Post on 11-Jan-2017
Building a World Class Base Metals Mining Company
Cautionary StatementsCautionary StatementsCaution Regarding Forward Looking Statements
This presentation contains forward-looking statements. These forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events. These forward-looking statements are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.
Caution Regarding Inferred Resources
This presentation uses the terms "Measured", "Indicated" and "Inferred" Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them "Inferred Resources" have a great amount of uncertainty as to theirCommission does not recognize them. Inferred Resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimated of Inferred Resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into reserves.
2007 First Quarter2007 First QuarterQ1 Highlights
• Net earnings US $53.7 million on sales of US $194 million• Cash flow US $10.7 million* • Record throughput at Neves-Corvo (21% increase) and
Zinkgruvan (39% increase)• Copper production at Neves-Corvo up 21.5%• Overall copper production up 9.3%
Production (Metal Contained in Concentrate)Production (Metal Contained in Concentrate)
• Copper 24,600 tonnes• Zinc 37,894 tonnes• Lead 11,047 tonnes• Silver 680,828 ounces
*affected by tax payments of US $41 million + increased accounts receivable at Neves Corvo
Q1 Financial ResultsQ1 Financial Results (US$ millions)
350 1801.00329.8 152 9 1.02
111 4 53 7151.5
329.8
63.6
152.9 1.02
EBITDA Earnings EPS ($/share)
Q1/07 Q1/06
111.4
Q4/06 YE/06 Q1/07 Q1/06Q4/06 YE/06 Q1/07 Q1/06Q4/06 YE/06
53.7
0.1950.3 21.50.28
0.18
EBITDA Earnings EPS ($/share)
Fewer shipments lead to high inventories at end of Q1
EuroZinc included as of November 1, 2006
Q1 Financial ResultsQ1 Financial Results (US$ millions)
600 250
250216.2539 7 247 2
193 2 75 5
216.2539.7
236.1 80 0110.7
247.2
Operating Cash FlowOperating ProfitSales
Q1/07 Q1/06
193.2
Q4/06 YE/06 Q1/07 Q1/06Q4/06 YE/06 Q1/07 Q1/06Q4/06 YE/06
75.5
10.791.8
80.0
36.2 22.7
Operating Cash FlowOperating Profit(EBIT)
Sales
Strong balance sheet working capital US $303 million … cash US $317 million
EuroZinc included as of November 1, 2006
Q1 Milled Ore (‘000 tonnes)Q1 Milled Ore ( 000 tonnes)
Zinkgruvan900
2,500 Neves-Corvo
2095 787
626 235546 518 225
700 400
Q1/07 Q4/06 YE/06 Q1/07 Q4/06 YE/06
StorlidenGalmoy
Q1/06 Q1/06
546 518 225170
617 362
94 65
Q1/07 Q4/06 YE/06Q1/07 Q4/06 YE/06 Q1/06Q1/06
160 156 93 98
Q1 Metal Concentrate ProductionQ1 Metal Concentrate ProductionCopper (‘000 tonnes)
180
Zinc (‘000 tonnes)100
89171
25 21 2343 43
Q1/07 Q4/06 YE/06 Q1/07 Q4/06 YE/06Q1/06 Q1/06
38 25
Silver (‘000 ounces)Lead (‘000 tonnes)503,000
Q1/07 Q4/06 YE/06 Q1/07 Q4/06 YE/06Q1/06 Q1/06
21 2343 43
45 2538
Q1/07 Q4/06 YE/06Q1/07 Q4/06 YE/06 Q1/06Q1/06
11 680
Q1/07 Q4/06 YE/06Q1/07 Q4/06 YE/06 Q1/06Q1/06
11 12 649 626
Operating Profit by MineOperating Profit by Mine (US $millions)
Q1/07 Q1/06 YE/06Q1/07 Q1/06 YE/06
Zinkgruvan 30.8 24.1 138.3
Storliden 4 7 9 2 44 8Storliden 4.7 9.2 44.8
Galmoy 0.6 8.6 38.8
Neves-Corvo* 53.9 - 23.5Neves Corvo 53.9 23.5
*Neves-Corvo is included as of November 1, 2006
Corporate Headquarters Vancouver,Vancouver, Canada
Operations Headquarters St kh lStockholm, Sweden
Business DevelopmentpReading, England
Operations OfficeOfficeMoscow, Russia World Wide Operations
Lundin Mining Asset SummaryLundin Mining Asset Summary
InvestmentsExplorationProjectsProduction Assets
Sunridge Gold
Sanu ResourcesAljustrel, Portugal
Ozernoe, Russia
PortugalIberian Pyrite Belt
Neves-Corvo, Portugal
Zinkgruvan, Sweden
InvestmentsExplorationProjectsProduction Assets
Mantle Resources
Union Resources
Chariot Resources
Tenke, DRC(pending merger)
SwedenSkellefte Bergslagen
Ireland
Storliden, Sweden
Galmoy, Ireland
Aguablanca, Spain (pending acquisition)Galmoy Mine Area
SpainToral District
g p(pending acquisition)
2006 production 90,000 tonnes of copper, 171,000 tonnes of zinc, 45,000 tonnes of lead and 2,500,000 ounces of silver
Neves-Corvo, Portugal Zinc Q1-07 Q1-06, gOre milled (tonnes) 94,200 -
Head grade 8.2% -
Zinc metal produced (tonnes)
6,193 -
Copper Q1-07 Q1-06
Ore milled (tonnes) 538,957 517,570
Head grade 5.0% 4.2%
Copper metal produced (tonnes) 23,405 9,261
Copper cash prod. cost* US$ 0.65/lb US$ 0.83/lb
• Q1 2007 – a 21% increase in milled ore - record level
• Increased mill throughput by 21% Financial Results Q1-07 Q1-06
• Fewer shipments leading to inventory build-up
• Zinc production at a steady, increasing, rate since start in 2006
Revenue 111,507 -
Operating Profit 53,927 -
* Net of by-product credits
Zinkgruvan Mine, Sweden Financial Results Q1-07 Q1-06Zinkgruvan Mine, Sweden Financial Results Q1-07 Q1-06
Revenue 49,476 38,453
Operating Profit 30,766 24,139
Q1-07 Q1-06
Ore milled (tonnes) 235,390 169,765
Zinc head grade 7.7% 11.2%
Lead head grade 4.2% 5.2%g
Zinc metal prod. (tonnes) 17,162 17,957
Lead metal prod. (tonnes) 8,643 7,793
Zinc Cash Prod. Cost * US$ 0.23/lb US$ 0.35/lb
• 30% increase in mine tonnage Q1-07 vs. Q1-06
• Ore processed 235,000 tonnes, 39% increase – record level
• Feed grades lower – mining sequence
• High recoveries
• Extension of mine life – Dalby/Finnafallet
• Project investigating Cu production and increased production
* Net of by-product credits
Galmoy Mine, Ireland Financial Results Q1-07 Q1-06Galmoy Mine, Ireland Financial Results Q1 07 Q1 06
Revenues 17,752 27,408
Operating Profit 610 8,580
Q1-07 Q1-06
Ore milled (tonnes) 94,060 156,053
Zinc head grade 12.8% 13.2%
Lead head grade 3 5% 4 3%Lead head grade 3.5% 4.3%
Zinc metal prod. (tonnes) 9,961 17,217
Lead metal prod. (tonnes) 2,404 4,441
Zinc Cash Prod. Cost * US$ 1.15/lb US$ 0.60/lb
• Production in January and February negatively influenced by negotiations and a tragic accident – 50% utilization rate in January –standstill for 8 days in February
• Run of mine ore grades were lower mining sequence lead recovery• Run of mine ore grades were lower – mining sequence - lead recovery was 73 % - substantial improvement
• Modifications to the zinc flotation circuit – increase zinc recovery
• New promising drill results - continued aggressive drill program
* Net of by-product credits
Storliden Mine, Sweden Financial Results Q1-07 Q1-06Storliden Mine, Sweden Financial Results Q1-07 Q1-06
Revenues 15,544 25,892
Operating Profit 4,748 9,153
Q1-07 Q1-06
Ore milled (tonnes) 64,547 98,064
Copper head grade 2.0% 3.6%
Zinc head grade 7.6% 9.2%
Copper metal prod. (tonnes) 1,198 3,253
Zinc metal prod. (tonnes) 4,578 8,198
Zinc Cash Prod Cost * US$0 09/lb US$<0/lbZinc Cash Prod. Cost US$0.09/lb US$<0/lb
• P d ti til d f thi• Production until end of this year
• Planned lower production and head grades in Q1
* Net of by-product credits
Aljustrel Project, Portugal Tonnes (´000) Zn (%) Pb (%)Aljustrel Project, Portugal Tonnes ( 000) Zn (%) Pb (%)
Reserves 14,400 5.5 1.8
Resources (M&I) 23,579 5.7 1.8
Inferred 9,321 5.3 1.6
Est LOM 10+ yearsEst. LOM 10+ years
Resources incl. of reserves, as of December 31, 2006
Est. Annual Production (at full capacity)
Ore milled 1 800 000 tonnesOre milled 1,800,000 tonnes
Zinc metal contained 80,000 tonnes
Lead metal contained 17,000 tonnes
Silver metal contained 1.25 m oz.
Zinc Cash Prod. Cost * US$ 0.48/lb
• Development at the Moinho mine on target – start up September 2007
• Feitais mine development delayed, will however be able to meet planned scheduleto meet planned schedule
• Treatment plant preparation work is on track
* Net of by-product credits
Ozernoe Zinc/Lead Project Russia• Plan for conventional open pit mine,
stripping ratio 3.3 : 1
Ozernoe Zinc/Lead Project, Russia
• Commence BFS in May, 2007• Management and staff recruited• Production start 2009/2010Production start 2009/2010• Full production 2011/2012 at 300,000 to
350,000 tpa zinc• Hatch Engineering doing feasibility• Hatch Engineering doing feasibility• ABN AMRO financial advisor
E l ti
Ireland and Sweden
Exploration
Focus on near-mine explorationPromising near mine results at Galmoy – drilling to continue
– potential to extend life of mineScoping study underway at Norrliden discovery in Sweden
Portugal Lombador minex Chanca greenfield regional geophysicsLombador minex, Chanca greenfield, regional geophysics
Spain Toral drilling to test extension of historical resourceToral – drilling to test extension of historical resource
Two New Pending Major Transactions
• Acquisition of Rio Narcea Gold Mines, Ltd.
• Merger with Tenke Mining CorpMerger with Tenke Mining Corp.
Rio Narcea Acquisition
Ri N T ti SRio Narcea Transaction SummaryTakeover Bid Offer to acquire all issued and outstanding
h f Ri N G ld Mi Ltdshares of Rio Narcea Gold Mines, Ltd.
Consideration Cash offer of Cdn $5.00 per share 22.9% premium to 30 day VWAP
Valuation Cdn $864 million
Other Red Back Mining Inc. option to acquire Tasiast gold project upon successful completion of g jtakeover in consideration for US $225 million cash and assumption of US $42.5 million debt related to Tasiast project
Financing US $800 million senior credit facility through Scotia Capital
Rio Narcea Project LocationsRio Narcea Project LocationsSalave
Aljustrel MinePORTUGALPORTUGAL
Aguablanca MineNeves Corvo Mine
Tasiast Mine
Lundin Mining Projects
Rio Narcea Asset SummaryRio Narcea Asset SummaryAguablanca Producing nickel/copper mine in southern
Spain.p
Tasiast Gold development project in Mauritania under development. Production in H2/07.
Exploration Greenfield and brown field base andExploration Greenfield and brown field base and precious metals in Spain, Portugal and Mauritania.
Chariot Resources 20% equity investment. Flagship Marcona copper development project in Peru.
Salave Gold project in Spain – court case on change of land use.
Rio Narcea Resource Summary YE2006Rio Narcea Resource Summary YE2006Nickel/Copper Nickel/Copper –– Aguablanca Aguablanca (0.2% Ni cutoff)(0.2% Ni cutoff)
Category Tonnes Ni Cu Contained Contained g y(000) (%) (%) Ni (Tonnes) Cu (Tonnes)
P + P 11,500 0.60 0.47 69,100 54,400
M + I 14,800 0.58 0.48 86,400 71,400M I 14,800 0.58 0.48 86,400 71,400
Inferred 4,700 0.40 0.31 18,800 14,400
Gold Gold –– Tasiast Tasiast (0.8 g/t cutoff) Calculation based on US $491 gold price(0.8 g/t cutoff) Calculation based on US $491 gold price( g ) $ g p( g ) $ g p
Category Tonnes(000)
Grade(g/t)
Contained Au(ounces)
P + P 11,984 2.7 1,040,000
M + I 14,553 2.63 1,230,000
Inferred 18,633 1.94 1,165,000
Salave – development subject to legal proceedings has M+I resources containing 1.5 million oz Au, Inferred 223,000 oz
Tenke Merger
Tenke Merger SummaryTenke Merger SummaryConsideration 1.73 shares of Lundin Mining for each Tenke share
representing a 31.2% premium based on Tenke and Lundin Mining 20 day TSX VWAPMining 20 day TSX VWAP
Structure Plan of Arrangement - recommended by both Boards
Company Name Lundin Mining Corporation
V l ti Cd $1 4 billi b d L di Mi i ’ 20 d TSX VWAP fValuation Cdn $1.4 billion based on Lundin Mining’s 20 day TSX VWAP of $13.51 per share
Other South American assets spun out to Tenke shareholders through StubCo along with US $5 million cashthrough StubCo along with US $5 million cash
Management Paul Conibear, President and CEO of Tenke will join Lundin Mining in senior management position responsible for Tenke Fungurume and will become President and CEO of St bCStubCo
Subjects Regulatory, Court and Tenke and Lundin shareholder approval
Tenke Project LocationsTenke Project Locations
Existing Tenke shareholders benefit fromshareholders benefit from spinout of South American assets.
Targeted to unlocking their value
Tenke Mining Asset SummaryTenke Mining Asset Summary
Tenke Fungurume Extraordinarily rich copper/cobalt deposit inTenke Fungurume Extraordinarily rich copper/cobalt deposit in the DRC under development by partner Phelps Dodge/Freeport. Production startup in late 2008. 24.75% interest.
South America Advanced stage to early stage copper/gold exploration in Argentina and Chile. Assets to be spun out to Tenke shareholders.
Balance Sheet US $86 million cash post StubCo. No debt. 60 million shares outstanding.
Tenke Fungurume Resource SummaryTenke Fungurume Resource Summary
Copper/Cobalt Copper/Cobalt –– Tenke Fungurume Tenke Fungurume NI 43NI 43--101 June 2006, Mintec and Nilsson Mine Services101 June 2006, Mintec and Nilsson Mine Servicespppp gg ,,
Category Tonnes(000)
Cu(%)
Co(%)
ContainedCu (Tonnes)
Contained Co (Tonnes)
M + I 235,000 3.01 0.31 7,070,000 729,000M + I 235,000 3.01 0.31 7,070,000 729,000
Inferred 264,000 2.60 0.19 6,860,000 502,000
Less than half of the concession area explored
Resource estimate to be updated Q2 2007 to include last 15 months of drilling
The Famous “Green Wall”The Famous “Green Wall”
Tenke Fungurume Copper/Cobalt ProjectTenke Fungurume Copper/Cobalt ProjectKwatebala
DepositFwaluGomaD it
Airstrip
Known copper mineralization
TenkeVillage
DepositDepositsDeposits Known copper mineralization
Village
FungurumeVillage
Rail Line(to Kolwezi)
High VoltagePower Line
TFMCamp
A mining district unto itselfPumpi
Deposits
A E i l D iAn Exceptional Deposit• Cumulative strike length g
greater than 80 km
• Oxides to 150 m depth (oxides 30% of resource)(oxides 30% of resource)
• Sulphides to greater than 500 m depth
• Excellent upside -mineralization open in all directions
Soon to be a Major Copper ProducerSoon to be a Major Copper Producer
• 40 year mine plan40 year mine plan
• Open pit –strip ratio 3.1:1
• First 10 years grade 4.57% copper and 0.37% cobalty g pp
• Initial production rate 115,000 tpa copper and 8,000 tpa cobalt – startup in Q4 2008/Q1 2009
$• US$650 million capital cost (70/30 PD/TNK)
• Cash cost negative US$0.19/lb (including $10/lb cobalt credit)
• Expansion plans envision 400 000+ tpa copper• Expansion plans envision 400,000+ tpa copper
Local InfrastructureLocal InfrastructureConstructionVillagePlant
Access Road
AirstripConstructionVillagePlant
Access Road
Airstrip
Tailings Pond
Waste Dump
Fwalu220 KV Power Line
Tailings Pond
Waste Dump
Fwalu220 KV Power Line
SNELPower Substation
TFM CampG
KwatebalaPit
FwaluPits
SNELPower Substation
TFM CampG
KwatebalaPit
FwaluPits
Ca pGomaPits
National Road
150 KV Power LineSNCC Railway
Ca pGomaPits
National Road
150 KV Power LineSNCC Railway
Each grid line = 2kmEach grid line = 2km
Transport OptionsTransport Options
K d t di d i th l 1900’Known and studied since the early 1900’s
Important to the future of the DRC
Jobs Schools Social Programs AgricultureJobs, Schools, Social Programs, Agriculture
Tenke FungurumeTenke FungurumeOne of the most significant copper deposits in the world
Lundin Mining Proforma
Transaction TimelineTransaction TimelineMay 18 Interim court application
May 23 Mailing date for Lundin and Tenke Circulars
June 18 Lundin Mining Corporation - Annual and Special General MeetingTenke Mining Corp. - Special General Meeting
June 21 Final court approval of Tenke transaction
June 29 Expiry of Rio Narcea Bid (extension from original expiry of May 29)
July 3 Close Tenke transaction (effective date of June 30)
Lundin Mining Asset SummaryLundin Mining Asset Summary
InvestmentsExplorationProjectsProduction Assets
Sunridge Gold
Sanu ResourcesAljustrel, Portugal
Ozernoe, Russia
PortugalIberian Pyrite Belt
Neves-Corvo, Portugal
Zinkgruvan, Sweden
InvestmentsExplorationProjectsProduction Assets
Mantle Resources
Union Resources
Chariot Resources
Tenke, DRC(pending merger)
SwedenSkellefte Bergslagen
Ireland
Storliden, Sweden
Galmoy, Ireland
Aguablanca, Spain (pending acquisition)Galmoy Mine Area
SpainToral District
g p(pending acquisition)
2006 production 90,000 tonnes of copper, 171,000 tonnes of zinc, 45,000 tonnes of lead and 2,500,000 ounces of silver
Lundin Mining CorporationPro Forma Capital Structure
Price (1) SharesBasic/FD
Market Cap
(2)
Cash Debt EV EV (2)
(CDN)
LUN C$14.26 284.8/288.3 3,690.1 402.2 42.9 3,330.8 3,710.4
LUN + RNG(3)C$14.26 284.8/288.3 3,690.1 782.3 850.1 3,757.9 4,186.1
LUN + RNG (3) + TNK C$14.26 390.1/393.6 5,038.7 881.7 850.1 5,007.1 5,577.70.898
(in millions and $US unless otherwise noted)
(1) Prices as of April 25, 2007(2) US/CDN = 0.898(3) Includes sale of Tasiast to RBI
G fGrowing Production Profile
1000 kt Zn
600 kt700 kt800 kt900 kt
1000 kt Zn
Ni "new"
PbProd
uctio
n
200 kt300 kt400 kt500 kt600 kt
Co "new"
Ag
c Eq
uiva
lent
0 kt100 kt200 kt
2007 2008 2009 2010 2011
Cu "new"
Cu
Zinc
Notes: equivalents based on 2006 metal prices, preliminary production ramp-ups at Ozernoe, N-C Zinc
Zn $1.48/lb, Ni $11.01/lb, Pb $0.58/lb, Cu $3.05/lb, Ag $11.55/oz, Co $14/lb
A Growing Global PortfolioA Growing Global Portfolio
393 mm shares o/s proforma …LUN –TSX, LMC – AMEX, LUMI - Stockholm Post Transactions