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Lundin Mining Q4 and full year results

Mining News - Published on Mon, 18 Feb 2019

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Lundin Mining Corporation reported cash flows of USD 44.2 million generated from operations in its Q4 and USD 476.4 million for the year. Net earnings from continuing operations attributable to Lundin Mining shareholders were USD 28.8 million for the quarter and USD 195.9 million for the year ended December 31, 2018. Q4 net earnings include unrealized foreign exchange losses of USD 11.9 million, bond early redemption fee of USD 16.9 million, and other one-time item gains of USD 4.4 million.

Marie Inkster, President and CEO commented “We are pleased with our operational performance in 2018. We beat our overall safety performance target for the sixth consecutive year and achieved or exceeded latest production and cash cost guidance for all metals at all operations. Significant progress was made advancing our growth initiatives at Candelaria, Eagle East and Neves-Corvo Zinc Expansion Project. We are well positioned to complete these projects in 2019 and early 2020 to deliver improved production and free cash flow over the coming years. We enter 2019 in a strong financial position with approximately $800 million of cash, nominal debt and $1.4 billion of liquidity. Strategic focus remains on value creation through disciplined capital allocation, investing in our existing assets and potential external acquisition opportunities.”

Operational Performance
All metal production and cash costs across the operations achieved or exceeded the Company’s most recent annual guidance. Capital spending for the year of $751.8 million was also in-line with most recent guidance. Work on projects at Candelaria and Eagle continued with excellent progress achieved to date. Project work on the Zinc Expansion Project (“ZEP”) in Portugal fell behind schedule in 2018 and actions were taken during the fourth quarter to improve project execution.

Candelaria (80% owned): The Candelaria operations produced, on a 100% basis, 134,578 tonnes of copper, approximately 78,000 ounces of gold and 1.2 million ounces of silver in concentrate during the year. Copper production was lower than the prior year due to planned mining and processing of lower grade materials. Copper cash costs of $1.68/lb were better than full year guidance, but higher than the prior year. Lower metal production combined with higher diesel and labour costs contributed to the higher per unit production costs in the current year.

The Candelaria Mill Optimization Project progressed according to plan with construction approximately 40% complete at year-end. Ramp-up of the Candelaria Underground North Sector continues to achieve excellent results and is currently mining approximately 10,200 tonnes per day on average. The development of the South Sector continues and has advanced further than planned. With the advance in development, the project timeline is being reviewed to consider possible advancement in the production start-up date of year end 2019.

Approximately 60% of the new open pit mine fleet has been received and placed in service, with the remaining equipment expected to be delivered in 2019 and 2020.

Eagle (100% owned): Eagle production for the year met or exceeded most recent guidance, producing 17,573 tonnes of nickel and 17,974 tonnes of copper. Quantities were lower than the prior year as a result of planned mine sequencing. Nickel cash costs of $1.01/lb for the year were better than guidance but marginally higher than the prior year as higher operating per unit costs were driven by lower sales volumes.

Development of the Eagle East access ramp continues ahead of the original schedule with first ore expected into the mill in the fourth quarter of 2019. Underground definition drilling from the access ramp to Eagle East is ongoing.

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Posted By : Rabi Wangkhem on Mon, 18 Feb 2019
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