Lundin Mining Reports First Quarter Results
posted on
Apr 25, 2012 07:06PM
Edit this title from the Fast Facts Section
Wednesday, April 25, 2012
TORONTO, ONTARIO--(Marketwire - April 25, 2012) -Lundin Mining Corporation (TSX:LUN)(OMX:LUMI) ("Lundin Mining" or the "Company") today reported net income of $58.3 million ($0.10 per share) for the three months ended March 31, 2012 compared to $71.2 million ($0.12 per share) for the first quarter of 2011 and $36.1 million ($0.06 per share) for the fourth quarter of 2011.
Paul Conibear, President and CEO commented, "We followed up our strong production results from the fourth quarter of 2011 with another quarter of solid performance. Operational improvement programs led by new site management are producing good results, with our operations meeting or exceeding our targets."
Neves-Corvo produced 16,609 tonnes of copper at a cash cost of $1.63 per pound during the quarter, which was better than expected primarily due to more tonnes milled and higher plant recoveries than planned. The zinc plant at Neves-Corvo produced 7,020 tonnes of zinc which is expected to be an increasing by-product credit as the year progresses.
Zinkgruvan produced 20,431 tonnes of zinc and 10,348 tonnes of lead. This strong result was achieved through record milling performance and excellent recoveries of zinc on lower grade ores. Cash costs were $0.22 per pound.
Mr. Conibear commented, "Bengt Sundelin, who joined as our new General Manager of Zinkgruvan in September, has recently improved his operating team. The results have been exceptional with Zinkgruvan setting a new record for milling performance, the best in its 155 year history."
Tenke recorded another strong quarter of production, with the Company's share of attributable copper production for the quarter amounting to 8,924 tonnes. The Company's attributable cash flow from operations from Tenke was $31 million, with all cash being retained at the mine to fund the Phase II Expansion Project, which continues to track on schedule and on budget.
The Company continued the pursuit of new growth opportunities most notably signing an option agreement on the Touro copper project located in northern Spain (see news release April 11, 2012, entitledLundin Mining Enters into Option Agreement to Acquire Copper Project in Spain).
Summary financial results for the quarter and year: | ||
US $ millions (except per share amounts) | Three Months Ended March 31 | |
2012 | 2011 | |
Sales | 212.8 | 211.5 |
Operating earnings1 | 105.4 | 118.4 |
Net income | 58.3 | 71.2 |
Basic & diluted income per share | 0.10 | 0.12 |
Cash provided by operations | 51.3 | 132.2 |
Cash position at March 31 | 274.2 | 293.8 |
1Operating earnings is a non-GAAP measure defined as sales, less operating costs (excluding depreciation) and general and administrative costs. |
Corporate Highlights
At the corporate level, Mr. Joao Carrelo will be stepping down from his role as Executive Vice-President and Chief Operating Officer effective June 30, 2012 to pursue other personal interests. Mr. Carrelo has been instrumental in the growth and development of the Company's operations for many years and his significant contributions are much appreciated.
Mr. Michael Hulmes has joined the Company as General Manager at Neves-Corvo. Mr. Hulmes is a Mining Engineer with substantial underground and open pit experience. He has worked in a number of international base metals and gold companies. Most recently he served as General Manager - Operations at the Ok Tedi copper mine in Papua New Guinea. He spent 17 years with Homestake/Barrick where he ultimately served as General Manager - Operations, responsible for a group of three Barrick mines and their interest in the Kalgoorlie Consolidated Gold Mines JV.
Operational Highlights
Wholly-owned operations :Outstanding operational performance generated higher than expected copper, zinc and lead production. Sales volumes were higher and operating costs were lower than expectations.
Tenke: The mine and mill continue to perform well and the $850 million Phase II expansion is on track.
Total Q1 production was as follows: | ||||||
Q1 2012 |
Total 2011 |
Q4 2011 |
Q3 2011 |
Q2 2011 |
Q1 2011 |
|
Copper (tonnes) | 17,145 | 75,877 | 27,488 | 15,419 | 13,831 | 19,139 |
Zinc (tonnes) | 33,743 | 111,445 | 27,053 | 28,791 | 27,404 | 28,197 |
Lead (tonnes) | 11,766 | 41,130 | 9,273 | 10,077 | 10,367 | 11,413 |
Nickel (tonnes) | - | - | - | - | - | - |
Tenke attributableaCopper (tonnes) | 8,924 | 31,523 | 8,635 | 7,982 | 7,398 | 7,508 |
aLundin Mining's attributable share of Tenke's production was reduced from 24.75% to 24.0% effective March 26, 2012, when changes to bylaws of TFM were signed. |
Tenke Fungurume
Corporate Development
Financial Position and Financing
Outlook
2012 Production and Cost Guidance
2012 Guidance | |||
(contained tonnes) | Tonnes | C1 Costa,b, | |
Neves-Corvo | Cu | 52,500 - 57,000 | $ 1.80 |
Zn | 30,000 - 40,000 | ||
Zinkgruvan | Zn | 75,000 - 81,000 | $ 0.25 |
Pb | 34,000 - 39,000 | ||
Cu | 2,000 - 3,000 | ||
Galmoyc | Zn | 7,000 - 8,000 | |
(in ore) | Pb | 1,500 - 2,000 | |
Aguablanca | Ni | 500 - 1,000 | |
Cu | 500 - 1,000 | ||
Total: Wholly-owned operations | Cu | 55,000 - 61,000 | |
Zn | 112,000 - 129,000 | ||
Pb | 35,500 - 41,000 | ||
Ni | 500 - 1,000 | ||
Tenke: 24.0% attributable shared | Cu | 32,600 | $ 1.13 |
a Cash costs remain dependent on exchange rates (€/USD: 1.35, USD/SEK: 6.50) and metal prices (Cu: $3.50, Zn: $0.95). |
b Cash cost is a non-GAAP measure reflecting the sum of direct costs less by-product credits. |
c Production tonnage is based on a 50% attributable-share to Lundin Mining. |
d Lundin Mining's production from Tenke's attributable share was reduced from 24.75% to 24.0%, after approval of changes to TFM's bylaws. |
2012 Capital Expenditure Guidance
Capital expenditures for 2012 are expected to be $410 million, an increase of $40 million over previous guidance primarily as a result of a revision in accounting policy, as described below:
About Lundin Mining
Lundin Mining Corporation is a diversified 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 its Neves‐Corvo mine, along with an equity stake in the world-class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo, which is undergoing expansion to 195,000 tpa copper cathode production.
On Behalf of the Board,
Paul Conibear, 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. 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's 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, 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.
1Operating earnings is a non-GAAP measure defined as sales, less operating costs (excluding depreciation) and general and administrative costs.
2Net cash is a non-GAAP measure defined as available unrestricted cash less long-term debt and finance leases.
FOR FURTHER INFORMATION PLEASE CONTACT:
Sophia Shane Lundin Mining Corporation Investor Relations North America +1-604-689-7842
OR
John Miniotis Lundin Mining Corporation Senior Business Analyst +1-416-342-5565
OR
Robert Eriksson Lundin Mining Corporation Investor Relations Sweden +46 8 545 015 50 www.lundinmining.c