should
economics warrant it.
* Neves-Corvo - Zinc: The new zinc plant is expected to operate at full
capacity processing approximately 1.0 million tonnes per annum ("Mtpa") in
2013 and 2014 (up from 0.5Mtpa in 2012). 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 is expected to increase from 2012 due to
debottlenecking initiatives and as higher grade material becomes available
due to the mine sequencing of the various ore bodies. Copper production
increases in 2013 as the copper plant reaches its full throughput capacity
of 300ktpa.
* Aguablanca: Production from Aguablanca is expected to resume in late-2012.
The current production plan is based solely from the open pit and does not
include any production from the potential development of higher grade
underground mineralization.
* Galmoy: High grade mining is expected to conclude in the first half of
2012, however sales are expected to continue into early-2013 as stockpiled
ore will continue to be milled at a third party processing facility.
* Tenke Fungurume: 2012 Production guidance has not yet been provided by
Freeport, the mine?s operator. Lundin Mining anticipates production from
Tenke in 2012 to be greater than 2011, and anticipates the Phase 2
expansion project to 195,000 tpa of copper cathode (production on a
100%-basis) to be completed by 2013. All operating decisions are ultimately
made by Freeport and therefore these production assumptions should not be
perceived as representing official guidance for the operation.

2012 Cash Costs

* At Neves-Corvo, estimated C1 cash costs are expected to approximate
$1.80/lb after zinc by-product credits in 2012. Improvement on this
estimated unit cost could occur if zinc prices are higher than 2012 budget
assumptions and as a result of operating cost-cutting initiatives in
progress.
* At Zinkgruvan, estimated C1 cash costs are expected to approximate $0.25/lb
after copper and lead by-product credits. Zinkgruvan is expected to remain
as one of the lower cost zinc producers for the foreseeable future.
* Guidance on Aguablanca C1 cash cost estimates will be provided closer to
the timing of plant start-up.
* At Tenke, cash cost guidance will be provided by Freeport in due course.

The 2012 cash cost estimates were calculated using the following metals prices
and exchange rates (royalties included where applicable).

----------------------------
|Budget Assumptions 2012 |
|Copper $3.50 |
|Zinc $0.95 |
|Lead $0.98 |
|?/USD 1.35 |
|US$/SEK 6.50 |
----------------------------

2012 Capital Expenditure Guidance

Capital expenditures for 2012 are expected to be $410 million (2011 - guidance
$290 million) which includes:

* Sustaining capital in European operations: $95 million (2011 ? $100
million). The modest decrease is related to slightly lower sustaining
capital expenditures at Neves?Corvo for the year ahead.
* New investment capex in European operations: $65 million (2011 ? $70
million), consisting of:
* Lombador Phase One ($40 million) including underground development, final
SAG mill delivery payments, and other critical path items. Lombador Phase
One underground work is proceeding on schedule and the main access ramp has
reached approximately 800m below surface. It is expected to reach 900
meters depth by the second quarter of 2012 to facilitate the development of
an exploration drive to allow for further underground exploration of the
Lombador deposits.
* Neves-Corvo dam ($13 million) related to tailings and water storage
capacity increases
* Other plant improvements and debottlenecking ($12 million) at both
Neves-Corvo and Zinkgruvan
* New Investment in Tenke: We have assumed the Phase II expansion at Tenke to
be completed by 2013, and we contemplate our share of expansion funding and
sustaining capital funding to be up to $250 million for next year. The
capital spending, if prices remain strong, is expected to be cash neutral
to the Company as Tenke operating cash flows should be sufficient.

2012 Exploration Investment

Exploration expenditures are expected to increase from around $43 million in
2011 to $50 million in 2012. Approximately $34 million of this will be spent
at Neves-Corvo, where a 90,000 metre surface drilling program is planned for
2012 which will continue to test resource expansion targets at Semblana in
addition to drill-testing the multiple high priority targets recently
identified within the Neves-Corvo near mine area. Additionally, next year?s
exploration program will also test several greenfield targets in the Iberian
Region, as well as continued resource definition drilling at the Company?s
Clare exploration project in Ireland.

Other Opportunities

The Company is evaluating several optimization projects and expansions of
current operations that could further increase production over the next few
years. The following projects could contribute to production above the
current planed levels in the near to medium term horizon:

* Neves-Corvo Copper Plant: The current higher cutoff grade production plan
leaves spare capacity in the copper plant, which could be used to treat
lower-grade ore, should copper prices rise above current levels.
* Neves-Corvo Zinc Plant Expansion: A further expansion of the existing zinc
capacity to 2.5 Mtpa ore feed capacity (to a peak 150,000tpa zinc
production averaging 112,000tpa) has been evaluated as described in the
Company's Lombador Phase One feasibility study press release of September
2011. While the SAG mill has been ordered and certain other surface
critical path items are still advancing, less schedule sensitive
expenditures related to the zinc plant expansion have been put on hold
pending completion of the overall Neves-Corvo Underground Materials
Handling Study.
* Neves-Corvo Underground Materials Handling Study: In order to seek optimal
value from the Neves-Corvo asset, a conceptual level study is progressing
to evaluate the relative merits of accessing and extracting copper rich
Semblana deposit mineralization in advance of exploiting deeper zinc and
copper mineralization from Lombador ("Lombador Phase Two"). This study is
comparing underground infrastructure investment options including a new
vertical shaft, inclined ramps and conveyors, and debottlenecking of the
current shaft and underground infrastructure. No allowance has been
included in the 2012 capital estimates for such investments pending
completion study work.
* Semblana/Lombador Phase Two: No production forecasts have been included for
material from these deposits, pending the completion of the Underground
Materials Handling Study.
* Tenke Heap-Leach Project: Freeport is conducting small scale heap leach pad
trials on low grade oxide stockpile ore. Should these be successful, heap
leaching could add additional copper cathode production in the near to
medium term.
* Zinkgruvan 2012 Copper Plant: For 2012, the copper plant at Zinkgruvan is
expected to have approximately 150kt of excess throughput capacity, which
could be used to process any additional zinc ore that may be mined. The new
copper plant has already been proven to be able to successfully process
zinc ore giving the operation additional flexibility to respond to
anticipated zinc market demand.
* Aguablanca Underground Project: No production estimates have been included
for the underground project at this stage, pending the completion of the
Underground Pre-Feasibility Study in early 2012.

Commenting on the three year outlook for the Company, Mr. Conibear said ?As we
enter 2012, we are very well positioned to continue to increase output with a
good balance sheet, several internal optimization opportunities and a strong
exploration focus. We look forward to delivering on our objectives of
internal growth, to maximize the value of our existing assets and we are
now in pursuit of the additional near term and existing production assets
with the intent of acquiring value accretive investments complimentary to our
existing business.?

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 mine 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

For further information, please contact:

Sophia Shane, Investor Relations North America: +1-604-689-7842

John Miniotis, Senior Business Analyst: +1-416-342-5565

Robert Eriksson, Investor Relations Sweden: +46 8 545 015 50

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.

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Om Lundin Mining

Affärsvärlden
2014-10-08
Cormark: Köp Lundin Mining
2014-10-07
Lundin Mining stiger efter Candelaria-affär
2014-10-07
Lundin Mining i miljardaffär
2014-09-24
Lundin Mining har påbörjat produktion vid Eagle Mine
2014-08-14
Aktiespararens triss i köpråd
2014-08-01
Lundin Minings gruvköp i Chile kan gå i stöpet
2014-07-31
Lundin Mining höjer kopparprognos
2014-07-31
Ökad vinst för Lundin Mining
SIX
2014-10-24
Lundin Mining: BMO Capital återupptar bevakning med outperform
2014-10-23
Lundin Mining: Slutför finansiering till förvärv 80 % av Candelaria
2014-10-13
Lundin Mining: Prissätter 8-årig obligation till 7,875 % ränta
2014-10-09
Lundin Mining: Blackrock ökar till 10,1 % av kapital och röster
2014-10-08
Lundin Mining: Cormark höjer till köp (market perform)
2014-10-08
Lundin Mining: Swedbank höjer rekommendation till köp (neutral)
2014-10-08
Lundin Mining: SEB höjer rekommendation till behåll (sälj)
2014-10-07
Lundin Mining: Koppar får ökad betydelse efter förvärv av Candelaria
2014-10-07
Lundin Mining: Raymond James höjer rekommendation till starkt köp
2014-10-07
Lundin Mining: S&P sätter betyget B+ med stabila utsikter
Pressmeddelanden
2014-10-24
Lundin Mining to Release Third Quarter 2014 Results Wednesday, October 29, 2014
2014-10-23
Lundin Mining Closes C$674 Million Bought Deal Financing
2014-10-13
LUNDIN MINING ANNOUNCES PRICING OF US$1.0 BILLION OF SENIOR SECURED NOTES
2014-10-06
LUNDIN MINING ANNOUNCES AGREEMENT TO PURCHASE FREEPORT'S 80% INTEREST IN THE CANDELARIA MINING COMPLEX
2014-09-24
LUNDIN MINING COMMENCES PRODUCTION AT EAGLE MINE
2014-09-05
LUNDIN REPORTS 2014 MINERAL RESERVE & RESOURCE ESTIMATE UPDATE
2014-07-31
LUNDIN MINING SECOND QUARTER RESULTS
2014-07-28
Lundin Mining to Release Second Quarter 2014 Results Wednesday, July 30, 2014
2014-07-17
LUNDIN MINING ANNOUNCES FIRST ORE SHIPMENT AT EAGLE MINE
2014-07-14
LUNDIN MINING FURTHER RESPONDS TO MEDIA SPECULATION