Lundin Mining Provides Operating Outlook for 2014-2016
December 04 2013 - 5:30PM
Marketwired
Lundin Mining Provides Operating Outlook for 2014-2016
TORONTO, ONTARIO--(Marketwired - Dec 4, 2013) - Lundin Mining
Corporation(TSX:LUN)(OMX:LUMI) ("Lundin Mining" or the "Company"),
provides the following production guidance for the three-year
period of 2014 through 2016. Key highlights are as follows:
- Commissioning and production at Eagle is expected to add
significantly to total nickel and copper production, starting in
late 2014.
- 2014 to 2016 annual attributable copper production is expected
to increase more than 20% from the Company's wholly owned
operations.
- Zinc production is expected to increase by 10% between 2014 to
2016, as Neves-Corvo zinc production continues to ramp-up owing to
higher throughput levels and zinc grades from Lombador Phase
I.
- Nickel production is expected to increase significantly as
Eagle reaches full production levels in 2015. Additionally, mining
at Aguablanca is now expected to continue until 2018 as the
underground project has been approved for development owing to the
favourable economics of the project.
"For 2014, we anticipate continuing our strong execution at the
current operations and completing construction of the Eagle Mine on
target. Our assets continue to offer attractive, low risk,
near-term production growth with relatively modest levels of
capital requirements, which ideally positions us to continue to add
significant shareholder value over the next several years," said
Mr. Paul Conibear, President & CEO.
Production Outlook 2014 - 2016(1):
|
2014 |
2015 |
2016 |
Copper: |
Tonnes |
Tonnes |
Tonnes |
Neves-Corvo |
50,000 - 55,000 |
50,000 - 55,000 |
50,000 - 55,000 |
Zinkgruvan |
3,000 - 4,000 |
2,000 - 3,000 |
2,000 - 3,000 |
Aguablanca |
5,000 - 6,000 |
3,000 - 4,000 |
4,000 - 5,000 |
Eagle |
2,000 - 3,000 |
17,000 - 22,000 |
17,000 - 22,000 |
Copper wholly-owned operations |
60,000 - 68,000 |
72,000 - 84,000 |
73,000 - 85,000 |
Tenke(2) (24%) |
~50,000 |
~50,000 |
~50,000 |
Total Attributable Copper |
110,000 - 118,000 |
122,000 - 134,000 |
123,000 - 135,000 |
|
|
|
|
Zinc: |
|
|
|
Neves-Corvo |
60,000 - 65,000 |
75,000 - 80,000 |
75,000 - 80,000 |
Zinkgruvan |
75,000 - 80,000 |
80,000 - 85,000 |
75,000 - 80,000 |
Total Zinc |
135,000 - 145,000 |
155,000 - 165,000 |
150,000 - 160,000 |
|
|
|
|
Lead: |
|
|
|
Neves-Corvo |
2,000 - 2,500 |
2,000 - 2,500 |
2,000 - 2,500 |
Zinkgruvan |
27,000 - 30,000 |
30,000 - 34,000 |
30,000 - 34,000 |
Total Lead |
29,000 - 32,500 |
32,000 - 36,500 |
32,000 - 36,500 |
|
|
|
|
Nickel: |
|
|
|
Aguablanca |
6,000 - 7,000 |
4,000 - 5,000 |
4,000 - 5,000 |
Eagle |
2,000 - 3,000 |
20,000 - 25,000 |
20,000 - 25,000 |
Total Nickel |
8,000 - 10,000 |
24,000 - 30,000 |
24,000 - 30,000 |
- Neves-Corvo: Copper production is expected to be maintained
above 50,000 tonnes per annum with an increasing zinc by-product
credit. The zinc plant operated at full capacity in 2013,
processing approximately 1.0 million tonnes per annum ("Mtpa") of
ore and is expected to reach 125% of nameplate capacity in 2015
with minor investments in plant debottlenecking, taking advantage
of higher grade Lombador feed and expected improvements in zinc
price. The production forecasts assume that the zinc plant will be
used exclusively to process zinc ore over the next three years,
though the plant has already proven to have the flexibility to
process either zinc or copper ores.
- Zinkgruvan: Zinc production over the outlook period is expected
to remain relatively steady, as plans to increase throughput by
investment in an ore dressing plant have been deferred
indefinitely. In 2015, production is expected to increase modestly
due to higher zinc grades as per the mine plan. Thereafter
production is expected to remain relatively steady between 75,000 -
80,000 tonnes of zinc.
- Aguablanca: The Company's Board of Directors has approved the
development of the underground project which is expected to result
in production continuing until 2018. Total capital expenditures for
the project are expected to be approximately $30 million spread
over the period 2014 - 2017. Economics of the underground project
are expected to be very attractive with a rapid payback period,
even at current depressed nickel prices.
- Eagle: The project remains on schedule and budget. Shipment of
the first saleable concentrates of copper and nickel are expected
to occur prior to the end of 2014. Following an initial ramp up
period, ore is expected to be processed at a rate of 2,000
tonnes/day by mid-2015. The Company is also pleased to announce
that Mr. Michael Welch has joined Lundin Mining as General Manager
Eagle Mine effective in early January, 2014. Mr. Welch has more
than 20 years of combined operations and project management
experience, and holds a Bachelor of Science Honors Degree in
Geology as well as a Master of Science Degree in Geology. Mr. Welch
was most recently responsible for Glencore Xstrata's Raglan nickel
operations in Quebec, and previously served as project director on
the successful construction and start up of the Nickel Rim South
project in Sudbury, Ontario.
- Tenke Fungurume: 2014 production guidance has not yet been
provided by Freeport, the mine's operator. Lundin Mining
anticipates production from Tenke in 2014 to be largely consistent
with that of 2013. The three year outlook for Tenke does not
reflect potential increases in copper production that could occur
from Phase III expansion initiatives which could entail further
plant debottlenecking and heap leach investment to fully utilize
the 270,000 tpa copper electro-winning capacity that has been
installed as part of the Phase II project. The Lundin Mining
estimate and comments do not represent the official guidance for
the mine which will ultimately be provided by Freeport.
2014 Cash Costs(3)
- At Neves-Corvo, estimated C1 cash costs for 2014 are expected
to approximate $1.90/lb Cu after zinc by-product credits.
Improvement on this estimated unit cost could occur if zinc prices
are higher than internal assumptions.
- At Zinkgruvan, estimated C1 cash costs are expected to
approximate $0.35/lb Zn after copper and lead by-product credits.
Zinkgruvan is expected to remain one of the lower cost zinc
producers for the foreseeable future.
- At Aguablanca, estimated C1 cash costs for 2014 are expected to
approximate $4.50/lb Ni after by-product credits.
- For Tenke, cash cost guidance will be provided by Freeport in
due course.
2014 Capital Expenditure Guidance
Capital expenditures for 2014 are expected to be $460 million
including Eagle and excluding Tenke (compared to an estimated $255
million in 2013, on the same basis) which includes:
- Sustaining capital in European operations: $100 million (vs.
$100 million in 2013), consisting of approximately $55 million for
Neves-Corvo, $40 million for Zinkgruvan and $5 million across other
sites.
- New investment capital expenditures in European operations: $60
million (vs. $45 million in 2013), consisting of approximately $50
million for Neves-Corvo (including $38 million for Lombador Phase
I, $6 million for Lombador Phase II and underground drilling, and
$5 million for zinc plant expansion and shaft upgrade project
studies), and $10 million in support of the underground mining
project at Aguablanca.
- Eagle: $300 million to complete construction of the Humboldt
mill and Eagle mine.
- Tenke: All of the capital expenditures are expected to be
self-funded by cash flow from Tenke operations. If current metal
prices and operating conditions prevail and construction of future
phases of expansion are not commenced in 2014, the Company believes
it is reasonable to expect Lundin's attributable cash distributions
to range between $130 to $150 million in 2014.
2014 Exploration Investment
Exploration expenditures are expected to be in the range of $40
million in 2014 (2013 - estimated at $33 million). These
expenditures are expected to be directed primarily towards
Neves-Corvo, Zinkgruvan and Eagle, where drilling programs will
advance exploration on various in and near mine targets. A portion
of 2014 exploration budgets are allocated to South American and
Eastern European exploration work.
About Lundin Mining
Lundin Mining Corporation is a diversified Canadian base metals
mining company with operations in Portugal, Sweden, Spain and the
US, producing copper, zinc, lead and nickel. In addition, Lundin
Mining holds a 24% equity stake in the world-class Tenke Fungurume
copper/cobalt mine in the Democratic Republic of Congo and in the
Freeport Cobalt Oy business, which includes a cobalt refinery in
Kokkola, Finland.
On Behalf of the Board,
Paul Conibear, President and CEO
Forward Looking Statements
Certain of the statements made and information contained herein
is "forward-looking information" within the meaning of the Ontario
Securities Act. This release includes, but is not limited to,
forward looking statements with respect to the Company's estimated
annual metal production, C1 cash costs and capital expenditures.
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, timing and quantities of production from
the Eagle Project, cost estimates for the Eagle Project, 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.
(1) Production guidance is based on certain estimates and
assumptions, including but not limited to; mineral resources and
reserves, geological formations, grade and continuity of deposits
and metallurgical characteristics.
(2) Tenke guidance has not yet been provided by operator,
Freeport McMoRan Copper and Gold Inc. ("Freeport"). Lundin Mining
anticipates production from Tenke in 2014 to be comparable to
expected 2013 production.
(3) Cash Costs and C1 cash costs are based on various
assumptions and estimates, including, but not limited to;
production volumes, as noted above, commodity prices (2014 - Cu:
$3.15, Zn: $0.87, Pb: $1.00, Ni: $6.50) foreign currency exchange
rates (2014 - EUR/USD:1.30, USD/SEK:6.50) and operating costs.
Lundin Mining CorporationSophia ShaneInvestor Relations North
America+1-604-689-7842Lundin Mining CorporationJohn MiniotisSenior
Business Analyst+1-416-342-5565Lundin Mining CorporationRobert
ErikssonInvestor Relations Sweden+46 8 545 015 50
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