TORONTO, ONTARIO — (Marketwire) — 07/29/11 — Lundin Mining Corporation (TSX: LUN)(OMX: LUMI) („Lundin Mining“ or the „Company“) today reported net income of $57.7 million ($0.10 per share) for the second quarter of 2011, an increase of $15.4 million from the $42.3 million ($0.07 per share)(1) for the second quarter of 2010.
Paul Conibear, President and CEO commented, „While results for the quarter are below our expectations, as a result of lower than expected metal production and higher unit costs, the monthly mine plans going forward particularly at Neves-Corvo, provide for a significantly improved second half. Towards the end of the third quarter we should also expect our first cash returns from Tenke, contributing significantly to our operating cash flows.
At Neves-Corvo, lower grades in the quarter resulted in less metal produced and consequently higher cash costs on a per pound basis. As well, our mid-year plant maintenance shut-down was brought forward to the end of June to coincide with other tie-in activities necessary for the start of commissioning of the new zinc circuit and this also affected Q2 production. The new zinc plant started up on time and on budget; however, given the strong copper prices as compared to zinc, we will utilize the new zinc circuit to process copper ore as soon as commissioning is complete in order to maximize copper production and revenues for the balance of the year. We were pleased with the fact that we mined and milled record tonnes during this quarter and this will assist us in production recovery for the balance of the year.
At Zinkgruvan we treated a high volume of low-grade overflow material that had accumulated over the past year and while this detracted somewhat from planned production we did build up our ore stockpiles on surface to record levels which will allow us to maximize mill throughput through the summer holiday season. We also removed significant amounts of waste stored underground, providing additional in-mine flexibility for mining and ore handling activities going forward. As a result of the added haulage capacity from the recently completed daylight ramp, for the first time in many years, the mine is able to produce at a rate greater than the mill. We are now working on de-bottlenecking the front end of the plant to pursue great capacity from the entire operation.“
Summary financial results for the quarter are as follows:
Highlights
Operational and Financial Highlights
Total production was as follows:
Cash flow from operations does not include cash flow related to Tenke.
Corporate Highlights
Tenke Fungurume
For the quarter ended June 30, 2011, Tenke production was 29,891 tonnes of copper; 34,138 tonnes of copper were sold at an average realized price of $4.08 per pound.
Attributable cash flow from Tenke, including repayments of the EOC facility, was as follows:
Financial Position and Financing
The increase in net cash during the quarter is primarily attributable to cash flow from operations ($102.5 million) offset by investment in mineral property, plant and equipment ($47.3 million) and Tenke Fungurume ($10.5 million).
Outlook
2011 production and cost guidance was released on July 21, 2011 in a news release entitled Lundin Mining Provides Corporate Update and Revised Outlook.
2011 Capital Expenditure Guidance
Guidance for total capital expenditures for the year ($US290 million) is unchanged from that outlined in the Company-s Q1 report. Final decisions on capital investment levels for Tenke Fungurume are ultimately made by Freeport McMoRan, the mine-s operator, and are not yet in place until the expansion feasibility study is complete, although critical path work is already well advanced with early funding. The expansion study is expected to be complete in the third quarter of 2011.
The Q2 2011 unaudited financial statements and management-s discussion and analysis are available on SEDAR () or the Company-s website ().
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 an expansion project at its Neves-Corvo mine along with its equity stake in the world class Tenke Fungurume copper/cobalt project in the Democratic Republic of Congo.
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 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.
Contacts: Lundin Mining Corporation Sophia Shane Investor Relations North America +1-604-689-7842
Lundin Mining Corporation John Miniotis Senior Business Analyst +1-416-342-5565
Lundin Mining Corporation Robert Eriksson Investor Relations Sweden +46 8 545 015 50
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