|
|
Commenting
on the guidance, Mr. Phil Wright, President and CEO of Lundin Mining said
"We expect higher copper, zinc and lead production in 2011 compared to
2010 at all of the mines for which guidance has been provided.
"Capital investment is expected to increase to $290 million, up from an
estimated $185 million for 2010 and this increase reflects: expansion of
production capacity in our European operations; commencement of the
development of the Lombador mine; and provision for the commencement of
expansion at Tenke, though no decisions have been made on that yet by the
mine operator," Mr. Wright said.
(For complete press release including tables see attached file)
� Neves-Corvo: Copper production expected to be similar to 2010. Based on the
present high price of copper, the zinc plant will be used to process
low-grade copper ore in the first six months of 2011 with zinc production
starting in July once the plant expansion is complete. C1 costs are expected
to remain around $1.30 after by-product credits.
� Zinkgruvan: Zinc production is expected to increase as a result of higher
throughput. C1 costs remain low-cost quartile with the reduction based on
higher by-product credits.
� Aguablanca: Not guided pending review (See news release dated December 9,
2010 entitled "Lundin Mining Suspends Full-Scale Pit Operations At
Aguablanca Pending Review").
� Galmoy: Sales of remnant high-grade ore are expected to be made to an
adjacent mine for processing. Production tonnage is based on a 50%
attributable-share to Lundin Mining.
� Tenke: Freeport-McMoRan Copper & Gold Inc. ("Freeport") the
mine's operator, is expecting copper cathode production to increase from
115,000 tonnes per annum in 2010 to approximately 130,000 tonnes per annum in
2011.
2011 Capital Expenditure Guidance
Capital expenditures for the year are expected to be around $290 million
which includes:
� Sustaining capital in European operations: $100 million (2010 - $70
million). The increase is related to: at Neves-Corvo, the replacement of
underground mobile equipment and completion of the new tailings facility; at
Zinkgruvan, expenditure to increase mine capacity to handle higher
throughput.
� New investment capex in European operations: $70 million (2010 - $75
million). The majority of this is related to Lombador development ($50
million).
� The Lombador orebody access ramp is being accelerated to reach a depth of
900 metres below surface by Q1 2012 in order to facilitate further exploration
that will be key to gaining a full understanding of the zinc and, more
importantly, copper mineralisation associated with Lombador.
The Lombador feasibility study, based on a small upper section of Lombador
South, is expected to be complete in Q1 2011 and commissioning of the
expanded zinc plant to cater for production from Lombador is targeted for
mid-2013.
� The Zinkgruvan copper plant will be converted to treat zinc ores in
addition to copper, thereby significantly increasing the flexibility of the
Zinkgruvan operation. The conversion is expected to be complete by Q4 2011
giving Zinkgruvan the plant capacity to produce around 100,000 tonnes per
annum of zinc, if warranted by metal prices.
� New Investment in Tenke: For planning purposes we have assumed an expansion
at Tenke to commence in mid-2011 and we contemplate our share of expansion
funding to be up to $120 million for next year. This is contingent on a
number of factors including incorporation into underlying agreements of the
changes agreed in order to successfully resolve the contract review. Final
decisions on capital investment levels for 2011 are not yet in place and are
ultimately made by Freeport, the mine's operator.
� Semblana: Scoping studies are planned to evaluate an early start on an
access drift to the new Semblana deposit at Neves-Corvo. No allowance has
been included in the capital estimates above pending completion of the
scoping studies expected by the end of Q1 2011. Production estimates do not
take into account any underground development associated with Semblana access
drift development. Additional studies on shaft-capacity de-bottlenecking are
in progress to better facilitate Lombador and Semblana development waste
hoisting needs and so as not to unduly affect mine ore production.
Exploration/Resource acquisition
Exploration expenditures are expected to increase from around $25 million in
2010 to $38 million in 2011. Approximately $20 million of this will be spent
on exploration drilling to delineate additional copper resources at Neves
Corvo. A further $4 million is allocated for a 24km2 high resolution 3D
seismic survey to cover the entire near-mine area, which will attempt to
detect other nearby massive sulphide lenses. Drill testing of copper-gold
targets will be conducted in Spain and drilling at the Company's Clare
joint-venture property in Ireland will continue.
Commenting on the capital plans, Mr. Wright said "We are investing
around $70 million in new projects at our European operations where we expect
to complete the expansion of zinc capacity at Neves-Corvo to 50,000 tonnes
per annum and, in addition, commence the next stage of expansion necessary to
be able to bring Lombador into production.
"At Zinkgruvan we continue to commit the capital necessary to expand production
at Zinkgruvan
"With the Tenke contract review undergoing completion, we are ready for
a major expansion to be announced at a time of Freeport's choosing.
"We continue to invest in internal growth options that will position us
well to take advantage of the increasing demand for our products," Mr.
Wright said.
About Lundin Mining
Lundin Mining Corporation ("Lundin", "Lundin Mining" or
the "Company") is a diversified base metals mining company with
operations in Portugal, Spain and Sweden, producing copper, nickel, lead and
zinc. In addition, Lundin Mining holds a development project pipeline which
includes expansion projects at its Zinkgruvan and Neves-Corvo mines along
with its equity stake in the world class Tenke Fungurume copper/cobalt project
in the Democratic Republic of Congo.
On Behalf of the Board,
Phil Wright
President and CEO
For further information, please contact:
Sophia Shane, Investor Relations North America: +1-604-689-7842
Marie Inkster, Chief Financial Officer: +1-416-342-5568
Robert Eriksson, Investor Relations Sweden: +46 8 545 015 50
Forward Looking Statements
Certain of the statements made and information contained herein is
"forward-looking information" within the meaning of the Ontario
Securities Act or "forward-looking statements" within the meaning
of Section 21E of the Securities Exchange Act of 1934 of the United States.
Forward-looking statements are subject to a variety of risks and
uncertainties which could cause actual events or results to differ from those
reflected in the forward-looking statements, including, without limitation,
risks and uncertainties relating to foreign currency fluctuations; risks
inherent in mining including environmental hazards, industrial accidents,
unusual or unexpected geological formations, ground control problems and
flooding; risks associated with the estimation of mineral resources and
reserves and the geology, grade and continuity of mineral deposits; the
possibility that future exploration, development or mining results will not
be consistent with the Company's expectations; the potential for and effects
of labour disputes or other unanticipated difficulties with or shortages of
labour or interruptions in production; actual ore mined varying from
estimates of grade, tonnage, dilution and metallurgical and other
characteristics; the inherent uncertainty of production and cost estimates
and the potential for unexpected costs and expenses, commodity price
fluctuations; uncertain political and economic environments; changes in laws
or policies, foreign taxation, delays or the inability to obtain necessary
governmental permits; and other risks and uncertainties, including those
described under Risk Factors Relating to the Company's Business in the
Company's Annual Information Form and in each management discussion and
analysis. Forward-looking information is in addition based on various
assumptions including, without limitation, the expectations and beliefs of
management, the assumed long term price of copper, nickel, lead and zinc;
that the Company can access financing, appropriate equipment and sufficient
labour and that the political environment where the Company operates will
continue to support the development and operation of mining projects. Should
one or more of these risks and uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described in forward-looking statements. Accordingly, readers are
advised not to place undue reliance on forward-looking statements.
|
|
|