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Lundin Mining Announces 2016 Production Results

TORONTO, ONTARIO -- (Marketwired) -- 01/12/17 -- Lundin Mining Corporation (TSX:LUN) (OMX:LUMI) ("Lundin Mining" or the "Company") announces production results for the three and twelve months ended December 31, 2016. The Company also provides a capital project update and announces the disposal of Aguablanca Mine.

2016 Highlights:


--  The Company achieved annual production guidance for copper and nickel.
    Zinc production was marginally below the most recent guidance.  
    
--  Candelaria's fourth quarter capped a strong operating year with the
    highest quarterly copper production of the year. Eagle production met
    full year guidance on continued robust performance. Neves-Corvo's zinc
    plant demonstrated stability with continued zinc recovery improvements,
    while Zinkgruvan's performance was impacted by lower than planned zinc
    head grades in the final quarter. 
    
--  Operations safety performance in 2016 saw the fourth straight year-over-
    year improvement with a Total Recordable Injury Frequency ("TRIF") rate
    of 0.60 achieved at year-end. 
    
--  Year-end net debt balance was approximately $290 million, including cash
    and cash equivalents of approximately $710 million. Tenke Fungurume
    related distributions totalled approximately $70 million for the year,
    better than previously guided. 
    

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                Q4 2016                                     
                             Production     Full Year 2016   2016 Production
(contained tonnes)              Results Production Results       Guidance(1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Copper Candelaria (80%)          39,258            133,274 130,000 - 132,000
       Eagle                      5,742             23,417   22,000 - 24,000
       Neves-Corvo               10,975             46,557   48,000 - 51,000
       Zinkgruvan                     0              1,906     1,900 - 2,000
                       -----------------------------------------------------
       Wholly-owned              55,975            205,154 201,900 - 209,000
       Tenke (24%)(2)               n/a                n/a            52,800
       ---------------------------------------------------------------------
       Total                                                                
        attributable                n/a                n/a 254,700 - 261,800
                                                                            
       ---------------------------------------------------------------------
Nickel Eagle                      5,249             24,114   23,000 - 25,000
       ---------------------------------------------------------------------
       Total                      5,249             24,114   23,000 - 25,000
                                                                            
Zinc   Neves-Corvo               15,886             69,527   70,000 - 73,000
       Zinkgruvan                19,773             78,523   80,000 - 85,000
       ---------------------------------------------------------------------
       Total                     35,659            148,050 150,000 - 158,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1) Guidance as presented in the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2016.

(2) Production results for Tenke have not yet been released by the operator.

Mr. Paul Conibear, President and CEO commented: "We are pleased with our aggregate performance across all of our mines in the challenging metal price environment of 2016 and expect to build upon this performance in the year ahead. Responding to market conditions that persisted over the majority of last year, the Company focused on discretionary spending restraint, deferring of non-essential sustaining capital and maximizing cash flow. Lundin Mining is in the desirable position of having one of the strongest balance sheets in our sector enabling us great financial flexibility to advance our internal growth projects, return capital to shareholders, and take advantage of potential external growth opportunities."

Operational Commentary

Production guidance for the three-year period of 2017 through 2019, and 2017 cash cost guidance remain unchanged from figures previously disclosed on November 30, 2016.


--  Safety and environmental performance: 2016 was a Company record year,
    with a TRIF rate of 0.60 achieved at year-end (measured per 200,000
    person hours worked). This marks the fourth straight year-over-year
    improvement and was capped by a Lundin Mining record of zero recordable
    injuries during the month of December.  
    
    Environmental performance met expectations with no Level 3 incidents
    experienced. The Company received the International Green Apple Award
    for best environmental practice related to the Galmoy mine closure
    wetlands reclamation project on the former mine tailings site in
    Ireland. 
    
    
--  Candelaria: Fourth quarter copper production of 49,072 tonnes on a 100%
    basis was the highest quarterly rate of the year. Total annual copper
    production at Candelaria exceeded the most recent guidance on strong
    mill throughput and increased head grades.  
    
    A NI 43-101 Technical Report is expected to be filed within the month
    supporting the five-year outlook provided on November 30, 2016, and
    further detailing the life of mine improvements made at Candelaria over
    the last year. 
    
    
--  Eagle: Production of both nickel and copper met target during the fourth
    quarter and achieved the most recent full year guidance on continued
    robust performance across the operation. 
    
    
--  Neves-Corvo: Full year zinc and copper production were modestly below
    the most recent guidance range. Zinc recovery rates continued to
    demonstrate improvement over prior year performance. Increased
    production definition drilling is being undertaken in the copper
    stockwork mineralization to better predict near term variation in ore
    grade and complex copper ore characteristics that impacted 2016 copper
    recovery and overall copper production. 2016 actual copper plant
    performance has been factored into 2017 production guidance. 
    
    
--  Zinkgruvan: Full year zinc production was near to target. Fourth quarter
    equipment availability and mine sequencing impacted ore delivery and the
    planned zinc head grade. No copper ore was campaigned through the plant,
    as planned, to maximize processing of the higher value zinc/lead ore. 

Capital Projects Update

Expected capital expenditure and the exploration budget for 2017 remain unchanged from figures previously disclosed on November 30, 2016.


--  Candelaria Los Diques Tailings Storage Facility: Construction continues
    to progress on time and on budget, while sustaining a perfect safety
    record. First tailings deposition remains on schedule for the first
    quarter of 2018. Owner self-perform construction successes of the main
    embankment and civil works continue, the last of the major contracts
    have been awarded, and all construction permits have been received.
    Originally budgeted at approximately $400 million, total project costs
    are now estimated at approximately $295 million with $135 million
    expected to be spent in 2017 and $30 million in 2018. 
    
    
--  Candelaria Consolidation Project (CCP): Conceptual studies into
    underground production expansion and further optimization of the life-
    of-mine plan at the operation continue to advance. Feasibility Study
    level work is examining a potential mill debottlenecking expansion to
    add approximately 15-20% throughput with increased ore feed from the
    underground deposits. This work continues to be supported by ongoing
    underground exploration success. The 2017 exploration budget at
    Candelaria has been approximately doubled over that of 2016 to $32
    million.  
    
    
--  Neves-Corvo Zinc Expansion Project (ZEP): The Environmental Impact
    Assessment (EIA) was submitted to the regulatory authorities in the
    fourth quarter of 2016. The 2015 Feasibility Study capital cost
    estimates are being updated and early works and project critical path
    items are being assessed in the anticipation of fast tracking the
    project once EIA approvals and subsequent full project expenditure
    approvals are in hand. The approximately EUR250 million initial project
    investment targets doubling of current zinc production levels within 28
    months of full project approval, adding about 80,000 tpa zinc production
    to Neves Corvo.  
    
    
--  Eagle East: Exploration ramp development is progressing on plan while
    the Eagle East project is advancing in the permitting phase. The Eagle
    East Feasibility Study has progressed with the completion of stope and
    mine infrastructure design as well as geotechnical, hydrogeological and
    metallurgical investigation programs. Exploration drilling continued in
    the fourth quarter of 2016 systematically testing the Eagle East conduit
    and deep peridotite and gabbro targets. Growth capital of $35 million
    for project advancement and exploration ramp development and $16 million
    for ongoing exploration is budgeted for 2017. 
    
    
--  Zinkgruvan 1350 Expansion Project: This investment increases plant
    capacity by 10% and remains on schedule for a mid-2017 commissioning.
    The remaining approximately $5 million of project capital expenditure is
    expected to be incurred in H1 2017. 
    
    
--  Zinkgruvan Enemossen Tailings Facility: Expansion of the existing
    facility is advancing on schedule and budget, with the first phase of
    the new dam expected to be complete Q3 2017. A major milestone was
    reached in November 2016 with material completion of the embankment to
    the final height. 

Additionally, during the fourth quarter, the Company disposed of the Aguablanca Mine in Spain through the transfer of all of the shares of Rio Narcea Recursos S.A. ("RNR") to Valoriza Mineria, a subsidiary of Grupo Sacyr. The assets of RNR included the Aguablanca mine and other exploration licenses. Grupo Sacyr is a multinational infrastructures and services company, operating in 29 countries and headquartered in Madrid, Spain. The Company transferred approximately EUR30 million to RNR prior to the transfer in order to ensure that all of the environmental, employee and other liabilities were fully funded.

About Lundin Mining

Lundin Mining is a diversified Canadian base metals mining company with operations in Chile, the USA, Portugal, and Sweden, primarily producing copper, nickel and zinc. In addition, until its announced sale has been concluded, Lundin Mining holds an indirect 24% equity stake in the world-class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and in the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland.

On Behalf of the Board,

Paul Conibear, President and CEO

The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse Regulation and the Swedish Securities Market Act. This information was publicly communicated on January 12, 2017 at 5:30 p.m. Eastern Time.

Forward Looking Statements

Certain of the statements made and information contained herein is "forward-looking information" within the meaning of the applicable Canadian securities legislation including, without limitation, with respect to the timing and amount of future dividends. Forward-looking information includes, but is not limited to information with respect to the Company's strategy, plans or future financial or operating performance. Forward-looking statements are characterized by words such as "plan," "expect", "budget", "target", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur.

Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation: uncertain political and economic environments; 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; 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 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, nickel, lead and zinc; 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.

2016 Operating Statistics

Details of operating statistics by mine, by quarter and for the year are summarized in the tables that can be found by following this link: http://media3.marketwire.com/docs/Lundin%20Tables.pdf

Contacts:
For further information, please contact:
Mark Turner
Director, Business Valuations and Investor Relations
+1-416-342-5565

Sonia Tercas
Senior Associate, Investor Relations
+1-416-342-5583

Robert Eriksson
Investor Relations Sweden
+46 8 545 015 50

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