Market Overview

Lundin Mining Reports Third Quarter Results


TORONTO, ONTARIO--(Marketwire - Oct. 24, 2012) - Lundin Mining Corporation ("Lundin Mining" or the "Company") (TSX:LUN)(OMX:LUMI) today reported net earnings of $37.9 million ($0.07 per share) for the three months ended September 30, 2012 compared to $16.4 million ($0.03 per share) for the three months ended September 30, 2011.

Sales volumes in the current quarter were directly impacted by labour action of dock workers in Portugal and Sweden resulting in lower sales volumes than the prior quarter, with the offsetting positive impact to be realized in the fourth quarter. Unit cash costs(1) of $1.87/lb for copper were in line with expectations after taking into account planned maintenance, and were much lower than the $2.35/lb realized the third quarter of 2011. Unit cash costs for zinc were $0.08/lb for the quarter compared to $0.13/lb in the third quarter of last year.

Paul Conibear, President and CEO, commented, "Our operations performed well this quarter, building on the production increases of the past two quarters of 2012. The Company continues to expect to deliver a strong fourth quarter operationally, with production from all metals now anticipated to be near the high-end of our guidance ranges.

In addition, we continue to be very pleased with the performance at Tenke. For the quarter, production at Tenke achieved another all-time record high for both copper and cobalt, while the Phase II Expansion Project remains on budget and is expected to be substantially completed by year end.

The sustained execution by our operating teams continues to underpin our ability to add value by consistently achieving strong operational performance at all of our mines."

Summary financial results for the quarter and year-to-date:
Three months Nine months
ended ended
September 30 September 30
US$Millions (except per share amounts) 2012 2011 2012 2011
Sales 159.6 146.2 544.6 541.7
Operating earnings(2) 71.1 53.8 256.9 257.6
Net earnings 37.9 16.4 140.3 147.6
Basic earnings per share 0.07 0.03 0.24 0.25
Cash flow from operations (25.7) (36.6) 144.6 194.8
Ending cash position 255.9 256.2 255.9 256.2

(1) Cash cost/lb of copper and zinc are non-GAAP measures defined as all
cash costs directly attributable to mining operating, less royalties and by-
product credits.
(2) Operating earnings is a non-GAAP measure defined as sales, less
operating costs (excluding depreciation) and general and administrative

Operational Highlights

Wholly-owned operations: The Company continued to perform well in the third quarter with production and operational results that were in line with expectations. Financial results for the quarter were affected by labour action by dock workers in Portugal and Sweden. This resulted in a disruption to concentrate shipments in the latter part of September and some of the quarter's sales were pushed into the fourth quarter.

-- Operational improvements, on target grades, good copper recoveries and
out of reserve mining continued to assist Neves-Corvo metal production.

-- Zinkgruvan experienced another quarter of high zinc and lead head grades
resulting in higher metal production than last year; grades are expected
to return to historical levels in the fourth quarter.

-- Aguablanca recommenced production in August 2012, ahead of schedule,
with ramp up towards full production expected in the fourth quarter. The
Company continues to monitor new south pit wall stability issues and is
taking additional measures to secure areas deemed to be higher risk.

Tenke: The mine and mill continue to perform very well, achieving record mining, milling and copper production rates. Construction activities on the Phase II expansion are expected to be on budget and substantially completed by the end of 2012; currently, the expansion is approximately 90% complete. The addition of a second sulphuric acid plant is expected to be completed in 2015.

-- A combination of the higher mining rate due to additional mine equipment
and the increase in mill throughput from the ramp-up of parts of the
Phase II expanded facilities (including the new jaw crusher which was
completed ahead of schedule), resulted in production being higher than

-- Cobalt production was in line with expectations.

-- A cash call for $15.0 million was funded by the Company during the
quarter to cover sustaining capital, on-going concession exploration and
expansion initiatives. If copper prices remain strong, surplus cash from
Tenke operations should be sufficient to cover the Company's share of
capital and non-capital requirements for the remainder of the year.

Total production from the Company's assets including attributable share of
YTD Q3 Q2 Q1 FY Q4 Q3 Q2 Q1
(tonnes) 2012 2012 2012 2012 2011 2011 2011 2011 2011
Copper 49,654 15,573 16,936 17,145 75,877 27,488 15,419 13,831 19,139
Zinc 93,043 28,452 31,972 32,619 111,445 27,053 28,791 27,404 28,197
Lead 30,111 9,365 9,780 10,966 41,130 9,273 10,077 10,367 11,413
Nickel 693 693 - - - - - - -
Tenke attributable(a)
Copper 27,503 9,947 8,632 8,924 31,523 8,635 7,982 7,398 7,508

a. Lundin Mining's attributable share of Tenke's production was reduced
from 24.75% to 24.0% effective March 26, 2012, when changes to bylaws of
Tenke Fungurume Mining ("TFM") were signed.

Financial Highlights

-- Operating earnings for the third quarter of 2012 were $71.1 million, an
increase of $17.3 million from the $53.8 million reported in the
comparable quarter of 2011. The increase was largely attributable to
lower per unit production costs ($10.4 million) and favourable foreign
exchange rates ($6.0 million).

On a year-to-date basis, operating earnings of $256.9 million were in
line with the $257.6 million reported for the first nine months of 2011.
The $0.7 million decrease in operating earnings was mainly attributable
to lower realized metal prices for current period sales ($62.4 million),
partially offset by prior period price adjustments ($14.9 million),
lower costs ($21.4 million) and favourable effects of foreign exchange
($20.3 million).

-- For the quarter ended September 30, 2012, sales of $159.6 million
increased $13.4 million over the prior year ($146.2 million) which was
mainly as a result of higher sales volume ($5.9 million), higher
realized metal prices for current quarter sales ($5.4 million) and
positive prior period price adjustments ($2.1 million). The increase in
volume from the restart of the Aguablanca mine was partially offset by a
stevedore strike in Portugal which prevented the loading and shipment of
concentrate, leaving approximately 11,000 dry metric tonnes ("dmt") of
copper concentrate in inventory at the end of the period.

Sales of $544.6 million for the nine months ended September 30, 2012
were in line with the comparable period in 2011 ($541.7 million). Lower
realized metal prices ($62.4 million) were more than offset by the
effects of higher sales volume ($50.4 million) and prior period price
adjustments ($14.9 million).

-- Average metal prices for copper, zinc and lead for the three and nine
months ended September 30, 2012 were significantly lower (14% - 27%)
than the same periods in the prior year.

-- Operating costs (excluding depreciation) of $82.3 million in the current
quarter were slightly lower than the prior year comparative quarter of
$88.2 million as a result of lower per unit production costs and
positive foreign exchange impacts at both Neves-Corvo and Zinkgruvan.

On a year-to-date basis, operating costs (excluding depreciation) for
the nine months ended September 30, 2012 of $267.7 million were
marginally lower than the $269.8 million reported for the first half of

-- Net earnings of $37.9 million ($0.07 per share) in the current quarter
were $21.5 million higher than the $16.4 million ($0.03 per share)
reported in 2011. Earnings were impacted by:

-- higher equity earnings from investment in Tenke ($7.8 million);

-- lower unrealized loss on revaluation of marketable securities ($8.6

-- lower depreciation, depletion and amortization expense ($6.7

-- lower tax expense of $14.1 million, $12.5 million (EUR9.1 million)
of which relates to a Spanish tax assessment recorded in 2011 for
deductibility of accelerated depreciation; offset by

-- lower other income ($25.3 million) arising mostly from reduced
foreign exchange gains.

-- Cash outflow from operations for the current quarter was $25.7 million
compared to $36.6 million for 2011. The comparative decrease in the cash
outflow is mostly attributable to higher net earnings in the current

For the nine months ended September 30, 2012, cash flow from operations
was $144.6 million compared to $194.8 million for 2011 primarily as a
result of changes in non-cash working capital.

Tenke Fungurume

-- Milling facilities continued to produce above rated capacity, with
throughput averaging 13,600 metric tonnes of ore per day in the third
quarter of 2012, approximately 700 metric tonnes of ore per day higher
than the previous quarter in 2012.

-- For the quarter ended September 30, 2012, Tenke produced 41,446 tonnes
of copper and sold 39,790 tonnes at an average realized price of
$3.53/lb. In addition, 3,356 tonnes of cobalt in hydroxide was produced
and 3,519 tonnes were sold at an average realized price of $8.29/lb of

-- Cash costs of $1.23/lb of copper in the third quarter of 2012 were
higher than the $1.12/lb in the prior year comparable quarter,
reflecting lower cobalt credits and higher consumable costs.

-- Cash advances of $15.0 million were made to Tenke in the quarter ended
September 30, 2012. During the quarter, $38.4 million was spent on our
attributable share of capital requirements, which was funded by the
above noted cash call and excess cash flow from operations.

-- Attributable operating cash flow related to Tenke for the third quarter
of 2012 was $26.1 million and now totals $106.7 million year-to-date.

Financial Position and Financing

-- Net cash(1) position at September 30, 2012 was $245.0 million compared
to $236.1 million at December 31, 2011, $312.7 million at June 30, 2012
and $208.7 million at September 30, 2011.

-- The $67.7 million decrease in net cash during the quarter was primarily
attributable to cash outflow from operations of $25.7 million (including
a $61.7 million outflow for working capital), investment in mineral
properties, plant and equipment of $37.3 million and a $15.0 million
cash advance to Tenke.

-- Year-to-date, net cash remained relatively unchanged as cash flow from
operations was offset by investment in mineral properties, plant and
equipment ($130.4 million) and a $15.0 million advance to Tenke.

-- Cash balance at October 22, 2012 was approximately $290 million.

Corporate Highlights

-- On September 4, 2012 the Company reported its Mineral Reserve and
Resource estimates as at June 30, 2012. The full press release can be
found on the Company's website at

-- The Company announced its intention not to exercise its option under the
purchase option agreement to acquire a controlling interest in the Touro
copper project located in northern Spain. See press release entitled
"Lundin Mining update on Touro Copper Project Option", dated September
25, 2012.

-- As part of the Company's growth strategy to add more copper production
to its asset base in established, low-risk mining jurisdictions,
subsequent to quarter-ender, the Company committed to investments in two
highly prospective, rapidly developing copper/gold projects. Both of
these investments have advanced resource exploration in low altitude
properties within the coastal cordillera of central Chile.

-- The Company has agreed, by way of a binding term sheet, to enter
into a strategic agreement with Southern Hemisphere Mining (SHM), a
ASX/TSX-listed Chile-focused exploration company who control the
Llahuin copper-gold porphyry project, located only 56 km from the
Pacific Ocean. As part of the agreed terms, the Company can earn a
direct interest of up to 75 per cent over a six-year period by
spending up to $35 million at the Llahuin Project. Lundin Mining
will fund the Llahuin project expenditures in stages with an initial
commitment of $3 million to be spent on exploration within the first
three years. Lundin Mining will also take a strategic 11.5% per cent
stake in Southern Hemisphere by way of a $5 million share placement,
$3 million of which will also be spent on the Llahuin Project.

-- The Company has also recently committed to making a $5 million
private placement equity investment in ASX-listed Hot Chili Ltd.
("HCH") who control the advanced resource exploration stage
Productora Cu-Au project, also located within the coastal cordillera
belt of central Chile. This investment is subject to HCH shareholder
approval expected prior to year end.

(1)Net cash is a non-GAAP measure defined as available unrestricted cash
less long-term debt and finance leases


2012 Capital Expenditure Guidance

Capital expenditures for 2012 are expected to be $380 million, $30 million lower than previous guidance as a result of reduced estimated Tenke requirements. Estimated capital investment for the year is as follows:

-- Sustaining capital in European operations - $130 million: Primarily in
support of pre-stripping costs at Aguablanca and development costs at
our Zinkgruvan and Neves-Corvo operations.

-- New investment capital expenditures in European operations - $70
million: Consisting largely of Lombador Phase I and Neves-Corvo water
dam improvements.

-- New investment in Tenke - $180 million: Estimated total capital
expenditures for the year have been reduced by $30 million from previous
guidance to reflect on budget performance of the Phase II expansion,
deferral of some costs to 2013 and overall lower sustaining and
expansion capital requirements this year. Year-to-date there has been
one cash call for $15.0 million made by TFM from Lundin as surplus cash
from operations has covered substantially all Phase II expansion costs
incurred during the period. No other cash calls for 2012 are expected to

2012 Production and Cost Guidance

-- Cash cost guidance for Zinkgruvan has been improved, reflecting overall
better mine performance.

-- Production guidance for Aguablanca has been increased to reflect earlier
than planned restart of production at the mine. Despite stability issues
on the south pit wall, no disruptions to planned concentrate production
prior to year-end are expected as there is a significant amount of ore
that has been stockpiled which will be supplemented with ongoing mining
of ore from the north side of the pit.

-- Guidance for Galmoy has also been updated to reflect better zinc
production estimates prior to closure.

-- Revised guidance from Freeport on Tenke's copper sales from 140,600 to
149,700 tonnes (100% basis) has been reflected in the revised guidance
below and is based on the assumption that production volumes will
approximate sales. Freeport has also increased its guidance on full year
cash cost as a result of lower average cobalt prices.

2012 Guidance Prior Guidance Revised Guidance
tonnes) Tonnes C1 Cost(a) Tonnes C1 Cost(a)
Neves-Corvo Cu 55,000 - 60,000 $ 1.70 55,000 - 60,000 $ 1.70
Zn 25,000 - 30,000 25,000 - 30,000
Zinkgruvan Zn 77,000 - 83,000 $ 0.20 77,000 - 83,000 $ 0.15
Pb 34,000 - 39,000 34,000 - 39,000
Cu 3,000 - 4,000 3,000 - 4,000
Galmoy(b) Zn 7,000 - 8,000 8,500 - 9,000
(in ore) Pb 1,500 - 2,000 1,000 - 1,100
Aguablanca Ni 1,000 - 1,500 1,500 - 2,000
Cu 1,000 - 1,500 1,500 - 2,000
Total: Wholly- Cu 59,000 - 65,500 59,500 - 66,000
owned Zn 109,000 - 121,000 110,500 - 122,000
operations Pb 35,500 - 41,000 35,000 - 40,100
Ni 1,000 - 1,500 1,500 - 2,000
Tenke: 24.0%
share(c) Cu 34,000 $ 1.16 36,200 $ 1.25

a. Cash costs remain dependent upon exchange rates (forecast at
EUR/USD:1.28, USD/SEK:6.80) and metal prices (forecast at Cu: $3.50, Zn:
b. Galmoy production tonnage is based on a 50% attributable-share to
Lundin Mining.
c. Lundin Mining's attributable share was reduced from 24.75% to 24.0% in
March 2012, after approval of changes to TFM's bylaws.

About Lundin Mining

Lundin Mining Corporation is a diversified base metals mining company with operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc, lead and nickel. In addition, Lundin Mining holds a development project pipeline which includes expansion projects at its Neves-Corvo mine, along with a 24% equity stake in the world-class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo, which is undergoing expansion to 195,000 tonnes per annum copper cathode production.

On Behalf of the Board,

Paul Conibear, President and CEO

Forward-Looking Statements

Certain of the statements made and information contained herein is "forward-looking information" within the meaning of the Ontario Securities Act. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to foreign currency fluctuations; risks inherent in mining including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; risks associated with the estimation of mineral resources and reserves and the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; commodity price fluctuations; uncertain political and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; and other risks and uncertainties, including those described under Risk Factors Relating to the Company's Business in the Company's Annual Information Form and in each management's discussion and analysis. Forward-looking information is, in addition, based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long-term price of copper, zinc, lead and nickel; that the Company can access financing, appropriate equipment and sufficient labour and that the political environment where the Company operates will continue to support the development and operation of mining projects. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements.

Attachment Available:

Lundin Mining Corporation
Sophia Shane
Investor Relations North America

Lundin Mining Corporation
John Miniotis
Senior Business Analyst

Lundin Mining Corporation
Robert Eriksson
Investor Relations Sweden
+46 8 545 015 50

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