Lundin Mining Releases 2011 Guidance
TORONTO, ONTARIO -- (Marketwire) -- 12/09/10 -- Lundin Mining Corporation ('Lundin Mining' or the 'Company') (TSX: LUN)(OMX: LUMI) today provided guidance for its wholly-owned operations in 2011.
Commenting on the guidance, Mr. Phil Wright, President and CEO of Lundin Mining said 'We expect higher copper, zinc and lead production in 2011 compared to 2010 at all of the mines for which guidance has been provided.
'Capital investment is expected to increase to $290 million, up from an estimated $185 million for 2010 and this increase reflects: expansion of production capacity in our European operations; commencement of the development of the Lombador mine; and provision for the commencement of expansion at Tenke, though no decisions have been made on that yet by the mine operator,' Mr. Wright said.
2011 Production and Cost Guidance
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REVISED 2010
(contained tonnes) 2011 Guidance Guidance
Tonnes C1 Cost Tonnes C1 Cost
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Neves-Corvo Cu 76,000 $1.30 75,000 $1.30
Zn 25,000 6,000
Zinkgruvan Zn 78,000 $0.20 75,000 $0.30
Pb 38,000 36,000
Cu 3,400 1,000
Galmoy Zn 17,000 12,000
(in ore) Pb 6,000 4,000
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Tenke: 24% attributable share Cu 31,200 28,500
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Cash costs remain dependent upon exchange rates (2011 EUR/USD: 1.30).
-- Neves-Corvo: Copper production expected to be similar to 2010. Based on
the present high price of copper, the zinc plant will be used to process
low-grade copper ore in the first six months of 2011 with zinc
production starting in July once the plant expansion is complete. C1
costs are expected to remain around $1.30 after by-product credits.
-- Zinkgruvan: Zinc production is expected to increase as a result of
higher throughput. C1 costs remain low-cost quartile with the reduction
based on higher by-product credits.
-- Aguablanca: Not guided pending review (See news release dated December
9, 2010 entitled 'Lundin Mining Suspends Full-Scale Pit Operations At
Aguablanca Pending Review').
-- Galmoy: Sales of remnant high-grade ore are expected to be made to an
adjacent mine for processing. Production tonnage is based on a 50%
attributable-share to Lundin Mining.
-- Tenke: Freeport-McMoRan Copper & Gold Inc. ('Freeport') the mine's
operator, is expecting copper cathode production to increase from
115,000 tonnes per annum in 2010 to approximately 130,000 tonnes per
annum in 2011.
2011 Capital Expenditure Guidance
Capital expenditures for the year are expected to be around $290 million which includes:
-- Sustaining capital in European operations: $100 million (2010 - $70
million). The increase is related to: at Neves-Corvo, the replacement of
underground mobile equipment and completion of the new tailings
facility; at Zinkgruvan, expenditure to increase mine capacity to handle
higher throughput.
-- New investment capex in European operations: $70 million (2010 - $75
million). The majority of this is related to Lombador development ($50
million).
-- The Lombador orebody access ramp is being accelerated to reach a
depth of 900 metres below surface by Q1 2012 in order to facilitate
further exploration that will be key to gaining a full understanding
of the zinc and, more importantly, copper mineralisation associated
with Lombador.
The Lombador feasibility study, based on a small upper section of
Lombador South, is expected to be complete in Q1 2011 and
commissioning of the expanded zinc plant to cater for production
from Lombador is targeted for mid-2013.
-- The Zinkgruvan copper plant will be converted to treat zinc ores in
addition to copper, thereby significantly increasing the flexibility
of the Zinkgruvan operation. The conversion is expected to be
complete by Q4 2011 giving Zinkgruvan the plant capacity to produce
around 100,000 tonnes per annum of zinc, if warranted by metal
prices.
-- New Investment in Tenke: For planning purposes we have assumed an
expansion at Tenke to commence in mid-2011 and we contemplate our share
of expansion funding to be up to $120 million for next year. This is
contingent on a number of factors including incorporation into
underlying agreements of the changes agreed in order to successfully
resolve the contract review. Final decisions on capital investment
levels for 2011 are not yet in place and are ultimately made by
Freeport, the mine's operator.
-- Semblana: Scoping studies are planned to evaluate an early start on an
access drift to the new Semblana deposit at Neves-Corvo. No allowance
has been included in the capital estimates above pending completion of
the scoping studies expected by the end of Q1 2011. Production estimates
do not take into account any underground development associated with
Semblana access drift development. Additional studies on shaft-capacity
de-bottlenecking are in progress to better facilitate Lombador and
Semblana development waste hoisting needs and so as not to unduly affect
mine ore production.
Exploration/Resource acquisition
Exploration expenditures are expected to increase from around $25 million in 2010 to $38 million in 2011. Approximately $20 million of this will be spent on exploration drilling to delineate additional copper resources at Neves Corvo. A further $4 million is allocated for a 24km(2) high resolution 3D seismic survey to cover the entire near-mine area, which will attempt to detect other nearby massive sulphide lenses. Drill testing of copper-gold targets will be conducted in Spain and drilling at the Company's Clare joint-venture property in Ireland will continue.
Commenting on the capital plans, Mr. Wright said, 'We are investing around $70 million in new projects at our European operations where we expect to complete the expansion of zinc capacity at Neves-Corvo to 50,000 tonnes per annum and, in addition, commence the next stage of expansion necessary to be able to bring Lombador into production.
'At Zinkgruvan we continue to commit the capital necessary to expand production at Zinkgruvan
'With the Tenke contract review undergoing completion, we are ready for a major expansion to be announced at a time of Freeport's choosing.
'We continue to invest in internal growth options that will position us well to take advantage of the increasing demand for our products,' Mr. Wright said.
About Lundin Mining
Lundin Mining Corporation ('Lundin', 'Lundin Mining' or the 'Company') is a diversified base metals mining company with operations in Portugal, Spain and Sweden, 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.
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.
Contacts:
Lundin Mining Corporation
Sophia Shane
Investor Relations North America
1-604-689-7842
Lundin Mining Corporation
Marie Inkster
Chief Financial Officer
1-416-342-5568
1-416-348-0303 (FAX)
Lundin Mining Corporation
Robert Eriksson
Investor Relations Sweden
46 8 545 015 50
www.lundinmining.com