.png)
Lundin Mining 2007 Second Quarter Results
Lundin Mining Corporation (Toronto:LUN.TO - News)(AMEX:LMC - News)(OMX: LUMI)....
Lundin Mining Corporation (
Three Three Six Six
Months months months months
Ended ended ended ended
Millions of US$, except per June 30, June 30, June 30, June 30,
Share data 2007 2006 2007 2006
Sales 319.9 112.9 513.9 204.7
EBITDA (i) 210.2 68.9 322.5 119.1
Net earnings (ii) 159.9 37.2 213.6 58.6
Basic earnings per share (iii) 0.56 0.30 0.75 0.48
Diluted earnings per share (iii) 0.56 0.30 0.74 0.48
Cash provided by operations 150.1 54.4 160.7 77.1
(i) Non GAAP measure
(ii) Net earnings include a $50.4 million gain from the divesture of
Marketable securities in the second quarter 2007
(iii) All figures related to shares and per share data are calculated as If the three-for-one stock split, effective February 5, 2007,Occurred at the beginning of the first period presented.Karl-Axel Waplan, President and CEO of the Company commented: "A solid performance in most of our operations and rising metals prices during the spring led to record net earnings. Meanwhile, the growth strategy continues. We recently closed the acquisition of Tenke Mining Corp., which adds a highly promising, world class copper/cobalt project, Tenke Fungurume, in the Democratic Republic of Congo to our asset portfolio. We have also broadened our commodity mix into nickel with the acquisition of Rio Narcea Gold Mines, Ltd. Rio Narcea's main asset is the Spanish nickel-copper mine Aguablanca, which will contribute to our cash flow beginning in the third quarter of this year. Growth will also continue, through the development of internal projects, the optimization of our operating mines and as well through the possible acquisition of performing assets. We are confident that we have the ability to continue to generate strong cash flow going forward, both from our existing operations and our mine development projects as they go into production. We continue to believe the global metals markets will remain strong for years to come." On June 29, 2007 the Company increased its offer for the shares and warrants of Rio Narcea Gold Mines, Ltd. ("Rio Narcea") and on August 10, 2007 the company announced a final extension of the amended offer to August 20, 2007. Effective as at August 14, 2007, 91.7% of the outstanding shares (fully diluted) have been tendered to the amended offer. Following the August 20 expiry of the offer, the Company will undertake a compulsory acquisition transaction under the Canada Business Corporations Act to take up the balance of the shares. The acquisition of Rio Narcea adds the Aguablanca copper-nickel mine to Lundin Mining's assets which will be consolidated during the third quarter. The planned sale of Rio Narcea's Tasiast gold mine for $225 million was completed in early August. - The acquisition of Tenke Mining Corp. was completed in early July following the approval by the shareholders' of both companies. Tenke's main asset is a 24.75% holding in the Tenke Fungurume project in the Democratic Republic of Congo, which is one of the largest and highest grades, undeveloped copper-cobalt deposits in the world. Work is in progress to develop the deposit into a low-cost open-pit mine and start-up is planned for in the fourth quarter of 2008 or early 2009. Freeport McMoRan Copper & Gold Inc. holds 57.75% interest in Tenke-Fungurume and is the operator of the project. - Prices for copper, zinc and lead during the second quarter were 29%, 6% and 22% higher than in the first quarter of 2007. The Company believes that the prices for these metals will remain at current levels for the balance of 2007. - Processed ore for the Group was 17% greater in the second quarter of 2007 as compared with the same period in 2006. While head grades for most operations were lower than in the second quarter of 2006, increased ore throughput partially compensated for the potential shortfall in copper and zinc production while lead and silver metal production were up 18% and 6%, respectively, for the same comparable period in 2006. - Exploration drilling at the Neves-Corvo mine encountered very encouraging results, adding to the outline and size of a large, continuous zone of high-grade zinc and lead mineralization within the giant Lombador sulfide deposit. Assays were received for ten drill holes, including drill hole NF22A that intersected 55 metres of mineralization of 8.51% zinc and 2.47% lead. Hole ND20A-1 intersected 35 meters of 9.44% zinc and 3.16% lead. Subsequent to the second quarter, drill hole NF34 intersected a true thickness of 95 metres of massive sulphide mineralization, including a 67.2 metre interval of 8.03% zinc, 2.93% lead and 0.31% copper, and also included a 21 meter interval of 11.13% zinc and 3.99% lead (silver assays are pending). This intersection is a step-out of 270 meters from the intersection in drill hole NF22A. The intersection in drill hole NF34 leaves the zone completely open for expansion down-dip and along strike at depth. This hole is in an area that is not included in any resource category and clearly illustrates the potential to expand the Neves-Corvo resource base. In addition to the zinc mineralization, drill hole NF34 intersected a 16 meter wide separate zone of stock work copper mineralization of 3.92% copper and included a 4 meter section of 8.72% copper. - Negotiations with the local unions at the Galmoy mine continue and on the 4th of August SIPTU members voted to reject the