Lundin Mining Fourth Quarter and Full Year Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 02/18/16 -- Lundin Mining Corporation ("Lundin Mining" or the "Company") (TSX: LUN)(OMX: LUMI) today reported positive cash flows of $107.1 million generated from operations in the quarter and $713.9 million for the year, not including the Company's attributable cash flows related to Tenke Fungurume, which aggregated to an additional $32.9 million in 2015. As a result of a significant decline of metal prices, a number of asset impairments were taken which result in a net loss attributable to Lundin shareholders of $377.7 million ($0.52 per share) for the quarter and $294.1 million ($0.41 per share) for the year ended December 31, 2015.
Net loss for the quarter and the year included a non-cash, after-tax impairment charge of $278.0 million ($0.39 per share) as short-term metal prices negatively impacted estimated net recoverable values of our operating assets and exploration properties.
Mr. Paul Conibear, President and CEO commented, "For 2015 we are very pleased to have generated the highest cash flow in our Company's history. With all of our operations achieving or exceeding their annual production guidance and continuing to generate robust margins, the Company has been able to further improve its strong financial position despite the current commodity price environment. As we progress through 2016 and beyond, we intend to maintain our focus on consistent high performance of our operations, which are capable of providing positive margins at current metal prices, and disciplined capital investment, contributing to preservation of a healthy balance sheet."
Summary financial results for the quarter and year-to-date:
Highlights
Operational Performance
For 2015, all of the Company's operations met or performed better than guidance on production, but financial results were negatively impacted by a lower metal price environment. Aggregate capital spending was well below guidance as a result of proactive spending restraint measures adopted in stages to react to declining metal markets.
Candelaria (80%): The Candelaria operations produced, on a 100% basis, 181,040 tonnes of copper, approximately 1,874,000 ounces of silver, and 102,500 ounces of gold in concentrate, with copper and gold production exceeding expectations as a result of higher throughput. Copper cash costs(1) of $1.25/lb for the year were lower than full year guidance of $1.35/lb.
Eagle (100%): Eagle's operational results were excellent, with both nickel (27,167 tonnes) and copper (24,331 tonnes) production exceeding guidance. Nickel cash costs of $2.02/lb for the year were in-line with guidance of $2.00/lb.
Neves-Corvo (100%): Neves-Corvo produced 55,831 tonnes of copper and 61,921 tonnes of zinc for the year ended December 31, 2015. Copper production exceeded the prior year by 9% due to higher average copper head grades and recoveries. Zinc production fell short of the prior year comparable period resulting from lower mill throughput and lower zinc recoveries. Significant improvements were achieved in stabilizing the existing zinc plant resulting in improved recoveries in the fourth quarter. Copper cash costs of $1.63/lb for the year were in-line with our latest full-year guidance ($1.60/lb) and were lower than the prior year of $1.85/lb.
Zinkgruvan (100%): Zinc production of 83,451 tonnes at Zinkgruvan was a new record, exceeding prior year production due primarily to record tonnages of ore mined and milled. Lead production of 34,120 tonnes exceeded both expectations and 2014 production. Cash costs for zinc of $0.37/lb were lower than guidance ($0.40/lb) and in-line with the prior year ($0.37/lb).
Aguablanca (100%): Aguablanca met production expectations for the year, though current year production of 7,213 tonnes of nickel and 6,221 tonnes of copper were lower than the prior year due to cessation of open pit mining in the first quarter and the suspension of underground mining operations in the third quarter of 2015. Cash costs of $2.72/lb of nickel for 2015 were slightly higher than full year guidance ($2.60/lb) due to the lower by-product credits.
Tenke (24%): Tenke operations continue to perform well. Lundin's attributable share of annual production included 48,951 tonnes of copper cathode and 3,843 tonnes of cobalt in hydroxide. The Company's attributable share of sales included 50,826 tonnes of copper at an average realized price of $2.42/lb and 3,809 tonnes of cobalt at an average realized price of $8.21/lb. Tenke operating cash costs for the year ended December 31, 2015 were $1.21/lb of copper sold, higher than the latest guidance due to lower cobalt by-product credits. Cash distributions received by Lundin Mining in the year from Tenke were $24.6 million, slightly higher than expectations. An additional $8.3 million was received from the Freeport Cobalt operations, for total Tenke related distributions to the Company of $32.9 million for the year.
Financial Performance
Corporate Highlights
Financial Position and Financing
Outlook
Market Conditions
The Company is advancing production optimizations, cost savings and cost deferrals that are expected to protect cash flows and profits in 2016 and which are reflected in the guidance outlined below. To the extent that base metals markets improve, spending restraint plans will be re-assessed as certain expenditures and deferrals would be reconsidered in a moderately stronger metal price environment.
2016 Production and Cost Guidance
Commentary on 2016 Production Guidance by Mine
2016 Capital Expenditure Guidance
Capital expenditures, excluding capitalized interest, are expected to be $220 million (excluding Tenke), lower than the $275 million of capital expenditures in 2015, as part of on-going efforts to defer or reduce non-essential spending as long as base metal prices remain low.
Exploration Investment
The Company's exploration expenditures (not including Tenke) are expected to be in the range of $40 million in 2016 (2015 - $52 million). The majority of the planned activity is expected to be directed towards near mine targets at Candelaria and Eagle.
Tenke
The Company estimates its share of sustaining capital funding for 2016 at $25 million ($67 million in 2015). All of Tenke's capital expenditures and exploration programs are expected to be self-funded by cash flow from operations.
At current metal prices, the Company believes it is reasonable to expect Lundin Mining's attributable cash distributions to range between $30 to $40 million in 2016, taking into account self-funding of capital and other expenditures such as exploration. Final decisions on capital investments and the amounts and timing of any cash distributions for 2016 are ultimately made by Freeport, the mine's operator.
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, and Sweden, primarily producing copper, nickel and zinc. 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 publically communicated on February 18, 2016 at 6:00 p.m. Eastern Time.
Cautionary Statement in Forward-Looking Information and Non-GAAP performance measures
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. In addition, forward-looking information is based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed price of copper, nickel, zinc and other metals; 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.
Certain financial measures contained herein, such as operating earnings, net debt and cash costs, have no meaning within generally accepted accounting principles under IFRS and therefore amounts presented may not be comparable to similar data presented by other mining companies. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures or performance prepared in accordance with IFRS.
Contacts:
Sonia Tercas
Investor Relations North America
+1-416-342-5583
John Miniotis
Senior Manager, Corporate Development and Investor Relations
+1-416-342-5565
Robert Eriksson
Investor Relations Sweden
+46 8 545 015 50
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Datum: 18.02.2016 - 23:00 Uhr
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