Lundin Mining Reports Third Quarter Results

Lundin Mining Reports Third Quarter Results 
TORONTO, ONTARIO -- (Marketwire) -- 10/24/12 -- Lundin Mining
Corporation ("Lundin Mining" or the "Company") (TSX:LUN)(OMX:LUMI)
today reported net earnings of $37.9 million ($0.07 per share) for
the three months ended September 30, 2012 compared to $16.4 million
($0.03 per share) for the three months ended September 30, 2011.  
Sales volumes in the current quarter were directly impacted by labour
action of dock workers in Portugal and Sweden resulting in lower
sales volumes than the prior quarter, with the offsetting positive
impact to be realized in the fourth quarter. Unit cash costs(1) of
$1.87/lb for copper were in line with expectations after taking into
account planned maintenance, and were much lower than the $2.35/lb
realized the third quarter of 2011. Unit cash costs for zinc were
$0.08/lb for the quarter compared to $0.13/lb in the third quarter of
last year. 
Paul Conibear, President and CEO, commented, "Our operations
performed well this quarter, building on the production increases of
the past two quarters of 2012. The Company continues to expect to
deliver a strong fourth quarter operationally, with production from
all metals now anticipated to be near the high-end of our guidance
In addition, we continue to be very pleased with the performance at
Tenke. For the quarter, production at Tenke achieved another all-time
record high for both copper and cobalt, while the Phase II Expansion
Project remains on budget and is expected to be substantially
completed by year end.  
The sustained execution by our operating teams continues to underpin
our ability to add value by consistently achieving strong operational
performance at all of our mines."   

Summary financial results for the quarter and year-to-date:                 
                                               Three months      Nine months
                                                      ended            ended
                                               September 30     September 30
US$Millions (except per share amounts)        2012     2011     2012    2011
Sales                                        159.6    146.2    544.6   541.7
Operating earnings(2)                         71.1     53.8    256.9   257.6
Net earnings                                  37.9     16.4    140.3   147.6
Basic earnings per share                      0.07     0.03     0.24    0.25
Cash flow from operations                    (25.7)   (36.6)   144.6   194.8
Ending cash position                         255.9    256.2    255.9   256.2
(1) Cash cost/lb of copper and zinc are non-GAAP measures defined as all    
cash costs directly attributable to mining operating, less royalties and by-
product credits.                                                            
(2) Operating earnings is a non-GAAP measure defined as sales, less         
operating costs (excluding depreciation) and general and administrative     

Operational Highlights 
Wholly-owned operations: The Company continued to perform well in the
third quarter with production and operational results that were in
line with expectations. Financial results for the quarter were
affected by labour action by dock workers in Portugal and Sweden.
This resulted in a disruption to concentrate shipments in the latter
part of September and some of the quarter's sales were pushed into
the fourth quarter.  

--  Operational improvements, on target grades, good copper recoveries and
    out of reserve mining continued to assist Neves-Corvo metal production. 
--  Zinkgruvan experienced another quarter of high zinc and lead head grades
    resulting in higher metal production than last year; grades are expected
    to return to historical levels in the fourth quarter.  
--  Aguablanca recommenced production in August 2012, ahead of schedule,
    with ramp up towards full production expected in the fourth quarter. The
    Company continues to monitor new south pit wall stability issues and is
    taking additional measures to secure areas deemed to be higher risk. 

Tenke: The mine and mill continue to perform very well, achieving
record mining, milling and copper production rates. Construction
activities on the Phase II expansion are expected to be on budget and
substantially completed by the end of 2012; currently, the expansion
is approximately 90% complete. The addition of a second sulphuric
acid plant is expected to be completed in 2015.  

--  A combination of the higher mining rate due to additional mine equipment
    and the increase in mill throughput from the ramp-up of parts of the
    Phase II expanded facilities (including the new jaw crusher which was
    completed ahead of schedule), resulted in production being higher than
--  Cobalt production was in line with expectations. 
--  A cash call for $15.0 million was funded by the Company during the
    quarter to cover sustaining capital, on-going concession exploration and
    expansion initiatives. If copper prices remain strong, surplus cash from
    Tenke operations should be sufficient to cover the Company's share of
    capital and non-capital requirements for the remainder of the year. 
Total production from the Company's assets including attributable share of  
                YTD     Q3     Q2     Q1      FY     Q4     Q3     Q2     Q1
(tonnes)       2012   2012   2012   2012    2011   2011   2011   2011   2011
Copper       49,654 15,573 16,936 17,145  75,877 27,488 15,419 13,831 19,139
Zinc         93,043 28,452 31,972 32,619 111,445 27,053 28,791 27,404 28,197
Lead         30,111  9,365  9,780 10,966  41,130  9,273 10,077 10,367 11,413
Nickel          693    693      -      -       -      -      -      -      -
Tenke attributable(a)                                 
 Copper      27,503  9,947  8,632  8,924  31,523  8,635  7,982  7,398  7,508
a.  Lundin Mining's attributable share of Tenke's production was reduced
    from 24.75% to 24.0% effective March 26, 2012, when changes to bylaws of
    Tenke Fungurume Mining ("TFM") were signed. 

Financial Highlights 

--  Operating earnings for the third quarter of 2012 were $71.1 million, an
    increase of $17.3 million from the $53.8 million reported in the
    comparable quarter of 2011. The increase was largely attributable to
    lower per unit production costs ($10.4 million) and favourable foreign
    exchange rates ($6.0 million).
    On a year-to-date basis, operating earnings of $256.9 million were in
    line with the $257.6 million reported for the first nine months of 2011.
    The $0.7 million decrease in operating earnings was mainly attributable
    to lower realized metal prices for current period sales ($62.4 million),
    partially offset by prior period price adjustments ($14.9 million),
    lower costs ($21.4 million) and favourable effects of foreign exchange
    ($20.3 million). 
--  For the quarter ended September 30, 2012, sales of $159.6 million
    increased $13.4 million over the prior year ($146.2 million) which was
    mainly as a result of higher sales volume ($5.9 million), higher
    realized metal prices for current quarter sales ($5.4 million) and
    positive prior period price adjustments ($2.1 million). The increase in
    volume from the restart of the Aguablanca mine was partially offset by a
    stevedore strike in Portugal which prevented the loading and shipment of
    concentrate, leaving approximately 11,000 dry metric tonnes ("dmt") of
    copper concentrate in inventory at the end of the period.
    Sales of $544.6 million for the nine months ended September 30, 2012
    were in line with the comparable period in 2011 ($541.7 million). Lower
    realized metal prices ($62.4 million) were more than offset by the
    effects of higher sales volume ($50.4 million) and prior period price
    adjustments ($14.9 million). 
--  Average metal prices for copper, zinc and lead for the three and nine
    months ended September 30, 2012 were significantly lower (14% - 27%)
    than the same periods in the prior year. 
--  Operating costs (excluding depreciation) of $82.3 million in the current
    quarter were slightly lower than the prior year comparative quarter of
    $88.2 million as a result of lower per unit production costs and
    positive foreign exchange impacts at both Neves-Corvo and Zinkgruvan.
    On a year-to-date basis, operating costs (excluding depreciation) for
    the nine months ended September 30, 2012 of $267.7 million were
    marginally lower than the $269.8 million reported for the first half of
--  Net earnings of $37.9 million ($0.07 per share) in the current quarter
    were $21.5 million higher than the $16.4 million ($0.03 per share)
    reported in 2011. Earnings were impacted by: 
    --  higher equity earnings from investment in Tenke ($7.8 million); 
    --  lower unrealized loss on revaluation of marketable securities ($8.6
    --  lower depreciation, depletion and amortization expense ($6.7
    --  lower tax expense of $14.1 million, $12.5 million (EUR9.1 million)
        of which relates to a Spanish tax assessment recorded in 2011 for
        deductibility of accelerated depreciation; offset by 
    --  lower other income ($25.3 million) arising mostly from reduced
        foreign exchange gains. 
--  Cash outflow from operations for the current quarter was $25.7 million
    compared to $36.6 million for 2011. The comparative decrease in the cash
    outflow is mostly attributable to higher net earnings in the current
    For the nine months ended September 30, 2012, cash flow from operations
    was $144.6 million compared to $194.8 million for 2011 primarily as a
    result of changes in non-cash working capital. 

Tenke Fungurume  

--  Milling facilities continued to produce above rated capacity, with
    throughput averaging 13,600 metric tonnes of ore per day in the third
    quarter of 2012, approximately 700 metric tonnes of ore per day higher
    than the previous quarter in 2012. 
--  For the quarter ended September 30, 2012, Tenke produced 41,446 tonnes
    of copper and sold 39,790 tonnes at an average realized price of
    $3.53/lb. In addition, 3,356 tonnes of cobalt in hydroxide was produced
    and 3,519 tonnes were sold at an average realized price of $8.29/lb of
--  Cash costs of $1.23/lb of copper in the third quarter of 2012 were
    higher than the $1.12/lb in the prior year comparable quarter,
    reflecting lower cobalt credits and higher consumable costs. 
--  Cash advances of $15.0 million were made to Tenke in the quarter ended
    September 30, 2012. During the quarter, $38.4 million was spent on our
    attributable share of capital requirements, which was funded by the
    above noted cash call and excess cash flow from operations. 
--  Attributable operating cash flow related to Tenke for the third quarter
    of 2012 was $26.1 million and now totals $106.7 million year-to-date. 

Financial Position and Financing 

--  Net cash(1) position at September 30, 2012 was $245.0 million compared
    to $236.1 million at December 31, 2011, $312.7 million at June 30, 2012
    and $208.7 million at September 30, 2011.  
--  The $67.7 million decrease in net cash during the quarter was primarily
    attributable to cash outflow from operations of $25.7 million (including
    a $61.7 million outflow for working capital), investment in mineral
    properties, plant and equipment of $37.3 million and a $15.0 million
    cash advance to Tenke. 
--  Year-to-date, net cash remained relatively unchanged as cash flow from
    operations was offset by investment in mineral properties, plant and
    equipment ($130.4 million) and a $15.0 million advance to Tenke.  
--  Cash balance at October 22, 2012 was approximately $290 million. 

Corporate Highlights 

--  On September 4, 2012 the Company reported its Mineral Reserve and
    Resource estimates as at June 30, 2012. The full press release can be
    found on the Company's website at 
--  The Company announced its intention not to exercise its option under the
    purchase option agreement to acquire a controlling interest in the Touro
    copper project located in northern Spain. See press release entitled
    "Lundin Mining update on Touro Copper Project Option", dated September
    25, 2012. 
--  As part of the Company's growth strategy to add more copper production
    to its asset base in established, low-risk mining jurisdictions,
    subsequent to quarter-ender, the Company committed to investments in two
    highly prospective, rapidly developing copper/gold projects. Both of
    these investments have advanced resource exploration in low altitude
    properties within the coastal cordillera of central Chile.  
    --  The Company has agreed, by way of a binding term sheet, to enter
        into a strategic agreement with Southern Hemisphere Mining (SHM), a
        ASX/TSX-listed Chile-focused exploration company who control the
        Llahuin copper-gold porphyry project, located only 56 km from the
        Pacific Ocean. As part of the agreed terms, the Company can earn a
        direct interest of up to 75 per cent over a six-year period by
        spending up to $35 million at the Llahuin Project. Lundin Mining
        will fund the Llahuin project expenditures in stages with an initial
        commitment of $3 million to be spent on exploration within the first
        three years. Lundin Mining will also take a strategic 11.5% per cent
        stake in Southern Hemisphere by way of a $5 million share placement,
        $3 million of which will also be spent on the Llahuin Project.  
    --  The Company has also recently committed to making a $5 million
        private placement equity investment in ASX-listed Hot Chili Ltd.
        ("HCH") who control the advanced resource exploration stage
        Productora Cu-Au project, also located within the coastal cordillera
        belt of central Chile. This investment is subject to HCH shareholder
        approval expected prior to year end. 
(1)Net cash is a non-GAAP measure defined as available unrestricted cash    
less long-term debt and finance leases                                      

2012 Capital Expenditure Guidance 
Capital expenditures for 2012 are expected to be $380 million, $30
million lower than previous guidance as a result of reduced estimated
Tenke requirements. Estimated capital investment for the year is as

--  Sustaining capital in European operations - $130 million: Primarily in
    support of pre-stripping costs at Aguablanca and development costs at
    our Zinkgruvan and Neves-Corvo operations. 
--  New investment capital expenditures in European operations - $70
    million: Consisting largely of Lombador Phase I and Neves-Corvo water
    dam improvements. 
--  New investment in Tenke - $180 million: Estimated total capital
    expenditures for the year have been reduced by $30 million from previous
    guidance to reflect on budget performance of the Phase II expansion,
    deferral of some costs to 2013 and overall lower sustaining and
    expansion capital requirements this year. Year-to-date there has been
    one cash call for $15.0 million made by TFM from Lundin as surplus cash
    from operations has covered substantially all Phase II expansion costs
    incurred during the period. No other cash calls for 2012 are expected to

2012 Production and Cost Guidance  

--  Cash cost guidance for Zinkgruvan has been improved, reflecting overall
    better mine performance. 
--  Production guidance for Aguablanca has been increased to reflect earlier
    than planned restart of production at the mine. Despite stability issues
    on the south pit wall, no disruptions to planned concentrate production
    prior to year-end are expected as there is a significant amount of ore
    that has been stockpiled which will be supplemented with ongoing mining
    of ore from the north side of the pit. 
--  Guidance for Galmoy has also been updated to reflect better zinc
    production estimates prior to closure. 
--  Revised guidance from Freeport on Tenke's copper sales from 140,600 to
    149,700 tonnes (100% basis) has been reflected in the revised guidance
    below and is based on the assumption that production volumes will
    approximate sales. Freeport has also increased its guidance on full year
    cash cost as a result of lower average cobalt prices. 
2012 Guidance                   Prior Guidance              Revised Guidance
 tonnes)                     Tonnes C1 Cost(a)            Tonnes  C1 Cost(a)
Neves-Corvo    Cu   55,000 - 60,000  $    1.70   55,000 - 60,000  $     1.70
               Zn   25,000 - 30,000              25,000 - 30,000            
Zinkgruvan     Zn   77,000 - 83,000  $    0.20   77,000 - 83,000  $     0.15
               Pb   34,000 - 39,000              34,000 - 39,000            
               Cu     3,000 - 4,000                3,000 - 4,000            
Galmoy(b)      Zn     7,000 - 8,000                8,500 - 9,000            
(in ore)       Pb     1,500 - 2,000                1,000 - 1,100            
Aguablanca     Ni     1,000 - 1,500                1,500 - 2,000            
               Cu     1,000 - 1,500                1,500 - 2,000            
Total: Wholly- Cu   59,000 - 65,500              59,500 - 66,000            
 owned         Zn 109,000 - 121,000            110,500 - 122,000            
 operations    Pb   35,500 - 41,000              35,000 - 40,100            
               Ni     1,000 - 1,500                1,500 - 2,000            
Tenke: 24.0%                                                                
 share(c)      Cu            34,000  $    1.16            36,200  $     1.25
a.  Cash costs remain dependent upon exchange rates (forecast at
    EUR/USD:1.28, USD/SEK:6.80) and metal prices (forecast at Cu: $3.50, Zn:
b.  Galmoy production tonnage is based on a 50% attributable-share to
    Lundin Mining. 
c.  Lundin Mining's attributable share was reduced from 24.75% to 24.0% in
    March 2012, after approval of changes to TFM's bylaws. 

About Lundin Mining 
Lundin Mining Corporation is a diversified base metals mining company
with operations in Portugal, Sweden, Spain and Ireland, producing
copper, zinc, lead and nickel. In addition, Lundin Mining holds a
development project pipeline which includes expansion projects at its
Neves-Corvo mine, along with a 24% equity stake in the world-class
Tenke Fungurume copper/cobalt mine in the Democratic Republic of
Congo, which is undergoing expansion to 195,000 tonnes per annum
copper cathode production. 
On Behalf of the Board, 
Paul Conibear, President and CEO 
Forward-Looking Statements 
Certain of the statements made and information contained herein is
"forward-looking information" within the meaning of the Ontario
Securities Act. 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's 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, zinc, lead and nickel; 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. 
Lundin Mining Corporation
Sophia Shane
Investor Relations North America
Lundin Mining Corporation
John Miniotis
Senior Business Analyst
Lundin Mining Corporation
Robert Eriksson
Investor Relations Sweden
+46 8 545 015 50
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