22/02/2024 - Lundin Mining Corporation: Lundin Mining Fourth Quarter and Full Year 2023 Results

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NEWS RELEASE

Lundin Mining Fourth Quarter and Full Year 2023 Results

Vancouver, February 21, 2024 (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or the "Company") today reported its fourth quarter and full year 2023 financial results. Unless stated otherwise, results are presented on a 100% basis and Caserones results are from July 13, 2023.

Jack Lundin, President and CEO commented, "2023 was a milestone year for the Company. We finished the year generating a record $3.4 billion in revenues and achieved our best-ever quarterly and full year copper production which we forecast to further increase by over 15% in 2024. Our 2023 financial performance was strong with $1.4 billion in adjusted EBITDA1, $345 million in free cash flow from operations1 and we returned $206 million to our shareholders in dividends.

"The Company's record copper production was driven by our strategic acquisition of a majority interest in Chile's Caserones copper mine, as well as organically through our expansion project at Neves-Corvo, which also contributed to record fourth quarter zinc production for the Company. Going forward, we will be disciplined in our growth plans and capital allocation as we continue to optimize assets and operational efficiencies to drive down costs.

"At Josemaria, we're derisking the project via optimization and trade-off studies that aim to enhance the overall value of the Project. We are concurrently continuing to explore potential partnership opportunities and actively working towards establishing stability agreements in Argentina."

Fourth Quarter Highlights

• Copper Production: Consolidated production of 103,337 tonnes of copper in the fourth quarter, a quarterly record for the Company and an increase of over 80% on the same quarter in the previous year.
• Other Production: During the quarter, a total of 50,719 tonnes of zinc, 3,729 tonnes of nickel and approximately 44,000 ounces of gold were produced. The zinc expansion project ("ZEP") at Neves-Corvo contributed to record quarterly zinc volumes being produced.
• Revenue: $1,060.0 million in the fourth quarter.
• Adjusted EBITDA1: $419.7 million generated during the quarter.
• Adjusted Earnings1: Net earnings attributable to shareholders of the Company were $38.8 million ($0.05 per share) in the fourth quarter with adjusted earnings of $79.7 million ($0.10 per share).
• Cash Generation: Cash provided by operating activities1 was $306.1 million and free cash flow from operations was $116.8 million, which included a working capital build of $56.0 million.

Full Year 2023 Highlights

• Copper Production: Record copper production of 314,798 tonnes of copper for the full year which is above the midpoint of originally-published2 2023 annual copper production guidance.
• Revenue: $3,392.1 million for the full year.
• Adjusted EBITDA: $1,363.5 million generated during the full year.
• Adjusted Earnings: Net earnings attributable to shareholders of the Company were $241.6 million ($0.31 per share) in 2023 and adjusted earnings of $336.2 million ($0.44 per share).

1. These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2023 and the Reconciliation of Non-GAAP measures section at the end of this news release.
2. Guidance as outlined in the news release 'Lunding Mining Announces Closing of the Acquisition of Majority interest in the Caserones Mine in Chile and Commitments for New $800 Millon Term Loan' dated July 13, 2023 and 'Lundin Mining Announces 2022 Production Results & Provides 2023 Guidance" dated January 12, 2023.

• Cash Generation: During the year, cash provided by operating activities1 was $1,016.6 million and free cash flow from operations1 amounted to $345.1 million, which included a working capital build of $7.6 million.
• Balance Sheet: To fund the Caserones acquisition, the Company obtained a term loan in July 2023 of a principal amount of $800.0 million with an additional $400.0 million accordion option, maturing July 2026 ("Term Loan"). As at December 31, 2023, the Company had a net debt balance of $946.2 million, excluding lease liabilities.
• Growth: The Company acquired a 51% interest in the Caserones copper mine on July 13, 2023 which added an additional 120,000 to 130,000 tonnes of copper2 to the Company's production profile on a 100% basis. The acquisition adds another long-life asset in a tier one jurisdiction, which is strategically located in the Vicuña District.
• Leadership: Jack Lundin assumed the role of CEO in the fourth quarter of 2023. During the year several senior leadership changes took place to add financial, technical and operational capacity to the team as the Company's head office relocated to Vancouver.

Summary Financial Results

	Three months ended		Twelve months ended
	December 31,		December 31,
US$ Millions (except per share amounts)	2023	2022		2023	2022
Revenue	1,060.0	811.4		3,392.1	3,041.2
Gross profit	188.9	155.2		652.4	762.6
Attributable net earningsa	38.8	145.6		241.6	426.9
Net earnings	66.8	145.3		315.2	463.5
Adjusted earnings a,b,c	79.7	191.5		336.2	482.8
Adjusted EBITDAb,c	419.7	353.7		1,363.5	1,292.5
Basic and diluted earnings per share ("EPS")1	0.05	0.19		0.31	0.56
Adjusted EPSa,b,c	0.10	0.25		0.44	0.63
Cash provided by operating activities	306.1	156.9		1,016.6	876.9
Adjusted operating cash flowb	362.0	289.1		1,024.2	992.9
Adjusted operating cash flow per shareb	0.47	0.38		1.33	1.30
Free cash flow from operationsb	116.8	(35.7)		345.1	381.4
Free cash flowb	61.2	(124.3)		13.5	34.1
Cash and cash equivalents	268.8	191.4		268.8	191.4
Net (debt) cash excluding lease liabilitiesb	(946.2)	16.3		(946.2)	16.3
Net (debt) cashb	(1,223.4)	(10.9)		(1,223.4)	(10.9)

a. Attributable to shareholders of Lundin Mining Corporation.

b. These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the year ended December 31, 2023 and the Reconciliation of Non-GAAP Measures section at the end of this news release.

c. Q2 2023 amounts have been adjusted from those presented in the Company's MD&A for the three and six months ended June 30, 2023.

• For the year ended December 31, 2023 the Company generated revenue of $3,392.1 million (2022 - $3,041.2 million), gross profit of $652.4 million (2022 - $762.6 million) and adjusted EBITDA of $1,363.5 million (2022 - $1,292.5 million). Financial results include the contribution from the acquisition of the Caserones copper mine ("Caserones") located in Chile, from the closing date of the transaction on July 13, 2023.
• Net earnings attributable to shareholders of the Company were $38.8 million ($0.05 per share) in the fourth quarter, and were impacted by higher interest expenses and increased deferred tax on foreign exchange revaluation of non- monetary assets at the Josemaria Project in Argentina.

1. These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2023 and the Reconciliation of Non-GAAP measures section at the end of this news release.
2. Represents Caserones 2024 production guidance as outlined in the news release 'Lundin Mining Provides 2024 Guidance & Announces 2023 Production Results' dated January 14, 2024.

• Adjusted earnings1 attributable to shareholders of the Company for the twelve months ended December 31, 2023 of $336.2 million ($0.44 per share) were $146.6 million lower than the prior year after adjusting for the non-cash revaluation of derivative contracts, fair value adjustments relating to the Caserones acquisition and deferred tax relating to foreign exchange translation and a Chilean mining royalty rate change, among other things.
• Cash and cash equivalents as at December 31, 2023 were $268.8 million. Cash provided by operating activities of $1,016.6 million in the year ended December 31, 2023 was used to fund investing activities of $1,674.5 million. Investing activities in the year included $648.6 million net cash paid at closing for the acquisition of Caserones, consisting of $796.6 million upfront cash consideration after adjustments, net of $148 million cash and cash equivalents held by SCM Minera Lumina Copper Chile ("Lumina Copper") at closing on a 100% basis. Cash generated from financing activities was $728.6 million, which was comprised primarily of the proceeds from the Term Loan to finance the Caserones acquisition.
• Free cash flow1 for the three months ended December 31, 2023 of $61.2 million was $185.5 million higher than the prior year comparable period and benefited from the inclusion of Caserones cash flows as well as higher gross profit overall at the operations.
• As at February 21, 2024, the Company had a cash balance of approximately $446.7 million and a net debt balance excluding lease liabilities of approximately $851.4 million.

Operational Performance

Total Production

(Contained metal)a			2023					2022
	YTD	Q4	Q3	Q2	Q1	Total	Q4	Q3	Q2	Q1
Copper (t)b	314,798	103,337	89,942	60,057	61,462	249,659	56,552	63,930	64,096	65,081
Zinc (t)	185,161	50,719	49,774	36,115	48,553	158,938	44,308	40,327	41,912	32,391
Nickel (t)	16,429	3,729	4,290	4,686	3,724	17,475	4,096	4,379	4,719	4,281
Gold (koz)b	149	44	35	34	36	154	36	45	39	34
Molybdenum (t)b	2,024	928	1,096	-	-	-	-	-	-	-

a. Tonnes (t) and thousands of ounces (koz)

b. Candelaria and Caserones production is on a 100% basis. Caserones results are from July 13, 2023.

Candelaria (80% owned): Candelaria produced, on a 100% basis, 152,012 tonnes of copper, approximately 90,000 ounces of gold and 1.5 million ounces of silver in concentrate during the year. Copper production was consistent with the prior year due to higher throughput being offset by lower grades and recoveries. Gold production was higher than in the prior year due to higher throughput and grades. Both metals were within the most recently disclosed 2023 production guidance ranges. Total production costs were higher than the prior year primarily due to inflationary cost increases and unfavourable foreign exchange. Copper cash cost1 of $2.07/lb was within the most recently disclosed 2023 cash cost guidance range.

Caserones (51% owned): Caserones produced 65,210 tonnes of copper and 2,024 tonnes of molybdenum on a 100% basis during the year, from the acquisition closing date of July 13, 2023 to the end of the year. Both metals met or exceeded the most recently disclosed 2023 production guidance ranges due to strong throughput, grade and recoveries. Copper cash cost of $1.99/lb was slightly below the low end of the most recently disclosed cash cost guidance range as a result of higher production.

Chapada (100% owned): Chapada produced 45,719 tonnes of copper and approximately 59,000 ounces of gold, with copper production remaining consistent to the prior year and gold production being negatively impacted by lower grade, throughput, and recoveries. Both metals were within the most recently disclosed 2023 production guidance ranges. Total production costs were lower than the prior year due to lower sales volumes. Full year copper cash cost of $2.27/lb was below the low end of the most recently disclosed cash cost guidance.

1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2023 and the Reconciliation of Non-GAAP measures section at the end of this news release.

Eagle (100% owned): Eagle's production of 16,429 tonnes of nickel and 13,600 tonnes of copper were near the higher ends of recently disclosed 2023 production guidance ranges but lower than that in the prior year due to planned lower grades. Total production costs were lower than the prior year due to lower sales volumes. Nickel cash cost1 of $2.16/lb was within the most recently disclosed 2023 cash cost guidance range but higher than the prior year as a result of lower grade, lower by-product credits and higher repair and maintenance costs.

Neves-Corvo(100% owned): Neves-Corvo produced 33,823 tonnes of copper and 108,812 tonnes of zinc during the year. Zinc production increased significantly from the prior year due to higher throughput as a result of the zinc expansion project ("ZEP"). Copper production also increased due to higher throughput and production of both metals was within the most recently disclosed 2023 production guidance ranges. Total production costs were lower than in the prior year despite higher sales, primarily due to lower input costs, in particular lower electricity and diesel prices, partially offset by unfavourable foreign exchange. Copper cash cost1 of $2.37/lb for the year exceeded the most recently disclosed 2023 cash cost guidance range and was higher than in the prior year primarily due to lower zinc by-product credits, higher treatment and refining charges, and unfavourable foreign exchange.

Zinkgruvan (100% owned): Zinc production of 76,349 tonnes was consistent with the prior year, but slightly below the most recently disclosed 2023 production guidance range. Installation of a sequential flotation system during the year achieved improved recoveries, but a longer than anticipated ramp-up limited mill availability and reduced recoveries, limiting production of both lead and zinc. Lead production of 26,284 tonnes was also lower than in the prior year. Total production costs and sales volumes were consistent with the prior year and zinc cash cost1 of $0.43/lb was below the most recently disclosed 2023 cash cost guidance range but higher than in the prior year, primarily due to lower by-product credits.

1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2023 and the Reconciliation of Non-GAAP measures section at the end of this news release.

Outlook

Production, cash cost, capital expenditures and exploration investment guidance for 2024 remains unchanged from the most recently reported guidance as outlined in the news release 'Lundin Mining Provides 2024 Guidance & Announces 2023 Production Results" dated January 14, 2024.

2024 Production and Cash Cost Guidance

					Guidancea
	(contained metal)		Production	Cash Cost ($/lb)b
	Copper (t)	Candelaria (100%)	160,000	- 170,000	1.60 - 1.80c
		Caserones (100%)	120,000	- 130,000	2.60 - 2.80
		Chapada	43,000	- 48,000	1.95 - 2.15d
		Eagle	9,000	- 12,000
		Neves-Corvo	30,000	- 35,000	1.95 - 2.15c
		Zinkgruvan	4,000 - 5,000
		Total	366,000	- 400,000
	Zinc (t)	Neves-Corvo	120,000	- 130,000
		Zinkgruvan	75,000	- 85,000	0.45 - 0.50c
		Total	195,000	- 215,000
	Nickel (t)	Eagle	10,000	- 13,000	2.80 - 3.00
	Gold (koz)	Candelaria (100%)		100 - 110
		Chapada			55 - 60
		Total		155 - 170
	Molybdenum (t) Caserones (100%)	2,500 - 3,000

a. Guidance as outlined in the news release 'Lundin Mining Provides 2024 Guidance & Announces 2023 Production Results" dated January 14, 2024. b. Cash costs are based on various assumptions and estimates, including but not limited to: production volumes, commodity prices (Cu: $3.75/lb, Zn:

$1.10/lb,Pb: $0.90/lb, Au: $1,800/oz, Mo: $20.00/lb, Ag: $23.00/oz ), foreign exchange rates (€/USD:1.05, USD/SEK:10.50, USD/CLP:850, USD/BRL:5.00) and production costs. Cash cost is a non-GAAP measure - see section 'Non-GAAP and Other Performance Measures' of the Company's Management's Discussion and Analysis for the year ended December 31, 2023 and the Reconciliation of Non-GAAP Measures section at the end of this news release.

c. 68% of Candelaria's total gold and silver production are subject to a streaming agreement and silver production at Zinkgruvan and Neves-Corvo are also subject to streaming agreements. Cash costs are calculated based on receipt of approximately $429/oz gold and $4.28/oz to $4.68/oz silver.

d. Chapada's cash cost is calculated on a by-product basis and does not include the effects of its copper stream agreements. Effects of the copper stream agreements are reflected in copper revenue and will impact realized price per pound.

2024 Capital Expenditure Guidancea,b

	($ millions)
Candelaria (100% basis)	300
Caserones (100% basis)	205
Chapada	110
Eagle	25
Neves-Corvo	125
Zinkgruvan	75
Other	-
Total Sustaining	840
Josemaria (expansionary)	225
Total Capital Expenditures	1,065

a. Guidance as outlined in the news release 'Lundin Mining Provides 2024 Guidance & Announces 2023 Production Results" dated January 14, 2024.

b. Sustaining capital expenditure is a supplementary financial measure, and expansionary capital expenditure is a non-GAAP measure - see section 'Non-GAAP and Other Performance Measures' of the Company's Management's Discussion and Analysis for the year ended December 31, 2023 and the Reconciliation of Non-GAAP Measures section at the end of this news release.

2024 Exploration Investment Guidance

Total exploration expenditure guidance for 2024 is $48.0 million.

Exploration: Exploration drilling campaigns are underway at Caserones, Josemaria, Chapada and Zinkgruvan. Drilling at Caserones is targeting the Angelica target and Caserones sulphide deep target with three rigs. Initial holes are underway at Josemaria's Cumbre Verde target, and additional roads are being developed to gain access to higher priority areas. At Chapada, drilling is focused on higher grade corridors within known areas of mineralization that could contribute higher grades to the mine plan. At Zinkgruvan, drilling with six rigs is focused on extending multiple deposits, with the priority on the high-grade Borta Barkom area.

Senior Leadership Appointments

The Company would also like to announce the executive appointments of Patrick Merrin as Executive Vice President, Technical Services and Joel Adams as Vice President, Commercial.

Patrick Merrin

Mr. Merrin was appointed Executive Vice President, Technical Services and brings over 25 years of international experience in mining and metals including 10 years in executive and senior technical, project and operating roles. Mr. Merrin was appointed CEO of Copper Mountain Mining prior to its acquisition in 2024. He has also worked as Senior Vice President Canadian Operations with Newcrest Mining, COO of Mining with the Washington Companies and Senior Vice President of Canadian Operations with Goldcorp. Earlier in his career he also held positions with Hudbay Minerals, Xstrata and Anglo American.

Mr. Merrin holds a Bachelor of Chemical Engineering from McGill University, a Master of Business Administration from the Rotman School of Business at the University of Toronto and is a registered Professional Engineer (Ontario).

Joel Adams

Mr. Adams was appointed Vice President, Commercial and will lead Lundin Mining's commercial strategy. He has more than 15 years of experience as a base metal trader and in logistics management.

Prior to joining Lundin Mining, Joel was a Portfolio Manager with Balyasny Asset Management where he was focused on commodity trading. In addition, Mr. Adams was a senior base metals trader at Trafigura and prior to that held diverse roles within Glencore's base metals business from 2010 to 2020 as a senior member of the copper division in Switzerland.

Joel holds a Bachelor's degree in International Business from the University of Colorado.

About Lundin Mining

Lundin Mining is a diversified Canadian base metals mining company with projects and operations in Argentina, Brazil, Chile, Portugal, Sweden and the United States of America, primarily producing copper, zinc, nickel and gold.

The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below on February 21, 2024 at 15:30 Pacific Standard Time.

For further information, please contact:

Stephen Williams, Vice President, Investor Relations +1 604 806 3074

Robert Eriksson, Investor Relations Sweden: +46 8 440 54 40

Technical Information

The scientific and technical information in this press release has been prepared in accordance with the disclosure standards of National Instrument 43-101 ("NI 43-101") and has been reviewed by Arman Barha, P.Eng., Vice President, Technical Services, a "Qualified Person" under NI 43-101. Mr. Barha has verified the data disclosed in this release and no limitations were imposed on his verification process.

Reconciliation of Non-GAAP Measures

The Company uses certain performance measures in its analysis. These performance measures have no standardized meaning within generally accepted accounting principles under International Financial Reporting Standards and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. For additional details please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the year ended December 31, 2023 which is available on SEDAR+ at www.sedarplus.ca.

Cash Cost per Pound and All-in Sustaining Costs can be reconciled to Production Costs on the Company's Consolidated Statement of Earnings as follows:

Twelve months ended December 31, 2023

Operations	Candelaria	Caserones	Chapada	Eagle	Neves-	Zinkgruvan
					Corvo
($000s, unless otherwise	(Cu)	(Cu)	(Cu)	(Ni)	(Cu)	(Zn)	Total
noted)
Sales volumes (Contained
metal):
Tonnes	144,473	66,075	43,761	13,339	32,054	65,344
Pounds (000s)	318,508	145,670	96,476	29,407	70,667	144,059
Production costs							2,086,108
Less: Royalties and other							(66,237)
Inventory fair value							(39,945)
adjustment
							1,979,926
Deduct: By-product credits							(699,915)
Add: Treatment and							183,328
refining
Cash cost	660,160	290,553	219,278	63,457	167,424	62,467	1,463,339
Cash cost per pound	2.07	1.99	2.27	2.16	2.37	0.43
($/lb)
Add: Sustaining capital	380,112	83,880	72,291	22,201	102,621	53,358
Royalties	-	15,820	8,568	22,994	3,949	-
Reclamation and	9,258	2,560	7,836	11,331	5,387	3,744
other closure
Leases & other	13,325	47,944	4,999	4,100	553	427
All-in sustaining cost	1,062,855	440,757	312,972	124,083	279,934	119,996
AISC per pound ($/lb)	3.34	3.03	3.24	4.22	3.96	0.83

Twelve months ended December 31, 2022

Operations	Candelaria	Caserones1	Chapada	Eagle	Neves-	Zinkgruvan
					Corvo
($000s, unless otherwise	(Cu)	(Cu)	(Cu)	(Ni)	(Cu)	(Zn)	Total
noted)
Sales volumes (Contained
metal):
Tonnes	147,251	-	45,563	14,427	31,592	65,684
Pounds (000s)	324,633	-	100,449	31,806	69,648	144,808
Production costs							1,661,358
Less: Royalties and other							(53,785)
							1,607,573
Deduct: By-product							(656,534)
Add: Treatment and							124,841
refining
Cash cost	637,486	-	209,238	25,168	158,351	45,637	1,075,880
Cash cost per pound	1.96	-	2.08	0.79	2.27	0.32
($/lb)
Add: Sustaining capital	389,731	-	104,711	16,413	71,222	48,144
Royalties	-	-	12,298	33,281	4,169	-
Reclamation and	8,001	-	7,388	18,512	1,562	3,937
other closure
Leases & other	11,313	-	3,988	2,404	1,404	665
All-in sustaining cost	1,046,531	-	337,623	95,778	236,708	98,383
AISC per pound ($/lb)	3.22	-	3.36	3.01	3.40	0.68

1 Caserones results are from July 13, 2023 to December 31, 2023.

Three months ended December 31, 2023

Operations	Candelaria	Caserones	Chapada	Eagle	Neves-	Zinkgruvan
					Corvo
($000s, unless	(Cu)	(Cu)	(Cu)	(Ni)	(Cu)	(Zn)		Total
otherwise noted)
Sales volumes
(Contained metal):
Tonnes	38,888	35,690	13,080	3,105	9,054	17,316
Pounds (000s)	85,733	78,683	28,836	6,845	19,961	38,176
Production costs								648,037
Less: Royalties and								(24,520)
other
Inventory fair value								(7,760)
adjustment
								615,757
Deduct: By-product								(204,164)
Add: Treatment and								57,938
refining
Cash cost	152,276	183,687	54,108	16,229	39,218	24,013		469,531
Cash cost per pound	1.78	2.33	1.88	2.37	1.96	0.63
Add: Sustaining capital	79,316	55,031	19,858	6,548	28,070	10,546
Royalties	-	8,270	2,174	5,003	1,081	-
Reclamation and	2,158	1,427	2,047	2,620	1,305	933
other closure
Leases & other	2,901	25,715	1,131	1,101	106	103
All-in sustaining cost	236,651	274,130	79,318	31,501	69,780	35,595
AISC per pound ($/lb)	2.76	3.48	2.75	4.60	3.50	0.93