VANCOUVER, BC, Nov. 1, 2023 /PRNewswire/ -- (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or the "Company") today reported its third quarter 2023 financial results.

"Our operations continued with a strong performance in the third quarter. As a result, we are increasing our production guidance for Caserones and Eagle. The acquisition of Caserones enabled us to achieve a new record in quarterly consolidated copper production, and we also achieved a record in quarterly zinc production. This led the Company to an adjusted EBITDA of $415 million for the period." commented Peter Rockandel, CEO.

Mr. Rockandel added, "During the integration process of Caserones, our team has identified and outlined synergies between Caserones and Candelaria, which are expected to yield initial annual savings of $20 to $30 million per year. We are excited about launching the largest exploration program at Caserones since production commenced, targeting resource extensions and near-mine discoveries. The corporate office move to Vancouver is complete and all senior executive positions are in place. As we approach 2024, Lundin Mining is strategically, operationally, and financially, in a strong position to continue to deliver on our plans and execute on the next phase of growth. On a personal note, as this is my last quarter as CEO, I would like to thank all our employees, partners and stakeholders for their dedication, hard work and support, all of which have been integral to our current and future success. I am extremely proud of what the team has been able to accomplish during my tenure as CEO."

Third Quarter Highlights

  • Copper Production: The Company achieved consolidated production of 89,942 tonnes of copper, a new quarterly record.
  • Other Production: During the quarter a total of 49,774 tonnes of zinc, 4,290 tonnes of nickel and approximately 35,000 ounces of gold were produced. A quarterly zinc production record was achieved as the zinc expansion project ("ZEP") at Neves-Corvo ramps up and a full quarter of operation from the sequential flotation project at Zinkgruvan was realized.
  • Revenue: $992.2 million in the quarter.
  • Adjusted Earnings: Net loss attributable to shareholders of the Company was $3.0 million ($0.00 per share). Adjusted earnings attributable to shareholders of the Company1 was $85.6 million ($0.11 per share).
  • Adjusted EBITDA: Adjusted earnings before interest, taxes, depreciation and amortization1 ("EBITDA") of $415.1 million in the third quarter.
  • Cash Generation: Cash provided by operating activities was $303.8 million and cash and cash equivalents at September 30, 2023 was $357.3 million. Adjusted operating cash flow1 was $316.5 million ($0.41 per share), after removing the impact of working capital. Free cash flow1 was $71.1 million.
  • Caserones Acquisition: Completed the acquisition of 51% of the Caserones copper-molybdeum mine on July 13, 2023, adding another long-life asset in a tier one jurisdiction. The Company anticipates initial annual synergies from supply chain and service contracts between Caserones and Candelaria to be $20 million to $30 million per year.
  • Term Loan: To fund the Caserones acquisition, the Company obtained a term loan in July 2023 of a principal amount of $800.0 million with an additional $400.0 million accordion option maturing in July 2026. As at September 30, 2023, the Company had a net debt1 balance of $1,158.9 million.
  • CEO Succession: Peter Rockandel, the current Chief Executive Officer announced that he will be stepping down from the role of CEO and from the Board of Directors as of December 31, 2023. Those responsibilities will be assumed by Jack Lundin, current President, and former Director of the Company.
  • Outlook: Revised annual production guidance, including an increase in copper production from 296,000 - 325,000 tonnes to 305,000 - 325,000 tonnes. Cash cost guidance was lowered at Caserones and Eagle and increased at Candelaria. Annual capital expenditure guidance is lower by $30 million.

__________________________________

1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the three and nine months ended September 30, 2023 and the Reconciliation of Non-GAAP measures section at the end of this news release.

Summary Financial Results 


Three months ended

September 30,


Nine months ended

September 30,

US$ Millions (except per share amounts)

2023

2022


2023

2022

Revenue

992.2

648.5


2,332.1

2,229.8

Gross profit

197.3

82.5


463.5

607.3

Attributable net earnings (loss)2

(3.0)

(11.2)


202.8

281.3

Net earnings (loss)

21.9

(11.2)


248.5

318.2

Adjusted earnings 1,2,3

85.6

30.9


256.9

288.9

Adjusted EBITDA1,3

415.1

202.4


943.8

938.8

Basic and diluted earnings per share ("EPS")2

(0.01)


0.26

0.37

Adjusted EPS1,2,3

0.11

0.04


0.33

0.38

Cash provided by operating activities

303.8

36.3


710.5

720.0

Adjusted operating cash flow1

316.5

181.3


662.2

703.9

Adjusted operating cash flow per share1

0.41

0.23


0.86

0.93

Free cash flow from (used in) operations1

136.5

(43.9)


228.3

417.1

Free cash flow1

71.1

(163.2)


(47.7)

158.3

Cash and cash equivalents

357.3

226.9


357.3

226.9

Net debt1

(1,158.9)

177.6


(1,158.9)

177.6

1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the three and nine months ended September 30, 2023 and the Reconciliation of Non-GAAP Measures section at the end of this news release.

2 Attributable to shareholders of Lundin Mining Corporation.

3 Q2 2023 amounts have been adjusted from those presented in the Company's MD&A for the three and six months ended June 30, 2023.

Quarter Ended September 30, 2023

  • The Company generated revenue of $992.2 million, gross profit of $197.3 million and adjusted EBITDA of $415.1 million (Q3 2022 - $202.4 million).
  • Net loss attributable to shareholders of the Company was $3.0 million ($0.00 per share) in the third quarter, impacted by higher interest expense, non-cash unrealized losses on derivative contracts and increased deferred tax expense as a result of the enactment of the mining royalty law in Chile4.
  • Adjusted earnings attributable to shareholders of the Company for the quarter of $85.6 million ($0.11 per share attributable to shareholders of the Company) were $49.5 million higher than the prior year quarter after adjusting for the non-cash revaluation of derivative contracts, fair value adjustments relating to the Caserones acquisition and deferred tax relating to the mining royalty rate change4, among other things.
  • Cash and cash equivalents as at September 30, 2023 were $357.3 million. Cash generated from operations of $303.8 million during the quarter was used to fund investing activities of $908.8 million. Investing activities in the third quarter included $648.6 million net cash paid at closing for the acquisition of Caserones, consisting of $796.6 million upfront cash consideration after adjustments, net of $148 million cash and cash equivalents held by SCM Minera Lumina Copper Chile at closing on a 100% basis.
  • Free cash flow of $71.1 million was $234.3 million higher than the prior year comparable period and benefited from the inclusion of production from Caserones, combined with higher realized copper prices and higher overall changes in working capital.
  • As at November 1, 2023, the Company had cash and net debt balances of approximately $368.6 million and $1,137.6 million, respectively.

4 Refer to Management's Discussion and Analysis for the three and nine months ended September 30, 2023 for further information related to the deferred tax relating to the mining royalty rate change.

Corporate Highlights

  • Candelaria EIA: A new Environmental Impact Assessment ("EIA") was granted at Candelaria for the extension of operations from 2030 to 2040.
  • Exploration: Exploration programs continue at our existing assets while new exploration drilling campaigns are underway at Caserones and Josemaria. Drilling at Caserones will be the largest exploration program since the mine began operation in 2013. The initial phase of the drill program is expected to be over 10,000 meters and results are expected in H1 2024.
  • Copper Mark: Caserones has achieved the Copper Mark at its operations, a designation that highlights the Company's commitment to sustainable mining practices.
  • Josemaria Project: The Company continues to derisk and advance the Josemaria project through optimization and trade off studies. These studies will continue into 2024.
  • Senior Leadership Appointments: The corporate office move to Vancouver has been completed. The Company is pleased to announce the following executive appointments, Peter Brady has been hired as General Counsel, Ricardo Checura as Vice President, Health and Safety and Nathan Monash as Vice President, Sustainability.

Outlook

Production and cash cost guidance for 2023 is updated from that disclosed in the Company's Management's Discussion and Analysis for the three and six months ended June 30, 2023.

Most production guidance ranges are tightening and improving, with the lower end of the range increasing for copper, nickel and gold. Cash cost guidance is lower for Caserones and Eagle driven by higher production volumes and by-product credits, and increasing for Candelaria, reflecting higher operating costs. Production continues to be weighted to the second half of the year, notably at Chapada due to the first half seasonal operating conditions and forecast grade and recovery profiles.

2023 Production and Cash Cost Guidance




Previous Guidancea

Revised Guidance


(contained metal)

Production

Cash Cost ($/lb)f

Production

Cash Cost ($/lb)b,f


Copper (t)

Candelaria (100%)

145,000 - 155,000

1.80 – 1.95c

147,000 - 153,000

2.00 – 2.20c



Caserones (100%)e

60,000 - 65,000

2.30 – 2.45

65,000 - 69,000

2.00 – 2.20



Chapada

43,000 - 48,000

2.35 – 2.55d

45,000 - 48,000

2.35 – 2.55d



Eagle

12,000 - 15,000


12,000 - 15,000




Neves-Corvo

33,000 - 38,000

2.10 – 2.30c

33,000 - 36,000

2.10 – 2.30c



Zinkgruvan

3,000 - 4,000


3,000 - 4,000




Total

296,000 - 325,000


305,000 - 325,000



Zinc (t)

Neves-Corvo

100,000 - 110,000


103,000 - 110,000




Zinkgruvan

80,000 - 85,000

0.45 – 0.50c

78,000 - 82,000

0.45 – 0.50c



Total

180,000 - 195,000


181,000 - 192,000



Molybdenum (t)

Caserones (100%)e

1,500 - 2,000


1,500 - 2,000



Gold (koz)

Candelaria (100%)

85 - 90


87 - 92




Chapada

55 - 60


55 - 60




Total

140 - 150


142 - 152



Nickel (t)

Eagle

13,000 - 16,000

2.30 – 2.45

15,000 - 17,000

2.00 – 2.20

a. Guidance as outlined in the MD&A for the three and six months ended June 30, 2023.        

b. Cash costs are based on various assumptions and estimates, including but not limited to: production volumes, commodity prices (Cu: $3.75/lb, Zn: $1.10/lb, Mo: $20.00/lb Pb: $0.90/lb, Au: $1,850/oz), foreign exchange rates (€/USD:1.05, USD/SEK:10.50, USD/CLP:800, USD/BRL:5.00) and production costs for the remainder of 2023.

c. 68% of Candelaria's total gold and silver production are subject to a streaming agreement and silver production at Zinkgruvan and Neves-Corvo are also subject to streaming agreements. Cash costs are calculated based on receipt of approximately $425/oz gold and $4.25/oz to $4.57/oz silver.

d. Chapada's cash cost is calculated on a by-product basis and does not include the effects of its copper stream agreements. Effects of the copper stream agreements are reflected in copper revenue and will impact realized price per pound.

e. Caserones guidance is for the  second half of 2023.

f. These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the three and nine months ended September 30, 2023 and the Reconciliation of Non-GAAP measures section at the end of this news release.

As a result of re-phasing several projects at Neves-Corvo and Zinkgruvan, capital expenditure guidance is lower by an additional $30 million for 2023. As disclosed in the Company's Management's Discussion and Analysis for the three and six months ended June 30, 2023, capital spend guidance at Josemaria was previously lowered to $350 million for 2023 due to foreign exchange, a delay in planned equipment deliveries and reduced activities.

2023 Capital Expenditure


($ millions)

Previous Guidancea

Revisions

Revised Guidance


Candelaria (100% basis)

375

375


Caserones (100% basis)c

110

110


Chapada

70

70


Eagle

20

20


Neves-Corvo

130

(25)

105


Zinkgruvan

70

(5)

65


Other

10

10


Total Sustaining

785

(30)

755


Josemaria

350

350


Total Capital Expenditures

1,135

(30)

1,105


a. Guidance as outlined in the MD&A for the three and six months ended June 30, 2023. 


b. Sustaining capital expenditure is a supplementary financial measure and expansionary capital expenditure is a non-GAAP measure - see the Company's Management Discussion and Analysis for the three and six months ended June 30, 2023 and the Reconciliation of Non-GAAP Measures at the end of this news release.


c. Caserones guidance is for the second half of 2023.

2023 Exploration Investment Guidance

Total exploration expenditures are on target to be $45.0 million in 2023, unchanged from previous guidance.

Operational Performance

Total Production

(contained metal)a

2023

2022

YTD

Q3

Q2

Q1

Total

Q4

Q3

Q2

Q1

Copper (t)b

211,461

89,942

60,057

61,462

249,659

56,552

63,930

64,096

65,081

Zinc (t)

134,442

49,774

36,115

48,553

158,938

44,308

40,327

41,912

32,391

Molybdenum (t)b

1,096

1,096







Gold (koz)b

105

35

34

36

154

36

45

39

34

Nickel (t)

12,700

4,290

4,686

3,724

17,475

4,096

4,379

4,719

4,281

a. Tonnes (t) and thousands of ounces (koz)

b. Candelaria and Caserones production is on a 100% basis. Caserones results are from July 13, 2023.

Candelaria (80% owned): Candelaria produced 34,275 tonnes of copper and approximately 20,000 ounces of gold in concentrate on a 100% basis in the quarter. Copper production was lower than the prior year quarter primarily due to lower grades partially offset by higher throughput. Gold production was lower than the prior year quarter due to lower grades and recoveries. Current quarter production costs and copper cash cost of $2.19/lb were higher than the prior year quarter largely owing to higher contractor and maintenance costs and unfavorable foreign exchange. Cash cost was further impacted by lower sales volumes.

Caserones (51% owned): In the three months ended September 30, 2023 Caserones produced 34,427 tonnes of copper and 1,321 tonnes of molybdenum on a 100% basis, of which 29,821 tonnes of copper and 1,096 tonnes of molybdenum were produced from the acquisition closing date of July 13. Copper and molybdenum production were higher than planned due to increased throughput and recoveries. Production costs in the quarter were negatively impacted by the recognition of fair market value adjustments to inventory due to the acquisition. Copper cash cost of $1.60/lb benefited from higher than planned production and by-product credits.

Chapada (100% owned): Chapada produced 12,286 tonnes of copper and approximately 15,000 ounces of gold in concentrate in the quarter. Copper and gold production was lower than the prior year quarter primarily due to lower throughput and grades. Production costs were lower than the prior year quarter due to lower sales volumes. Copper cash cost of $2.28/lb for the quarter increased from the prior year quarter due to lower sales volumes, unfavorable foreign exchange variances, and lower by-product credits and production.

Eagle (100% owned): During the quarter Eagle produced 4,290 tonnes of nickel and 3,245 tonnes of copper which were lower than the prior year quarter due to lower planned grades. Production costs were higher than the comparable prior year quarter due to inflationary contractual cost increases. Nickel cash cost in the quarter of $2.07/lb was higher than the prior year quarter primarily due to lower by-product credits and higher production costs.

Neves-Corvo (100% owned): Neves-Corvo produced 9,016 tonnes of copper and 25,807 tonnes of zinc in the quarter. Copper production was higher than in the prior year quarter due to higher throughput, grades and recoveries. Zinc production was higher than in the prior year quarter primarily due to increased grades and recoveries driven by the Zinc Expansion Project ("ZEP"). Production costs during the quarter were lower than the prior year quarter despite higher sales, primarily due to reduced electricity costs. Current quarter copper cash cost per pound of $2.27/lb was lower than the prior year quarter primarily as a result of lower input costs and benefited from higher production and sales. 

Zinkgruvan (100% owned): Zinc production of 23,967 tonnes and lead production of 8,643 tonnes were higher than the prior year quarter primarily due to higher throughput and grades. Copper production of 1,299 tonnes was lower than the prior year quarter due to lower throughput. Production costs were higher than the prior year quarter primarily due to higher sales volumes. Zinc cash cost per pound of $0.28/lb during the quarter was higher than the prior year quarter primarily as a result of lower by-product costs per pound and higher treatment and refining charges. 

Senior Leadership Appointments

The Company is pleased to announce the executive appointments of Peter Brady as General Counsel, Ricardo Checura as Vice President, Health and Safety, and Nathan Monash as Vice President, Sustainability.

Peter Brady
General Counsel
Mr. Brady has joined Lundin Mining's Executive Leadership Team as General Counsel. He has over 20 years of experience in industry and private practice working with major international mining companies. Prior to joining Lundin Mining, he most recently was Chief Legal & Governance Officer with Vale Base Metals, responsible for advising their senior leadership team on all legal and business risk, compliance, and corporate governance matters. Previous to Vale Base Metals, he was a Partner at McCarthy Tetrault. Mr. Brady holds a Bachelor of Laws from Queen's University and a Master of Arts in Environmental Law from the University of Windsor.

Ricardo Checura
Vice President Health and Safety
Mr. Checura was previously at BHP Inc, where he spent the past 12 years in various leadership roles, most recently as Head of Risk Operations. He was a member of BHP's Global Risk Leadership Team and managed the risk management activities of their Global Operating Assets. Prior to his most recent role, Ricardo served as their Head of Safety – Minerals Americas between 2018 to 2021. Mr. Checura's experience also includes implementing Fatal Risk Management from his previous roles in the mining industry. Ricardo holds a Bachelor of Science in Engineering from the University of Concepción and a Master of Business Administration from the University of Chile.

Nathan Monash
Vice President, Sustainability
Mr. Monash has joined Lundin Mining's Senior Leadership Team as Vice President, Sustainability. He has over 20 years of experience in the mining sector, developing and integrating sustainability strategy and governance structures and advising operations on community relations, local government relations, human rights and communications. Prior to joining Lundin Mining, he most recently led Lundin Gold's sustainability activities during the construction and operation of the Fruta del Norte mine in Ecuador and prior to that led AngloGold Ashanti's sustainability efforts in the Americas. Nathan has also worked with International Finance Corporation, guiding extractive industry clients on the structure and implementation of sustainable development strategies, and spent several years with the World Economic Forum where he worked closely with leaders from business, academia and government to identify and address key economic, social and environmental issues facing the mining and metals industry. Mr. Monash holds a Bachelor of Science in Biology from McGill University and a Master of Arts from the Fletcher School at Tufts University.

About Lundin Mining

Lundin Mining is a diversified Canadian base metals mining company with projects and operations in Argentina, Brazil, Chile, Portugal, Sweden and the United States of America, primarily producing copper, zinc, molybdenum, gold and nickel. 

The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below on November 1, 2023 at 3:00 pm Pacific Standard Time.

Technical Information

The scientific and technical information in this press release has been prepared in accordance with the disclosure standards of National Instrument 43-101 ("NI 43-101") and has been reviewed by Arman Barha, P.Eng., Vice President, Technical Services, a "Qualified Person" under NI 43-101. Mr. Barha has verified the data disclosed in this release and no limitations were imposed on his verification process.

For further Technical Information on the Company's material properties, refer to the following technical reports, each of which is available on the Company's SEDAR profile at www.sedarplus.ca: Candelaria: technical report entitled Technical Report for the Candelaria Copper Mining Complex, Atacama Region, Region III, Chile dated February 22, 2023. Caserones: Caserones Mining Operation, Chile, NI 43-101 Technical Report on the Caserones Mining Operation, dated July 13, 2023 Chapada: technical report entitled Technical Report on the Chapada Mine, Goiás State, Brazil dated October 10, 2019. Eagle Mine: technical report entitled Technical Report on the Eagle Mine, Michigan, U.S.A. dated February 22, 2023. Neves-Corvo: technical report entitled NI 43-101 Technical Report on the Neves-Corvo Mine, Portugal dated February 22, 2023. Josemaria Project: technical report entitled NI 43-101 Technical Report, Feasibility Study for the Josemaria Copper-Gold Project, San Juan Province, Argentina, September 28, 2020, which is available on Josemaria Resources' SEDAR profile at www.sedarplus.ca.

Reconciliation of Non-GAAP Measures  

The Company uses certain performance measures in its analysis. These performance measures have no standardized meaning within generally accepted accounting principles under International Financial Reporting Standards and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. For additional details please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the three and nine months ended September 30, 2023 which is available on SEDAR+ at www.sedarplus.ca.

Net (debt) cash can be reconciled as follows:

($thousands)

September 30, 2023

December 31, 2022


Debt and lease liabilities

(1,130,754)

(27,179)


Current portion of total debt and lease liabilities           

(380,645)

(170,149)


Less deferred financing fees (netted in above)

(4,810)

(4,926)



(1,516,209)

(202,254)


Cash and cash equivalents

357,337

191,387


Net debt

(1,158,872)

(10,867)






Adjusted operating cash flow and adjusted operating cash flow per share can be reconciled to cash provided by operating activities as follows:


Three months ended

September 30,


Nine months ended

September 30,

($thousands, except share and per share amounts)

2023

2022


2023

2022

Cash provided by operating activities

303,812

36,331


710,531

719,999

Changes in non-cash working capital items

12,655

145,006


(48,360)

(16,111)

Adjusted operating cash flow   

316,467

181,337


662,171

703,888







Basic weighted average number of shares outstanding

773,147,920

775,563,527


772,214,160

759,726,506

Adjusted operating cash flow per share                                 

$               0.41

0.23


0.86

0.93

Free cash flow from operations can be reconciled to cash provided by operating activities as follows:


Three months ended

September 30,


Nine months ended

September 30,

($thousands)

2023

2022


2023

2022

Cash provided by operating activities

303,812

36,331


710,531

719,999

General exploration and business development

12,734

72,446


41,192

132,259

Sustaining capital expenditures

(180,013)

(152,722)


(523,397)

(435,145)

Free cash flow from operations

136,533

(43,945)


228,326

417,113

General exploration and business development

(12,734)

(72,446)


(41,192)

(132,259)

Expansionary capital expenditures

(52,662)

(46,766)


(234,831)

(126,523)

Free cash flow

71,137

(163,157)


(47,697)

158,331

Adjusted EBITDA can be reconciled to the Company's Consolidated Statement of Earnings as follows:


Three months ended

September 30,


Nine months ended

September 30,

($thousands)

2023

2022


2023

2022

Net earnings (loss)

21,883

(11,245)


248,496

318,238

Add back:






Depreciation, depletion and amortization                                     

179,788

140,161


430,540

412,040

Finance income and costs

36,212

15,240


67,808

47,521

Income taxes

84,891

10,766


113,983

136,975


322,774

154,922


860,827

914,774

Unrealized foreign exchange

9,096

14,426


(1,545)

25,000

Revaluation loss on derivatives1

47,874


43,407

Sinkhole costs

(1,247)

7,789


15,235

7,789

Revaluation loss (gain) on marketable securities

3,449

(554)


(453)

1,712

Caserones inventory fair value adjustment

32,185


32,185

Unrealized foreign exchange and trading loss on equity
investments

18,848


Write-down of fixed assets

3,617


3,619

Gain on disposal of subsidiary


(5,718)

(16,828)

Other

990

3,325


(120)

2,724

Total adjustments - EBITDA

92,347

47,451


82,991

24,016

Adjusted EBITDA1

415,121

202,373


943,818

938,790







1 Q2 2023 amounts have been adjusted from those presented in the Company's MD&A for the three and six months ended June 30, 2023.          

Adjusted earnings and adjusted earnings per share can be reconciled to the Company's Consolidated Statement of Earnings as follows:


Three months ended

September 30,


Nine months ended

September 30,

($thousands, except share and per share amounts)

2023

2022


2023

2022

Net earnings (loss) attributable to Lundin Mining shareholders

(2,964)

(11,212)


202,765

281,289

Add back:






Total adjustments - EBITDA

92,347

47,451


82,991

24,016

Tax effect on adjustments

(20,114)

(12,012)


(23,295)

(11,323)

Deferred tax expense due to change in tax rate

25,700


25,700

Deferred tax arising from foreign exchange translation

9,669

5,599


(12,327)

(6,264)

Non-controlling interest on adjustments

(19,049)

1,070


(18,980)

1,197

Total adjustments

88,552

42,108


54,089

7,626

Adjusted earnings1                                                                      

85,588

30,896


256,854

288,915







Basic weighted average number of shares outstanding

773,147,920

775,563,527


772,214,160

759,726,506







Net (loss) earnings attributable to shareholders  

(0.01)


0.26

0.37

Total adjustments  

0.11

0.05


0.07

0.01

Adjusted earnings per share1                                                   

0.11

0.04


0.33

0.38

1 Q2 2023 amounts have been adjusted from those presented in the Company's MD&A for the three and six months ended June 30, 2023.

Cash and All-in Sustaining Costs can be reconciled to the Company's operating costs as follows:


Three months ended September 30, 2023


Operations

Candelaria

Caserones

Chapada

Eagle

Neves-Corvo

Zinkgruvan


($000s, unless
otherwise noted)

(Cu)

(Cu)

(Cu) 

(Ni)

 (Cu)

(Zn)

Total

Sales volumes
(Contained metal):








Tonnes                    

33,668

30,385

11,445

3,640

8,799

22,042


Pounds (000s)

74,225

66,987

25,232

8,025

19,398

48,594


Production costs   







615,109

Less: Royalties and
other







(21,662)

Inventory fair value
adjustment







(32,185)








561,262

Deduct: By-product







(216,150)

Add: Treatment and







56,261

Cash cost

162,672

106,866

57,501

16,598

44,043

13,693

401,373

Cash cost per pound

2.19

1.60

2.28

2.07

2.27

0.28


Add: Sustaining capital                  

86,693

28,849

16,716

4,989

27,357

12,350


Royalties

7,550

2,142

7,385

1,055


Reclamation and
other closure
accretion and
depreciation

2,349

1,133

2,141

2,742

1,462

1,011


Leases & other

2,841

11,531

865

797

131

86


All-in sustaining cost

254,555

155,929

79,365

32,511

74,048

27,140


AISC per pound ($/lb)

3.43

2.33

3.15

4.05

3.82

0.56


         


Three months ended September 30, 2022


Operations

Candelaria

Caserones

Chapada

Eagle

Neves-Corvo

Zinkgruvan


($000s, unless otherwise noted)

(Cu)

(Cu)

(Cu) 

(Ni)

(Cu) 

(Zn)

Total

Sales volumes (Contained metal):








Tonnes                    

35,587

12,817

3,715

8,574

13,722


Pounds (000s)

78,456

28,257

8,190

18,903

30,252


Production costs   







425,814

Less: Royalties and







(8,593)








417,221

Deduct: By-product







(172,179)

Add: Treatment and







28,829

Cash cost

154,633

54,147

8,637

50,888

5,566

273,871

Cash cost per pound

1.97

1.92

1.05

2.69

0.18


Add: Sustaining capital                  

103,486

19,197

3,062

15,860

8,415


Royalties

3,055

5,705

(1,213)


Reclamation and
other closure
accretion and
depreciation

1,951

1,784

4,809

630

962


Leases & other

2,327

1,017

484

173

149


All-in sustaining cost

262,397

79,201

22,697

66,338

15,092


AISC per pound ($/lb)

3.34

2.80

2.77

3.51

0.50


 


Nine months ended September 30, 2023


Operations

 Candelaria

Caserones

Chapada

Eagle

Neves-Corvo

Zinkgruvan


($000s, unless otherwise noted)

(Cu)

(Cu)

(Cu) 

(Ni)

 (Cu)

(Zn)

Total

Sales volumes (Contained metal):








Tonnes                    

105,585

30,385

30,681

10,234

23,000

48,028


Pounds (000s)

232,775

66,987

67,640

22,562

50,706

105,883


Production costs   







1,438,071

Less: Royalties and other







(41,717)

Inventory fair value adjustment







(32,185)








1,364,169

Deduct: By-product credits







(495,751)

Add: Treatment and







125,390

Cash cost

507,884

106,866

165,170

47,228

128,206

38,454

993,808

Cash cost per pound ($/lb)

2.18

1.60

2.44

2.09

2.53

0.36


Add: Sustaining capital       

300,796

28,849

52,433

15,653

74,551

42,812


Royalties

7,550

6,394

17,991

2,868


Reclamation and
other closure
accretion and
depreciation

7,100

1,133

5,789

8,711

4,082

2,811


Leases & other

9,638

11,531

3,002

2,441

437

288


All-in sustaining cost

825,418

155,929

232,788

92,024

210,144

84,365


AISC per pound ($/lb)

3.55

2.33

3.44

4.08

4.14

0.80










 


Nine months ended September 30, 2022


Operations

Candelaria

Caserones

Chapada

Eagle

Neves-Corvo

Zinkgruvan


($000s, unless otherwise noted)

(Cu)

(Cu)

(Cu) 

(Ni)

 (Cu)

(Zn)

Total

Sales volumes (Contained metal):








Tonnes                    

113,690

33,526

11,188

25,241

48,049


Pounds (000s)

250,643

73,912

24,665

55,647

105,930


Production costs   







1,210,431

Less: Royalties and other







(38,121)








1,172,310

Deduct: By-product







(487,914)

Add: Treatment and







90,944

Cash cost

450,858

157,456

7,999

125,889

33,138

775,340

Cash cost per pound
($/lb)

1.80

2.13

0.32

2.26

0.31


Add: Sustaining capital       

272,557

63,412

10,445

49,136

31,537


Royalties

9,161

24,129

984


Reclamation and
closure accretion
and depreciation

6,002

5,533

14,109

1,081

3,035


Leases & other

6,953

3,056

1,766

569

547


All-in sustaining cost

736,370

238,618

58,448

177,659

68,257


AISC per pound ($/lb)

2.94

3.23

2.37

3.19

0.64


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 laws. All statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements regarding the Company's plans, prospects and business strategies; the Company's guidance on the timing and amount of future production and its expectations regarding the results of operations; expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any Preliminary Economic Assessment, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimates, and mine and mine closure plans; anticipated market prices of metals, currency exchange rates, and interest rates; the development and implementation of the Company's Responsible Mining Management System; the Company's ability to comply with contractual and permitting or other regulatory requirements; anticipated exploration and development activities at the Company's projects; the Company's integration of acquisitions and any anticipated benefits thereof, including the Caserones transaction; and expectations for other economic, business, and/or competitive factors. Words such as "believe", "expect", "anticipate", "contemplate", "target", "plan", "goal", "aim", "intend", "continue", "budget", "estimate", "may", "will", "can", "could", "should", "schedule" and similar expressions identify forward-looking statements.

Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management, including that the Company can access financing, appropriate equipment and sufficient labour; assumed and future price of copper, nickel, zinc, gold and other metals; anticipated costs; ability to achieve goals; the prompt and effective integration of acquisitions; that the political environment in which the Company operates will continue to support the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and assumptions are considered reasonable by Lundin Mining as at the date of this document in light of management's experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: global financial conditions, market volatility and inflation, including pricing and availability of key supplies and services; risks inherent in mining including but not limited to risks to the environment, industrial accidents, catastrophic equipment failures, unusual or unexpected geological formations or unstable ground conditions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable risks; project financing risks, liquidity risks and limited financial resources; volatility and fluctuations in metal and commodity demand and prices; delays or the inability to obtain, retain or comply with permits; significant reliance on a single asset; reputation risks related to negative publicity with respect to the Company or the mining industry in general; health and safety risks; risks relating to the development of the Josemaria Project; inability to attract and retain highly skilled employees; risks associated with climate change; compliance with environmental, health and safety laws and regulations; unavailable or inaccessible infrastructure, infrastructure failures, and risks related to ageing infrastructure; risks inherent in and/or associated with operating in foreign countries and emerging markets, including with respect to foreign exchange and capital controls; economic, political and social instability and mining regime changes in the Company's operating jurisdictions, including but not limited to those related to permitting and approvals, environmental and tailings management, labour, trade relations, and transportation; risks relating to indebtedness; the inability to effectively compete in the industry; risks associated with acquisitions and related integration efforts, including the ability to achieve anticipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration, including with respect to the Caserones transaction; changing taxation regimes; risks related to mine closure activities, reclamation obligations, environmental liabilities and closed and historical sites; reliance on key personnel and reporting and oversight systems, as well as third parties and consultants in foreign jurisdictions; information technology and cybersecurity risks; risks associated with the estimation of Mineral Resources and Mineral Reserves and the geology, grade and continuity of mineral deposits including but not limited to models relating thereto; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing efficiency; community and stakeholder opposition; financial projections, including estimates of future expenditures and cash costs, and estimates of future production may not be reliable; enforcing legal rights in foreign jurisdictions; environmental and regulatory risks associated with the structural stability of waste rock dumps or tailings storage facilities; activist shareholders and proxy solicitation matters; risks relating to dilution; regulatory investigations, enforcement, sanctions and/or related or other litigation; risks relating to payment of dividends; counterparty and customer concentration risks; the estimation of asset carrying values; risks associated with the use of derivatives; relationships with employees and contractors, and the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; conflicts of interest; existence of a significant shareholder; exchange rate fluctuations; challenges or defects in title; internal controls; compliance with foreign laws; potential for the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights violations; the threat associated with outbreaks of viruses and infectious diseases; risks relating to minor elements contained in concentrate products; and other risks and uncertainties, including but not limited to those described in the "Risk and Uncertainties" section of the Company's Annual Information Form and the "Managing Risks" section of the Company's MD&A for the year ended December 31, 2022, which are available on SEDAR+ at www.sedarplus.ca under the Company's profile.

All of the forward-looking statements made in this document are qualified by these cautionary statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, forecast or intended and readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. 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 information. Accordingly, there can be no assurance that forward-looking information will prove to be accurate and forward-looking information is not a guarantee of future performance. Readers are advised not to place undue reliance on forward-looking information. The forward-looking information contained herein speaks only as of the date of this document. The Company disclaims any intention or obligation to update or revise forward‐looking information or to explain any material difference between such and subsequent actual events, except as required by applicable law.

Stephen Williams, Vice President, Investor Relations +1 604 806 3074; Robert Eriksson, Investor Relations Sweden: +46 8 440 54 40

Cision View original content:https://www.prnewswire.co.uk/news-releases/lundin-mining-third-quarter-2023-results-301974904.html