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Construction of the initial phase of
operations is well underway. Production start-up, however, will be slightly
behind the initial schedule of 4th quarter 2008, due to delays in
construction works. Construction and start-up of production will now extend into
2009. To date approximately 55% of design and 70% of procurement are
complete. Bulk earthworks are substantially complete at the plant site and
shop areas, and concrete work has started. Approximately 15% of the
construction work has been completed and the project is approximately 40%
complete overall.
Completion of the mine's first phase will provide annual production of
115,000 tonnes of copper cathode and 8,000 tonnes of cobalt. Based on the current
mine plan, ore grades for the first ten years are expected to average 4.6%
copper and 0.4% cobalt. The mine's cash cost is expected to be one of the
lowest in the industry.
Freeport, as operator of the project has now advised that the capital costs
for developing the first phase of operations are expected in the range of
$900 million. Part of the cost increase from the previous estimate of $650
million is due to an increased design throughput from 7,000 tpd of ore
capacity to 8,000 tpd, in addition to various inflationary pressures and
scope changes. Capital costs estimates will continue to be reviewed.
Approximately $157 million in capital costs have been incurred as of
September 30, 2007. Freeport is responsible for funding 70% of project
development costs and Lundin Mining the balance of 30%. The shareholder
agreement terms with Lundin Mining state that Freeport is obliged to arrange
for funding overruns in excess of 25% over the initial budget.
Aggressive exploration work is in progress on the Tenke Fungurume mineral
concessions with the aim of upgrading resources to reserves to support
expansion plans. Year-to-date 31,000 metres have been drilled and 9 rigs are
currently active across the concession.
About Lundin Mining
Lundin Mining is a rapidly growing mining and exploration company engaged
internationally in the extraction, development, acquisition and discovery of
base metal deposits. The company currently owns five operating mines,
extracting copper, zinc, lead, nickel and silver: Neves-Corvo in Portugal,
the Zinkgruvan and Storliden mines in Sweden, the Galmoy mine in Ireland and
the recently acquired Aguablanca mine in Spain. A further mine, the Aljustrel
mine in Portugal, is under development and will be brought into production in
the fourth quarter 2007. In addition, Lundin Mining holds an extensive
exploration portfolio, including interests in international ventures and
development projects such as the world class Tenke Fungurume copper/cobalt
project in the Democratic Republic of Congo, which is currently under
construction and the Ozernoe zinc project under detailed feasibility study in
Russia.
For further information, please contact:
Catarina Ihre, Manager, Investor Relations: +46-70-607-9263
Sophia Shane, Investor Relations, North America: 1-604-689-7842
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 companies' 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 and zinc; that the
companies can access financing, appropriate equipment and sufficient labour
and that the political environment where the Companies operate 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.
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