TORONTO, Jan. 22, 2020 /CNW/ - (TSX: LUN; Nasdaq
Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or
the "Company") announces production results for the three and
twelve months ended December 31, 2019
and provides an update on operations and capital projects. The
consolidated financial results for the year ended December 31, 2019 will be published on
February 20, 2020.
Highlights
- 2019 annual production guidance was achieved for all metals at
all operations.
- Candelaria copper production increased 9% year-on-year and is
well positioned to deliver a further 16% increase in 2020. The
Candelaria Mill Optimization Project remains on-track to be
complete in the first quarter of 2020.
- Chapada copper and gold production exceeded and achieved
guidance, respectively. Work continues on optimization of the
production schedule while options for mine and plant expansion
advance in parallel with a significant increase in exploration
efforts.
- Eagle achieved nickel and copper production guidance. Nickel
and copper production are forecast to increase 22% and 15%,
respectively, at the midpoint of the 2020 guidance range as higher
grade Eagle East ore contributes to the mill feed.
- Neves-Corvo achieved both copper and zinc production guidance.
The Zinc Expansion Project (ZEP) continued to advance on schedule
and budget for a phased start-up in 2020. Zinc production at the
midpoint of the 2020 guidance range is forecast to increase 37%
over that of 2019 as the ZEP ramps-up during 2020.
- Zinkgruvan zinc, lead and copper production all increased
year-on-year in 2019. Increased zinc and lead production were
primarily a result of sustained improvements in recovery and ore
head grades.
- Year-end net debt position was approximately $60 million, including $100 million in funds received from Freeport
Cobalt after the sale of the cobalt refinery in Finland and related cobalt cathode precursor
business.
Marie Inkster, President and CEO
commented, "Our mines performed well in the fourth quarter, each
achieving their annual production guidance. Particular recognition
is owed to our Candelaria team which remained poised and focused on
safe operations during a time of considerable unrest in the
country.
We began to realize the benefits of the significant
investments made over the last few years in our operations during
the second half of 2019. This positive momentum is expected to
accelerate in 2020 with the Candelaria reinvestment initiatives and
development of Eagle East essentially complete, and as the ZEP
ramps-up. Our annual copper production is to increase over 20% this
year, zinc production over 18% and nickel production over 22%. We
are well positioned to deliver multiple years of strong production,
decreasing cash costs and free cash flow generation."
Summary of 2019 Production
|
|
Q4
2019
Production
|
Full Year
2019
Production
|
2019
Production Guidance1
|
Copper
(t)
|
|
|
|
|
|
|
Candelaria (100%
basis)
|
39,221
|
146,330
|
145,000
|
-
|
155,000
|
|
Chapada2
|
12,884
|
30,529
|
27,000
|
-
|
30,000
|
|
Eagle
|
3,626
|
14,297
|
13,000
|
-
|
15,000
|
|
Neves-Corvo
|
10,898
|
41,436
|
40,000
|
-
|
42,000
|
|
Zinkgruvan
|
502
|
2,906
|
2,000
|
-
|
3,000
|
|
Total
Copper
|
67,131
|
235,498
|
227,000
|
-
|
245,000
|
|
|
|
|
|
|
|
Zinc
(t)
|
|
|
|
|
|
|
Neves-Corvo
|
17,946
|
73,202
|
73,000
|
-
|
76,000
|
|
Zinkgruvan
|
20,979
|
78,313
|
76,000
|
-
|
81,000
|
|
Total
Zinc
|
38,925
|
151,515
|
149,000
|
-
|
157,000
|
|
|
|
|
|
|
|
Nickel
(t)
|
|
|
|
|
|
|
Eagle
|
2,651
|
13,494
|
12,000
|
-
|
14,000
|
|
Total
Nickel
|
2,651
|
13,494
|
12,000
|
-
|
14,000
|
|
|
|
|
|
|
|
Chapada gold
production was 54 koz for the period of Lundin Mining's ownership,
compared to guidance of
50,000-55,000 oz for the same period. Chapada Q4 2019 gold
production was 20 koz
|
____________________________
|
1
|
Guidance as disclosed
in the Company's Management Discussion and Analysis for the three
and nine months ended September 30, 2019.
|
2
|
Production results
and guidance are for the period of Lundin Mining's
ownership.
|
Operations and Capital Projects Update
- Safety Performance: The 2019 Total Recordable Injury
Frequency (TRIF) rate was 0.66 against a target of 0.60 per 200,000
person hours worked. While 2019 TRIF performance fell short of
target, it represents a modest improvement over the 2018 TRIF of
0.67 (vs. target of 0.70). The 2019 safety performance incorporates
the acquisition of the Chapada mine and was impacted by project
activities associated with Candelaria, Neves-Corvo ZEP, Eagle East,
and several significant planned maintenance downs. The 2020 Health
and Safety Action Plan activities will focus on recordable injury
prevention at each operation through the elimination of similar or
repeat incidents, and by enhancing workplace hazard recognition and
elimination processes.
- Candelaria: Copper production guidance was achieved for
the year. Full year copper production increased 9% year-on-year to
146,330 t in 2019. Fourth quarter production was impacted by below
plan head grade, though was significantly above that of 2018 and
the first half of 2019 as higher grade ore from the open pit
contributed the majority of mill feed.
The Candelaria South Sector underground mine was successfully
transferred to operations in the third quarter of 2019. Mine
production from the Candelaria North and South Sector underground
mines increased to approximately 13,500 tonnes per day (tpd) in the
fourth quarter, approaching the 14,000 tpd permitted.
Candelaria copper production is forecast to increase to
approximately 190,000 tonnes per annum by 2022 and remain above
this level through 2025 as the benefits of reinvestment initiatives
undertaken over the last two years are realized. At the midpoint of
the guidance range, copper production is forecast to increase by
over 20,600 t (16%) year-over-year in 2020 to
165,000-175,000 t.
- Chapada: Copper and gold production exceeded and
achieved guidance, respectively, for the period of Lundin Mining's
ownership. As expected, fourth quarter production of copper and
gold was less than that of the particularly strong third quarter on
planned maintenance downtime and head grade variation. The Company
is continuing to optimize the production schedule while advancing
options for mine and plant expansion in parallel with a significant
increase in exploration.
Chapada is forecast to produce 51,000-56,000 t of copper and
90,000-95,000 oz of gold in 2020.
- Eagle: Full year nickel and copper production achieved
guidance. First ore from Eagle East was mined in the third quarter
of 2019. During the fourth quarter mine development to support
Eagle East production continued, allowing for full access to the
higher grade ores in 2020.
Eagle nickel production at the midpoint of the 2020 guidance range
is forecast to increase more than 3,000 t (22%) over that of
2019, to 15,000-18,000 t, as higher grade Eagle East ore
contributes to the mill feed. Copper production at the
midpoint of the 2020 guidance range is forecast to increase more
than 2,200 t (15%) over that of 2019 to 15,000-18,000 t.
- Neves-Corvo: Both copper and zinc production achieved
guidance. Fourth quarter zinc production was lower year-on-year as
an increased zinc concentrate grade was prioritized over total
metal recovery to maximize return in a more demanding concentrate
market.
The ZEP continued to advance on schedule and budget in the fourth
quarter for phased start-up and production ramp-up in 2020.
Installation of the 3.5 km of underground conveyor systems
were well advanced and the jaw crusher is nearing completion. The
first phase of the hoisting shaft upgrade was completed in December
with installation of new higher-capacity skips and rope. Surface
construction continued with primary focus on mechanical piping,
electrical and instrumentation installation.
Neves-Corvo zinc production at the midpoint of the 2020 guidance
range is forecast to increase nearly 26,800 t (37%) over that
of 2019, to 95,000-105,000 t, as the ZEP is commissioned and
ramped-up during the year. Copper production at the midpoint of the
2020 guidance range of 38,000-43,000 t is forecast to be consistent
with 2019.
- Zinkgruvan: Full year zinc and copper production
achieved guidance. Zinc, lead and copper production were higher
year-on-year in 2019 as a result of sustained improvement in zinc
ore head grades and recoveries following continuation of focused
planning and execution efforts to improve dilution and ore
loss.
Zinc production, at the midpoint of 77,000-82,000 t guidance, is
expected to be at a similar level in 2020 as 2019. Copper
production in 2020 is forecast to increase over that of 2019 to
3,000-4,000 t.
Fourth Quarter and Full Year 2019 Results Date
Results for the fourth quarter and full year ended December 31, 2019 will be published on Thursday
February 20, 2020.
The Company will hold a telephone conference call and webcast at
08:00 ET, 14:00 CET on Friday February 21, 2020.
Conference call details are provided below. Please call in 10
minutes before the conference starts.
Call-in number for the conference call (North America): +1 647 778 4922
Call-in number for the conference call (North America Toll Free):
+1 877 223 4471
Call-in number for the conference call (Sweden): 02 079 4343
To view the live webcast presentation, please log on using this
direct link:
https://onlinexperiences.com/Launch/QReg/ShowUUID=BA8ACABE-EBC2-41CF-A224-18651E48DCB0
The presentation slideshow will also be available in PDF format
on the Lundin Mining website www.lundinmining.com before the
conference call.
A replay of the telephone conference will be available after the
completion of the call until March 6, 2020.
Call-in numbers for the replay are (North America): +1 800 585 8367 or +1 416 621
4642
The passcode for the replay is: 6676687
A replay of the webcast will be available by clicking on the
direct link above.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining
company with operations in Brazil,
Chile, Portugal, Sweden and the
United States of America, primarily producing copper, zinc,
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 January 22, 2020 at 17:00
Eastern Time.
Cautionary Statement in 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;
and the Company's integration of acquisitions (such as the Chapada
mine) and any anticipated benefits thereof. 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: risks inherent in and/or
associated with operating in foreign countries; uncertain political
and economic environments; community activism, shareholder activism
and risks related to negative publicity with respect to the Company
or the mining industry in general; changes in laws, regulations or
policies including but not limited to those related to permitting
and approvals, environmental and tailings management, labour, trade
relations, and transportation; delays or the inability to obtain
necessary governmental approvals and/or permits; regulatory
investigations, enforcement, sanctions and/or related or other
litigation; risks associated with business arrangements and
partners over which the Company does not have full control; risks
associated with acquisitions and related integration efforts
(including with respect to the Chapada mine), including the ability
to achieve anticipated benefits, unanticipated difficulties or
expenditures relating to integration and diversion of management
time on integration; competition; development or mining results not
being consistent with the Company's expectations; estimates of
future production and operations; operating, cash and all-in
sustaining cost estimates; allocation of resources and capital;
litigation; uninsurable risks; volatility and fluctuations in metal
and commodity prices; the estimation of asset carrying values;
funding requirements and availability of financing; indebtedness;
foreign currency fluctuations; interest rate volatility; changes in
the Company's share price, and equity markets, in general; changing
taxation regimes; counterparty and credit risks; health and safety
risks; risks related to the environmental impact of the Company's
operations and products and management thereof; unavailable or
inaccessible infrastructure and risks related to ageing
infrastructure; 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; actual ore mined varying from estimates
of grade, tonnage, dilution and metallurgical and other
characteristics; ore processing efficiency; risks relating to
attracting and retaining of highly skilled employees; ability to
retain key personnel; the potential for and effects of labour
disputes or other unanticipated difficulties with or shortages of
labour or interruptions in production; the price and availability
of energy and key operating supplies or services; the inherent
uncertainty of exploration and development, and the potential for
unexpected costs and expenses including, without limitation, for
mine closure and reclamation at current and historical operations;
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; mine plans, and life of
mine estimates; the possibility that future exploration,
development or mining results will not be consistent with
expectations; natural phenomena such as earthquakes, flooding, and
unusually severe weather; 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; security at the
Company's operations; breach or compromise of key information
technology systems; materially increased or unanticipated
reclamation obligations; risks related to mine closure activities;
risks related to closed and historical sites; title risk and the
potential of undetected encumbrances; risks associated with the
structural stability of waste rock dumps or tailings storage
facilities; and other risks and uncertainties, including but not
limited to those described in the "Risk and Uncertainties" section
of the Annual Information Form for the year ended December 31, 2018 and the "Managing Risks"
section of the Company's MD&A for the year ended December 31, 2018, which are available on SEDAR
at www.sedar.com 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.
SOURCE Lundin Mining Corporation