A stellar performance from the Neves-Corvo mine, in Portugal, during the most recent quarter has prompted TSX-listed Lundin Mining to paint a more rosy production outlook for the full year, with the miner's copper and zinc guidance having been improved.

The Neves-Corvo mine, where Lundin is advancing a zinc expansion project, was more productive in the second quarter and benefited from higher head grades, resulting in second-quarter production increasing to 11 899 t of copper and 20 230 t of zinc, exceeding the prior-year comparable period.

“Neves-Corvo delivered another excellent quarter, setting a new zinc production record in June, and full-year production and cash cost guidance for Neves-Corvo has been improved,” commented Paul Conibear, who on Wednesday also announced his retirement as CEO after seven years at the helm.

The improvements in mine productivity at Neves-Corvo resulted in Lundin raising its full-year copper guidance for the mine to a range of 42 000 t to 45 000 t at $1.20/b, compared with a previous guidance of 39 000 t to 44 000 t at $1.30/lb.

The zinc guidance has been increased to between 72 000 t and 75 000 t, from a previous estimate of 68 000 t to 73 000 t.

Lundin also made adjustments to the zinc guidance of its Zinkgruvan mine, in Sweden. The group’s total attributable copper production guidance has been increased to a range of 162 000 t to 174 000 t from its previous estimate of 159 000 t to 173 000 t, while the zinc estimate has increased to between 148 000 t and 154 000 t, compared with 148 000 t to 154 000 t.

Conibear stated that the zinc expansion project at Neves-Corvo continued to progress well, and so were the other growth projects, including Eagle nickel/copper project and Candelaria copper/gold project, in Chile.

The Neves-Corvo expansion project’s capital costs, however, have risen by about 5% to €270-million, he said, and added that the project remained on track to start its production ramp-up before the end of 2019. The mill foundation has been successfully poured in July.

The 80%-owned Candelaria mine produced 34.4-million tonnes of copper, about 20 000 oz of gold and 295 000 oz of silver in concentrate. Copper production in the quarter was lower than the prior year comparable period owing to planned mining and processing of lower grade materials and lower mill throughput. Copper cash costs of $1.71/lb for the quarter were in line with full year guidance ($1.70/lb), but higher than the prior year quarter.

The Eagle mine produced 4 234 t of nickel and 4 115 t of copper during the quarter. Quantities were lower than the prior year as a result of planned mine sequencing. Nickel cash costs of $1.09/lb for the quarter were in line with its full-year guidance and modestly higher than the prior year comparable period.

The Zinkgruvan mine produced 16 845 t of zinc and 3 914 t of lead, which were less than the prior year quarter, owing to lower head grades as a result of mine sequencing and higher-than-planned dilution and ore loss. The top of the range for full year zinc production guidance was moderately reduced.

Lundin reported net earnings of $87.05-million in the second quarter – in line with the $85-million reported for the June 2017 quarter. Revenue was $467.7-million, which is an increase of $13-million in comparison with the second quarter of the prior year. The increase was driven mainly by higher prices.

NEW CEO
Meanwhile, Lundin announced that senior VP and CFO Marie Inkster would succeed Conibear as president and CEO when he retires this year.

Conibear joined the company in 2007 following Lundin’s acquisition of Tenke Mining, where he served as president and CEO. Conibear was initially appointed senior VP for corporate development, before being promoted to CEO in 2011. During his time in this role, Conibear has led the company through a sustained period of growth. Among the highlights, the company states, are the acquisitions of the Eagle mine in Michigan and the Candelaria mining complex in Chile, the sale of Lundin Mining’s interest in Tenke Fungurume, as well as advancement of the company’s corporate social responsibility initiatives resulting in a strong corporate reputation.

“On behalf of the Lundin Mining Corporation board of directors, I would like to thank Paul for building our company into the success it has become today. Paul has provided steady hands during challenging times in which many other mining organizations did not fare as well. His sound judgement has well positioned Lundin Mining to build towards an even greater future,” commented chairperson Lukas Lundin.

Inkster has nearly 20 years of industry leadership experience, including ten years with Lundin.

"Marie's intimate knowledge of Lundin Mining, her leadership style, industry expertise, and market understanding will build on the success Paul has helped the company achieve. Marie is well-known and respected in the market and is focused on the future and the company achieving its long-term strategic goals,” Lundin added.