Lundin Mining Corporation News - LUN

Lundin Mining Adopts Shareholder Rights Plan and Commences Pursuit of Alternatives to Maximize Shareholder Value
Mar. 29, 2011 (Marketwire Canada) --
TORONTO, ONTARIO --

(TSX:LUN)(OMX:LUMI) Lundin Mining Corporation
("Lundin Mining" or the "Company") today announced
that its Board of Directors has adopted a limited duration
Shareholder Rights Plan (the "Rights Plan") to enable
a full consideration of strategic alternatives.

Commenting on the adoption of the Rights Plan, Mr. Phil Wright, the President and CEO of Lundin Mining said, "This plan has been put in place to ensure that we have adequate time to explore all alternatives to bring value to Lundin shareholders. Our exploration of alternatives starts immediately and we will be actively and aggressively looking for the best value transaction.

"The Rights Plan ensures that we can do this in a considered and structured way and get the best result for our shareholders," Mr. Wright said.

In a previous release earlier today, Lundin Mining announced that it has mutually terminated its proposed merger with Inmet Mining Corporation ("Inmet") and has agreed that Inmet's right to a break fee of $120 million will be preserved in connection with the unsolicited offer of Equinox Minerals Limited ("Equinox").

The Board continues to recommend that shareholders reject the Equinox offer, on its own merits, for the reasons detailed in the Directors' Circular mailed to registered shareholders on March 21, 2011 and available on SEDAR at www.sedar.com.

Commenting on the plans to pursue alternative transactions, Mr. Lukas Lundin, Chairman of Lundin Mining said, "Our hands have been completely tied in defending against the low ball, risky Equinox bid because of the Inmet agreement.

"Having agreed to terminate with Inmet, we can now pursue new alternatives to significantly improve shareholder value and get a proper premium if we do a change of control transaction.

"I am not against selling if it achieves an excellent financial return to shareholders but I will not support selling at bargain prices," Mr. Lundin said.

Scotia Capital, as financial advisors, and Cassels Brock & Blackwell LLP, as legal advisor, will continue to assist the Company in responding to the unsolicited offer announced by Equinox.

The Board will make every effort to maximize value for the benefit of Lundin Mining shareholders and will update shareholders from time to time of its efforts.

Details of the Rights Plan

The Rights Plan is intended to ensure that in the context of the unsolicited take-over proposal for Lundin Mining common shares announced by Equinox, the Board has sufficient time to identify, develop and negotiate alternatives to maximize shareholder value. The Rights Plan also seeks to ensure the fair treatment of shareholders and to provide them with adequate time to properly assess any potential take-over bid without undue pressure.

Prior to the termination of the proposed merger with Inmet, the Company has been subject to customary "no shop" clause obligations under the terms of the arrangement agreement with Inmet which has rendered the Company unable to seek other value enhancing alternatives to Equinox's unsolicited offer.

The Board has authorized the issuance of one right in respect of each common share of the Company outstanding at 5:00 p.m. (Eastern Time) on March 29, 2011 and each share issued thereafter. The rights will become exercisable if a person, together with its affiliates, associates and joint actors, acquires or announces an intention to acquire beneficial ownership of common shares which, when aggregated with its current holdings, total 20% or more of the outstanding common shares of the Company (determined in the manner set out in the Rights Plan). Following the acquisition of 20% or more of the outstanding common shares, each right held by a person other than the acquiring person and its affiliates, associates and joint actors would, upon exercise, entitle the holder to purchase common shares at a substantial discount to the market price of the common shares at that time.

The Board has the discretion to defer the time at which the rights become exercisable (which it has done in respect of the proposed Equinox offer) and to waive the application of the Rights Plan and/or redeem the Rights if the Board determines it is in the best interests of Lundin Mining to do so.

The Rights Plan permits the acquisition of control of Lundin Mining through a "permitted bid", a "competing permitted bid" or a negotiated transaction. A permitted bid is one that, among other things, is made to all holders of common shares for all of their shares, is open for a minimum of 90 days and is subject to an irrevocable minimum tender condition of at least 50% of the common shares held by independent shareholders. The Rights Plan will expire at 5:00 p.m. (Eastern Time) on May 31, 2011.

Although the Rights Plan is effective immediately, it remains subject to acceptance by the Toronto Stock Exchange. A copy of the Rights Plan will be available at www.sedar.com.

The Equinox Offer

The Board recommends to Lundin Mining shareholders that they REJECT the Unsolicited Offer and DO NOT TENDER their Lundin Mining shares for the following reasons:

The Unsolicited Offer is inadequate from a financial point of view to Lundin Mining shareholders;

The pro-forma debt-to-equity ratio of the combined Equinox and Lundin Mining is excessive and will present increased financial risk and a more highly leveraged capital structure than Lundin Mining and peer group companies. In addition, the lenders to Equinox will have considerable influence over the business decisions of a combined Equinox and Lundin Mining;

Substantially all of Equinox's and Lundin Mining's existing cash balances and projected near-term cash flow will be utilized to pay for: lenders' fees; interest charges; and the principal repayments of the debt incurred to fund the cash portion of the consideration payable under the Unsolicited Offer;

The Unsolicited Offer would result in a company with increased exposure to geopolitical risks due to the location of Equinox assets in Zambia and Saudi Arabia;

The Unsolicited Offer is highly opportunistic. Equinox's shares were trading at or near the all-time high share price when Equinox announced the Unsolicited Offer, which followed a news release made earlier in February 2011 on its strategy to expand the Lumwana project. The proposed Lumwana expansion plan is not supported by mineral reserves or mineral resources and is not based on pre-feasibility or feasibility studies. To date the Lumwana mine has significantly under-performed original feasibility study projections disclosed by Equinox;

There are no strategic benefits for Lundin Mining shareholders under the Unsolicited Offer. The acquisition results in a company with high Africa and Middle East concentration and few, if any synergies with Lundin Mining's business.

The Board has reservations about the experience of the management of Equinox to operate a multi-mine company with projects and mines spread across seven countries.

The Unsolicited Offer is highly conditional and has a substantial risk regarding completion without additional compensation for such risk. Conditions are subject to Equinox's lenders discretion resulting in Equinox, in many instances, not being the ultimate decision-maker.

The Unsolicited Offer may be a violation of Section 5 of the U.S. Securities Act of 1933, as amended.

Lundin Mining's directors, officers and certain shareholders have confirmed that they will not tender their Common Shares to the Unsolicited Offer.

Shareholders do not need to take any action in response to Equinox's proposed offer at this time.

About Lundin Mining

Lundin Mining Corporation is a diversified base metals mining company with operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc, lead and nickel. In addition, Lundin Mining holds a development project pipeline which includes an expansion project at its Neves-Corvo mine along with its equity stake in the world class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo.

On Behalf of the Board,

Phil Wright, 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 or "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 of the United States. Forward-looking statements 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 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.

Lundin Mining Corporation
Investor Relations North America
+1-604-689-7842

Lundin Mining Corporation
Senior Business Analyst
+1-416-342-5560
+1 416 348 0303 (FAX)

Lundin Mining Corporation
Investor Relations Sweden
+46 8 545 015 50

http://www.lundinmining.com

MAY 7, 2009 - 09:30 ET
Lundin Mining Releases 2009 First Quarter Results

--------------------------------------------------------------------------------

View News Release in PDF Format TORONTO, ONTARIO--(Marketwire - May 7, 2009) - Lundin Mining Corporation ("Lundin Mining" or the "Company") (TSX:LUN)(OMX:LUMI) today reported an unaudited net loss for the quarter of $8.6 million, or $0.02 per share. Operating earnings were $38.2 million, down from $182.9 million in the first quarter of 2008. Cash flow from operations for the quarter was a cash outflow of $63.3 million, compared to a small inflow of $3.5 million in the first quarter of 2008.

-------------------------------------------------------------------------- January - MarchUS $ millions, except earnings per share 2009 2008--------------------------------------------------------------------------Sales 123.4 305.7Operating earnings (1) 38.2 182.9Net (loss) earnings before discontinued operations (14.2) 81.3Net (loss) earnings (8.6) 78.8
Basic and diluted (loss) earnings per share: From continuing operations (0.03) 0.21 From discontinued operations 0.01 (0.01)--------------------------------------------------------------------------Basic and diluted (loss) earnings per share (0.02) 0.20--------------------------------------------------------------------------Cash flow from operations (63.3) 3.5--------------------------------------------------------------------------1) Operating earnings is a Non-GAAP measure defined as sales, less operating costs, accretion of asset retirement obligation ("ARO") and other provisions, selling, general and administration costs and stock-based compensation.

Commenting on the quarter, Mr. Phil Wright, President and CEO said "This quarter has probably represented the bottom for us in terms of cash flow and earnings. We paid out $68.1 million in customer settlements that related to last quarter's severe price falls and, post this, all our mining operations are now cash flow positive.

"The recent equity raising, coupled with a limited-term copper hedge, has removed the liquidity concerns we had at the start of the quarter and we are now in a position to be able to finalize a suitable debt facility in the near future. We expect this new facility to be in the order of $225 million, an amount that we judge to be more than adequate to meet our needs over the next few years.

"On the operating front, our wholly-owned operations continue to perform well with a lower cost base and it is with a great deal of satisfaction that we have seen the Tenke copper/cobalt project start-up and finalize its first shipment of copper to market.

"This quarter has been a real watershed for us and strategically we are now looking for new opportunities to create value knowing that we have a very sound platform comprising long-life, low-cost assets off which to work," Mr. Wright said.

Highlights

- Sales for the quarter were $123.4 million, down 60% compared to sales in the first quarter of 2008 of $305.7 million. The decline is entirely related to lower metal prices.

- Operating cost performance improved primarily due to decrease in treatment and refining charges of $22.8 million and cost control initiatives which involved a reduced number of contractors and lower materials costs. Total operating costs decreased by $28.2 million to $76.8 million from $105.0 million in the first quarter of 2008. The US dollar-denominated cash cost per pound of metal produced was aided by a weakening of the Euro and Swedish krona.

- Operating earnings reduced by $144.7 million from $182.9 million in the first quarter of 2008 to $38.2 million in 2009. Price and price adjustments on previous concentrate sales accounted for a reduction of approximately $191 million, and this was partially offset by cost improvements at the operations and more favourable exchange rates.

- Cash flow from operations for the quarter was a cash outflow of $63.3 million, compared to a small inflow of $3.5 million in the first quarter of 2008. The Company paid $68.1 million to customers during the quarter for settlement of sales that occurred in previous periods.

- The Company announced the production of first copper was achieved during the quarter at the Tenke Fungurume copper-cobalt project in which the Company holds a 24.75% interest. This was followed shortly thereafter by the first shipment of copper cathode from the operation. The project is still expected to reach commercial production in the second half of 2009, targeting full production for Phase I of 115,000 tonnes per annum ("tpa") copper and at least 8,000 tpa cobalt.

- In March, the Company reported its Mineral Reserve and Resource estimates as at December 31, 2008. Notable items were: the replacement of mined reserves at the Company's two key operations of Neves-Corvo and Zinkgruvan; an initial copper reserve at Zinkgruvan; large copper reserves at Tenke Fungurume.

- The updated estimates also include a large increase in zinc reserves and resources at Neves-Corvo. Neves-Corvo is now not only a major copper producer but also a world-class zinc deposit and overall remains under-explored.

- In February, the Company agreed to terminate the plan of arrangement with HudBay Minerals Inc. that had been entered into in November of 2008.

Financial Position

- Net debt(1) at March 31, 2009 was $259.5 million, as compared to a net debt of $145.5 at December 31, 2008. The increase in net debt during the quarter was primarily attributable to the cash outflow on the settlement of sales for which provisional payments had been previously received, as well as cash outlays on disposal of Aljustrel and capital expenditures.

- On April 27th the Company closed a bought-deal public offering for total net proceeds of C$180.6 million ($149.2 million). The Company issued 92 million common shares of the Company at a price of C$2.05 per share.

- During April, the Company entered into multiple option collar arrangements to protect against near-term decreases in the price of copper. The contracts establish a weighted average floor price of $1.87 per pound and a weighted average maximum price cap of $2.39 per pound. The contracts, which come due over the next 12 months, are for approximately 40,000 tonnes of copper.

- Cash on hand at March 31, 2009 was $51.3 million. Cash on hand at May 4, 2009 was approximately $135.1 million.

Outlook

- Production outlook for 2009 is unchanged:

-------------------------------------------------------------------------- Production Outlook(contained metal in tonnes) 2009--------------------------------------------------------------------------Copper(i) 90,000Zinc 98,000Lead 40,000Nickel 6,800--------------------------------------------------------------------------(i) No tonnage included for Tenke

- Market outlook remains uncertain. Although prices have recovered somewhat since December's lows, the physical metal markets lack transparency and the Company remains prepared for any directional changes in near-term metal prices. Operating plans for Neves-Corvo have been secured by the hedging arrangements for 40,000 tonnes of copper which ensures positive cash flow even if copper prices fall back to December's lows of $1.30 per pound.

- Cash costs per pound are still expected to be in the region of 10% below 2008 but are dependent on exchange rates.

- Neves-Corvo and Zinkgruvan will continue to be free cash flow(2) positive and large amounts payable to customers at year end which drained cash balances have now been settled. Aguablanca is cash flow positive at current prices and will continue to be monitored to ensure it remains viable.

- Capital expenditures for the year are expected to be around $130 million which includes: $50 million of sustaining capital; $30 million of new investment in existing operations relating to the Zinkgruvan copper project and the Neves-Corvo zinc expansion; and in the range of $40 - $50 million for Tenke (covering pro rata working capital, exploration drilling, expansion studies and other minor costs).

- The Company expects that its consistent operational performance and the completion of the bought deal financing for net proceeds of C$180.6 million ($149.2) should assist in the satisfactory restructuring of the credit facility during the second quarter.

First Quarter 2009 Results
Financial and Operational Highlights
Three months ended March 31(USD millions, except per share amounts) 2009 2008 ----------- -----------Sales 123.4 305.7Operating earnings (1) 38.2 182.9Depletion, depreciation & amortization (43.5) (52.9)General exploration and project investigation (5.3) (10.1)Interest and bank charges (4.0) (3.4)Foreign exchange loss (7.2) (6.2)Loss on forward sales contracts - (1.2)Other income and expenses 1.2 2.8 ----------- -----------(Loss) earnings from continuing operations before discontinued operations and income taxes (20.6) 111.9
Income tax recovery (expense) 6.4 (30.6) ----------- -----------Net (loss) earnings after taxes before discontinued operations (14.2) 81.3Net income (loss) from discontinued operations 5.6 (2.5) ----------- -----------Net (loss) income (8.6) 78.8 ----------- ----------- ----------- -----------
Shareholders' Equity 2,580.4 3,750.0Cash flow from operations (63.3) 3.5Capital expenditures (33.6) (79.3)Net debt (2) 259.5 104.2
Key Financial Data Three months ended March 31 2009 2008 ----------- -----------Shareholders' equity per share (3) 5.29 9.61Basic (loss) earnings per share (0.02) 0.20Basic (loss) earnings per share before discontinued operations (0.03) 0.21Diluted (loss) earnings per share (0.02) 0.20Diluted (loss) earnings per share before discontinued operations (0.03) 0.21Dividends Nil NilEquity ratio (4) 0.75 0.74Shares outstanding: Basic weighted average 487,433,771 390,821,044 Diluted weighted average 487,433,771 390,942,398 End of period 487,433,771 390,413,431
Production Summary Three months ended March 31(excluding Aljustrel) 2009 2008 Change---------------------------------------------------------------------------Copper (tonnes) 24,240 24,940 -2.8%Zinc (tonnes) 34,277 40,062 -14.4%Lead (tonnes) 12,870 12,577 2.3%Nickel (tonnes) 1,961 1,848 6.1%
(1) Operating earnings is a Non GAAP measure defined as sales, less operating costs, accretion of asset retirement obligation ("ARO") and other provisions, selling, general and administration costs and stock based compensation. See page 22 of this MD&A for discussion of Non GAAP measures.(2) Net debt/(surplus) is a Non GAAP measure defined as available unrestricted cash less financial debt, including capital leases and other debt related obligations.(3) Shareholders' equity per share is a Non GAAP measure defined as shareholders' equity divided by total number of shares outstanding at end of period.(4) Equity ratio is a Non GAAP measure defined as shareholders' equity divided by total assets at the end of period.

The 2009 first quarter financial statements, management's discussion and analysis and notes to the financial statements are available on Sedar (www.sedar.com) or the Company's website (www.lundinmining.com).

About Lundin Mining

Lundin Mining Corporation ("Lundin", "Lundin Mining" or the "Company") is a diversified base metals mining company with operations in Portugal, Spain, Sweden and Ireland, producing copper, nickel, lead and zinc. In addition, Lundin Mining holds a development project pipeline which includes expansion projects at its Zinkgruvan and Neves-Corvo mines along with its equity stake in the world class Tenke Fungurume copper/cobalt project in the Democratic Republic of Congo. The Company also holds an extensive exploration portfolio and interests in international mining and exploration ventures.

On Behalf of the Board,

Phil Wright, 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 or "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 of the United States. Forward-looking statements 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 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.

Cautionary Notes to Investors - Reserve and Resource Estimates

In accordance with applicable Canadian securities regulatory requirements, all mineral reserve and mineral resource estimates of the Company disclosed or incorporated by reference in this Annual Information Form have been prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), classified in accordance with Canadian Institute of Mining Metallurgy and Petroleum's "CIM Standards on Mineral Resources and Reserves Definitions and Guidelines" (the "CIM Guidelines"). The definitions of mineral reserves and mineral resources are set out in our disclosure of our mineral reserve and mineral resource estimates that are disclosed or incorporated by reference in this Annual Information Form.

The Company uses the terms "mineral resources", "measured mineral resources", "indicated mineral resources" and "inferred mineral resources". While those terms are recognized by Canadian securities regulatory authorities, they are not recognized by the United States Securities and Exchange Commission (the "SEC") and the SEC does not permit U.S. companies to disclose resources in their filings with the SEC.

Pursuant to the CIM Guidelines, mineral resources have a higher degree of uncertainty than mineral reserves as to their existence as well as their economic and legal feasibility. Inferred mineral resources, when compared with measured or indicated mineral resources, have the least certainty as to their existence, and it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration. Pursuant to NI 43-101, inferred mineral resources may not form the basis of any economic analysis, including any feasibility study. Accordingly, readers are cautioned not to assume that all or any part of a mineral resource exists, will ever be converted into a mineral reserve, or is or will ever be economically or legally mineable or recovered.

(1) Net debt/(surplus) is a Non-GAAP measure defined as available unrestricted cash less financial debt, including capital leases and other debt related obligations.

(2) Free cash flow is a Non-GAAP measure defined as cash flows from operations, less sustaining capital expenditures.

All amounts are expressed in US dollars unless otherwise noted.

FOR FURTHER INFORMATION PLEASE CONTACT:

Lundin Mining Corporation
Sophia Shane
Investor Relations North America
+1-604-689-7842

or

Lundin Mining Corporation
Josh Crumb
Investor Relations Toronto
+1-416-342-5565

or

Lundin Mining Corporation
Robert Eriksson
Investor Relations Sweden
+46 8 545 015 50
www.lundinmining.com

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