Lundin Mining Second Quarter Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 07/29/15 -- Lundin Mining Corporation (TSX: LUN)(OMX: LUMI) ("Lundin Mining" or the "Company") today reported net earnings of $53.7 million or net earnings attributable to Lundin shareholders (after deducting non-controlling interests) of $46.4 million ($0.06 per share) for the quarter ended June 30, 2015. Cash flows of $262.7 million were generated from operations in the quarter, not including the Company's attributable cash flows from Tenke Fungurume.
Earnings for the three month period included a full quarter of operating and financial results from Candelaria, which was acquired in the fourth quarter of 2014 and Eagle, which was commissioned in the same period. Candelaria and Eagle generated operating earnings of $141.3 million and $40.3 million, respectively, in the current quarter.
Paul Conibear, President and CEO commented, "With another strong operating quarter, the Company remains very well positioned to continue to deliver record levels of cash flow at good margins despite the current commodity price environment. Our strong year-to-date performance coupled with weaker local currencies, has once again enabled us to improve our annual cash cost guidance across several of our operations."
"We are also extremely pleased that several key milestones have recently been achieved at Candelaria, including the approval of the Environmental Impact Assessment ("EIA"), and the completion of an optimized mine plan. Through these important advancements, Lundin Mining is expected to continue to generate excellent shareholder value well into the future," added Mr. Conibear.
Neves-Corvo Zinc Expansion
The Feasibility Study examining an expansion of the zinc operations at Neves-Corvo achieved substantial completion by quarter end. The scope of the study includes underground development of the lower Lombador zinc deposits, a major underground conveying system to take ore to the existing shaft, expansion of shaft capacity to 5.6 million tonnes per year, zinc plant expansion to 2.5 million tonnes per year ore throughput, and construction of expanded water treatment, paste backfill and tailings storage infrastructure. Maximum zinc production is nominally 165 ktpa with 25 ktpa of lead by-product. The estimated capital cost, including the first full year of underground development costs, is approximately EUR245 million. The project schedule is estimated to be approximately 24 months from approval to proceed through to commissioning of the expanded facilities.
An investment decision on zinc expansion has been deferred pending additional work to improve the existing zinc plant metallurgical recoveries and plant stability, and pending improved metal markets.
Lundin Mining Senior Organizational Changes
The Company is pleased to announce that Peter M. Quinn, currently the President of Candelaria and Ojos del Salado will assume the position of Chief Operating Officer of Lundin Mining effective August 1, 2015.
Mr. Quinn has over 25 years of experience in the mining industry, overseeing all aspects of mining, leaching and concentrating processes in both open pit and underground operations. He commenced his career at Western Mining Corporation's Olympic Dam Operations in 1988 (now BHP Billiton) and subsequently gained experience in Newcrest Mining, Phelps Dodge, and Freeport -McMoRan before joining Lundin Mining in November 2014. Mr. Quinn has had major green-field project startup experiences with the Mt. Keith Nickel Project in Western Australia and the Cadia Hill Gold Mine Project in New South Wales, Australia and has extensive experience with operating large scale open pit mining operations such as the Morenci Mine Operations, Arizona USA and the Candelaria operations. Throughout his career Mr. Quinn has been a leader in safety and production efficiency, through organizational team building and people development and was recognized by CORESEMIN, Third Region de Atacama Premier Award for Safety Leadership in 2012. Mr. Quinn received his Bachelor of Engineering in mining engineering from the South Australian Institute of Technology.
Following the successful completion of construction and ramp up of operations at the Eagle mine, General Manager Mike Welch will be transferring from the Eagle Mine to take up the role of General Manager at Neves-Corvo in August.
Quarter Highlights
Operational Performance
For the second quarter of 2015, all of the Company's operations continued to perform well, with most operations meeting or exceeding expectations. Production results continue to be strong, cash costs remain competitive, and favourable profit margins were maintained at all operations.
Candelaria (80%): The Candelaria operations produced, on a 100% basis, 46,651 tonnes of copper, and approximately 464,000 ounces of silver and 26,900 ounces of gold in concentrate, with copper and gold production better than expectations as a result of higher throughputs and good metallurgical recoveries. Copper cash costs(1) of $1.21/lb for the quarter benefitted from lower mine and mill costs, favourable foreign exchange rates, and higher production.
Eagle (100%): Eagle's operational results were generally in-line with expectations, with nickel production (6,349 tonnes) meeting expectations, and copper production (5,403 tonnes) exceeding expectations for the quarter with higher than expected head grades and recoveries. Nickel cash costs of $2.15/lb for the quarter were higher than full year guidance of $2.00/lb as a result of lower than expected copper by-product credit pricing and higher treatment charges.
Neves-Corvo (100%): Neves-Corvo produced 15,348 tonnes of copper and 16,022 tonnes of zinc in the second quarter. Copper production exceeded the prior year comparable period by 14% due to higher head grades and the continued rollout of bulk mining methods in more areas. Zinc production fell short of the prior year comparable period, resulting from a reduction in mill throughput and below target metal recovery in the zinc plant. Copper cash costs of $1.43/lb for the quarter were lower than guidance ($1.60/lb) due primarily to favourable foreign exchange rates.
Zinkgruvan (100%): Zinc production was strong in the second quarter of 2015, with the mine once again hoisting a record volume of ore. Zinc production of 21,237 tonnes was 10% higher than the comparable period in 2014 due to higher head grades and recoveries. Lead production exceeded expectations in the current quarter, but fell short of the prior year comparable period as mining took place in areas with lower lead grades. Cash costs for zinc of $0.43/lb for the quarter were higher than guidance ($0.35/lb) due to lower by-product credit pricing.
Aguablanca (100%): Aguablanca had another strong quarter of operational performance as mining transitioned from open pit to underground. Current quarter production of 2,245 tonnes of nickel and 1,975 tonnes of copper exceeded both expectations and the prior year comparable period. Cash costs of $1.72/lb of nickel for the quarter were significantly below expectations and the prior year comparable period as mining of the open pit was extended early into the second quarter.
Tenke (24%): Tenke operations continue to perform well. Lundin's attributable share of second quarter production included 12,544 tonnes of copper cathode and 996 tonnes of cobalt in hydroxide. The Company's attributable share of sales included 11,376 tonnes of copper at an average realized price of $2.63/lb and 893 tonnes of cobalt at an average realized price of $9.27/lb. Tenke operating cash costs for the second quarter of 2015 were $1.07/lb of copper sold, lower than the latest guidance, primarily reflecting higher cobalt credits, partly offset by lower copper sales volumes. Cash distributions received by Lundin Mining in the quarter were $5.9 million, in-line with expectations. An additional $0.8 million was received from the Freeport Cobalt operations. Year-to-date cash distributions to the Company from Tenke and Freeport Cobalt totalled $17.0 million.
Financial Performance
Corporate Highlights
Financial Position and Financing
Outlook
2015 Production and Cost Guidance
2015 Capital Expenditure and Exploration Guidance
Capital expenditures for 2015 are expected to be $350 million (excluding Tenke). The Company expects to spend $40 million less on sustaining capital expenditures at Candelaria and $10 million less on sustaining capital expenditures at Neves-Corvo. In total, this represents a reduction of $50 million from the previous guidance.
The Company estimates its share of expansion related initiatives and sustaining capital funding for 2015 at Tenke to be $80 million, $10 million less than previously guided. All of the capital expenditures are expected to be self-funded by cash flow from Tenke operations.
The Company expects to receive cash distributions from Tenke in 2015 of approximately $20 - $30 million, slightly increased from previous guidance of $20 million.
The total exploration expense is expected to be $60 million, unchanged from previous guidance.
About Lundin Mining
Lundin Mining Corporation ("Lundin", "Lundin Mining" or the "Company") is a diversified Canadian base metals mining company with operations in Chile, the USA, Portugal, Sweden, and Spain, producing copper, nickel, zinc and lead. In addition, Lundin Mining holds a 24% equity stake in the world-class Tenke Fungurume ("Tenke") copper/cobalt mine in the Democratic Republic of Congo ("DRC") and in the Freeport Cobalt Oy business ("Freeport Cobalt"), which includes a cobalt refinery located in Kokkola, Finland.
On Behalf of the Board,
Paul Conibear, President and CEO
The information in this release is subject to the disclosure requirements of Lundin Mining under the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. This information was publicly communicated on July 29, 2015 at 6:15 p.m. Eastern Time.
Cautionary Statement on Forward-Looking Information
Certain of the statements made and information contained herein is "forward-looking information" within the meaning of applicable Canadian securities legislation. This report includes, but is not limited to, forward looking statements with respect to the Company's estimated annual metal production, cash costs, exploration expenditures, capital expenditures and dividends, as noted in the Outlook section and elsewhere in this document. These estimates and other forward-looking statements are based on a number of assumptions and 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 estimated operating and cash costs, foreign currency fluctuations; risks inherent in mining including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; including 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, and commodity price fluctuations; the inability to successfully integrate the Candelaria operations or realize its anticipated benefits; 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. 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:
John Miniotis
Senior Manager, Corporate Development & Investor Relations
+1-416-342-5565
Robert Eriksson
Investor Relations, Sweden
+46 8 545 015 50
Sonia Tercas
Senior Associate, Investor Relations
+1-416-342-5583
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Datum: 29.07.2015 - 22:15 Uhr
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