Building a World Class Base Metals Mining Company

Transcription

1 Building a World Class Base Metals Mining Company

2 Cautionary Statements Caution Regarding Forward Looking Statements This presentation contains forward-looking statements. These forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events. These forward-looking statements are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Caution Regarding Inferred Resources This presentation uses the terms "Measured", "Indicated" and "Inferred" Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them. "Inferred Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimated of Inferred Resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into reserves.

3 2007 First Quarter Q1 Highlights Net earnings US $53.7 million on sales of US $194 million Cash flow US $10.7 million* Record throughput at Neves-Corvo (21% increase) and Zinkgruvan (39% increase) Copper production at Neves-Corvo up 21.5% Overall copper production up 9.3% Production (Metal Contained in Concentrate) Copper 24,600 tonnes Zinc 37,894 tonnes Lead 11,047 tonnes Silver 680,828 ounces *affected by tax payments of US $41 million + increased accounts receivable at Neves Corvo

4 Q1 Financial Results (US$ millions) Q1/07 Q4/06 Q1/06 YE/06 Q1/07 Q4/06 Q1/06 YE/06 Q1/07 Q4/06 Q1/06 YE/06 EBITDA Earnings EPS ($/share) Fewer shipments lead to high inventories at end of Q1 EuroZinc included as of November 1, 2006

5 Q1 Financial Results (US$ millions) Q1/07 Q4/06 Q1/06 YE/06 Q1/07 Q4/06 Q1/06 YE/06 Q1/07 Q4/06 Q1/06 YE/06 Sales Operating Profit (EBIT) Operating Cash Flow Strong balance sheet working capital US $303 million cash US $317 million EuroZinc included as of November 1, 2006

6 Q1 Milled Ore ( 000 tonnes) 2,500 Neves-Corvo 900 Zinkgruvan Q1/07 Q4/06 Q1/06 YE/06 Q1/07 Q4/06 Q1/06 YE/ Galmoy 400 Storliden Q1/07 Q4/06 Q1/06 YE/06 Q1/07 Q4/06 Q1/06 YE/06

7 Q1 Metal Concentrate Production 180 Zinc ( 000 tonnes) 100 Copper ( 000 tonnes) Q1/07 Q4/06 Q1/06 YE/06 Q1/07 Q4/06 Q1/06 YE/06 50 Lead ( 000 tonnes) 3,000 Silver ( 000 ounces) Q1/07 Q4/06 Q1/06 YE/06 Q1/07 Q4/06 Q1/06 YE/06

8 Operating Profit by Mine (US $millions) Q1/07 Q1/06 YE/06 Zinkgruvan Storliden Galmoy Neves-Corvo* *Neves-Corvo is included as of November 1, 2006

9 Corporate Headquarters Vancouver, Canada Operations Headquarters Stockholm, Sweden Business Development Reading, England Operations Office Moscow, Russia World Wide Operations

10 Lundin Mining Asset Summary Production Assets Projects Exploration Investments Neves-Corvo, Portugal Zinkgruvan, Sweden Storliden, Sweden Galmoy, Ireland Aljustrel, Portugal Ozernoe, Russia Tenke, DRC (pending merger) Portugal Iberian Pyrite Belt Sweden Skellefte Bergslagen Sunridge Gold Sanu Resources Mantle Resources Union Resources Aguablanca, Spain (pending acquisition) Ireland Galmoy Mine Area Chariot Resources (pending acquisition) Spain Toral District 2006 production 90,000 tonnes of copper, 171,000 tonnes of zinc, 45,000 tonnes of lead and 2,500,000 ounces of silver

11 Neves-Corvo, Portugal Zinc Q1-07 Q1-06 Ore milled (tonnes) 94,200 - Head grade 8.2% - Zinc metal produced (tonnes) 6,193 - Copper Q1-07 Q1-06 Ore milled (tonnes) 538, ,570 Head grade 5.0% 4.2% Copper metal produced (tonnes) 23,405 9,261 Copper cash prod. cost* US$ 0.65/lb US$ 0.83/lb Q a 21% increase in milled ore - record level Increased mill throughput by 21% Financial Results Q1-07 Q1-06 Fewer shipments leading to inventory build-up Revenue 111,507 - Zinc production at a steady, increasing, rate since start in 2006 Operating Profit 53,927 - * Net of by-product credits

12 Zinkgruvan Mine, Sweden Financial Results Q1-07 Q1-06 Revenue 49,476 38,453 Operating Profit 30,766 24,139 Q1-07 Q1-06 Ore milled (tonnes) 235, ,765 Zinc head grade 7.7% 11.2% Lead head grade 4.2% 5.2% Zinc metal prod. (tonnes) 17,162 17,957 Lead metal prod. (tonnes) 8,643 7,793 Zinc Cash Prod. Cost * US$ 0.23/lb US$ 0.35/lb 30% increase in mine tonnage Q1-07 vs. Q1-06 Ore processed 235,000 tonnes, 39% increase record level Feed grades lower mining sequence High recoveries Extension of mine life Dalby/Finnafallet Project investigating Cu production and increased production * Net of by-product credits

13 Galmoy Mine, Ireland Financial Results Q1-07 Q1-06 Revenues 17,752 27,408 Operating Profit 610 8,580 Q1-07 Q1-06 Ore milled (tonnes) 94, ,053 Zinc head grade 12.8% 13.2% Lead head grade 35% 3.5% 43% 4.3% Zinc metal prod. (tonnes) Lead metal prod. (tonnes) 9,961 17,217 2,404 4,441 Zinc Cash Prod. Cost * US$ 1.15/lb US$ 0.60/lb Production in January and February negatively influenced by negotiations and a tragic accident 50% utilization rate in January standstill for 8 days in February Run of mine ore grades were lower mining sequence - lead recovery was 73 % - substantial improvement Modifications to the zinc flotation circuit increase zinc recovery New promising drill results - continued aggressive drill program * Net of by-product credits

14 Storliden Mine, Sweden Financial Results Q1-07 Q1-06 Revenues 15,544 25,892 Operating Profit 4,748 9,153 Q1-07 Q1-06 Ore milled (tonnes) 64,547 98,064 Copper head grade 2.0% 3.6% Zinc head grade 7.6% 9.2% Copper metal prod. (tonnes) 1,198 3,253 Zinc metal prod. (tonnes) 4,578 8,198 Zinc Cash Prod. Cost * US$0.09/lb09/lb US$<0/lb Production until end of this year Planned lower production and head grades in Q1 * Net of by-product credits

15 Aljustrel Project, Portugal Tonnes ( 000) Zn (%) Pb (%) Reserves 14, Resources (M&I) 23, Inferred 9, Est. LOM 10+ years Resources incl. of reserves, as of December 31, 2006 Est. Annual Production (at full capacity) Ore milled 1,800, tonnes Zinc metal contained 80,000 tonnes Lead metal contained 17,000 tonnes Development at the Moinho mine on target start up September 2007 Feitais mine development delayed, will however be able to meet planned schedule Treatment plant preparation work is on track Silver metal contained 1.25 m oz. Zinc Cash Prod. Cost * US$ 0.48/lb * Net of by-product credits

16 Ozernoe Zinc/Lead Project, Russia Plan for conventional open pit mine, stripping ratio 3.3 : 1 Commence BFS in May, 2007 Management and staff recruited Production start 2009/2010 Full production 2011/2012 at 300,000 to 350,000 tpa zinc Hatch Engineering doing feasibility ABN AMRO financial advisor

17 Exploration Ireland and Sweden Focus on near-mine exploration Promising near mine results at Galmoy drilling to continue potential to extend life of mine Scoping study underway at Norrliden discovery in Sweden Portugal Lombador minex, Chanca greenfield, regional geophysics Spain Toral drilling to test extension of historical resource

18 Two New Pending Major Transactions Acquisition of Rio Narcea Gold Mines, Ltd. Merger with Tenke Mining Corp.

19 Rio Narcea Acquisition

20 Rio Narcea Transaction Summary Takeover Bid Consideration Valuation Other Financing Offer to acquire all issued and outstanding shares of Rio Narcea Gold Mines, Ltd. Cash offer of Cdn $5.00 per share 22.9% premium to 30 day VWAP Cdn $864 million Red Back Mining Inc. option to acquire Tasiast gold project upon successful completion of takeover in consideration for US $225 million cash and assumption of US $42.5 million debt related to Tasiast project US $800 million senior credit facility through Scotia Capital

21 Salave Rio Narcea Project Locations PORTUGAL Aljustrel Mine Aguablanca Mine Neves Corvo Mine Tasiast Mine Lundin Mining Projects

22 Rio Narcea Asset Summary Aguablanca Tasiast Exploration Chariot Resources Salave Producing nickel/copper mine in southern Spain. Gold development project in Mauritania under development. Production in H2/07. Greenfield and brown field base and precious metals in Spain, Portugal and Mauritania. 20% equity investment. Flagship Marcona copper development project in Peru. Gold project in Spain court case on change of land use.

23 Rio Narcea Resource Summary YE2006 Nickel/Copper Aguablanca (0.2% Ni cutoff) Category Tonnes Ni Cu Contained Contained (000) (%) (%) Ni (Tonnes) Cu (Tonnes) P + P 11, ,100 54,400 M + I 14, ,400 71,400 Inferred 4, ,800 14,400 Gold Tasiast (0.8 g/t cutoff) Calculation based on US $491 gold price Category Tonnes Grade Contained Au (000) (g/t) (ounces) P + P 11, ,040,000 M + I 14, ,230,000 Inferred 18, ,165,000 Salave development subject to legal proceedings has M+I resources containing 1.5 million oz Au, Inferred 223,000 oz

24 Tenke Merger

25 Consideration Structure Company Name Tenke Merger Summary 1.73 shares of Lundin Mining for each Tenke share representing a 31.2% premium based on Tenke and Lundin Mining 20 day TSX VWAP Plan of Arrangement - recommended by both Boards Lundin Mining Corporation Valuation Cdn $1.4 billion based on Lundin Mining s i 20 day TSX VWAP of $13.51 per share Other Management Subjects South American assets spun out to Tenke shareholders through StubCo along with US $5 million cash Paul Conibear, President and CEO of Tenke will join Lundin Mining in senior management position responsible for Tenke Fungurume and will become President and CEO of StubCo Regulatory, Court and Tenke and Lundin shareholder approval

26 Tenke Project Locations Existing Tenke shareholders benefit from spinout of South American assets. Targeted to unlocking their value

27 Tenke Mining Asset Summary Tenke Fungurume South America Balance Sheet Extraordinarily rich copper/cobalt deposit in the DRC under development by partner Phelps Dodge/Freeport. Production startup in late % interest. Advanced stage to early stage copper/gold exploration in Argentina and Chile. Assets to be spun out to Tenke shareholders. US $86 million cash post StubCo. No debt. 60 million shares outstanding.

28 Tenke Fungurume Resource Summary Copper/Cobalt Tenke Fungurume NI 43, NI June 2006, Mintec and Nilsson Mine Services Category Tonnes (000) Cu (%) Co (%) Contained Cu (Tonnes) Contained Co (Tonnes) M+I 235, ,070, ,000 Inferred 264, ,860, ,000 Less than half of the concession area explored Resource estimate to be updated Q to include last 15 months of drilling

29 The Famous Green Wall

30 Tenke Fungurume Copper/Cobalt Project Goma Deposits Fwalu Deposits Kwatebala Deposit Airstrip Known copper mineralization Tenke Village Fungurume Village Pumpi Deposits Rail Line (to Kolwezi) High Voltage Power Line TFM Camp A mining district unto itself

31 An Exceptional Deposit Cumulative strike length greater than 80 km Oxides to 150 m depth (oxides 30% of resource) (oxides 30% of resource) Sulphides to greater than 500 m depth Excellent upside - mineralization open in all directions

32 Soon to be a Major Copper Producer 40 year mine plan Open pit strip ratio 3.1:1 First 10 years grade 4.57% copper and 0.37% cobalt Initial production rate 115,000 tpa copper and 8,000 tpa cobalt startup in Q4 2008/Q US$650 million capital cost (70/30 PD/TNK) Cash cost negative US$0.19/lb (including $10/lb cobalt credit) Expansion plans envision 400, tpa copper

33 Local Infrastructure Waste Dump Plant Access Road Construction Village Airstrip Tailings Pond Fwalu Pits Kwatebala Pit 220 KV Power Line SNEL Power Substation Goma Pits SNCC Railway 150 KV Power Line TFM Camp National Road Each grid line = 2km

34 Transport Options

35 Known and studied d since the early 1900 s Important to the future of the DRC

36 Jobs, Schools, Social Programs, Agriculture

37 Tenke Fungurume Tenke Fungurume One of the most significant copper deposits in the world

38 Lundin Mining Proforma

39 Transaction Timeline May 18 May 23 June 18 June 21 Interim court application Mailing date for Lundin and Tenke Circulars Lundin Mining Corporation - Annual and Special General Meeting Tenke Mining Corp. - Special General Meeting Final court approval of Tenke transaction June 29 Expiry of Rio Narcea Bid (extension from original expiry of May 29) July 3 Close Tenke transaction (effective date of June 30)

40 Lundin Mining Asset Summary Production Assets Projects Exploration Investments Neves-Corvo, Portugal Zinkgruvan, Sweden Storliden, Sweden Galmoy, Ireland Aljustrel, Portugal Ozernoe, Russia Tenke, DRC (pending merger) Portugal Iberian Pyrite Belt Sweden Skellefte Bergslagen Sunridge Gold Sanu Resources Mantle Resources Union Resources Aguablanca, Spain (pending acquisition) Ireland Galmoy Mine Area Chariot Resources (pending acquisition) Spain Toral District 2006 production 90,000 tonnes of copper, 171,000 tonnes of zinc, 45,000 tonnes of lead and 2,500,000 ounces of silver

41 Lundin Mining Corporation Pro Forma Capital Structure Price (1) Shares Basic/FD Market (2) Cash Debt EV EV (2) (CDN) Cap LUN C$ / , , ,710.4 LUN + RNG (3) C$ / , , ,186.1 LUN + RNG (3) + TNK C$ / , , , (1) Prices as of April 25, 2007 (2) US/CDN = (3) Includes sale of Tasiast to RBI (in millions and $US unless otherwise noted)

42 Growing Production Profile Production Zinc Equivalent 1000 kt Zn 900 kt 800 kt 700 kt 600 kt 500 kt 400 kt 300 kt 200 kt 100 kt 0 kt Ni "new" Pb Co "new" Ag Cu "new" Cu Notes: equivalents based on 2006 metal prices, preliminary production ramp-ups at Ozernoe, N-C Zinc Zn $1.48/lb, Ni $11.01/lb, Pb $0.58/lb, Cu $3.05/lb, Ag $11.55/oz, Co $14/lb

43 A Growing Global Portfolio Post Transactions 393 mm shares o/s proforma LUN TSX, LMC AMEX, LUMI - Stockholm