Lundin Mining Corporate Presentation

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Lundin Mining Corporate Presentation Powered By Docstoc

                Phil Wright
            Chief Executive

            Corporate Presentation
                   November 2009

                         Cautionary Statements
            Caution Regarding Forward Looking Statements

                 p                                    g
            This presentation contains forward-looking statements. These forward-looking   g
            statements are not based on historical facts, but rather on current expectations and
            projections about future events. These forward-looking statements are subject to risks
            and uncertainties. These risks and uncertainties could cause actual results to differ
            materially from the future results expressed or implied by the forward-looking statements.

            Caution Regarding Inferred Resources

                                                Measured , Indicated          Inferred
            This presentation uses the terms "Measured", "Indicated" and "Inferred" Resources. U.S.
            investors are advised that while such terms are recognized and required by Canadian
            regulations, the Securities and Exchange Commission does not recognize them.
            "Inferred Resources" have a great amount of uncertainty as to their existence, and great
            uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any
            part of an inferred resource will ever be upgraded to a higher category. Under Canadian
            rules, estimated of Inferred Resources may not form the basis of feasibility or other
            economic studies. U.S. investors are cautioned not to assume that all or any part of
            Measured or Indicated Resources will ever be converted into reserves.

Corporate      Operations             Projects          Exploration          Growth

 About Lundin Mining
     • Experienced                         • Excellent evaluation                • Strong operations team
     • Successful track record               capabilities                          in multiple jurisdictions
     • Strong backing of major             • Extensive international             • Exploration team covers
       shareholder                             p
                                             experience                                      ;
                                                                                   Americas; Europe;p ;
                                           • Large-scale feasibilities             Africa; SE Asia/Australia
                                           • Project management
     Executive                              Evaluation                           Execution
     Team                                   Team                                 Team

Lukas Lundin,       Phil Wright,           Joao Carrelo,       Marie Inkster,    Paul Conibear,       Neil O’Brien,
  Chairman             CEO                  EVP/COO                CFO           SVP Corp Dev          SVP Expl

           Symbol/Exchange         LUN/TSX,                Share Price                C$4.47
                                   LUMI/OMX                                           SEK 28.70
           Shares OS (M)           579.5                   52 Wk High/Low             C$4.77/$0.69
           Share FD (M)            589.2                   Mkt Cap (C$M)              C$2.6 billion

Corporate         Operations               Projects         Exploration         Growth

Two Key Asset Groups

                Europe                         Tenke                 Business 
                                                                   D l         t
            100% ownership                      24.75%
            3 operating mines                 Tier 1 asset             What’s next
                          l d
            Copper, zinc, lead,         Freeport operator
                 nickel                   Copper, cobalt

Corporate          Operations      Projects         Exploration   Growth

Asset Location

Corporate   Operations   Projects   Exploration   Growth

 Production Profile and Earnings History
               Production Profile                                                           Operating Results
ktpa                                                                               $mn
                 Copper           Zinc            Lead      Nickel                                Earnings      Cashflow
175                                                                                700

150                                                                                600

125                                                                                500

100                                                                                400
75                                                                                 300

50                                                                                 200

25                                                                                 100

     0                                                                                 0
            2005          2006          2007         2008        2009                      2005   2006   2007   2008   9 mth
                                                                F'Cast                                                 2009
         * Excludes approx 17,000t attributable
           production ex Tenke

Conservative capital structure:
             Low debt (4.5% debt-to-equity at September ‘09)
             Structure well matched to existing portfolio – no surplus

Corporate                 Operations                 Projects            Exploration       Growth

European Business
                                         All operations cashflow positive
            Neves-Corvo                         g                y y
                                         Leverage to commodity cycle
                                         Good internal growth prospects
                                                j                political risk
                                         Stable jurisdiction/low p
            Zinkgruvan                   Cash cost competitive


Corporate   Operations   Projects   Exploration    Growth

Neves-Corvo Mine: Copper/Zinc: Portugal
                                    Estimated 10+ year mine life
                                    E i     d 10         i lif
                                    2009 production estimate:
                                        ,       pp
                                    o 84,000t copper
                                    2009 cash cost estimate:
                                    o $1.10/lb of copper*
                                    Zinc        i        j t to d        i i
                                    Zi expansion project t produce minimum of     f
                                    50,000 tpa: first production expected Q1 ‘11;
                                    estimated cost of €43 mn
                                    Lombador is a world-class zinc deposit with
                                    emerging copper potential. Pre-feasibility
                                    Neves-Corvo remains under-explored

                                * Based on €/US$ 1.40.

Corporate   Operations   Projects       Exploration      Growth

Exploration: Neves Corvo                          Drillhole From (m) To (m) Length (m)   Cu %     Zn %
                                                  NK26      1,230.0   1,252.0    22.0      5.89    0.22
                                                  NK26-2    1,143.9   1,155.5    11.6      3.13    0.10
                                                  NJ26      1,258.5   1,264.0     5.5      4.20    0.10
                                                  NJ26-2    1,122.0   1,154.0    32.0      3.81    1.37
                                                     plus   1,173.0   1,196.0    23.0      0.40    7.28
                                                     plus   1,214.0   1,250.0    36.0      0.41    5.95
                                                     plus   1,263.0   1,283.0    20.0      2.84    0.09
                                                  NG36-1    1,248.4   1,288.8    40.4    assays pending
                                                  NH38      1,367.8   1,397.2    29.4    assays pending

Corporate   Operations   Projects   Exploration            Growth

 Zinkgruvan Mine: Zinc/Lead/Copper: Sweden
                                        Estimated 10+ year mine life
                                        2009 production estimate:
                                        o 72,000t zinc
                                        o 34,000t lead

                                                h t ti t
                                        2009 cash cost estimate:
                                        o 30c/lb of zinc

                                        Further throughput increases possible
                                        Copper project continues within budget
                                        and is on track for first copper
                                        production in Q2 ’10


Corporate   Operations   Projects       Exploration        Growth

Aguablanca Mine: Nickel/Copper: Spain
                                    Estimated 5 year mine life
                                    2009 production estimate:
                                    o 7,200t nickel
                                    o 7,000t copper

                                    2009 cash cost estimate:
                                    o $5.00/lb of nickel

                                                   ndergro nd
                                    Potential for underground mine to
                                    supplement open-pit :under

Corporate   Operations   Projects   Exploration       Growth

Tenke Fungurume Investment
                                             24.75% equity interest
                                             Large, long-life, low-cost
                                             Large long-life low-cost, high-
              Tenke                          growth asset
            Fungurume                        Potential to be one of the
                                             world’s largest producers of
                                             copper and cobalt
                                             F        t         t
                                             Freeport iis operator
                                             Higher political risk

Corporate   Operations   Projects   Exploration    Growth

Tenke Fungurume – Phase I Built

Corporate   Operations   Projects   Exploration   Growth

Tenke Copper Production

Corporate   Operations   Projects   Exploration   Growth

Tenke Overview– Lundin - 24.75% equity interest
     $                                      y      p
     $1.8 billion construction substantially complete           Solution loaded with Copper
     First shipment of copper cathode in April; First
     saleable cobalt produced in May
     Capacity of 115,000 tpa of copper already
     reached in September - 9,000 tpa of cobalt
     expected by year end
     Cash cost expected to be around 50¢/lb of
     copper at $ cobalt ($2.00/lb change in average p of
        pp      $10         ($        g          g price        Solution loaded with Cobalt
     cobalt changes net cash costs by 12¢/lb)
     Excess overrun cost facility at September 30,
     2009 was $216 6 million – to be paid back to
     FCX through preferential sweeps from first
     available net cash flows

Corporate        Operations          Projects   Exploration   Growth

Tenke – A Mining District
      Tenke Fungurume
        Concessions                                                                                                     Airstrip

                                                                                                                Construction Village
                                   Overburden Storage
         Plan Area
                                                          Processing Facility
     Tenke      Fungurume   Tailings Pond

        Fwaulu Deposits                                  Kwatebala Deposit
                                                                                                                Power Substation
                                                   Dipeta Syncline Exploration
                            Tenke Deposits
                                                                                                                Fungurume Village

                                     Dipeta Syncline

                                                                                            40 years of oxides from
 Pumpi Deposits                                                                                just these 3 deposits

                                            Facilities                          National Road             220 kV Power Line
                 5 km
                                            Copper Deposits                     Rail Line                 120 kV Power Line

Corporate                    Operations             Projects              Exploration           Growth

Tenke – Exploration                                  F 005 N      F 104 N
                                                                            F 103 N   F 112 N

                                      Oxide Ore
     Only half the concession has
     been explored
                                         Mixed Ore
     20 deposits have been drilled
     but mineral resources only
     completed for 7, mineral

                                              Sulfide Ore

     reserves only completed for 5.            Bearing
     Expansion feasibility studies                   p
                                               At Depth
     now commencing.
     Much remains to be done before there is a
     comprehensive understanding of the full
     mineral inventory including: size; and the
     break-down between oxide, sulphide and
     mixed ores.
Corporate      Operations     Projects       Exploration       Growth

Tenke – Distribution of Benefits
                   Direct Benefits
                                                                           Tenke agreements fair, equitable,
    57% of Direct Benefits stay within DRC
                                                                           comply with Congolese laws, and
                                                                           enforceable without modifications
                             TF Holdings                                   Dialogue continues with DRC
                                                                           authorities to reach resolution
             11%                                                           In addition to agreement
                         46%                                               commitments: Tenke investments
                        DRC                                                in social programs and
                     Government                                            infrastructure rebuilding are
                                                                                    d t d         l
                                                                           unprecedented iin scale and d
$2 copper & $10 cobalt
*    direct benefits to the DRC include taxes, royalties and dividends

Corporate             Operations               Projects             Exploration    Growth

Tenke – Current Focus
     Optimise existing facilities
     Continue to define district through exploration
     Advance feasibility study in Q4 ‘09 on iincrementall expansion/de-
     Ad       f ibilit t d i                         t          i /d
                 y       p
      o Relatively low capital
      o Increase current capacity by 50%

     Exploration results & infrastructure development to drive future major

          Tenke-Fungurume is a mining district comprising multiple deposits.
                   g                g             p     g      p     p
     Expansion timing cannot be completely disconnected from Contract Review

Corporate        Operations      Projects   Exploration   Growth

Corporate and Business Development
                                         Strategically we remain active
                                         portfolio managers and are looking
                                         to upgrade our base metal assets
                                         and investments
            What’s Next                             p       g
                                         With Europe running well and
                                         Tenke in excellent hands, we are
                                         increasing our corporate and
                                         business development activities
                                         New SVP of Corp Development
                                         appointed: Mr. Paul Conibear
                                         Our focus is base metals

Corporate    Operations   Projects   Exploration   Growth

Lundin Mining Summary
                        (             )
     In the short-term (<12 months) we remain cautious with a continued focus on
     tight expenditure controls
     In medium to longer term, supply constraints expected to emerge with the
        t ti f b            t     i     to      i ifi tl higher
     potentiall for base metall prices t move significantly hi h
     All our operations are cashflow positive and can remain free cashflow
     positive at the sort of prices that we experienced at the bottom of the trough

Lundin offers:
  Si ifi t leverage t lleverage to copper and zinc markets
  Significant l         to          t           d i       k t
  Stable operations and cashflow in Europe with good internal growth options
                world-class                                   mine-life
  Exposure to world class Tenke copper/cobalt project: long mine life and
  potentially one of the largest/lowest-cost copper producers
  Conservative capital structure

Corporate     Operations     Projects     Exploration   Growth
                                            May 15, 2009


                                Corporate Presentation
      2009 Annual Meeting of   Shareholders2009