Lundin Mining Corporation press release
Lundin Mining Provides 2024 Guidance & Announces 2023 Production Results
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VANCOUVER, BC , Jan. 14, 2024 /CNW/ - (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or the "Company") is pleased to announce production results for the year ended December 31, 2023 and provides production guidance for the three-year period of 2024 through 2026, as well as cash cost, capital and exploration expenditure forecasts for 2024. View PDF version
Highlights
2023 production results: On a consolidated basis the Company achieved guidance 1 . Production for all metals was at the midpoint or above for all guidance ranges. On a 100% basis consolidated copper production was a record for the Company at 314,798 tonnes (t), and copper-equivalent consolidated production was over 550,000 t. 2 Candelaria achieved guidance. Copper production was 152,012 t and gold production was 89,700 ounces (oz). Caserones copper production was 65,210 t for the second half of the year which exceeded original guidance 3 , and on a full year basis was 139,520 t. Chapada achieved guidance. Copper production was 45,719 t, and gold production was on the upper end of guidance at 59,268 oz for the year. Consolidated zinc production was 185,161 t, which was at the midpoint of the guidance. Production at Neves-Corvo was on the upper end of zinc guidance while Zinkgruvan was slightly below zinc guidance. Consolidated gold production was 148,968 oz which was on the upper end of guidance. Nickel production at Eagle was 16,429 t and copper production was 13,600 t both of which exceeded original guidance.
2024 guidance on a consolidated basis is largely in line with last year's production guidance: Copper production guidance of 366,000 – 400,000 t. Zinc production guidance of 195,000 – 215,000 t. Gold production guidance of 155,000 – 170,000 t. Nickel production guidance of 10,000 – 13,000 t.
| | | 1 Guidance as most recently disclosed in the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2023. | | 2 Calculated based on the ratios of 2023 average metal prices of Cu: $3.85/lb, Zn: $1.20/lb, Ni: $9.74/lb, Mo: $24.19/lb, Pb: $0.97/lb Ag: $23.50/oz and Au: $1,941/oz. | | 3 Caserones guidance is for the second half of 2023. See "Lundin Mining Announces Closing of the Acquisition of Majority Interest in the Caserones Copper-Molybdenum Mine in Chile and Commitments for New $800 Million Term Loan" dated July 13, 2023. | | | | This news release contains non-GAAP measures and forward-looking information about expected future events and financial and operating performance of the Company. Please refer to the Historical Non-GAAP Measure Comparatives section and the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information section of this press release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted. |
Jack Lundin , President and CEO, commented "2023 was a significant year for Lundin Mining and we are well positioned for growth in 2024. The 51% acquisition of Caserones led to a record in annual copper production. We have initiated comprehensive value optimization efforts across our Latin American sites. We are beginning to execute on some of these initiatives at Chapada and Candelaria and the kickoff of optimization work at Caserones will begin this quarter. An exciting exploration program has begun on both the Chilean and Argentinian side of the Vicuña district. We will look to drive value from the drill bit as this has proven to be a key contributor to the overall value creation at Lundin Mining.
"Across our critical metals portfolio, the zinc expansion project at Neves Corvo, otherwise known as ZEP, is coming to fruition, leading to back-to-back quarterly record zinc production at this operation. At Zinkgruvan in 2023, improved recoveries from the sequential flotation project were achieved, however, a longer than anticipated ramp up resulted in a slight miss on guidance. Our nickel operation, Eagle, continues to perform and hit the upper end of guidance.
"During the year, the cumulative result was over 550,000 tonnes of consolidated copper equivalent production. This year's guidance shows an increase of over 20% for copper production and 10% for zinc production over 2023. As we turn the page on a transformational year for the Company, our focus remains on achieving operational excellence by consistently maintaining elevated safety standards, all while meeting production guidance at competitive costs."
Summary of 2023 Production
| | | Q4 2023
Production | Full Year 2023
Production | 2023 Original
Guidance 4 | 2023 Revised Guidance 5 | | | | | | | | | | | | | | | | | | | | | | | | | | Copper (t) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Candelaria (100% basis) | 41,618 | 152,012 | 145,000 | - | 155,000 | 147,000 | - | 153,000 | | | | | | | | | | | | | | | | | | | | | | | Caserones (100% basis H2) 6 | 35,389 | 65,210 | 60,000 | - | 64,000 | 65,000 | - | 69,000 | | | | | | | | | | | | | | | | | | | | | | | Chapada | 12,872 | 45,719 | 43,000 | - | 48,000 | 45,000 | - | 48,000 | | | | | | | | | | | | | | | | | | | | | | | Eagle | 3,334 | 13,600 | 12,000 | - | 15,000 | 12,000 | - | 15,000 | | | | | | | | | | | | | | | | | | | | | | | Neves-Corvo | 9,623 | 33,823 | 33,000 | - | 38,000 | 33,000 | - | 36,000 | | | | | | | | | | | | | | | | | | | | | | | Zinkgruvan | 501 | 4,434 | 3,000 | - | 4,000 | 3,000 | - | 4,000 | | | | | | | | | | | | | | | | | | | | | | | Total Copper | 103,337 | 314,798 | 296,000 | - | 325,000 | 305,000 | - | 325,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Zinc (t) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Neves-Corvo | 31,035 | 108,812 | 100,000 | - | 110,000 | 103,000 | - | 110,000 | | | | | | | | | | | | | | | | | | | | | | | Zinkgruvan | 19,684 | 76,349 | 80,000 | - | 85,000 | 78,000 | - | 82,000 | | | | | | | | | | | | | | | | | | | | | | | Total Zinc | 50,719 | 185,161 | 180,000 | - | 195,000 | 181,000 | - | 192,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gold (oz) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Candelaria (100% basis) | 24,787 | 89,700 | 85,000 | - | 92,000 | 87,000 | - | 92,000 | | | | | | | | | | | | | | | | | | | | | | | Chapada | 19,025 | 59,268 | 55,000 | - | 60,000 | 55,000 | - | 60,000 | | | | | | | | | | | | | | | | | | | | | | | Total Gold | 43,812 | 148,968 | 140,000 | - | 150,000 | 142,000 | - | 152,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nickel (t) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Eagle | 3,729 | 16,429 | 13,000 | - | 16,000 | 15,000 | - | 17,000 | | | | | | | | | | | | | | | | | | | | | | | Total Nickel | 3,729 | 16,429 | 13,000 | - | 17,000 | 15,000 | - | 18,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Molybdenum (t) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Caserones (100% basis H2) 6 | 928 | 2,024 | 1,500 | - | 2,000 | 1,500 | - | 2,000 | | | | | | | | | | | | | | | | | | | | | | | | Total Molybdenum | 928 | 2,024 | 1,500 | - | 2,000 | 1,500 | - | 2,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 4 Guidance as announced by news release "Lundin Mining Announces 2022 Production Results & Provides 2023 Guidance" dated January 12, 2023, and "Lundin Mining Announces Closing of the Acquisition of Majority Interest in the Caserones Copper-Molybdenum Mine in Chile and Commitments for New $800 Million Term Loan" dated July 13, 2023. | | 5 Guidance as most recently disclosed in the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2023. | | 6 Caserones guidance is for the second half of 2023. As per previous disclosure, revised production guidance for the second half of 2023 was 65,000 t to 69,000 t and molybdenum was 1,500 t to 2,000 t. |
Three-Year Production Outlook 2024 - 2026
2024 updated guidance outlook is in line with previously disclosed production ranges. Consolidated copper production in 2024 has stayed consistent with previous estimates, consolidated zinc production ranges have been slightly adjusted and consolidated gold production ranges have increased for 2024. In 2025 consolidated copper and gold ranges have increased while zinc guidance has stayed in line with previous disclosure.
Copper production is forecast to be 366,000 - 400,000 t on a consolidated basis in 2024. Higher consolidated copper production is forecast for 2024, mainly due to mine sequencing and the mine plan copper grade profile at Candelaria. Caserones copper production guidance has been increased to 120,000 - 130,000 t on an annual basis to reflect higher planned throughput rates in the mill.
Zinc production is forecast to increase to 195,000 - 215,000 t on a consolidated basis in 2024, increasing further over the three-year period to reach 220,000 - 240,000 t in 2025 and 2026.
Consolidated gold production is forecast to be 155,000 - 170,000 oz in 2024 and then taper through the three-year outlook period. Higher consolidated gold production in 2024 is due mainly to mine sequencing and the planned gold grade profile at Candelaria.
Nickel production is forecast to be 10,000 - 13,000 t in 2024 and then taper over the three-year period. The production profile is driven by the planned mine sequencing and nickel grade as the Eagle East and Upper Keel orebodies at Eagle are nearing the end of their mine life.
Production Outlook 7
| | | 2024 | | 2025 | | 2026 | | | | | | | | Copper (t) | | | | | | | | | | | | | | | Candelaria (100% basis) | 160,000 | - | 170,000 | | 150,000 | - | 160,000 | | 150,000 | - | 160,000 | | | Caserones (100% basis) | 120,000 | - | 130,000 | | 125,000 | - | 135,000 | | 125,000 | - | 135,000 | | | Chapada | 43,000 | - | 48,000 | | 40,000 | - | 45,000 | | 40,000 | - | 45,000 | | | Eagle | 9,000 | - | 12,000 | | 5,000 | - | 8,000 | | 5,000 | - | 8,000 | | | Neves-Corvo | 30,000 | - | 35,000 | | 35,000 | - | 40,000 | | 33,000 | - | 38,000 | | | Zinkgruvan | 4,000 | - | 5,000 | | 3,000 | - | 4,000 | | 3,000 | - | 4,000 | | | Total Copper | 366,000 | - | 400,000 | | 358,000 | - | 392,000 | | 356,000 | - | 390,000 | | | | | | | | | | | | | | | | Zinc (t) | | | | | | | | | | | | | | | Neves-Corvo | 120,000 | - | 130,000 | | 140,000 | - | 150,000 | | 140,000 | - | 150,000 | | | Zinkgruvan | 75,000 | - | 85,000 | | 80,000 | - | 90,000 | | 80,000 | - | 90,000 | | | Total Zinc | 195,000 | - | 215,000 | | 220,000 | - | 240,000 | | 220,000 | - | 240,000 | | | | | | | | | | | | | | | | Gold (oz) | | | | | | | | | | | | | | | Candelaria (100% basis) 8 | 100,000 | - | 110,000 | | 90,000 | - | 100,000 | | 85,000 | - | 95,000 | | | Chapada | 55,000 | - | 60,000 | | 55,000 | - | 60,000 | | 55,000 | - | 60,000 | | | Total Gold | 155,000 | - | 170,000 | | 145,000 | - | 160,000 | | 140,000 | - | 155,000 | | | | | | | | | | | | | | | | Nickel (t) | | | | | | | | | | | | | | | Eagle | 10,000 | - | 13,000 | | 5,000 | - | 8,000 | | 4,000 | - | 7,000 | | | Total Nickel | 10,000 | - | 13,000 | | 5,000 | - | 8,000 | | 4,000 | - | 7,000 | | | | | | | | | | | | | | | | Molybdenum (t) | | | | | | | | | | | | | | | Caserones (100% basis) | 2,500 | - | 3,000 | | 1,500 | - | 2,000 | | 2,500 | - | 3,000 | | | Total Molybdenum | 2,500 | - | 3,000 | | 1,500 | - | 2,000 | | 2,500 | - | 3,000 | | | | | | | | | | | | | | |
| | | 7 Production guidance is based on certain estimates and assumptions, including but not limited to Mineral Resources and Mineral Reserves, geological formations, grade and continuity of deposits and metallurgical characteristics. | | 8 68% of Candelaria's total gold and silver production are subject to a streaming agreement. |
Candelaria: Annual fluctuations in copper and gold production forecasts for the next three years are primarily due to sequencing of the Candelaria open pit. An increase in annual production this year is expected from higher copper and gold grades in the lower benches of Phase 11. Initial ore from Phase 12 will begin in 2024 and increase through 2026.
Over the guidance period, total mill throughput is forecast to range between 27 - 29 million tonnes per annum ("Mtpa"). Debottlenecking initiatives of the Candelaria plant pebble crushing circuit were completed in 2023. Based on the planned mill feed blend and the ore hardness throughput model, annual throughput is expected to approximate 29 Mtpa commencing in 2025.
Candelaria's 2024 copper and gold production are forecast to be weighted to the second half of the year, primarily owing to mine sequencing and the resultant grade profiles.
Caserones: During 2024, ore to the concentrator will come from Phases 5 and 6 which is expected to have a lower grade profile compared to 2023. Annual ore throughput is projected to be approximately 34 – 36 Mtpa. Cathode production will range between 15 – 19 ktpa. In 2025 and 2026 ore will be supplied from Phases 6 and 7 which is projected to have similar grades to 2024.
Chapada: Production guidance is based on the current throughput capacity of approximately 23.5 Mtpa over the three-year period with annual fluctuations primarily due to mine sequencing and the forecasted copper and gold grade profiles.
Ore mining is planned from the North, Southwest, South and Baru pits through 2025 followed by South, Southwest and Baru.
Eagle: Eagle will be producing ore at similar rates as in 2023 and will be primarily sourced from Eagle East. Metal production is modestly weighted to the first half of the year driven by the higher-grade zone on the lower levels of Eagle East. Development of the Upper Eagle East zone referred to as the 'Keel Zone' will progress to enable access to those zones in late 2024 with production ramp up in 2025/26. The remaining stopes in the upper zones at Eagle will remain productive through 2024 as supplemental ore to meet the annual production plan.
Neves-Corvo: Copper production guidance is consistent with prior expectations. 2024 copper production is forecast to be weighted to the second half of the year owing to mine sequencing and the resultant grade profiles. Additional ground support in the mine will be required in the Lombador orebody to maintain mining rates.
Zinkgruvan: Zinc metal production is forecasted to increase over the three-year period with increased production volume and refinement of operating plans. Zinc head grades are expected to be consistent over the period. Metal recovery rates and concentrate grades are anticipated to improve with further adjustments to the recently improved sequential flotation process. Zinkgruvan's 2024 zinc production is forecast to be modestly weighted to the first half of the year, primarily owing to higher zinc ore throughput. Development towards Dalby and Mellanby orebodies will open new production areas in later 2025.
2024 Cash Cost 9 Guidance
2024 cash cost guidance is estimated to be:
| Cash Cost | 2024 10 | | | | | | | | | | | Copper | | | | | | | | | | | | | Candelaria 11 | $1.60/lb | - | $1.80/lb | | | | | | | | | Caserones | $2.60lb | - | $2.80/lb | | | | | | | | | Chapada | $1.95/lb | - | $2.15/lb | | | | | | | | | Neves-Corvo | $1.95/lb | - | $2.15/lb | | | | | | | | | | | | | | | | | | | | Zinc | | | | | | | | | | | | | Zinkgruvan | $0.45/lb | - | $0.50/lb | | | | | | | | | | | | | | | | | | | | Nickel | | | | | | | | | | | | | Eagle | $2.80/lb | - | $3.00/lb | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Candelaria: Cash cost is forecast to be $1.60 /lb – $1.80 /lb of copper, after by-product credits. The cash cost is expected to benefit from a higher production profile and realized savings from synergies between Candelaria and Caserones. By-product credits have been adjusted for the terms of the gold streaming agreement.
Caserones: Cash cost is forecast to be $2.60 /lb – $2.80 /lb of copper, after by-product credits. The forecasted increase in Caserones cash cost compared to 2023 reflects lower grade, higher operating costs, as well as lower by-product credits. Mill throughput is forecast to increase by 2 – 3 Mtpa compared to 2023 based on the expected plant utilization and improved availability of the mill.
Chapada: Cash cost is forecast to be $1.95 /lb – $2.15 /lb of copper in 2024, after unencumbered gold by-product credits. The forecasted decrease in Chapada's cash costs compared to 2023 reflects lower mine movement volumes and expected savings as the result of cost savings initiatives that were identified late last year as part of an operational optimization process. Effects of copper stream agreements are reflected in the realized copper revenue.
Eagle: Cash cost is forecast to be $2.80 /lb – $3.00 /lb of nickel in 2024, after by-product copper credits. The forecast increase compared to 2023 is primarily a reflection of planned lower production volumes and by-product credits.
Neves-Corvo : Cash cost is forecast to be $1.95 /lb – $2.15 /lb of copper in 2024, after zinc and lead by-product credits. The cash cost is expected to improve compared to the previous year as zinc and lead production volumes increase.
Zinkgruvan: Cash cost is forecast to be $0.45 /lb – $0.50 /lb of zinc, after copper and lead by-product credits, consistent with 2023 levels.
| | | 9 This is a non-GAAP measure. For equivalent historical non-GAAP financial measure comparatives see the Historical Non-GAAP Measure Comparatives section of this press release. Please also see the Management's Discussion and Analysis for the year ended December 31, 2022 and nine months ended September 30, 2023. | | 10 2024 cash costs are based on various assumptions and estimates, including, but not limited to: production volumes, commodity prices (2024 - Cu: $3.75/lb, Zn: $1.10/lb, Mo: $20.00/lb, Pb: $0.90/lb, Au: $1,800/oz: Ag: $23.00/oz) foreign currency exchange rates (2024 - €/USD:1.05, USD/SEK:10.50, CLP/USD:850, USD/BRL:5.00) and operating costs. | | 11 68% of Candelaria's total gold and silver production are subject to a streaming agreement and as such cash costs are calculated based on receipt of $425/oz and $4.25/oz, respectively, on gold and silver sales in the year. |
2024 Capital Expenditure Guidance
Capital expenditures are forecast to total $1,065 million on a 100% basis, including expansionary capital expenditures 12 on the Josemaria Project. The majority of sustaining capital expenditures are for open pit waste stripping, underground mine development, tailings storage facility ("TSF") and water management works.
| Capital Expenditures ($ millions) | 2024 12, 13 | | | Sustaining Capital | | | | | Candelaria (100% basis) | $300 | | | Caserones (100% basis) | $205 | | | Chapada | $110 | | | Eagle | $25 | | | Neves-Corvo | $125 | | | Zinkgruvan | $75 | | | Total Sustaining Capital | $840 | | | | | | Josemaria Project | $225 | | | | | | | Total Capital Expenditures | $1,065 | |
Candelaria ( $300 million ): Capitalized waste stripping is forecast to be $170 million , and underground mine development, including ramp works, of approximately $16 million . Capital expenditure for mobile and mine equipment is forecast to be $40 million , and $22 million is estimated for the continued building of the Los Diques tailings storage facility ("TSF"). Other sustaining capital requirements are estimated at $40 million .
Caserones ( $205 million ): This includes approximately $80 million for capitalized waste stripping, $60 million for TSF and water management systems, and $12 million for mine and mobile equipment. Other sustaining capital requirements are estimated at $35 million .