(For table see attached file)
Company Comments
Colin K. Benner, Vice Chairman and CEO of the Company said, “Lundin Mining had an extraordinary year in 2006 having had a successful merger with EuroZinc Mining, excellent results in mine development, and good progress in the ongoing efforts to improve performance at our operations. At the end of the year we have three major zinc projects underway; Ozernoe, Aljustrel and Neves-Corvo and we are actively seeking other opportunities in the base metal industry and were doing so throughout 2006. The financial results, excluding non-cash one-off items related to the merger, were the highest recorded in the history of the Company and the cash generated will provide for future growth and value creation for the Company’s shareholders. We plan to continue with our strategy of aggressive growth and the adding of quality long life reserves to our present asset base.”
Highlights
· Consolidated base metal producer EuroZinc Mining Corporation into Lundin Mining Corporation as of November 1, 2006. The main assets of EuroZinc Mining consisted of the Portuguese copper-zinc mine, Neves-Corvo, the Aljustrel project, a zinc-lead-silver mine which will be re-opened in 2007 and significant exploration properties in Portugal. Due to merger accounting rules the inventory at the Neves-Corvo mine was valued at fair value as of October 31, 2006. As a result, a non-recurring, non-cash item of $38.6 million has been recorded as a cost of sales in November and December 2006.
· Finalized the acquisition of a 49% interest in the Ozernoe zinc project in the Republic of Buryatia, Russia. The planning and work to construct an open pit zinc-lead-silver mine has begun and the preliminary estimate on mine production is for a 2009 startup.
· A 10% holding was acquired in the Canadian exploration company Mantle Resources Inc., the main asset of which is the Akie zinc-lead deposit in British Columbia, Canada.
· A 14% holding was acquired in Sanu Resources Ltd. which holds promising exploration properties in Eritrea, Burkina Faso and in Morocco.
· Achieved design levels for zinc production at Neves-Corvo in December 2006 just five months from the commissioning date. This was substantially ahead of the typical industry ramp-up time for similar base metals process plants.
(For complete report see attached file)
