TORONTO Sep 4, 2015 (Thomson StreetEvents) -- Edited Transcript of Lundin Mining Corp earnings conference call or presentation Thursday, October 31, 2013 at 12:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Paul Conibear Lundin Mining Corporation - President, CEO, Director * Marie Inkster Lundin Mining Corporation - SVP, CFO ================================================================================ Conference Call Participants ================================================================================ * Tom Meyer CIBC World Markets - Analyst * Gustav Sandstrom Erik Penser Bankaktiebolag - Analyst * Orest Wowkodaw Scotia Bank - Analyst * David Charles Dundee Capital Markets - Analyst * Oscar Cabrera BofA Merrill Lynch - Analyst * Johannes Grunselius ABG Sundial Collier - Analyst * Alex Terentiew Raymond James Financial Services, Inc. - Analyst * Tatinger Gole Citigroup - Analyst * Greg Barnes TD Newcrest/Waterhouse Securities - Analyst * Pierre Vaillancourt Macquarie Securities - Analyst * Steve Versel RBC Capital Markets - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good morning ladies and gentlemen, welcome to the Lundin Mining Q3 Conference Call. I would now like to turn the meeting over to Mr. Paul Conibear, President and Chief Executive Officer. Please go ahead, Mr. Conibear. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [2] -------------------------------------------------------------------------------- Thank you Operator, and thank you everybody for attending our Q3 call for Lundin Mining today. To assist me in answering any questions that we can, at the end of the presentation, we have with us on the call today Marie Inkster, our Senior Vice President and Chief Financial Officer. We also have Paul McRae who is our Senior Vice President of Projects, and Paul is currently resident in Marquette, Michigan, and responsible for the successful execution of the new Eagle Mine investment. We also have Steve Gatley, our Vice President of Technical Services, who will assist in answering any operating questions if there are any at the end of the presentation. In regards to our performance in Q3 and year-to-date here, we're really basically on track on production from our mines, and in the quarter achieved our objectives. The copper production at Neves-Corvo was in line with what we expected, and at Aguablanca and at Zinkgruvan who have small copper production, we exceeded expectations during the quarter. Aguablanca grades and recoveries were better than expected and that results in us being able to improve our production guidance for both copper and nickel from this small mine for the year. We did have higher throughput through the copper circuit at Zinkgruvan and consequently, we are able to improve our guidance for copper production from Zinkgruvan as well. On zinc, Zinkgruvan mine in Sweden, production was in line with expectations and better-than-expected zinc production coming from Neves-Corvo. We've had a couple challenges in Q1 and Q2 in our zinc production at Zinkgruvan. Those have been resolved and we had much better production, to back to planned levels and catching up on production for zinc and lead during Q3. At Neves-Corvo on zinc, we had another quarterly record and that was contributed to by the big high tonneage bulk stopes that we're now mining with better grades of zinc and better recoveries in Lombador. On a cash for operating costs basis at Neves-Corvo, some disappointments during the quarter there, really contributed by lower grade, lower recoveries. Consequently, and year-to-date, we've had lower byproduct credits than expected and we have revised our guidance from $1.80 per pound of copper produced to a C1 of $1.90 for the year for Neves-Corvo. On the positive side, both at Aguablanca and Zinkgruvan, we've had very good performance on a cash operating cost basis for the quarter and year-to-date we are able to now revise and improve our guidance on a cash operating cost at Aguablanca from $5.00 nickel to $4.50. And I think that may still be on the conservative side if we continue on the trends we've seen at that very well-run mine in southern Spain. In Zinkgruvan we had great catch-up on the returns from the mine due to good grades and good production so we maintained our most recent guidance at $0.30 per pound of zinc. At Tenke, which is very capably operated by Freeport, we had another very good quarter, putting more mill throughput through than nameplate. Cash operating costs were completely in line with expectations at about $1.23, $1.24 per pound of copper produced, and cash distributions back to the partners, Freeport and ourselves to repay project debt for Lundin, it was $38 million for the quarter and totaling $110 million year to date, so significantly improving our bottom line on our balance sheet. Financial highlights, revenues for the quarter from our own operations, $176 million, net income of $28 million. Operating cash flow lower than expected. From our own mines, we were at $39 million, which is $0.07 per share. That does not include the cash contributions from Tenke which I've already mentioned. We're very pleased obviously with those steady returns that are coming back and we'd see those returns at current copper prices continuing at the same level for the remainder of the year and next year. Our finance team has landed an outstanding expansion to our credit facility. I think if you benchmark the $600 million that we have available to the Company, the flexibility of the terms and the interest rates and holding costs, you'll find it's one of the best facilities of that level that's been landed in our peer group for quite some time. And that's facilitating I think a very strategic financing mechanism for the Eagle project, which is advancing. We now have net debt of about $71 million at the end of the quarter. Just taking a look at the physical changes, this is year-upon-year, so Q3 2013 versus Q3 2012. On copper, you can see throughput up, grades definitely down from last year, and consequently lower recovery. On lead, improved throughput. Lower grades, and consequently lower recovery. Zinc at aggregate up with better throughput, slightly lower grades, but better recovery, and on nickel very consistent improved performance there on throughput, grade and recovery from Aguablanca. Taking a look at earnings, obviously some disappointments from expectations for the quarter. Both metal price and adjustments, costs up at Neves-Corvo in the quarter, and negative contributions from foreign exchange. But Aguablanca, once again, contributing positively on our earnings. I've already mentioned a little bit on cash operating costs. You can see year-upon-year the differences by basically by mine by commodity, here. guidance now $1.90 so we're still on a pretty decent part of the cost curve at Neves-Corvo. Even given where we got to in the last quarter. Zinkgruvan continuing to be excellent, Aguablanca very good and Tenke steady in Tier 1. Taking a look at our production expectations, in aggregate, Lundin Mining including our contribution from Tenke is expected to benefit from a little bit more copper than we expected at the beginning of the year. So, in aggregate, our guidance is improved at the top end to 115,000 tonnes of copper contributing to the Company. Over 130,000 tonnes of zinc, lead steady in the 33,000 to 36,000 tonnes, which is consistent with our original guidance. And significant improvement on a percentage basis of nickel production now heading towards 7,000 tonnes of nickel for the year. And the cash operating costs of $4.50 or lower, our margins are very good from that small mine. A couple slides on each of the operations, here. Production as I mentioned was down a little bit, and cash operating costs are up. That was primarily because of lower average copper grades, 2.4%, and we had some difficult ore zones that we were working in both Zambujal and upper Lombador where we had some increased impurities that took us more work in a flotation circuit to produce the saleable [con] and consequently recoveries were down to clean up that con. I think we're back on track here for Q4, but something we're obviously watching more closely. As noted, zinc production achieved a new record and it's really those big stopes in high grade with good recoveries coming on now in Lombador and you'll see a trend of that improving our zinc performance here as the year advances and into 2014. We maintain our guidance in copper at 50,000, 55,000 tonnes, and that's really a trend that you'll see moving forward so the next ten years we would expect, and zinc production increasing as time goes by. I highlighted in the Q2 call that we had some positive initial results from some shaft debottlenecking studies. We continued to look at how Lombador could contribute to significantly more zinc production and steady copper production through a debottleneck shaft. We're looking at the interconnecting underground materials handling. We had already taken delivery of a new SAG mill which had been contemplated for a zinc expansion a few years ago, so we're dusting off some of those studies but looking at things in a low capital intensity level with the concept of seeing whether we can debottleneck overall systems underground, expand the zinc plant and be at a higher level conceptually by 2017 so those studies do progress. And they've -- those studies have definitely been encouraged by underground expiration activity that we've had this year in lower Corvo, looking at the possibility of some higher-grade copper to be able to add to the inventory next year. And greater effort with some exploration drifts, looking for both more higher grade zinc and more copper in Lombador. Those would be I think things to look forwards for next year. Turning to Zinkgruvan in Sweden, pretty good production, consistent really with the levels that we've seen over the last couple years of 18,000 to 20,000 tonnes of zinc a quarter with good byproduct credits from lead and from copper. Volumes were back on track, grades, recoveries back on track, cash operating costs at $0.06, the lowest that we have had since 2007. So, that's helped make some corrections that we needed to catch up on. And from Q1, Q2, and Q4, looks like it's going to be a typical quarter for the Zinkgruvan mine. Nothing particularly special I think to look out for here, other than relatively steady production here in the near term. We had looked at replacing the front end of the plant, here. We've deferred that, I think it's appropriate with today's zinc price and the metal inventories that continue to be relatively high in the LME. We defer that, and we'll reassess it towards the end of next year probably. I've mentioned a few times Aguablanca's performance. A small mine, but being very well-run. It had all aspects of that mine are being well-run. We had no lost time accidents in the whole quarter. We've outperformed on tonnes and on grades and on recoveries, both nickel and copper and a good saleable concentrate there so I'm pretty pleased on how that's operating. You know, this is unfortunately, an old dead mine that's not going to last for another decade like our other mines. We are likely to be done producing in the open pit in Q1 of 2015. We have got an underground study that's being delivered in draft here shortly that shows that there's I think a pretty good potential to extend mining operations there at a smaller scale to 2018 by going underground. There's about 7 million tonnes of resource left there. We have about 2 million tonnes left of open-pitable. There's an underground study that probably shows about 2 million tonnes, but it's open at depth and grades slightly improving as you go down. So, we might keep this mine open, we'll make some decisions prior to year-end on that. Tenke, another excellent quarter in all regards -- mining, milling, copper production. Total production almost 50,000 tonnes of cathode, that's on a 100% basis. Cash distributions have already gone through but certainly meeting expectations or better than expected for the year to date. And copper production guidance modestly increased if you go through the Freeport numbers to just under 210,000 tonnes of cathode. Very highly-publicized power interruption issues that we had at Tenke in September. Those are obviously unfortunate. We were doing better than expected year-to-date and would have even had more outstanding results there. Obviously, all eyes are on the power reliability in Katanga province here moving forward. We've -- we're basically back to normal here, so far in October, and hope that will continue towards year-end. Just an outlook here, fairly simple statements that have been made before, I think. Lots of constraints on capital expansion in the copper business by all majors worldwide, here. Freeport, no difference. However, where there's a high-return investment to be made, they've always been prudent in doing that. So we're very pleased to see them going ahead with the installation of a new big sulfuric acid plant which is part of the critical path for expanded copper production in the future. However, there's been no notice of when Phase 3 will go ahead. They continue to do a lot of study work, not only on Phase 3 but on mixed and sulfide ores, that investment continues at a pretty significant level. However, I think both Freeport and ourselves at today's copper price can continue to rely upon good debt repayment, cash distributions for the balance of the year, and through 2014 at Tenke. Eagle I think has been an outstanding success story from all the way from us tracking this asset, landing it in a I think pretty efficient way with the good acquisition price, and being able to ramp up from a closing in mid-July to the point where we have 500 people on-site and construction just going really, really well here. We've been blessed with some pretty good weather. So far, they do get a severe winter there, but I think Indian Summer has arrived and we're well, well advanced on concrete. Lots of steel in [the air]. The warehouse facilities we have are chockablock full of equipment that's been delivered, just waiting for concrete to cure to start placing. We've just awarded the big mechanical electrical piping contract. That contractor mobilizes next week. We have had very competitive tenders on underground mine contracting. The underground contractor award is imminent as well, very competitive contracting marketplace here. This is really a builder's market for this kind of project in this location. So, we're anticipating that we will be commissioning the mine facilities towards the end of Q2 of 2014 and the mill up and running and first saleable concentrate in Q4 2014. Got a few pictures here, just to give a graphic illustration of progress and the high quality of installations that are going in for Eagle. In fact, the mill building that you see in the top left corner there is essentially closed in now, and that concrete area, elevated slab, has been poured. Underground is actually well ahead of the mill, so we'll have no problems in starting mining there, [heads and all] being ready. And that's our presentation for Q3 for the -- this quarter, and I would like to open it up to any questions you'd have. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Thank you. (Operator instructions) The first question is from Tom Meyer of CIBC, please go ahead. -------------------------------------------------------------------------------- Tom Meyer, CIBC World Markets - Analyst [2] -------------------------------------------------------------------------------- Thank you. Good morning, Paul. Just more color on the Neves-Corvo debottlenecking and the Santa Barbara shaft. Is there a point where you'll be able to provide like solid details on what the plan is, and just at this stage should we think of it as more of an incremental capital spend between now and 2017? Or are there some chunky bits of capital that we should be thinking about? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [3] -------------------------------------------------------------------------------- Tom, nothing available to put in your models yet, and I wouldn't encourage anybody to be speculating that way yet, but I guess maybe just to go at our, sort of our criteria, or our objectives is, and kind of work backwards. We have already been able to make some improvements, minor improvements in shaft capacity just with software programming and acceleration/deceleration of the skips up and down. This is a shaft that basically does about 4.5 million tonnes a year of capacity, and we've probably been able to increase that to maybe 4.7 or something like that just with some fine tuning of software and how the shaft goes, the skips go up and down here. But what we've been looking at and brought in a lot of external expertise, is what can we fundamentally do to that shaft. And that's things like taking 17.5 tonne skips and going up to 20 or 22 tonnes with new skips. With new skips and heavier payloads, changing out the [wire rope], and going to stronger [shevs] and bigger drives, and how can you do all that without going down and replacing your head frame? And there's been some examples in industry where you know, you can come in with only one to three months shutdown and significantly improve shaft capacity with those types of measures, and what are our targets? Still to be confirmed by technical study is to take a shaft capacity from 4.5 million tonnes up to 5.5 million tonnes or 6.5 million tonnes. Those orders of magnitude with those types of changes that are you know, not a significant risk to downtime. So, we've got some comfort from external experts that with a relatively small capital investment and I won't quote numbers here, but you know, much smaller numbers than our sustaining capital for instance for that mine, that we could improve shaft capacity. So, and we know that the Lombador ore bodies which are very steeply dipping and large and massive, zinc and copper, can feed much greater tonneage. They could themselves feed more than 1 million tonnes a year of production if the underground infrastructure is there to carry that kind of tonnes. So okay, we can maybe improve the shaft by more than a million tonnes. Can we get it from Lombador to the shaft? So, that's the next stage of study that we're doing now. We have a big underground incline conveyor called TP12. We have crushers, loading pockets, they're all relatively congested right now. So the next level of study is okay, let's connect the dots all the way from stope up to surface, and obviously looking at [tail links] management, port facilities, that type of thing. And that's the studies that we're doing now, at a conceptual level. We had already done a zinc plant expansion study, it's been published I think in September 2011, so there's already numbers out there where you can see what it would take to go from a million tonnes of zinc plant throughput to 2.5 million tonnes, I think was our criteria then. Now we're seeing what we can do underground. So, we'll progress with these studies over the next six to 12 months. Nothing you should be plunking in your models. I think we've been certainly pleased how expiration is progressing and the early days of mining these big stopes in Lombador are very encouraging. Good grades, good recoveries, so I think it's maybe the only thing remaining to say is there's good upside here with Neves-Corvo with brown fields expansion, and not the great big capital investments that we were looking at about a year and a half ago with you know, $500 million or $600 million for a new shaft. Nothing in that order of magnitude at all. -------------------------------------------------------------------------------- Tom Meyer, CIBC World Markets - Analyst [4] -------------------------------------------------------------------------------- Okay perfect, thank you very much. I'll pass it on. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [5] -------------------------------------------------------------------------------- Thanks, Tom. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- Thank you. The following question is from Gustav Sandstrom of Erik Penser Bank, please go ahead. -------------------------------------------------------------------------------- Gustav Sandstrom, Erik Penser Bankaktiebolag - Analyst [7] -------------------------------------------------------------------------------- Thank you, Operator, and thanks for taking my questions. I'm looking at your volumes produced versus sold for copper and also to some extent the other metals, and the volumes sold as a function of the volumes produced are down to a level below what we typically see. Could you elaborate a bit on the dynamics here and what we should expect, if this should be a reversed effect in Q4? Thank you. -------------------------------------------------------------------------------- Marie Inkster, Lundin Mining Corporation - SVP, CFO [8] -------------------------------------------------------------------------------- It's Marie here, I don't think you'll see a reversing of the effect. What it is is, it -- when we have more complex concentrates, we get less payable back. And so you'll see a bit of the effect of that. I think in particular, Zinkgruvan was a bit lower than we had planned on, and you won't see a reversal of that. We were able to sell most of the concentrates that we have and our inventories are quite low, so it may also be the impact of having those inventories all being sold. Particularly in lead, we had more than normal shipments. But you won't see any change in that. It should return to lower levels, particularly for Zinkgruvan in the fourth quarter. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [9] -------------------------------------------------------------------------------- Yes, and naturally towards year-end, you know, like I think all well-run mines, the mine managers are very much encouraged to sell every shipment they can prior to Christmas. So, our inventory's carryover from December to January shouldn't be much different than they are normally year-to-year. -------------------------------------------------------------------------------- Gustav Sandstrom, Erik Penser Bankaktiebolag - Analyst [10] -------------------------------------------------------------------------------- All right, thanks, helpful. And turning to Aguablanca, looking at the production rates year-to-date and also taking into consideration the mined versus milled ore or for the quarter, one could argue that even the revised guidance for the full year seem a bit conservative. What's your thoughts there, Paul? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [11] -------------------------------------------------------------------------------- Well, I hope it is conservative, but we've learned from this mine and southern Spain, it's a very arid climate. But it rains like hell starting about this time of year, and some of these big rainstorms have shut the pit down in the past. So, I'd hope to be able to have this conversation again in January and say we were conservative, but you know, we're hedging a little bit on that production here knowing that rain does affect open-pit operations at Aguablanca. But it is, it is going really well, and if anything look for the upper end of the range on our production for that. -------------------------------------------------------------------------------- Gustav Sandstrom, Erik Penser Bankaktiebolag - Analyst [12] -------------------------------------------------------------------------------- All right great, thanks. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- Thank you. The following question is from Orest Wowkodaw of Scotia Bank. Please go ahead. -------------------------------------------------------------------------------- Orest Wowkodaw, Scotia Bank - Analyst [14] -------------------------------------------------------------------------------- Hi, good morning. My question revolves around Tenke. With Freeport going ahead with the acid plant there, I'm just curious what you think, Paul, would be the development timeline here for Phase 3 once Freeport decides to pull the trigger? I mean, it seems like it's a pretty easy expansion to go up to 270,000 tonnes a year. I'm just wondering what your thoughts are on that. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [15] -------------------------------------------------------------------------------- Yes, Orest, I agree with your sentiments here and Phase 3 is likely to be really just de-bottlenecking the front end of the plant, and almost entirely on-site plant expansion of identical units to what we have so no new technology, no offsite infrastructure, that type of thing. It's increasing front-end capacity of agitated leach and you know, hopefully some heap leaching as well which again is low capital intensity. I think the best benchmark on schedule will be what Freeport accomplished with Phase 2. Phase 2 took us from basically 135,000 tonnes of cathode up to, you can see we're operating at 210 for the year, here. And I -- you know, there was a bit of a soft start, like a fast-track start to that, with ordering long-lead equipment. That's been a history of Freeport strategy is even before the study's done, order the long-lead equipment. We support that kind of approach. So in aggregate, you know, this kind of an expansion if it went up similar in scale to Phase 2, you're looking at 14 to 18 months, I suppose. Take the longest lead piece of equipment and add four or five months. -------------------------------------------------------------------------------- Orest Wowkodaw, Scotia Bank - Analyst [16] -------------------------------------------------------------------------------- Okay great, and it certainly, it seems like the directive or strategy right now from the Freeport perspective is try to defer spending for the most part. Does this, do you think this probably pushes the expansion more into kind of that 2016-2017 time frame now? Just given the -- -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [17] -------------------------------------------------------------------------------- Yes, I wouldn't -- I mean, you know, they've got it -- as operator they've got to really speak to timing, here. Certainly from Lundin Mining's perspective, we would hope that it goes ahead much sooner than that, but knowing that you know, they're still working on studies and that sort of thing, there's been no study completed for Phase 3. So, it'll follow normal process. -------------------------------------------------------------------------------- Orest Wowkodaw, Scotia Bank - Analyst [18] -------------------------------------------------------------------------------- Okay, but it sounds like it's unlikely that there'll be major capital spend next year on Tenke? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [19] -------------------------------------------------------------------------------- You know, Lundin Mining is assuming there will not be major capital spend in 2014 on Tenke. And even if there were, we would completely expect it to be self-funded through Tenke cash flows. -------------------------------------------------------------------------------- Orest Wowkodaw, Scotia Bank - Analyst [20] -------------------------------------------------------------------------------- Yes, okay, thanks Paul. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- Thank you. The following question is from David Charles of Dundee Capital Markets, please go ahead. -------------------------------------------------------------------------------- David Charles, Dundee Capital Markets - Analyst [22] -------------------------------------------------------------------------------- Yes, good morning, Paul. Just to go back to Neves-Corvo just maybe if you give us a little bit more color there as to what happened in the quarter? You said that there were fewer high-grade paying stopes available. I'm just wondering, what are some stope sequencing issues there, or -- and you know, could this come up again? You did highlight that you're back online for the fourth quarter. I'm just wondering, was this just a one-off thing or should -- can it happen from quarter to quarter? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [23] -------------------------------------------------------------------------------- There's a whole combination of things that we experienced and I think that the gods weren't that friendly in Q3, when you add them all up here. I mean, we normally go down for one week with our mill and one week for the shaft in July or August. I think the shutdowns this year were more contractor-intensive, some maybe a little greater disruption than some of the things. That's one aspect of it. The bottom line, though, is really lower grades. And you'll take a look at the recoveries of 81% here, those are not at all typical for this mine. You can go back many, many quarters and rarely see anything like that. So we got into some, a difficult zone of material, partly expected in Zambujal in one of the -- some of the copper stopes we're mining in upper Lombador. We got into some difficult material there, and when I say difficult material, it's copper ores with some lead or copper ores with some mercury, and it takes additional work in a flotation circuit to make sure the concentrate is of saleable quality. And sometimes, when you get those higher impurities, you lose on recovery and exacerbate it with a lower grade. A bunch of things really contributed there as far as trends moving forward. You know, I think we're -- I take a look at the grades that we're getting so far Q4 to date, we're you know, back on track at deposit averages and expected grades. Recovery's starting to come up a bit. -------------------------------------------------------------------------------- David Charles, Dundee Capital Markets - Analyst [24] -------------------------------------------------------------------------------- Do you expect to have more of those complex ores going forward seeing as you're moving into Zambujal and sort of different areas in the mine, or do you think that's over with, now? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [25] -------------------------------------------------------------------------------- No, it's always been a mix, here. I mean, we've been into tough ores, even a couple years ago in Zambujal, and in fact sometimes there's high grade copper. But when you take a look at the impurities, you actually leave some of it there. So, I mean, they know the ore bodies fairly well there. We do have a lot of this outer reserve material, that never helps from a mine sequencing point of view because you get 15% or you get 50% some areas. It's usually clean material, but lower grade. So, you know, stick with our guidance for the year, Dave, and I don't see any reason for our -- like we publish a three-year plan every year, and I don't see any reason for it not to continue to be as we've forecasted for the next three years. -------------------------------------------------------------------------------- David Charles, Dundee Capital Markets - Analyst [26] -------------------------------------------------------------------------------- Thank you, but if I could just maybe ask one more question on Eagle. When we were there, I think I remember that they -- the ore bins needed to be installed fairly quickly before obviously the winter season started. It sounds to me that because you've already put the [clatting] on the mill, that that's already done. Is that the case, and it looks to me like you might be even a little bit ahead on what you expected to do on the mill so far? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [27] -------------------------------------------------------------------------------- Well, I -- you know, I won't -- those big ore bins are not in yet. I think they're going in imminently. They actually go in up back behind the mill, not inside. But they're on track. The overall project's on track. I'm very pleased. I was there a week and a half ago, we brought the Board down. It was a great visit, and there's quite a buzz going on. There's lots of activity about the mine and the mill. -------------------------------------------------------------------------------- David Charles, Dundee Capital Markets - Analyst [28] -------------------------------------------------------------------------------- Thank you very much. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [29] -------------------------------------------------------------------------------- Okay, thanks Dave. -------------------------------------------------------------------------------- Operator [30] -------------------------------------------------------------------------------- Thank you. The following question is from Oscar Cabrera of Bank of America. Please go ahead. -------------------------------------------------------------------------------- Oscar Cabrera, BofA Merrill Lynch - Analyst [31] -------------------------------------------------------------------------------- Thank you, Operator. Good morning, everyone. Just wondering if Paul, if you can provide more context around the issues that Tenke has been having with electricity? And by context, I mean you know, what have you guys done before? Because you know, I don't think this is anything new, but it's been exacerbated by higher demand. So, you know, any color there would be great. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [32] -------------------------------------------------------------------------------- Yes, it's probably limited what I can say, Oscar. I mean, you know, it's well-known that the southern African, not just DRC, power grids have been more challenging for mining operators and this goes over quite a few years. You know, Zambian copper operators, well-published issues with power supply, and DRC power grid issues have probably become tougher for many over the last couple years although actually the very large power investment that Tenke has been putting in which is you know, heading towards $250 million into the grid and the [Insitu] Power has actually improved power on the grid quite a bit. The fundamental issue that came up in September was just too much demand overall, and some power disruption of power that was being supplied up from Zambia. So, everybody experienced problems. We've had power issues, but they've been immaterial to us over the last couple years on a bottom line point of view. That was not the case in September. They were definitely a material level of disruption. Trends moving forward, pretty hard for me to comment upon it really. Depends on you know, how some of the improvements occur. There are other major copper producers, big, international companies now in Katanga, and they all have their own power investment initiatives. So, Glencore in the [Koaysi] area and others. So, as they put money into Inga-Shaba and the other parts of the system, power should improve. Can't comment at all on what's likely to happen with Zambian power, whether there'll be more or less coming up in the future. Those are critical issues obviously overall for the grid, for copper producers to monitor. -------------------------------------------------------------------------------- Oscar Cabrera, BofA Merrill Lynch - Analyst [33] -------------------------------------------------------------------------------- Great Paul, that's helpful, thanks. And the other thing, with Tenke, the global realized price. It's you know, getting about the same discount as we were before. Can you remind me where the reported margins from the nickel -- oh sorry, the cobalt refinery you purchased? Where are those going in? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [34] -------------------------------------------------------------------------------- Well, as far as the financial aspects of the Freeport cobalt investment, it's an equity investment by us and you'll see very little information in our reporting, and Freeport's reporting on that. It's an extremely competitive business. -------------------------------------------------------------------------------- Marie Inkster, Lundin Mining Corporation - SVP, CFO [35] -------------------------------------------------------------------------------- Yes, Oscar, in our statements it's through the other and the segmented, but for accounting purposes you can't record inter-company profits so the inter-company profits are stripped out. -------------------------------------------------------------------------------- Oscar Cabrera, BofA Merrill Lynch - Analyst [36] -------------------------------------------------------------------------------- Okay, well that's fair enough. And then lastly, in terms of Aguablanca, just surprised to see you investing in the mine that has limited life where you have Eagle just about to start, and I think you know -- during the trip there were comments with regards to you know, potentially looking at similar assets like Eagle. So, is there more really in Aguablanca that could provide upside to what you currently are seeing? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [37] -------------------------------------------------------------------------------- Honestly, it's quite a small mine and it's a non-core asset for us, but you know, we'll only invest money if it's got a decent return. It's very hard to buy new assets, and we'd had a sales effort a few years ago and weren't able to get a decent value for it. So, I guess like Galmoy, we decided to progress forwards and maximize the profit from it. So, it's small but it contributes. But don't expect any big upside from it, you know. I think what you see is what you get on the open pit. If we get some underground benefit from it, great, but it'll hardly move the needle. -------------------------------------------------------------------------------- Oscar Cabrera, BofA Merrill Lynch - Analyst [38] -------------------------------------------------------------------------------- Okay, thanks very much. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [39] -------------------------------------------------------------------------------- Yes, thank you. -------------------------------------------------------------------------------- Operator [40] -------------------------------------------------------------------------------- Thank you. The following question is from Johannes Grunselius of ABG, please go ahead. -------------------------------------------------------------------------------- Johannes Grunselius, ABG Sundial Collier - Analyst [41] -------------------------------------------------------------------------------- Yes, hello everyone, this is Johannes. A few questions. First one is on your updated guidance, Paul. You upgrade the guidance a bit here but you still keep a pretty you know, wide range. So can you elaborate on why you're keeping the wide range when we have you know, one more quarter as an actual number for the full year? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [42] -------------------------------------------------------------------------------- Well, just getting into winter weather in Sweden and rainy season in Portugal, and Aguablanca. So, these things, all it takes is you know, one mother nature event to throw you out. You know, I guess I've tried to give a little bit of an indication here on some of the mines that maybe you should expect to be at the upper end of the range on Aguablanca, on copper, and nickel. You know, if I want to maybe give a little bit more color here, you know, maybe the middle or lower end of the range on lead. We should be I think pretty fine in aggregate on zinc, if you want to stick in the middle of the range on zinc. That would, might not be a bad guess. And you know, copper, the middle of the range. We're looking at the difference here of only 5% and there's still two solid months to go. -------------------------------------------------------------------------------- Johannes Grunselius, ABG Sundial Collier - Analyst [43] -------------------------------------------------------------------------------- Sure. I asked you know, if you look at the lower end of the copper guidance, 50,000 tonnes for Neves-Corvo, you end up with a very low Q4 number. So I suppose you are more looking at the upper end than the low end of the range, right? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [44] -------------------------------------------------------------------------------- We'll see. -------------------------------------------------------------------------------- Johannes Grunselius, ABG Sundial Collier - Analyst [45] -------------------------------------------------------------------------------- Yes, okay. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [46] -------------------------------------------------------------------------------- Sorry. -------------------------------------------------------------------------------- Johannes Grunselius, ABG Sundial Collier - Analyst [47] -------------------------------------------------------------------------------- We know that in three months, then, fair enough. Just coming back also to one of the initial questions about mismatch between shipments and production, and I also notice this one and a particular for Aguablanca where you produced a lot more nickel than you shipped. But perhaps it's so that the smelters are keeping a lot of the produced material as part of the payment to the smelters? Or is this right, or should we expect a reversal of that inventory buildup that I suspect that happened in Aguablanca, please? -------------------------------------------------------------------------------- Marie Inkster, Lundin Mining Corporation - SVP, CFO [48] -------------------------------------------------------------------------------- Yes, Johannes, it's a smelter deduction so you won't see a reversal, we're not going to catch up on the tonnes. For Aguablanca, the sales are done monthly in warehouse so we actually have the sales billed and recorded every month for all of the production of that month. That is stored in the warehouse until it's eventually loaded on the ship. So, there's not a lot of timing difference there. It's a smelter deduction that you see. -------------------------------------------------------------------------------- Johannes Grunselius, ABG Sundial Collier - Analyst [49] -------------------------------------------------------------------------------- Okay, so the mismatch between shipments and production then, that's because the smelters are keeping part of the volumes? Or? -------------------------------------------------------------------------------- Marie Inkster, Lundin Mining Corporation - SVP, CFO [50] -------------------------------------------------------------------------------- Yes, that's right. -------------------------------------------------------------------------------- Johannes Grunselius, ABG Sundial Collier - Analyst [51] -------------------------------------------------------------------------------- Okay. Good. Yes, that's my question. I'll pass it on, thank you. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [52] -------------------------------------------------------------------------------- Okay. Thanks, thanks Johannes. -------------------------------------------------------------------------------- Operator [53] -------------------------------------------------------------------------------- Thank you. The following question is from Alex Terentiew of Raymond James, please go ahead. -------------------------------------------------------------------------------- Alex Terentiew, Raymond James Financial Services, Inc. - Analyst [54] -------------------------------------------------------------------------------- Hey, good morning, guys. I've just got a couple of follow-up questions on Neves-Corvo. The costs of the mine now for five consecutive quarters have been at or above $1.80 a pound. What needs to happen at that mine to get cost back down to your prior guidance of $1.80, and do you think that's achievable? I mean, aside from I know you've got zinc production growing quite handily over the next couple years, but are there other -- you know, other items, like on a cost per tonne basis, that you've had challenges with and you think you can improve upon? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [55] -------------------------------------------------------------------------------- $1 zinc would be the best way to get there. No honestly, we -- you know, we started, our $1.80 guidance started the year assuming $0.95 zinc. We obviously haven't got that. So, everything we've been doing at the mine has been conscious that the zinc credit is not as good. We did refine our mine plan as the year went by. We got into the big Lombador zinc stopes earlier, a little bit earlier, maybe a month earlier. So, that's going to help keep us at frankly at the $1.90 range rather than $1.80. If you drilled down and kind of -- well, I don't know whether we have enough money in our disclosure here, but if you really take a look at the details at the mine on a cost per tonne milled basis, even in dollars, they're bang-on. They're executing well. They've got our best safety record overall across the Company. This is the complex mine with lots of different stopes and lots of different ore bodies and a few different ore types. On a cost-per-tonne basis they execute pretty well. It's byproduct credits that are the big swing factor. Sometimes the Euro is the big swing factor, exchange rate to the US dollar, and then in this last quarter we got into some more great copper with more difficult impurities in it which nailed our recovery. So those are the issues that we manage. -------------------------------------------------------------------------------- Alex Terentiew, Raymond James Financial Services, Inc. - Analyst [56] -------------------------------------------------------------------------------- Okay great thanks, and just one more question on the mine. You deferred development of the underground access ramps at Semblana. Can you remind me how Semblana fits into your mine plan for the next few years, if it does at all? You know, and without it, will copper production be at risk of declining below your 50,000, 55,000 tonne guidance in a couple years? Or you know if it does, maybe could you offset that with more zinc from Lombador? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [57] -------------------------------------------------------------------------------- Answering the last question first, Semblana hasn't been factored into our mine plans at all. It's an inferred resource. It's about the same average grades as what we're currently mining so there's no encouragement for us to spend a lot of capital to bring it on earlier. If there was a need to bring it on, you know, it could be brought on in a three-year period or something like that. It's a big enough resource that it could contribute to quite a few years of mine life. It is not in any of our development plan. It wasn't in our ten-year plan that we published in January earlier this year. We continue with existing proven probable reserves at 50,000 to 55,000 tonnes of production for the next ten years plus. So, Semblana's all upside from there. -------------------------------------------------------------------------------- Alex Terentiew, Raymond James Financial Services, Inc. - Analyst [58] -------------------------------------------------------------------------------- Okay perfect, thank you. -------------------------------------------------------------------------------- Operator [59] -------------------------------------------------------------------------------- Thank you. The following question is from [Tatinger Gole] of Citigroup, please go ahead. -------------------------------------------------------------------------------- Tatinger Gole, Citigroup - Analyst [60] -------------------------------------------------------------------------------- Yes hi, I've got two questions regarding Tenke. Firstly Paul, if you had the decision-making authority to push ahead with Phase 3, and you would only choose either Eagle or Tenke Phase 3, which one would you choose, and your reasoning behind it? And secondly, more of an accounting question probably for Marie. Your share of income does not meet with what Freeport reports, so if I multiply by 24% I get to slightly higher numbers, especially for the last two quarters. Is there any accounting issue we need to be aware of, or is there a timing difference? Thank you. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [61] -------------------------------------------------------------------------------- Okay. I'll give you a non-answer on your first question. I mean, we're not operator on Tenke so I don't want to speculate what we would do or not do if we were operator, because we're not. We're progressing forwards with Eagle, that's our own project, and we're going as fast as possible. You know, we have always had 100% alignment with Freeport on their development plans and Tenke and we support whatever decisions they make in the past and moving forwards. Marie, accounting? -------------------------------------------------------------------------------- Marie Inkster, Lundin Mining Corporation - SVP, CFO [62] -------------------------------------------------------------------------------- Yes, so on the Tenke investment, yes. We've had some questions in the past about the disconnect between what Freeport reports from that segment as income, and what we report, and we do have an accounting adjustment that stems back from when Tenke Mining and Lundin Mining Corp merged back in 2007. The value that we, as Lundin Mining, paid for the Tenke Mining assets is being depreciated over the two pre-reserves, so we do have an adjustment coming through, a non-cash depreciation type adjustment for our purchase price. -------------------------------------------------------------------------------- Tatinger Gole, Citigroup - Analyst [63] -------------------------------------------------------------------------------- Okay, well thank you very much. Just if I could follow on the first one, Paul, obviously you can't answer a more hypothetical question but your view on nickel versus copper? Which one are you more positive on, given we have got Indonesian risk on the nickel side and on the copper side I think most of the market is more positive at least on the longer-term view, if they ignore the next couple of years in copper. Thank you. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [64] -------------------------------------------------------------------------------- Yes, I say, I mean copper has always been the -- you know, I think the best margin over time of any of the base metals. That's why you know, all of us in the base metals industry, small, medium-sized or large, are always looking for more copper first, generally speaking. We're happy to be involved in -- really happy to be involved in Eagle, but Eagle wasn't about becoming a nickel player. It was about excellent grades and excellent margins that we expect from the assets. So, you know, moving forwards as Lundin Mining looks to grow towards the end of next year and subsequent years here, preference as we said today would be more copper as a first preference. But any of the base metals it's a matter of the quality of the asset. If we found more zinc polymetallic or more nickel polymetallic, we'd obviously look at it in the future. But copper first. -------------------------------------------------------------------------------- Tatinger Gole, Citigroup - Analyst [65] -------------------------------------------------------------------------------- Okay great, so if I could ask one last question on Neves-Corvo, is there is a comment saying that the unit cost was also higher due to using more contractors. Is this more of a seasonal issue or you had to hire some people to deal with the complex ore you had? Or is there a reasoning why we use contractors when they are more expensive? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [66] -------------------------------------------------------------------------------- Yeah, no, that was in regards to the plant shutdowns and everything. We're actually taking a completely different strategy with our plant shutdowns for next year, which I think will add improvements to our bottom line. -------------------------------------------------------------------------------- Tatinger Gole, Citigroup - Analyst [67] -------------------------------------------------------------------------------- Okay great, thank you very much. -------------------------------------------------------------------------------- Operator [68] -------------------------------------------------------------------------------- Thank you. The following question is from Greg Barnes of TD Securities. Please go ahead. -------------------------------------------------------------------------------- Greg Barnes, TD Newcrest/Waterhouse Securities - Analyst [69] -------------------------------------------------------------------------------- Thank you, Operator. Paul, I'm -- like Oscar, I'm a little bit curious about the whole cobalt thing. As Oscar said, you are still -- well Freeport I guess, is still reporting the discount that we've seen over the last couple of years despite the fact you now have Kokkola there and I don't understand how that's working. Could you walk us through it conceptually? I thought acquiring a cobalt refinery would allow you to sell refined cobalt and get the full price. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [70] -------------------------------------------------------------------------------- Yes, but I think in the explanation of the business that was, been given by Freeport and ourselves when it's announced, I think there's been some guidance that it will take a period of time for us to be putting a lot of the Tenke cobalt up into the finish refinery because there's existing contracts that we have on Tenke that we'll be honoring that progress over the next couple years or so. And, there's existing sourcing contracts that the Freeport cobalt business has at Kokkola, that need to trend off over time. So, it will take a while for us to have the full benefits of large volumes of Tenke cobalt going up into a business that both partners own. -------------------------------------------------------------------------------- Greg Barnes, TD Newcrest/Waterhouse Securities - Analyst [71] -------------------------------------------------------------------------------- So eventually we are going to see that discount close up over the next two, three years, whatever the time frame is. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [72] -------------------------------------------------------------------------------- Yes, that's always been the business strategy from day one but it's a stage process. It won't happen in the first couple quarters, it won't even happen in the first year and unlikely even in the first year-and-a-half. -------------------------------------------------------------------------------- Greg Barnes, TD Newcrest/Waterhouse Securities - Analyst [73] -------------------------------------------------------------------------------- Okay, and will -- again, will we close that gap completely or will there always be some kind of discount versus the spot refined cobalt price, whatever that is? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [74] -------------------------------------------------------------------------------- There is a -- when you look at the production, you can speculate on the production plans for cobalt out of Tenke on volume, you know, 13,000 tonnes or more and you can take a look at the published plant capacity of Kokkola, which is about 13,000 tonnes. Physically it's possible to take substantially all of the Tenke cobalt ultimately up into Kokkola, but that will be determined by market at the time. If there's higher margin customers for some of the hydroxide to come straight from Tenke to consumer, Freeport will deal with that at the time. -------------------------------------------------------------------------------- Greg Barnes, TD Newcrest/Waterhouse Securities - Analyst [75] -------------------------------------------------------------------------------- And I guess as you point out earlier, since you are equity accounting for it, we're not really going to see anything for the next year or two in terms of an offset coming, any profitability coming out of Kokkola, until you've worked through those existing supply contracts? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [76] -------------------------------------------------------------------------------- Yes, yes, and you'll have to kind of sleuth through the financial statements quarter by quarter, and over time you'll get more information, but it'll take a while for it to materialize in anything you could put in your model. -------------------------------------------------------------------------------- Greg Barnes, TD Newcrest/Waterhouse Securities - Analyst [77] -------------------------------------------------------------------------------- Okay, I guess that's helpful then, though we should expect to see that gap close over the next two years then effectively? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [78] -------------------------------------------------------------------------------- Over time yes, that's part of the reason for the investment. -------------------------------------------------------------------------------- Greg Barnes, TD Newcrest/Waterhouse Securities - Analyst [79] -------------------------------------------------------------------------------- Okay, good. Thank you. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [80] -------------------------------------------------------------------------------- Thank you. -------------------------------------------------------------------------------- Operator [81] -------------------------------------------------------------------------------- Thank you. The following question is from Pierre Vaillancourt of Macquarie, please go ahead. -------------------------------------------------------------------------------- Pierre Vaillancourt, Macquarie Securities - Analyst [82] -------------------------------------------------------------------------------- Hey Paul, I'm just wondering with the development of Eagle, if you're taking any different approaches to Eagle relative to [Real], and if there are any opportunities to decrease the capital intensity a little bit or are you just so far in that you're sticking to the plan as is, and it's just going to stay as originally projected? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [83] -------------------------------------------------------------------------------- Yes Pierre, as far as the physical facilities, we've inherited a project that was 50% constructed and designed and 99% complete and permitted, and the clear instructions to the team is you don't touch anything on the project that has any risk of requiring permit complexity. So, yes, the bus has already left the station on being able to change any physical aspect in any significant way. You know, if we were given a blank sheet of paper would it be designed differently or would it have a different flow sheet or something? Probably, but that's years ago. So, the areas that we are working on to try to get some capital cost improvement are primarily schedule. The sooner we bring it in for sure the less overhead there is. The contracting strategy we modified a little bit, so it's the -- you know, the things in execution that I think will have the benefit to mitigate the risk. -------------------------------------------------------------------------------- Pierre Vaillancourt, Macquarie Securities - Analyst [84] -------------------------------------------------------------------------------- Okay thanks, and just to -- did you, you mentioned for Neves-Corvo, the profile 55,000 tonnes. I mean, for the next, did you say for the next ten years or so? Was that --? -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [85] -------------------------------------------------------------------------------- Yes, I forget the exact range. We published a 43-101 report, [Wardell] did one, it was published maybe mid-January this year. And that gives a ten-year production profile for copper and for zinc, and this assumes no expansions, no significant capital investment, and proven probable reserves of both commodities. And I'm pretty sure that you'll see a range in there that I don't know, might be 50,000 to 58,000 tonnes or something like that, varying year-by-year, depending on the mine planning we did for that ten-year plan. So you'll see you know, it's pretty steady production, below 60,000, above 50,000 tonnes for ten years out with proven probable reserves. New discovery that we make, Semblana could come in in a ten-year horizon. If we de-bottleneck the shaft, Semblana could maybe be brought in higher up elevation. It can maybe contribute to increasing production in the future, but same grades. -------------------------------------------------------------------------------- Pierre Vaillancourt, Macquarie Securities - Analyst [86] -------------------------------------------------------------------------------- Good okay, and I don't know, Marie if you can elaborate a little bit on the whole payables issue for us? Just to get us to understand what the parameters are around that? -------------------------------------------------------------------------------- Marie Inkster, Lundin Mining Corporation - SVP, CFO [87] -------------------------------------------------------------------------------- Sorry Pierre, what, the tables issue? -------------------------------------------------------------------------------- Pierre Vaillancourt, Macquarie Securities - Analyst [88] -------------------------------------------------------------------------------- Well, when you're talking about, when you're talking about payables for your concentrates and how you know, more complex ores, you don't get paid as much. I'm just wondering if you can elaborate a little more on that (multiple speakers)? -------------------------------------------------------------------------------- Marie Inkster, Lundin Mining Corporation - SVP, CFO [89] -------------------------------------------------------------------------------- Sure, I guess in terms of -- I think that probably the biggest difference that Oscar probably picked up on was in the zinc, because it was a bit different, and you know, typically if our concentrates are, example, say 55%, if during a quarter they fall below a certain level then there would be an additional deduction that this (technical difficulty) would take. So, and in addition, now that we have more Neves-Corvo zinc, Neves-Corvo isn't as good a quality as Zinkgruvan. Zinkgruvan has one of the best qualities of concentrate that you'll find. So you know, Neves-Corvo zinc is not going to get the same smelter deduction as Zinkgruvan zinc does. So it's just things like that will cause variations, but beyond that, I can't give specifics of commercial contracts obviously. But there should be a typical smelter deduction that you'll see and the difference between the production volumes and the sales volumes over time should generally be the same. -------------------------------------------------------------------------------- Pierre Vaillancourt, Macquarie Securities - Analyst [90] -------------------------------------------------------------------------------- Thanks. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [91] -------------------------------------------------------------------------------- Okay Operator, we'll take one more question, please. -------------------------------------------------------------------------------- Operator [92] -------------------------------------------------------------------------------- Certainly. The following question is from [Steve Versel] of RBC Capital Markets, please go ahead. -------------------------------------------------------------------------------- Steve Versel, RBC Capital Markets - Analyst [93] -------------------------------------------------------------------------------- Yes thanks guys, I just had another follow-up on the payables issue. The base one I notice is Aguablanca on the copper side. Why is that payable so much lower than a typical copper payable? -------------------------------------------------------------------------------- Marie Inkster, Lundin Mining Corporation - SVP, CFO [94] -------------------------------------------------------------------------------- Well, at Aguablanca it's a little bit special because we don't actually pay TCRC. We have a smelter deduction and that's how we pay. So, it won't be a typical contract. I think you'll find with a lot of nickel contracts they're much more complex than the zinc and copper contracts. So, you know, again, Aguablanca if you look over time, you'll see that it's a consistent level of deduction between the sold and the produced. -------------------------------------------------------------------------------- Steve Versel, RBC Capital Markets - Analyst [95] -------------------------------------------------------------------------------- Perfect, that's it for me, thank you. -------------------------------------------------------------------------------- Paul Conibear, Lundin Mining Corporation - President, CEO, Director [96] -------------------------------------------------------------------------------- Okay, well thank you very much everybody for attending our call today, and we look forward to speaking to you at year-end. -------------------------------------------------------------------------------- Operator [97] -------------------------------------------------------------------------------- The conference has now ended. Please disconnect your lines at this time. We thank you for your participation.
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