Toronto, 2013-10-30 23:07 CET (GLOBE NEWSWIRE) -- October 30, 2013 (TSX: LUN; OMX: LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”) today reported net earnings of $27.9 million ($0.05 per share) for the quarter ended September 30, 2013. Cash flows of $27.4 million were generated from operations, not including the Company’s attributable cash flows of $42.2 million from Tenke Fungurume.
Paul Conibear, President and CEO commented, "Our European operations continued to perform generally in-line with expectations and as we enter into the fourth quarter we are pleased to be able to modestly increase production guidance for copper, zinc and nickel.
Tenke experienced another excellent quarter, despite power interruptions in September, which highlights the excellent operating performance of the asset. Year-to-date cash distributions received from Tenke now total over $110 million.
At Eagle, construction has ramped up very well, with commissioning expected in the fourth quarter of 2014. We look forward to ending the year with a strong operating performance, well positioned for the future with our conservative balance sheet further improved by capital cost constraint measures and the recent completion of a flexible, low cost debt financing package."
|Summary financial results for the quarter and year-to-date:|
|Three months ended||Nine months ended|
|September 30||September 30|
|US$ Millions (except per share amounts)||2013||2012||2013||2012|
|Basic earnings per share||0.05||0.07||0.16||0.24|
|Cash flow from operations||27.4||(25.7)||99.7||144.6|
|Ending cash position||137.1||255.9||137.1||255.9|
1. Operating earnings is a non-GAAP measure defined as sales, less operating costs (excluding depreciation) and general and administrative costs.
Wholly-owned operations: Copper, zinc, and lead production were largely in-line with expectations for the quarter, with total zinc production at its highest levels in years. Production costs at Neves-Corvo were higher than planned. At Zinkgruvan, excellent cash costs in the quarter brought year-to-date results back in line with expectations. At Aguablanca, both metal production and costs continued to be better than expectations. As a result, production guidance has been updated to increase nickel and copper production at Aguablanca. As well, guidance for copper production at Zinkgruvan and zinc production at Neves-Corvo have also been increased. Cash cost guidance for Neves-Corvo has been increased to $1.90/lb1 of copper (from $1.80/lb) and for Aguablanca, it has been reduced to $4.50/lb of nickel (from $5.00/lb).
Tenke: Tenke continued to perform well, achieving the second best quarter on record for milling volumes, despite experiencing power interruptions in September which impacted operating rates. While the situation has improved, Freeport-McMoRan Copper & Gold Inc. (“Freeport”) is working closely with its power provider and DRC authorities to address the situation.
|Total production from the Company's assets including attributable share of Tenke:|
1. Cash cost/lb of copper are non-GAAP measures defined as all cash costs directly attributable to mining operating, less royalties and by-product credits.
On a year-to-date basis, operating earnings of $176.1 million were lower than the $256.9 million reported for the first nine months of 2012. The decrease was mainly attributable to lower realized metal prices and prior period price adjustments ($47.5 million), higher per unit production costs ($24.8 million), lower sales volumes ($16.4 million), and a change in sales mix ($14.9 million), partially offset by higher operating earnings at Aguablanca ($27.7 million).
Sales of $540.9 million for the nine months ended September 30, 2013 were $3.7 million lower than the comparable period in 2012 ($544.6 million). Lower realized metal prices and prior period price adjustments ($47.5 million), a change in sales mix ($17.4 million), and lower net sales volume ($16.1 million) were largely offset by the restart of operations at Aguablanca ($77.3 million).
For the nine months ended September 30, 2013, cash flow from operations was $99.7 million compared to $144.6 million for same period in 2012. Lower earnings and changes in non-cash working capital were the primary contributors to the decrease.
On a year-to-date basis, operating costs (excluding depreciation) for the nine months ended September 30, 2013 of $347.8 million were $80.1 million higher than the $267.7 million reported for the same period in 2012 largely as a result of the restart of operations at Aguablanca, and higher per unit production costs at Neves-Corvo and Zinkgruvan.
Financial Position and Financing
1. Net debt is a non-GAAP measure defined as available unrestricted cash less long-term debt and finance leases.
2013 Production and Cost Guidance
|2013 Guidance||Prior Guidance||Revised Guidance|
|(contained tonnes)||Tonnes||C1 Cost||Tonnesa||C1 Costb|
|Copper||Neves-Corvo||50,000 – 55,000||$||1.80||50,000 – 55,000||$||1.90|
|Zinkgruvan||2,500 – 3,500||3,500 – 4,000|
|Aguablanca||5,000 – 5,500||5,500 – 6,000|
|Wholly-owned||57,500 – 64,000||59,000 – 65,000|
|Total attributable||106,500 – 113,000||109,000 – 115,000|
|Zinc||Neves-Corvo||45,000 – 50,000||50,000 – 55,000|
|Zinkgruvan||73,000 – 78,000||$||0.30||73,000 – 78,000||$||0.30|
|Total||118,000 – 128,000||123,000 – 133,000|
|Lead||Zinkgruvan||33,000 – 36,000||33,000 – 36,000|
|Nickel||Aguablanca||6,000 - 6,500||$||5.00||6,500 – 7,000||$||4.50|
a. Changes in estimated metal production from the prior guidance are explained as follows:
b. Cash costs remain dependent upon exchange rates (forecast at €/USD:1.30, USD/SEK:6.50) and metal prices (forecast at Cu: $3.30, Zn: $0.85, Pb: $0.95, Ni: $6.50, Co: $12.00).
c. Freeport has provided 2013 sales and cash costs guidance. The sales guidance is assumed to approximate Tenke’s production.
2013 Capital Expenditure Guidance
Capital expenditures for 2013, excluding Eagle, are expected to be $210 million, a $75 million reduction from original guidance. The Company and Freeport have implemented initiatives to reduce or defer capital investments until metal markets improve. Capital expenditures for the Eagle Project in 2013 are expected to be $110 million (from date of acquisition). Details of the total estimated capital expenditures of $320 million for 2013 are described below:
2013 Exploration Guidance
Total exploration expenditures for 2013 (excluding Tenke) are estimated to be $33 million, including Eagle exploration expenditures of $3 million (original guidance, without Eagle - $38 million).
About Lundin Mining
Lundin Mining Corporation is a diversified Canadian base metals mining company with operations in Portugal, Sweden and Spain and an advanced development project in the US, producing copper, zinc, lead and nickel. In addition, Lundin Mining holds a 24% equity stake in the world-class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and in the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland.
On Behalf of the Board,
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. This document includes, but is not limited to, forward looking statements with respect to the Company’s estimated full year metal production, C1 cash costs and capital expenditures. These estimates and other forward-looking statements are based on a number of assumptions and 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 the estimated cash costs, the timing and amount of production from the Eagle Project, the cost estimates for the Eagle Project, 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’s discussion and analysis. Forward-looking information may also be based on other various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of copper, zinc, lead and nickel; 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.
For further information, please contact:
Sophia Shane, Investor Relations North America: +1-604-689-7842
John Miniotis, Senior Business Analyst: +1-416-342-5565
Robert Eriksson, Investor Relations Sweden: +46 8 545 015 50