TORONTO - Lundin Mining Corporation ('Lundin Mining' or the 'Company') provides the following production guidance for the three-year period of 2021 through 2023, as well as cash cost, capital and exploration expenditure forecasts for 2021.
Candelaria 2020 guidance has been reintroduced and an update on the return to full production capacity at Chapada provided. Additionally, the Company announces an anticipated 50% increase in the quarterly dividend and renewal of its Normal Course Issuer Bid ('NCIB'), both pending final approvals as detailed herein.
Copper production is forecast to increase over 25% in 2021, compared to the current 2020 guidance, primarily on increasing grades at Candelaria and full-year uninterrupted contributions from both Candelaria and Chapada.
Zinc production is forecast to increase 30% in 2022, over 2021, as the Neves-Corvo Zinc Expansion Project ('ZEP') completes its ramp up in the first half of that year. The ZEP is planned to restart in January 2021.
Nickel production is forecast to maintain current levels in 2021 before increasing over 10% in 2022 as higher-grade ore from Eagle East contributes to the mill feed.
Gold production is forecast to be 175,000 oz at the midpoint of 2021 guidance. Nearly 110,000 oz are unencumbered.
Candelaria 2020 Guidance & Chapada Update
Candelaria: Collective agreements have now been reached with all five unions representing employees at the Candelaria Copper Mining Complex in Chile. Ramp up of the operation to full capacity is underway and is anticipated to be achieved in the coming weeks. Installation of the fourth, more powerful, ball mill motor as part of the Candelaria Mill Optimization Project ('CMOP') has been pulled forward and is to be complete in December 2020. Following installation, the CMOP will be 100% complete.
With these considerations, reintroduced 2020 copper production guidance is for 120,000-125,000 t at a cash cost of $1.50/lb. Cash cost guidance is net of credits from forecast gold production of 70,000-75,000 oz, and includes expenses related to the strike and period of reduced operations. Full year 2020 capital expenditures are expected to be $225 million, of which $45 million is forecast for the fourth quarter.
Chapada: A return to full production capacity in December 2020 remains on track. The plant achieved approximately 35% of nameplate capacity while operating only the SAG mill. Throughput has further improved since mid-November with the temporary installation of a motor generously loaned from Samarco Mineracao S.A. on the ball mill.
The first repaired motor is expected to be on site this week and a second motor is anticipated in mid-December. A step-change increase to full production capacity is expected once these two motors are available and installed.
Chapada 2020 production guidance remains 45,000-50,000 t of copper and 80,000-85,000 oz of gold.
Production Outlook 2021 - 2023
Candelaria: Copper production for the next three years is forecast to increase over that of 2020 primarily on improving copper head grades and achievement of planned processing rates as the benefits of reinvestment initiatives completed over the last several years are realized. Refinement to mine phasing and operating plans have revised forecast 2021 copper and gold, and 2022 gold, production compared to the prior outlook.
Copper production is forecast to be 172,000-182,000 t in 2021, a near 45% increase over forecast 2020 production. Production is to further increase to 180,000-190,000 t of copper in 2022 and maintain this level in 2023. Over the next ten years copper production is forecast to average nearly 180,000 tpa.
Candelaria's gold production is forecast to be 95,000-100,000 oz in 2021 and 2022, nearly a 35% increase over the forecast for 2020. Gold production is to further increase in 2023 to 110,000-115,000 oz, averaging nearly 100,000 oz per annum over the next ten years.
Chapada: Forecast copper and gold production are generally consistent with the prior outlook. There have been minor revisions on refinement of near-term operating plans. Production expectations are based on the current 24 Mtpa throughput capacity with annual changes driven primarily by the forecast grade profile.
Copper production is forecast to increase over 5% in 2021 to 48,000-53,000 t. Copper production is to further increase over 10% to 53,000-58,000 t in 2022, before reducing modestly to 50,000-55,000 t in 2023.
Chapada's gold production is forecast to be 75,000-80,000 oz in 2021, 5,000 oz more than the prior outlook for the year. Gold production is then forecast to modestly decline in 2022 and 2023 on the expected grade profile. All of Chapada's gold production remains unencumbered and receives full market pricing.
Eagle: Nickel production is forecast to be 15,000-18,000 t in 2021, consistent with the prior outlook as Eagle East ore comprises the majority of the mill feed. Nickel production is forecast to increase 12% in 2022 to 17,000-20,000 t before declining to 13,000-16,000 t in 2023 on nickel grades.
Eagle's copper production is forecast to be 17,000-20,000 t in 2021, a 22% increase over the prior outlook. Similar to nickel, as Eagle East ore grades begin to decline, forecast copper production is anticipated to be 15,000-18,000 t in 2022 and 12,000-15,000 t in 2023.
Neves-Corvo: The ZEP is planned to restart in January 2021. Plans are to mobilize a smaller number of contractors with an extended schedule to advance the project given the current safety requirements for social distancing and other personnel limitations to safeguard and protect the workforce and local communities from the spread of COVID-19. Forecast zinc and copper production over the three-year outlook reflect this approach.
Zinc production in 2021 is forecast to be 70,000-75,000 t as the ZEP construction is to be completed in stages over the course of the year with production ramp up planned to commence in the fourth quarter. Zinc production is forecast to increase 66% in 2022 to 115,000-125,000 t as production ramp up is completed in the first half of the year. With the ZEP contributing a full year of production at design throughput, 2023 zinc production is forecast to be 145,000-155,000 t.
Copper production over the outlook period has been revised on refinement of the near-term mine plan, impacting the forecast copper head grade.
Zinkgruvan: Forecast zinc and copper production for 2021 and 2022 are generally consistent with the prior outlook with minor revision on refinement of operating plans. Zinc production is forecast to increase in 2023, compared to current and 2021-2022 levels, with planned mining of higher-grade orebodies.
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 November 30, 2020 at 17:30 Eastern Time.
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 or labour disputes; timing for any required repairs and resumption of any interrupted operations; the results of any 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 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: volatility and fluctuations in metal and commodity prices; global financial conditions and inflation; 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; changes in the Company's share price, and volatility in the equity markets in general; the threat associated with outbreaks of viruses and infectious diseases, including the novel COVID-19 virus; risks related to negative publicity with respect to the Company or the mining industry in general; reliance on a single asset; 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; 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; 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; ore processing efficiency; risks inherent in and/or associated with operating in foreign countries and emerging markets; security at the Company's operations; changing taxation regimes; health and safety risks; exploration, development or mining results not being consistent with the Company's expectations; unavailable or inaccessible infrastructure and risks related to ageing infrastructure; counterparty and credit risks and customer concentration; risks related to the environmental regulation and environmental impact of the Company's operations and products and management thereof; exchange rate fluctuations; reliance on third parties and consultants in foreign jurisdictions; community and stakeholder opposition; civil disruption; the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; uncertain political and economic environments; litigation; regulatory investigations, enforcement, sanctions and/or related or other litigation; risks associated with the structural stability of waste rock dumps or tailings storage facilities; changes in laws, regulations or policies including but not limited to those related to mining regimes, permitting and approvals, environmental and tailings management, labour, trade relations, and transportation; climate change; compliance with environmental, health and safety laws; enforcing legal rights in foreign jurisdictions; information technology and cybersecurity risks; estimates of future production and operations; estimates of operating, cash and all-in sustaining cost estimates; delays or the inability to obtain, retain or comply with permits; compliance with foreign laws; risks related to mine closure activities and closed and historical sites; challenges or defects in title; the price and availability of key operating supplies or services; historical environmental liabilities and ongoing reclamation obligations; indebtedness; funding requirements and availability of financing; liquidity risks and limited financial resources; risks relating to attracting and retaining of highly skilled employees; 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; the estimation of asset carrying values; internal controls; competition; dilution; existence of significant shareholders; conflicts of interest; activist shareholders and proxy solicitation matters; risks relating to dividends; risks associated with business arrangements and partners over which the Company does not have full control and other risks and uncertainties, including but not limited to those described in the 'Risks and Uncertainties' section of the Annual Information Form and the 'Managing Risks' section of the Company's MD&A for the year ended December 31, 2019 and the quarter ended September 30, 2020, 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.
Contact:
Mark Turner
Tel: +1 416 342 5565
LUNDIN MINING CORPORATION 
