LUNDIN MINING REPORTS ON NEVES-CORVO FUTURE UNDERGROUND MATERIALS HANDLING STUDY

Toronto, January 23, 2012 (TSX: LUN; OMX: LUMI) Lundin Mining Corporation
(“Lundin” or the “Company”) provides a summary of the results of the initial
Future Underground Materials Handling Study (the “Study”) for its Neves-Corvo
mining complex in southern Portugal. This conceptual level study identified and
evaluated the underground materials handling and access options necessary to
pursue the exploitation of the deeper Lombador copper/zinc resources as well as
the Semblana copper deposit which are adjacent to the Company’s Neves-Corvo
mine.


The Study indicated two preferred options:

  • A new rock-hoisting and man-riding shaft approximately 1,200 m deep,
    located to the north-east of the existing mine surface facilities, situated
    between the Semblana and Lombador mineralization (the “Shaft Option”).
  • A new decline from the existing plant area equipped with a conveyor system
    and man and material access facilities (the “Decline Option”).  The Decline
    Option consists of a proposed two-leg decline driven by a high speed tunnel
    boring machine  and would be aligned to pass close to and underneath the
    Semblana deposit and then on to deeper parts of the Lombador resource,
    reaching a similar ultimate depth as the Shaft Option.

The attached drawings illustrate the conceptual locations and layouts of these
two options.

 

The Shaft Option
                                                                                
                            

The Shaft Option is expected to comprise conventional shaft systems with
combination skip/cages providing a designed rock hoisting capacity of 5 million
tonnes per annum ("tpa"), coupled with rapid man-riding facilities to the
lowest levels of the mine. The shaft would provide direct ventilation benefits
and would allow ore and waste from production areas to be gravity-fed to a new
deep haulage level.  The shaft is expected to provide less positional and
sequencing flexibility, as well as a longer development schedule, as compared
to the Decline Option. Should the Shaft Option be selected, it could be in
production approximately 5 years from project start.  The Shaft Option is
expected to have a higher capital cost and lower operating cost than the
Decline Option.

 

The Decline Option

The Decline Option is expected to comprise an approximately 6-metre diameter,
inclined tunnel equipped with a conveyor system for rock hoisting, with the
same design capacity as the Shaft Option at 5 million tpa. At a current design
gradient of 1:5, the length of the decline from surface to the Semblana area is
approximately 5,200 m. Access to the deeper parts of the Lombador
mineralization would require a decline extension of a further 2,200 m. Man
access would be provided by a rope haulage system or conventional vehicles
depending on the final selected gradient of the decline. The Decline Option is
expected to allow earlier first production than the Shaft Option, with
potential to be operational in approximately 4 years from project start. This
option would also allow phased expenditure and sequential development of the
Semblana and Lombador mineralization. The Decline Option could also have the
added benefit of providing greater flexibility in accessing several other areas
of potential mineralization located near the Semblana deposit as identified by
the recent high-grade copper intercepts from initial drilling on 3D seismic
targets, as announced in the Company’s December 15th, 2011 press release. 

 

Study Advancement

A next level of study is advancing with a high priority, taking into account
ongoing new exploration results, and to further develop designs and comparisons
between the two options. The results of the initial Study are not intended to
imply that either option has been determined to be economically viable. The
Semblana mineral resource is still categorized as Inferred and comments on
economic potential are not provided. Given the preliminary nature of the Study
and the number of assumptions necessary to be made at this stage, capital and
operating cost estimates for the Shaft and Decline Options are still at a
conceptual stage and are insufficient for public dissemination. Studies are
advancing to refine comparisons between the Shaft and Decline Options with
anticipated completion by Q2 2012, to select a single preferred option for
subsequent feasibility level study. 

A significant exploration drilling program is planned for 2012 which is
expected to increase the current resource at Semblana. Expansion of this
resource and drilling success from other nearby seismic reflector targets are
likely needed to warrant a major underground infrastructure investment
dedicated just to this area. Additional drilling is progressing near recently
encountered high grade copper intercepts south and southwest of the existing
Semblana resource.  

 

Related  Development Plans

In parallel to ongoing study work and to fast track the schedule for accessing
the Semblana area, the Company has commenced planning and budgeting for
development of an access ramp to the Semblana Deposit from the Zambujal
orebody. Subject to investment approvals, the ramp development is targeted to
commence prior to the end of Q2 2012 with the objective of accessing an
intermediate level about 750 m below surface in 2 to 3 years, from which
further exploration and infill drilling can be carried out. Subject to this
drilling, further design and study results, this ramp will continue to
approximately 950 m depth which is the conceptual design level of a main
haulage way for Semblana. This access ramp from Zambujal would be utilized with
either the Shaft or Decline Options.

As previously announced in our December 12th, 2011 press release, the
development of the Lombador deposit (“Lombador Phase 1”) is progressing to
enable ramp up of zinc production to in excess of 60,000 tpa by 2014. The main
access ramp for Lombador Phase 1 has now reached a level 850 metres below
surface and is at the elevation to start the exploration drive planned for
detailed in-fill drilling of the deeper Lombador mineralization.

Commenting on the Study and the Company’s other developments plans at the
Neves-Corvo mining complex, Mr. Paul Conibear, CEO of Lundin Mining said, “The
successive stages of refinement of the materials handling study are essential
for the future development of new resources at Neves-Corvo.  We intend to move
forward aggressively with investment plans at the mine.  Ongoing exploration
efforts on Semblana, Lombador, and the drilling success we have recently
achieved on new targets will continue to shape and support our investment in
future underground materials handling infrastructure at Neves-Corvo.”

 

About Lundin Mining

Lundin Mining Corporation is a diversified Canadian base metals mining company
with operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc,
lead and nickel. In addition, Lundin Mining holds a development project
pipeline which includes expansion projects at Neves‐Corvo mine along with its
equity stake in the world class Tenke Fungurume copper/cobalt mine in the
Democratic Republic of Congo.

On Behalf of the Board,

Paul Conibear, CEO

 

 

 

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

 

Qualified Persons

Mr Stephen Gatley, BSc(Eng), CEng, MIMMM, Director Technical Services with
Lundin Mining, a Qualified Person pursuant to NI 43-101, has reviewed the
technical contents of this news release and consents to their publication.

 

Forward Looking Statements

Certain of the statements made and information contained herein is
“forward-looking information” within the meaning of the Ontario Securities Act.
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.