Lundin Mining Fourth Quarter and Full Year Results
TORONTO, Feb. 15, 2018 (GLOBE NEWSWIRE) -- (TSX:LUN) (OMX:LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”) today reported cash flows of $230.1 million generated
from operations in its fourth quarter of the year and $903.5 million for the year. Net earnings from continuing operations attributable to Lundin Mining shareholders were $133.0 million ($0.18
per share) for the quarter and $371.4 million ($0.51 per share) for the year ended December 31, 2017.
Mr. Paul Conibear, President and CEO commented, “Our operations performed well last year meeting production guidance and beating cash cost expectations. Importantly, this result was underpinned by the Company’s best ever safety performance, and excellent project execution on the various projects we have in progress to enhance value at each of our mines. It was a very constructive year for Lundin Mining as we commissioned the zinc mill expansion at Zinkgruvan, advanced Eagle East ahead of schedule, commenced work on a major zinc expansion at Neves-Corvo and we achieved completion of the initial phase of the Candelaria Los Diques tailings facility well ahead of schedule and significantly under its original budget.
We enter 2018 in excellent position. We are investing in several low-risk, positive return initiatives to further improve the value of our operations, taking a long-term view. Our financial strength, disciplined capital allocation, and focus will enable us to continue to deliver strong shareholder returns through opportunities both in our own assets and externally.”
Summary financial results for the quarter and year-to-date:
|Three months ended||Twelve months ended|
|December 31,||December 31,|
|US$ Millions (except per share amounts)||2017||2016||2017||2016|
|Continuing, attributable net earnings2||133.0||148.7||371.4||92.4|
|Attributable net earnings / (loss) 2||133.0||162.9||426.5||(661.7||)|
|Net earnings / (loss)||154.0||180.2||502.0||(630.2||)|
|Basic and diluted earnings / (loss) per share3||0.18||0.23||0.59||(0.92||)|
|Cash flow from operations||230.1||107.9||903.5||363.2|
|Cash and cash equivalents||1,567.0||715.3||1,567.0||715.3|
|Net cash / (debt)4||1,110.5||(284.1||)||1,110.5||(284.1||)|
1 Operating earnings is a non-GAAP measure defined as sales, less operating costs (excluding depreciation) and general and administrative costs.
2 Attributable to shareholders of Lundin Mining Corporation.
3 Basic and diluted earnings / (loss) per share attributable to shareholders of Lundin Mining Corporation.
4 Net cash / (debt) is a non-GAAP measure defined as cash and cash equivalents, less long-term debt and finance leases, before deferred financing fees.
Full year production for all metals met the Company’s most recent guidance provided in the Company’s MD&A for the three and nine months ended September 30, 2017. Cash costs1 across all operations benefitted from higher by-product metal prices and bettered the Company’s most recent guidance, with the exception of Candelaria’s which was higher by $0.02/lb of payable copper. Capital spending for the year of $478.8 million was modestly lower than the most recent guidance due primarily to the timing of payments.
Candelaria (80% owned): The Candelaria operations produced, on a 100% basis, 183,858 tonnes of copper, and approximately 104,000 ounces of gold and 1,821,000 ounces of silver in concentrate during the year. Copper production was in line with expectations and exceeded the prior year comparable period due primarily to higher copper head grades. Copper cash costs of $1.22/lb for the year were marginally higher than expectations ($1.20/lb), and were better than the prior year due primarily to higher production volumes in the current year.
Average head grades were lower in the fourth quarter as a higher proportion of low-grade ore was processed as a result of a localized slide on the east wall of the open pit which temporarily restricted activities in that area. In line with the improved life-of-mine plan announced November 29, 2017, increased waste stripping was initiated and advances in an effort to accelerate Phase 10.
Commissioning of the Los Diques Tailings Storage Facility (“TSF”) is underway with the first placement of tails deposited several months ahead of schedule in January 2018. Full operation of the Los Diques TSF for tailings deposition is expected in the second quarter of 2018. Total forecast spend on the project remains unchanged at $295 million. Construction of subsequent phases has been initiated early, beginning in the third quarter of 2017 with excellent progress to date.
Eagle (100% owned): Eagle production for the year was in line with most recent guidance producing 22,081 tonnes of nickel and 21,302 tonnes of copper. Quantities were lower than the prior year as a result of planned mine sequencing. Nickel cash costs of $0.93/lb for the year benefited significantly from excellent operating performance and higher by-product prices, and bettered both guidance and the prior year. Record metal recovery was achieved in 2017 with excellent concentrate qualities.
Permit approval for mining of the Eagle East orebody was received during the fourth quarter, and development of the access ramp continues ahead of schedule.
Neves-Corvo (100% owned): Neves-Corvo produced 33,624 tonnes of copper and 71,356 tonnes of zinc for the year, in line with most recent guidance. Zinc production was a new record for Neves-Corvo, while copper production was impacted by lower throughput, grades and recoveries. Copper cash costs of $0.88/lb for the year were significantly better than the prior year comparable period, aided by higher zinc by-product volumes and prices, and were also better than most recent guidance ($1.00/lb).
The Zinc Expansion Project (“ZEP”) investment, to double zinc production at Neves-Corvo, progressed over the year and remains on target to commence production ramp-up prior to the end of 2019, with approximately 50% of the underground materials handling development achieved as of year-end.
Production was affected by rotating strikes during the fourth quarter and the labour dispute has not yet been resolved. Accordingly, there remains a risk to 2018 production targets and the ZEP project schedule due to the possibility of future labour action.
Zinkgruvan (100% owned): Zinc production of 77,963 tonnes for the year was in line with both recent guidance and prior year production. Lead production of 28,324 tonnes was lower than the prior year driven by lower head grades as a result of mine sequencing. Zinc cash costs of $0.31/lb for the year were better than the prior year and most recent guidance, benefitting from higher by-product credits. Following mid-year completion of the 1350 mill expansion project, Zinkgruvan achieved a record total mill throughput of 1,264,000 tonnes in the year.