TORONTO, Oct. 24, 2018 (GLOBE NEWSWIRE) – (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”) today reported cash flows of $140.9 million generated from operations in the third quarter of the year. Net earnings from continuing operations attributable to Lundin Mining shareholders were $7.0 million ($0.01 per share) for the quarter.

Marie Inkster, President and CEO commented, “Although the impact of reduced metal prices affected the quarter earnings, the underlying operational performance at the mines was excellent and enabled the generation of more than $140 million of operating cash flow.

The reinvestment programs at Candelaria are advancing on plan and improvement in mining rates was achieved with good contractor performance management and ongoing delivery of new open pit equipment. Major underground and surface construction is underway on the Neves-Corvo Zinc Expansion Project, though overall progress continues to be impacted by contractor under-performance. Development of Eagle East continues to outperform and is on pace to produce first ore ahead of schedule and within budget in early 2020. ”

Summary financial results for the quarter and year-to-date:
hree months ended Nine months ended
September 30, September 30,
US$ Millions (except per share amounts) 2018 2017 2018 2017
Revenue 379.7 601.7 1,317.8 1,544.2
Gross profit 59.6 260.6 364.6 567.9
Continuing, attributable net earnings1 7.0 131.8 167.1 238.4
Attributable net earnings / (loss) 1 7.0 131.8 167.1 293.4
Net earnings / (loss) 9.1 156.6 183.7 348.0
Basic and diluted earnings / (loss) per share2 0.01 0.18 0.23 0.40
Cash flow from operations 140.9 249.5 432.1 673.4
Cash and cash equivalents 1,469.9 2,152.9 1,469.9 2,152.9
Net cash 3 1,031.7 1,145.5 1,031.7 1,145

Highlights

Operational Performance
Total copper and nickel production are on target to achieve annual guidance. Zinc production for the year is expected to be within guidance, although the range has been lowered to reflect grades realized to date at Zinkgruvan. Planned lower grades at Candelaria led to lower copper production in the quarter compared to the third quarter of 2017. Neves-Corvo had another excellent quarter with year-to-date copper production already exceeding full year 2017 production. Work on projects at Candelaria and Eagle continued throughout the quarter with excellent progress achieved to date.

Candelaria (80% owned): The Candelaria operations produced, on a 100% basis, 35,323 tonnes of copper, and approximately 20,000 ounces of gold and 330,000 ounces of silver in concentrate during the quarter. Copper production in the quarter was lower than the prior year comparable period due to planned mining and processing of lower grade materials. Copper cash costs1 of $1.64/lb for the quarter were better than full year guidance, but higher than the prior year quarter. Lower metal production combined with higher diesel and labour costs contributed to the higher per unit production costs in the current quarter.

The Candelaria Mill Optimization Project progressed according to plan during the quarter with construction approximately 32% complete. Ramp-up of the Candelaria Underground North Sector continues to achieve excellent results, mining approximately 9,700 tonnes per day on average throughout the third quarter. All purchase orders for open pit mine fleet replacement equipment have been placed, and thirty eight of eighty five pieces of equipment have already arrived at site.

Eagle (100% owned): Eagle produced 4,697 tonnes of nickel and 5,178 tonnes of copper during the quarter, on track to achieve full year guidance. Nickel quantities were lower than the prior year while copper quantities were higher, both a result of planned mine sequencing. Nickel cash costs of $0.87/lb for the quarter were better than full year guidance but higher than the prior year comparable period as higher operating per unit costs were driven by lower sales volumes.

Development of the Eagle East access ramp continues ahead of schedule with first ore scheduled into the mill by 2020. Underground definition drilling from the access ramp in Eagle East is ongoing and 4,200 metres have been drilled to September 30, 2018.

Neves-Corvo (100% owned): Neves-Corvo produced 11,746 tonnes of copper and 18,905 tonnes of zinc for the quarter. Copper production in the quarter was higher than the prior year comparable period due to improved mine productivity and higher mill throughput driven by improvements in mine plan execution, and to a lesser extent, higher head grades. Zinc production was slightly
lower (3%) than the prior year comparable period, as zinc head grades were negatively impacted by mine resequencing. Copper cash costs of $1.48/lb for the quarter were higher than full year guidance and the prior year period due to lower by-product credits, but were partly aided by lower per unit mine, mill, and administration costs associated with higher copper sales volumes.

Major surface and underground construction activities are underway on the Zinc Expansion Project (“ZEP”). Approximately 40% of major equipment deliveries have been received with all equipment expected to be received on schedule. Underground mechanical conveyor installation commenced during the quarter. The SAG mill building and flotation building concrete is advancing with SAG mill assembly beginning in October. Overall progress continues to be impacted by contractor under-performance, with the project now expected to commence production ramp-up in the first quarter of 2020. The total forecast cost of the project is currently €270 million, though the Company will be undertaking a third-party project schedule and cost review. Capital expenditure guidance for 2018 has been lowered to $110 million (from $130 million) to reflect the deferral of certain surface and underground expenditures to 2019.

Zinkgruvan (100% owned): Zinc production of 17,157 tonnes and lead production of 5,515 tonnes were lower than the prior year quarter driven by lower head grades as a result of mine sequencing and higher than planned dilution and ore loss. The operation is focused on mine stope design optimization and ore tracking in order to improve these factors. Zinc cash costs of $0.35/lb for the quarter were better than full year guidance, but higher than the prior year comparable quarter due primarily to higher per unit mine, mill and administration costs stemming from lower sales volumes.

Financial Performance
•Revenue for the quarter ended September 30, 2018 was $379.7 million, a decrease of $222.0 million in comparison to the third quarter of the prior year ($601.7 million). The decrease was mainly due to lower sales volumes ($136.9 million) and lower realized metal prices and price adjustments ($80.9 million).

On a year-to-date basis, revenue was $1,317.8 million, lower than the $1,544.2 million for the nine months ended September 30, 2017. The decrease was mainly due to lower sales volumes ($293.4 million), partially offset by higher realized metal prices, net of price adjustments ($38.6 million) and lower treatment and refining charges ($27.9 million).
•Cost of goods sold for the quarter ended September 30, 2018 was $320.1 million, lower than the third quarter of the prior year ($341.2 million). Lower sales volumes ($81.3 million) were partially offset by higher per unit production costs ($53.7 million).

On a year-to-date basis, cost of goods sold was $953.3 million, slightly lower than the nine months ended September 30, 2017 ($976.3 million). Lower sales volumes ($200.0 million) were partially offset by higher per unit production costs ($157.8 million).
•Gross profit for the quarter ended September 30, 2018 was $59.6 million, a decrease of $201.0 million in comparison to the third quarter of the prior year ($260.6 million). The decrease was primarily due to lower sales volumes ($55.6 million), lower realized metal prices and price adjustments ($80.9 million) and higher per unit production costs ($53.7 million).

On a year-to-date basis, gross profit was $364.6 million, a decrease of $203.3 million in comparison to the nine months ended September 30, 2017 ($567.9 million). The decrease was primarily due to lower sales volumes ($93.4 million) and higher per unit production costs ($157.8 million), partially offset by higher realized metal prices, net of price adjustments ($38.6 million).
•Net earnings for the quarter ended September 30, 2018 were $9.1 million, a decrease of $147.5 million in comparison to the three months ended September 30, 2017 ($156.6 million). Comparative earnings were lower due to:

–lower gross profit ($201.0 million); partially offset by
–lower net tax expense ($55.3 million).

On a year-to-date basis, the Company reported net earnings of $183.7 million, a decrease of $164.3 million in comparison to the nine months ended September 30, 2017 ($348.0 million). Comparative earnings in the current year were lower due to:

–lower gross profit ($203.3 million); and
–lower earnings from discontinued operations ($55.0 million); partially offset by
–lower net tax expense ($58.8 million).
•Cash flow from operations for the quarter ended September 30, 2018 was $140.9 million, a decrease of $108.6 million in comparison to the third quarter of the prior year ($249.5 million). The decrease was primarily due to lower sales revenues ($222.0 million), partly offset by lower current income tax expense ($63.6 million) and comparative change in non-cash working capital ($48.2 million).

On a year-to-date basis, cash flow from operations was $432.1 million, a decrease of $241.3 million in comparison to the nine months ended September 30, 2017 ($673.4 million). The decrease was primarily due to lower sales revenues ($226.4 million), higher production costs ($58.5 million), and comparative change in non-cash working capital ($38.0 million), partly offset by lower current income tax expense ($88.6 million).

Financial Position and Financing
•Cash and cash equivalents decreased $42.6 million during the quarter from $1,512.5 million at June 30, 2018 to $1,469.9 million at September 30, 2018. The decrease is primarily a reflection of investments in mineral properties, plant and equipment of $173.7 million and shareholder dividends of $16.9 million, partially offset by cash generated from operating activities of $140.9 million.

For the nine months ended September 30, 2018, cash decreased by $97.1 million due primarily to investments in mineral properties, plant and equipment of $517.7 million and shareholder dividends of $50.6 million, partially offset by cash generated from operating activities of $432.1 million and proceeds from the sale of marketable securities of $35.4 million.
•Net cash position at September 30, 2018 was $1,031.7 million compared to $1,063.5 million at June 30, 2018 and $1,110.5 million at December 31, 2017.


•As at October 24, 2018, cash and net cash were approximately $1.4 billion and $1.0 billion, respectively.

Outlook

2018 Production and Cost Guidance
Production and cash cost guidance for 2018 has been revised from that disclosed in our Management’s Discussion and Analysis for the three and six months ended June 30, 2018. Copper cash costs at Neves-Corvo have been increased from $1.20/lb to $1.30/lb to reflect lower forecast zinc by-product prices than previously forecast. A revision to Zinkgruvan’s zinc production reflects lower realized grades, and a revision to Zinkgruvan’s cash costs reflects year-to-date performance. The remaining revisions aim to provide a tighter production range based on results to date.


2018 Guidance Previous Guidancea Revised Guidanceb
(contained tonnes) Tonnes C1 Cost Tonnes C1 Cost
Copper Candelaria (80%) 104,000 - 109,000 $1.70/lb 107,000 - 109,000 $1.70/lb
Eagle 15,000 - 18,000 16,000 - 18,000
Neves-Corvo 42,000 - 45,000 $1.20/lb 43,000 - 45,000 $1.30/lb
Zinkgruvan 1,000 - 2,000 1,000 - 2,000
Total attributable 162,000 - 174,000 167,000 - 174,000
Zinc Neves-Corvo 72,000 - 75,000 73,000 - 75,000
Zinkgruvan 76,000 - 79,000 $0.45/lb 74,000 - 76,000 $0.40/lb
Total 148,000 - 154,000 147,000 - 151,000
Nickel Eagle 14,000 - 17,000 $1.10/lb 15,000 - 17,000 $1.10/lb
a. Guidance as outlined in our Management’s Discussion and Analysis for the three and six months ended June 30, 2018.
b. Cash costs remain dependent upon exchange rates and metal prices. Exchange rate assumptions for the remainder of the year are forecast at €/USD:1.20, USD/SEK:8.75, and USD/CLP:650. Metal price assumptions for the remainder of the year are forecast at Cu: $2.75/lb, Zn: $1.10/lb, Ni: $6.00/lb, Au: $1,200/oz, Pb: $0.95/lb, and Ag: $16.00/oz.


2018 Capital Expenditure Guidance
Total capital expenditures, excluding capitalized interest, are forecast to be $750 million, $45 million lower than previously disclosed. Spend on the Candelaria Mill Optimization Project has been reduced to reflect a deferral of certain expenditures to 2019. Neves-Corvo’s sustaining expenditures forecast has been reduced by $10 million but is highly dependent on the delivery of mobile equipment purchases. A reduction in the Zinc Expansion Project guidance reflects slower than anticipated project progress, deferring $20 million of expenditures to 2019.


Revised Capital Expenditure Guidance
($ millions) Previous Guidancea Revisions Revised Guidance
Candelaria (100% basis)
Capitalized Stripping 215 - 215
Los Diques TSF 60 - 60
New Mine Fleet Investment 120 - 120
Candelaria Mill Optimization Project 30 (10 ) 20
Candelaria Underground Development 15 - 15
Other Sustaining 80 - 80

Candelaria Sustaining 520 (10 ) 510
Eagle Sustaining 20 (5 ) 15
Neves-Corvo Sustaining 55 (10 ) 45
Zinkgruvan Sustaining 40 - 40
Total Sustaining Capital 635 (25 ) 610
Eagle East 30 - 30
ZEP (Neves-Corvo) 130 (20 ) 110
Total Expansionary Capital 160 (20 ) 140
Total Capital Expenditures 795 (45 ) 750
a. Guidance as outlined in our Management’s Discussion and Analysis for the three and six months ended June 30, 2018.


2018 Exploration Investment Guidance
Due largely to the inability to obtain sufficient drill rigs to meet our exploration plans, expenditures are expected to be approximately $75 million, or $8 million lower than previously guided for 2018.
The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse Regulation. This information was publicly communicated on October 24, 2018 at 6:30 p.m. Eastern Time.


Lundin Mining Announces Declaration of Dividend

October 24, 2018

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TORONTO, Oct. 24, 2018 - (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”) today announced that its Board of Directors has declared a dividend of CAD$0.03 per share, payable on December 19, 2018, to shareholders of record at the close of business on December 7, 2018. This dividend qualifies as an ‘eligible dividend’ for Canadian income tax purposes. The declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors.

Dividends on shares traded on the Toronto Stock Exchange (“TSX”) will be paid in Canadian Dollars (“CAD”) on December 19, 2018.

Dividends on shares traded on Nasdaq Stockholm will be paid in Swedish kronor (“SEK”) in accordance with Euroclear principles on December 20, 2018. To execute the payment of the dividend, a temporary administrative cross-border transfer closure will be applied by Euroclear from December 6, 2018 up to and including December 7, 2018, during which period shares of the Company cannot be transferred between TSX and Nasdaq Stockholm.
Notice to all Non-Canadian Resident Shareholders

In 2012, the Canada Revenue Agency (“CRA”) changed how the tax withholding rate applied to dividend payments made to non-residents is determined. The CRA now requires a certification of residency from each shareholder so that the preferred tax treaty rate can be applied where applicable to persons resident in countries which have a tax treaty with Canada.

Shares traded on Toronto Stock Exchange

Form NR301 will be mailed to any new Registered non-resident shareholders as at the dividend record date of December 7, 2018, by Computershare Investor Services Inc. (“Computershare”). In order to receive the preferred treaty rate, you must complete and mail back the form as soon as possible. Failure to supply a completed NR301 form will result in Computershare withholding the statutory 25% withholding tax rate on any payments to Registered non-resident shareholders. You can also download the form at https://cda.computershare.com/Content/4f677775-5e6c-4e64-a695-a5785771fec3. Instructions on how to correctly complete the NR301 are on the back of the form. Shareholders who hold their shares through a broker should contact their broker directly. They do not need to return a form to Computershare. If you have already completed Form NR301, you do not need to complete a new form.
Shares traded on Nasdaq Stockholm

Dividend payments will be made net of 25% Canadian withholding tax and any other deemed applicable country of residence tax. Holders who are entitled to reclaim taxes applicable under tax treaties should contact the applicable tax authorities, directly. Shareholders who hold their shares through a nominee should contact their nominee.