Name: Zinkgruvan mine.

Location: The Zinkgruvan mine is located about 250 km south-west of Stockholm, in south-central Sweden.

Controlling Company: Lundin Mining Corp (100%).

Brief History: The existence of the Zinkgruvan deposit has been known since the sixteenth century, but it was not until 1857 that large-scale production started under the ownership of the Belgian Vieille Montagne company. The processing plant for these operations was initially based in Åmmeberg on the shores of Lake Vättern, with ore transported about 5 km from the mine site by narrow gauge railway.

In the mid-1970s, it was decided that production would be significantly expanded to 600 000 t/y. A new shaft, P2, was sunk to access deeper ore and a new concentrator and tailings facility was established adjacent to the mine site. In 1990, Vieille Montagne merged with Union Miniere and, in 1995, North Limited of Australia acquired Union Miniere. In August 2000, Rio Tinto became the owner of the mine, following its acquisition of North. In June 2004, Lundin Mining bought the mine from Rio Tinto. In October 2007, the Zinkgruvan expansion programme was announced to increase ore production by 300 000 t/y through the addition of copper to the current zinc-lead production. In November 2010, an access ramp from the surface to the underground workings was completed, allowing for a significant increase in the mine’s operational flexibility. Later that year, the copper plant was commissioned and it is expected to reach design production of 7 000 t/y of copper in 2013.

Brief Description: The Zinkgruvan mining operations are contained within two exploitation concessions covering the deposit and its immediate area. The Zinkgruvan concession was amalgamated from a large number of smaller rights in 2000, which comprises 254 ha and is valid until 2025. The neighboring Klara Concession was granted in 2002, which comprises 355 ha and is valid until 2027. These concessions are automatically extendable for periods of ten years, provided the concession is being regularly exploited. In addition, the mine currently holds exploration concessions in the area totalling 3 753 ha.

Mining Method: Underground.

Products: Zinc, lead and silver.

Major Infrastructure and Equipment: Mine access is through three shafts, with the principle P2 shaft providing hoisting and man access to the 800 m and 850 m levels, with the shaft bottom at 900 m. A ramp connecting the underground workings with the surface provides vehicle access directly to the mine. A system of ramps is employed to exploit resources below the shaft and the deepest mine level is currently 1 130 m below surface. The mine is highly mechanised and uses long-hole primary secondary panel stoping in the Burkland area of the mine, sublevel benching in the Nygruvan area and in the Cecilia area. All stopes are backfilled with either paste tailings and cement or waste rock.

The processing plant is located adjacent to the P2 shaft. The run-of-mine ore is secondary crushed and then ground in an autogenous and ball mill circuit. A bulk flotation concentrate is produced initially before further flotation to separate zinc and lead concentrates. The concentrates are thickened, filtered and stockpiled under cover. Tailings are pumped about 4 km to a dedicated tailings impoundment from which decant water is returned to the process.

Geology/Mineralisation: Zinkgruvan is located in the south-west corner of the Proterozoic-aged Bergslagen greenstone belt. The district comprises a series of small, elongated basins, with felsic metavolcanics overlain by metasediments. The basins are surrounded by mainly granitoid intrusions of which the oldest are the same age as the metavolanics.

The Zinkgruvan deposit is situated in an east-west-striking synclinal structure. The tabular-shaped zinc/lead/silver orebodies occur in a 5-m- to 25-m-thick stratiform zone in the upper part of the metavolcanic-
sedimentary group. The orebody is 5 km long and is proven to a depth of 1 500 m below surface. A major subvertical fault splits the ore deposit in two parts – the Knalla mine to the west and the Nygruvan to the east.

The Zinkgruvan orebodies are dominated by sphalerite and galena and are generally massive, well banded and stratiform. The remobilisation of galena and silver has occurred in response to metamorphism and deformation and is most pronounced in the lead-rich western extension of Nygruvan and in the Burkland area.

Copper stockwork mineralisation has been identified in the structural hanging wall of the Burkland deposit. Chalcopyrite is the main copper mineral and occurs as coarse disseminations and patches within a
marble host rock.

Reserves: Total proven and probable reserves as at December 31, 2012, were 4.01-million tonnes, grading 2.2% copper, 0.4% zinc and 32 g/t silver.

Resources: Total measured resources as at December 31, 2012, were 5.29-million tons, with a grading of 2.3% copper, 0.4% zinc and 30 g/t silver. Total indicated resources were 587 000 t, with a grading of 2.3% copper, 0.3% zinc and 34 g/t silver. Total inferred resources were 622 000 t, with a grading of 1.7% copper, 0.4% zinc and 31 g/t silver.

Prospects: Zinc production in 2013 is expected be in line with 2012 and to grow in 2014 and 2015, reflecting potential new investment in the front end of the plant to modernise and increase total site-processing capacity to about 1.5-million tonnes a year of ore. The copper plant is expected to reach its full throughput capacity of 300 000 t/y in 2015.

Contact Person: Investor relations, Robert Eriksson.

Contact Details:
Lundin Mining
tel +46 8 545 015 50
Email info@lundinmining.com
Website www.lundinmining.com.