Lundin Mining Q4 2025 Earnings Report

Lundin Mining EPS Results

• Actual EPS: C$0.59
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Lundin Mining Revenue Results

• Actual Revenue: $1.51 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Lundin Mining Announcement Details

• Quarter: Q4 2025
• Date: 2/20/2026
• Time: After Market Closes
• Conference Call Date: Friday, February 20, 2026
• Conference Call Time: 10:00AM ET

Lundin Mining (TSE:LUN) Corp is a diversified Canadian base metals mining company with operations in Brazil Chile Portugal Sweden and the United States of America producing copper zinc gold and nickel. Its material mineral properties include Candelaria Chapada Eagle and Neves-Corvo.

Lundin Mining Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company delivered a record financial year with $4.5 billion revenue and $1.9 billion Adjusted EBITDA, returned $256 million to shareholders via dividends and buybacks, and secured an upsized revolving credit facility to $4.5 billion to fund growth.
• Positive Sentiment: Operations outperformed guidance—consolidated copper production was 331,000 tonnes (including Eagle), driven by strong Caserones and steady Candelaria and Chapada performance, while safety metrics hit the lowest TRIFR in company history.
• Positive Sentiment: The Vicuña integrated technical study shows district-scale potential (over 500,000 t copper, 800,000 oz gold and 20M oz silver per year at peak) with first‑quartile cash costs, and the company says it is financially primed to progress toward a sanction decision.
• Negative Sentiment: Q4 included one‑off costs (accelerated union signing payments at Candelaria) and a significant working capital build (~$414 million for the year), and earnings were boosted by a large non‑cash deferred tax recovery—factors that may limit near‑term free cash flow visibility.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Lundin Mining Fourth Quarter 2025 and Year End Financial Results Presentation. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jack Lundin, President and CEO. Please go ahead.

[Jack Lundin, President and CEO at Lundin Mining]

Welcome to Lundin Mining's Full Year and Q4 2025 Earnings Call. Our operating and financial results were released last night, and the news release, presentation, and webcast replay are available on our website. All amounts are in U.S. dollars, unless stated otherwise. You may have noticed a new look in our materials for this call. Today, we are pleased to introduce to you Lundin Mining's new brand, which is aligned with our copper-focused strategy and long-term growth ambitions. Over the past two years, we have completed transformative transactions that have streamlined our portfolio and sharpened our focus on copper. Our new brand identity brings together our corporate and sites under one unified, recognizable look and feel, while strengthening our visibility in the regions where we operate. You'll see the updated brand across our investor materials, website, and operations, starting with the financial results we are discussing today.

[Jack Lundin, President and CEO at Lundin Mining]

About the logo and colors, the stylized L in our new logo symbolizes momentum and growth, while our new color palette is inspired by copper and the landscapes where we operate. Before we start, we will play a quick video capturing our new look. Please enjoy.

[Video Narrator]

We're introducing a new look for Lundin Mining. We have reshaped our portfolio and sharpened our focus, centered on one of the world's most essential metals, copper. In South America, brownfield expansions at our Candelaria, Caserones, and Chapada mines are expected to deliver strong gains in the near term. In the longer term, our Vicuña project offers one of the world's most promising copper-gold-silver districts. As global demand for copper and critical minerals accelerates, our teams play a crucial role in supporting electrification and modern infrastructure. Our new look doesn't change who we are or how we operate. It celebrates our growth, signals our momentum, and unites our global teams under one cohesive identity. With our portfolio realigned and our growth plan clear, we're driving forward with a brand that reflects who we are and where we're going. Built for growth, ready for opportunity.

[Jack Lundin, President and CEO at Lundin Mining]

As a reminder, yesterday's results and some remarks made on today's call will include forward-looking statements. Please refer to the cautionary statements on slide three for reference. With me on the call today is Juan Andrés Morel, our Chief Operating Officer, and Teitur Poulsen, our Chief Financial Officer, to present operating and financial results for the company. 2025 was another milestone year for Lundin Mining on nearly all fronts of the business, and we have positioned ourselves on a clear path to becoming a top-tier copper producer, completing three transformative transactions during the year, which rationalized our portfolio and sharpened our focus on our existing assets in South America. In January, we finalized the merger of our Eagle Mine with Talon Metals to create a new pure-play American nickel company. This transaction unlocks meaningful synergies, including the opportunity to leverage the Humboldt Mill as a shared, centralized processing facility.

[Jack Lundin, President and CEO at Lundin Mining]

At the same time, Lundin Mining has retained a 20% ownership in the combined company, and me and Juan Andrés have joined the board, along with former Managing Director of Eagle, Darby Stacey, as the new CEO of Talon. With this streamlined asset base, we continued to advance our growth initiatives. This includes refining growth plans for our three operations and maturing the large-scale growth plans for the Vicuña project. We recently announced our updated Mineral Reserve and Resource Statement, and on an attributable basis, the company now has contained metal of over 35 million tons of copper, over 60 million ounces of gold, and over 960 million ounces of silver, effectively doubling our copper resource base and adding a significant amount of gold and silver to our mineral resource inventory.

[Jack Lundin, President and CEO at Lundin Mining]

We delivered our best financial performance in the history of the company and generated record revenue of more than $4.1 billion and Adjusted EBITDA of $1.9 billion for the year from continuing operations, not including the Eagle Mine. We declared our 39th regular quarterly dividend, paid out $106 million in dividends during the year, and purchased 15.1 million shares for a total return of $256 million to shareholders, demonstrating our commitment to shareholder returns as part of our capital allocation strategy.

[Jack Lundin, President and CEO at Lundin Mining]

We are pleased to reinforce today several recent announcements that have been published by the company. The highlight from earlier this week was that we announced the results of the Integrated Technical Report on the Vicuña project, highlighting an incredible project capable of producing over 500,000 tons of copper, 800,000 ounces of gold, and over 20 million ounces of silver during its peak production years, which would position it as a top five in terms of scale on all of these metal categories. We also announced commitments to upsizing our Revolving Credit Facility to $4.5 billion, to enable us to fund the next phase of growth for our company. Operationally, our assets performed exceptionally during the year, and we were able to increase copper guidance in the third quarter, while also reducing our consolidated cash cost guidance range.

[Jack Lundin, President and CEO at Lundin Mining]

We met revised guidance on all consolidated metals in 2025. Safety remains our top priority, and during the quarter, we continued to strengthen our safety culture through visible leadership and targeted training programs across all operations. We continued to improve our total recordable injury frequency rate, which resulted in achieving the lowest rate in the company's history. Including Eagle, consolidated copper production was 331,000 tons of copper for the year, led by strong performance from Caserones and consistency from Candelaria and Chapada. Gold production was 142,000 ounces for the year. Caserones annual production for copper was at the top end of the most recent production guidance range, and the fourth quarter copper production was the highest since the mine was acquired by the company in 2023.

[Jack Lundin, President and CEO at Lundin Mining]

From continuing operations, we generated Adjusted EBITDA of $1.9 billion and Adjusted Operating Cash Flow from operations of $1.6 billion during the year, both annual records for the company. For the third year in a row, we met copper guidance, reflecting the accuracy of our planning cycle and our disciplined focus on operational consistency. I will now hand it over to Juan Andrés to go through the operational results in more detail.

[Juan Andrés Morel, COO at Lundin Mining]

Thank you, Jack, and good morning, everyone. We shared our production results earlier this year. I will now briefly highlight some of the key points from the year-end release. The company exceeded original guidance, copper guidance, and met revised guidance across all metals. The company produced 331,000 tons of copper this year and 87,000 tons in the fourth quarter, inclusive of the Eagle Mine. Gold production for the fourth quarter totaling approximately 34,000 ounces, and for the full year, 142,000 ounces, which was in line with guidance. Throughout the year, Candelaria maintained steady operations with 95% mill availability and processed approximately 7.8 million-8.1 million tons of ore each quarter and 32 million tons in the year. Candelaria produced a total of 145,000 tons of copper, in line with annual guidance.

[Juan Andrés Morel, COO at Lundin Mining]

In the fourth quarter, the mine produced 34,000 tons of copper, which was slightly less than previous quarters due to planned lower head grades. Caserones performed very well, and annual production for copper beat original guidance and was at the top end of the most recent production guidance range. Fourth quarter copper production was the highest since the mine was acquired by the company, as Jack mentioned earlier. Caserones produced 133,000 tons of copper during the year and 40,000 tons in the quarter. Higher production was driven by higher head grades and strong cathode production. Addition of oxide material placed on the dump leach, together with improved leaching practices, increased copper cathode production to 25,800 tons in 2025.

[Juan Andrés Morel, COO at Lundin Mining]

As mentioned at our Capital Markets Day, these optimization efforts have led our annual copper cathode production forecast to increase to approximately 26,000-28,000 tons in 2026 through 2028, an improvement of 6,000-8,000 tons from prior levels. Chapada was slightly second half weighted this year. During the fourth quarter, throughput was 6 million tons, which produced 11,200 tons of copper and 44,000 tons of copper in 2025, which was at the upper end of guidance for the year. And finally, Eagle produced 2,200 tons of nickel in the quarter, and for the year, was in the midpoint of guidance at 10,000 tons. Our assets demonstrated positive progress in 2025. Moving forward, our focus will remain on operational enhancement to optimize margins and further improve the cost profile of our holdings.

[Juan Andrés Morel, COO at Lundin Mining]

I will now turn the call over to Teitur to provide financial summary.

[Teitur Poulsen, CFO at Lundin Mining]

Thank you, Juan Andrés, and good morning, everyone. So before going into the numbers, as a reminder, that with the completion of the sale of our Eagle Mine, this operation is presented as discontinued operations in our income statement, and the assets and liabilities on the balance sheet have been classified as held for sale as of December 31st, 2025. As Jack mentioned earlier, a robust copper and gold production, combined with unwinding concentrate inventory along with high commodity prices, led to an outstanding financial performance for the period. We reached record revenue and Adjusted EBITDA for 2025. We generated close to $1.4 billion in revenue during the fourth quarter, including $52 million from discontinued operations. Revenue for the full year amounted to a record of $4.5 billion, including $409 million from discontinued operations.

[Teitur Poulsen, CFO at Lundin Mining]

Our sales mix remains predominantly leveraged to copper, and has increased from last year, where 75% was generated from copper, compared to the fourth quarter this year, where the copper component accounts for 87% for the quarter. Moving to the next slide. In the third quarter, we incurred a shipment delay of approximately 20,000 tons of copper concentrate at Caserones due to weather-related impacts. This resulted in the company carrying higher than normal inventory levels at the end of Q3. This elevated level of inventory has been unwound during the fourth quarter, leading Caserones to sell 45,000 tons in the quarter. Pricing adjustments on prior period sales of concentrate had a positive impact on revenue by $83 million in the fourth quarter, helping drive financial performance.

[Teitur Poulsen, CFO at Lundin Mining]

In the fourth quarter, we realized a copper price of $5.89 per pound, which was higher than the LME quarterly average of $5.03 per pound. For the full year, our average realized price was $4.91 per pound for copper, which is materially higher than the annual LME average of $4.51 per pound copper. This higher realized price is driven by the fact that the disproportionate share of our annual sales occurred during the fourth quarter, when the market prices were higher than the annual average price. At the end of the fourth quarter, approximately 80,000 tons of copper were provisionally priced at $5.64 per pound and remained open for final pricing adjustments. Moving to slide 13.

[Teitur Poulsen, CFO at Lundin Mining]

Consolidated production costs for the fourth quarter amounted to $585 million, including discontinued operations, which is higher than previous quarters due to the elevated sales volumes and certain one-off costs expensed in the fourth quarter. At Candelaria, the company finalized ahead of schedule labor renewal agreements with Candelaria's five unions during the fourth quarter, which led to a one-time increase in costs due to signing payments. Cash costs for the fourth quarter were higher than previous quarters and were similarly impacted by the one-off union signing bonus payment. The higher sales volume at Caserones for the fourth quarter drove a high absolute production cost for the quarter. Cash costs for the fourth quarter were in line with the previous quarter, and Caserones full-year cash cost of $2.17 per pound is towards the bottom end of guidance.

[Teitur Poulsen, CFO at Lundin Mining]

Chapada's full-year cash cost of $0.75 per pound outperformed the revised range or guidance range of $0.90-$1.00 per pound. Cash costs were positively impacted by the favorable gold pricing compared to forecast, resulting in improved byproduct credits for both the full year and the fourth quarter. Cost control across all sites remain very robust, and this has resulted in the company's cash costs for the full year of $1.87 per pound, coming in below the bottom end of our original guidance and towards the bottom end of the revised guidance. This better than expected outcome was achieved despite the unbudgeted union agreement payment at Candelaria being accelerated from 2026 into 2025.

[Teitur Poulsen, CFO at Lundin Mining]

Slide 14 shows our total capital expenditure for the full year, which amounted to the sustaining CapEx of $499 million, inclusive of Eagle, compared to a revised guidance of $510 million. The lower sustaining capital investment was primarily the result of reduced stripping and a delay in capital projects at Caserones. Capital expenditure at Chapada was $167 million, compared to guidance of $250 million, with this underspend mostly relating to timing. Our full-year and fourth quarter key financial metrics are presented on the next couple of slides. As previously stated, total revenue for the year, including discontinued operations, reached close to $4.5 billion, with almost $1.5 billion generated in the fourth quarter.

[Teitur Poulsen, CFO at Lundin Mining]

We generated Adjusted EBITDA of $1.9 billion for the year from continuing operations, including $686 million in the fourth quarter. Adjusted Operating Cash Flow from continuing operations exceeded $1.6 billion for the year, including over $665 million in the fourth quarter. Moving to the next slide. Free cash flow from continuing operations was $774 million for the year and $388 million for the quarter. Operating cash flow benefited from higher commodity prices and was offset by a significant negative working capital build of $414 million for the full year, and a working capital build of $132 million for the fourth quarter. Full-year Adjusted Earnings from continuing operations amounted to $688 million and $364 million for the quarter.

[Teitur Poulsen, CFO at Lundin Mining]

Earnings from continuing operations for the quarter amounted to over $900 million and were positively impacted by a non-cash deferred tax recovery at Caserones of $517 million, with the company now having recognized a larger portion of the $3.9 billion tax loss at Caserones. Slide 17 presents in greater detail the sources and uses of cash in 2025. In 2025, our continuing operations generated just over $1.6 billion in cash flow before working capital.... This cash generation includes close to $400 million paid in cash taxes during the year. After netting capital expenditure and non-cash working capital movement, the free cash flow from continuing operations amounted to $539 million.

[Teitur Poulsen, CFO at Lundin Mining]

As per the company's shareholder distribution policy, the company executed on its share buyback program, totaling $150 million, and combined with the dividends for the fourth quarter of 2024, and the first three quarters of 2025, has paid an additional $106 million in dividends. Dividends to non-controlling interests in Candelaria and Caserones amounted to $138 million for the year. The company had a cash outflow of about $150 million on lease payments, interest, and hedges, and ending the year with a net cash position of $77 million, excluding capital leases. The company has thus significantly strengthened its balance sheet during 2025, with the sale of the European assets being pivotal to this strengthening.

[Teitur Poulsen, CFO at Lundin Mining]

With last week's announcement to upsize our Revolving Credit Facility from $1.75 billion-$4.5 billion, combined with the strong cash generation from our producing assets, the company is now financially primed to embark on the capital investment required to unlock the exciting Vicuña project in Argentina. And with that, I'll now turn the call back to Jack.

[Jack Lundin, President and CEO at Lundin Mining]

Thank you, Teitur. In January, we announced updated three-year guidance for production, operating cash costs, and capital expenditures for 2026. Copper production is forecast to be 310,000-335,000 tons on a consolidated basis in 2026. Compared to last year's three-year outlook, mine sequencing optimizations are expected to increase copper production by 20,000 tons in 2027, while the midpoint of 2026 has been adjusted by 5,000 tons, resulting in a net increase of approximately 15,000 tons over the two-year period. Revisions to Candelaria's 2026 copper and gold production guidance incorporates lower underground mining rates in the first half of the year as the company insources the underground mine operations contractor. The production profile is forecast to be modestly weighted towards the second half of the year due to higher expected grades from Phase 12.

[Jack Lundin, President and CEO at Lundin Mining]

We expect the insourcing strategy to lead to cost savings and improved productivity for our underground operations, which represents a significant value driver for the future of our Candelaria operation. At Caserones, 2026 estimates remain unchanged, while copper guidance in 2027 increased by 10,000 tons to range between 115,000-125,000 tons, resulting from higher cathode production and increased mill throughput. Chapada copper production guidance has been revised upward by approximately 5,000 tons for 2026, resulting in an anticipated range of 45,000-50,000 tons. Gold production guidance also increased by 10,000 ounces for 2027 compared to previous guidance. The updated mine plan reduces the dependence on lower-grade stockpile material from around 25% down to about 10%, enhancing copper and gold recovery rates over the three-year period.

[Jack Lundin, President and CEO at Lundin Mining]

Consolidated gold production is forecast to be 134,000-149,000 ounces in 2026 for the company. Consolidated cash costs for 2026 is projected to range from $1.90-$2.10 a pound of copper after accounting for byproduct credits. Total sustaining capital expenditures are forecast to be $550 million, consistent with prior year's guidance. Candelaria and Caserones account for approximately 80% of the sustaining capital budget, with the majority of expenditures directed to stripping, mine development for Candelaria's underground, tailings, and mining equipment purchases and replacements. Expansionary capital expenditures are forecast to be $445 million, and this includes the 50% expenditure related to our 50/50 joint arrangement between the company and our partners, BHP, for the Vicuña project.

[Jack Lundin, President and CEO at Lundin Mining]

This ramp-up in expenditure gets us ready for a sanction decision on Vicuña as early as the end of this year. Included in expansionary capital expenditures, we also have $35 million in expansionary CapEx at Candelaria, which includes pre-production stripping related to Phase 13 in the open pit. Exploration this year is estimated to be $53 million, and we will target drilling almost 70,000 meters between Caserones, Candelaria, and Chapada. The drill program at Caserones will primarily focus on defining the size of the Angelica deposit, both in terms of leachable copper resources and the underlying copper molybdenum sulfide mineralization, where we are targeting a maiden resource next year in calendar year 2027. Additional drilling at Caserones will be directed towards new discoveries and testing at least two new district exploration targets, Centauro and Cordillera.

[Jack Lundin, President and CEO at Lundin Mining]

At Candelaria, drilling is designed to continue expanding the underground resources and also growing the shallow La Española deposit and neighboring La Portuguesa target. At Chapada, additional drilling at Saúva will continue to further define higher-grade resources that will be incorporated into an updated resource estimate later this year, which will also be embedded within the updated Technical Report for Chapada. I'll now hand it back over to Juan Andrés to give an update on the Saúva project.

[Juan Andrés Morel, COO at Lundin Mining]

Thank you, Jack. As mentioned at our CMD last year, we are advancing key growth initiatives at our Chapada mine, including the installation of an additional ball mill and the development of the nearby Saúva satellite deposit. The ball mill installation will allow a finer grind size, which is expected to increase recoveries by approximately 5% for both copper and gold for the entire life of mine. At the same time, ore from Saúva deposit will provide higher grade ore, helping to offset the lower grade material at Chapada and further enhance overall plant performance. The pre-feasibility study for Saúva has been completed and a feasibility study has been initiated.

[Juan Andrés Morel, COO at Lundin Mining]

We are targeting to make a sanctioning decision in the second half of 2026, and we expect construction of the new ball mill to begin by the end of 2026 or early 2027, which will put the commissioning of the ball mill near the end of 2027. Permitting at Saúva will continue to advance in parallel, and potentially we could see first ore from Saúva in 2029, subject to permit timelines. The pre-feasibility study highlighted an average production increase of 17,000 tons per annum for copper and 32,000 ounces per year over a five-year period for Phase 1. We anticipate this profile will improve as the mine plan is optimized to include Phase 2. I will now turn it back to Jack.

[Jack Lundin, President and CEO at Lundin Mining]

On Monday, we announced the results of the Vicuña integrated technical study, signifying an important milestone for this impressive district scale project. At full capacity, the district is expected to produce over 500,000 tons of copper, 800,000 ounces of gold, and 20 million ounces of silver each year. The project benefits from a first quartile cash cost profile and will be built to generate sustained, significant cash flow for many decades throughout the cyclical nature of the base and precious metal sectors. Furthermore, the stage development approach is designed to use cash flows to fund subsequent expansions, optimizing capital efficiency and value creation. It is great to start off in 2026 with these recent company highlights and on the heels of a record-breaking year for the company.

[Jack Lundin, President and CEO at Lundin Mining]

Divesting our European assets simplified our portfolio and strengthened our balance sheet, allowing us to focus on future growth across our South American sites. Our partnership in the Vicuña district positions us for multi-year growth toward becoming a top 10 copper producer. Filo del Sol, one of the largest undeveloped copper, gold, silver deposits globally, and our joint venture with BHP, creates a pathway to form a new multigenerational mining district. Anchored by consistent operational performance, we delivered record revenue of $4.5 billion, declared our 39th consecutive quarterly dividend, and returned a total of $256 million to shareholders through dividends and share buybacks, highlighting our financial discipline and commitment to shareholder returns.

[Jack Lundin, President and CEO at Lundin Mining]

Lundin Mining is uniquely positioned with a strong balance sheet, funding commitments for our ambitious pipeline of growth, a simplified portfolio, and a strategic partnership with BHP in the Vicuña district, offering unparalleled growth opportunities for our stakeholders. With that, I would like to open the lines for questions. Thank you.

[Operator]

As a reminder, to ask a question, please press star one one on your telephone.

[Operator]

And wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Johannes Grunselius with SB1 Markets.

[Johannes Grunselius, Analyst at SB1 Markets]

Yes. Hi, it's Johannes. I have two questions. So the first one is on Caserones, where you had really good grades, as you highlighted. I can see that your annual sort of copper output is 158 or something, and your full year 2026 guidance is 130-140. Are you seeing that more conservative now than you did when you launched the guidance in this first in December? That's my first question.

[Juan Andrés Morel, COO at Lundin Mining]

Johannes, hi, this is Juan Andrés. We, as I mentioned on the presentation, we have seen a significant improvement in the performance of the cathode plant, so we are forecasting more cathode production, and that is somehow offsetting some of the drops in the grades in the following year, but we are maintaining our guidance overall as previous years.

[Johannes Grunselius, Analyst at SB1 Markets]

All right. Okay, so it was sort of in line with your expectations, the Q4 volumes. They didn't surprise you?

[Juan Andrés Morel, COO at Lundin Mining]

No, it was as expected in the mine plan.

[Johannes Grunselius, Analyst at SB1 Markets]

Okay. Okay, okay, good. Thank you. And the second question, and you partly answered it in your presentations, but when I look at the OpEx versus, for example, you know, your ore volumes in Candelaria, Caserones, it's a pretty high, you know, increase in OpEx per ton, ore mine and ore mill. And you mentioned there was some negotiations with unions that could explain that, but could you how should we view it? How much did cost move up, sort of on an underlying basis? And is this like in line with the mining industry right now in Argentina and Chile?

[Teitur Poulsen, CFO at Lundin Mining]

Yeah. Hi, Johannes. It's Teitur here. Yeah, I mean, first off, I mean, it's a great result that we managed to land these five agreements with the unions at Candelaria ahead of schedule, because that eliminates any risk of any production disruption in 2026. But we are not disclosing the exact details of what those bonus payments are. The sequence here is that every three years we enter into negotiations with the unions, and normally what happens is you're paying certain one-off bonuses to the labor force in order to extend stability for the next three years. And the way we account for that is that whenever we pay these bonuses every three years, we expense that payment in the quarter where the payment occurs.

[Teitur Poulsen, CFO at Lundin Mining]

So that did elevate the, I should say, the Candelaria absolute costs in Q4, but the return from that is that we now have stability for the next three years. And at Caserones, the absolute costs are also up, and that's simply because we report the production costs as per the sold volume, not the produced volume, and we sold an elevated amount of volume for Caserones in Q4. So that's what was driving our higher absolute production costs. But if you look at it on a unit basis, it's as low as it was in Q3.

[Johannes Grunselius, Analyst at SB1 Markets]

Yeah, yeah, I agree.

[Teitur Poulsen, CFO at Lundin Mining]

It's trending very well.

[Johannes Grunselius, Analyst at SB1 Markets]

I agree. Yeah, yeah. Thanks for clarifications, and congratulations to great results.

[Teitur Poulsen, CFO at Lundin Mining]

Thanks.

[Johannes Grunselius, Analyst at SB1 Markets]

Thank you.

[Operator]

Our next question comes from Daniel Major with UBS.

[Daniel Major, Metals and Mining Analyst at UBS]

Hi, can you hear me okay?

[Teitur Poulsen, CFO at Lundin Mining]

Yep.

[Juan Andrés Morel, COO at Lundin Mining]

Yep.

[Daniel Major, Metals and Mining Analyst at UBS]

Great, thanks. Just on the Saúva update, I'm just looking at the slide from the capital markets day on the scoping study. I mean, you're sort of guiding for a similar rate of production. I think it was 15,000-20,000 tons per annum of copper. It's now 17,000, it's fractionally lower gold, but the parameters seem somewhat different. I mean, the CapEx has gone down from $155-$110. The grades are lower, the throughput is lower, but the production's the same. Can you just run us through what the difference is between what you're presenting on now relative to the capital markets day and kind of what's changed, particularly the reduction in CapEx? Was that just a more conservative initial assessment, or has the scope changed much?

[Juan Andrés Morel, COO at Lundin Mining]

Morning, Daniel. This is Juan Andrés. Thank you for the question. So in doing the CMD, we guided based on a conceptual study, and as we moved into the pre-feasibility study, of course, we increased the level of understanding of this opportunity. In the original CapEx estimate, we have considered a secondary crusher for the addition of the ball mill. During the PFS, we learned that that was not necessary, so that was basically removed from the CapEx estimate, and the rest of the scope remains the same. So we have the ball mill, which is roughly $65 million. And then for the Saúva itself, for the open pit, is another $45 million for road construction, liners for the waste dumps and a water treatment plant. So that is basically the scope.

[Juan Andrés Morel, COO at Lundin Mining]

So that, that is what triggered this CapEx reduction. Of course, there were some minor adjustments to the mine plan, given also changes in the metal prices that were used for mine design, and that explains the small changes in the tons and grades.

[Daniel Major, Metals and Mining Analyst at UBS]

Okay, thanks. Second question, just around the treatment and refining charges. I think Antofagasta settled what looks like the benchmark essentially close to zero, would it be fair to say that you, you know, you're following similar terms? And then is there any difference in the realization when we look at, you know, what you're sort of putting in your accounts for treatment and refining charges, is that gonna dramatically decline, or are there any additional charges incremental to what, a pretty close to zero benchmark represents?

[Teitur Poulsen, CFO at Lundin Mining]

Yeah, those are, those are also the numbers we are hearing. Certainly for volume going into China, I think it'll be segmented a little bit more than what normally was the case. So we will have to see what the Japanese rates land at and other rates. But generally speaking, it's trending very well. I mean, within our cost guidance for 2026, we have assumed 25 and 2.5, so I think we're likely to land ahead of what we assumed in our guidance. I think that's as much as we can say, and obviously, you know, then depending on the blend of how much we sell on the fixed-term contracts versus spot markets, that might ultimately also impact the weighted average TC/RC charges we have for the full year.

[Daniel Major, Metals and Mining Analyst at UBS]

Okay, but you've assumed 25 and 2.5, so there's also quite a bit of downside-

[Teitur Poulsen, CFO at Lundin Mining]

Correct.

[Daniel Major, Metals and Mining Analyst at UBS]

-even though it's a relatively small number. Okay, thanks.

[Teitur Poulsen, CFO at Lundin Mining]

Yeah.

[Daniel Major, Metals and Mining Analyst at UBS]

Yeah, and final one, and I'll let someone else have a go. Just wanted to follow up on some of the discussions in the call earlier in the week around streaming and Vicuña. I mean, it felt like the narrative from BHP on their call following the announced transaction at Antamina was the reason they were happy to stream that was that there wasn't a huge amount of long-term growth optionality beyond life extension, which may not be the same dynamic in the Vicuña. Can you just, you know, give us another summary of how you're viewing streaming in the district, and confirm whether it would be at all possible that one party out of the JV would stream and the other would not?

[Jack Lundin, President and CEO at Lundin Mining]

Yeah. Hi, Daniel. It's Jack here. So I think as we were mentioning, and as we released on Friday last week, we've upsized our near finalization of upsizing our Revolving Credit Facility up to $4.5 billion, which would, you know, put us firmly in position to be fully financed for our portion of the build. Now, that also gives us the optionality to look at other forms of financing, streaming being one of them. You know, we're seeing that there are some uniquely structured streaming deals, being announced in the market, and we're obviously following what our partners, BHP, are doing at Antamina. I think it opens up optionality and opportunities for us.

[Jack Lundin, President and CEO at Lundin Mining]

But I, I think also as we've mentioned, you know, the Filo deposit is still open in all directions, and we see significant upside potential for the resource to grow, and that includes silver qualities and quantities. But of course, you can structure a deal where you're having step downs or, you know, arrangements where you, you know, don't have to run the stream in perpetuity. So we're looking at opportunities, but I would say it's still lower down on the probability list for us in terms of financing. And if there were to be one party, you know, working on a different form of financing than another, then you know, as part of the JV, the partners would have to get together and, and align on what that is.

[Jack Lundin, President and CEO at Lundin Mining]

But right now, I think we're in a really good position as it pertains to our funding strategy.

[Daniel Major, Metals and Mining Analyst at UBS]

Okay, great. Thanks, and, congrats on a good, stable, year.

[Jack Lundin, President and CEO at Lundin Mining]

Thank you so much.

[Operator]

Our next question comes from Sathish Kasinathan with Bank of America.

[Sathish Kasinathan, Equity Research Analyst at Bank of America]

Yeah, hi, good morning. Thanks for taking my question. My first question is on the long-term outlook, the outlook. So your 2028 guidance, which currently calls for a modest drop in copper production versus 2027, I guess there is upside from Saúva, which could start in the second half of 2028. Can you talk about some of the other opportunities you highlighted at the investor day, mainly the underground expansion at Candelaria, and then the Angelica target at Caserones?

[Jack Lundin, President and CEO at Lundin Mining]

Yeah, I can talk about the growth projects, and I'll hand it over to Juan Andrés to talk about the 2028 production guidance range. So, for Candelaria Underground, as we mentioned on the call, you know, right now the focus for us is to be insourcing the mine production operator in the underground. And, in order to accommodate that smooth transition, we've lowered the throughput assumption from the underground, and we'll be exiting 2026, getting back to kind of that 14,000 ton per day baseline production rate.

[Jack Lundin, President and CEO at Lundin Mining]

Once we've been able to do that, then we'll look at putting a plan in place to potentially grow, you know, in increments up to what could be around 22,000 tons per day in the underground, which translates to around, you know, 10,000 tons of copper per annum for, for, Candelaria overall. Angelica is a very exciting exploration play right beside Caserones.

[Jack Lundin, President and CEO at Lundin Mining]

We've got a number of exploration targets that we're following up on through our drilling season this year at Caserones, and really what we're looking at is, you know, high impact holes that are near the existing infrastructure of Caserones that could quickly translate into mineable inventory to, you know, potentially feed higher grade material to the sulfide concentrator or even more oxide material for our dump leach, which, as we have been announcing and talking about, the cathode plant is running exceptionally well due to upgrades that we've made to our overall kind of leaching plan. So yeah, we're gonna be chasing up those opportunities in addition to the Saúva project, which we just spoke about, and I'll hand it over to Juan Andrés to talk about 2028.

[Juan Andrés Morel, COO at Lundin Mining]

Yeah. In our guidance in 2028, we have not yet included any of these opportunities yet. So as we move forward, we will be including those. So I don't think there's-

[Jack Lundin, President and CEO at Lundin Mining]

No, Saúva is not part of our... We haven't fully sanctioned it yet. We look to do that before the end of this year. I mean, the Chapada plant upgrade for the extra ball mill is something that we will be proceeding on. Right now, the PFS outlined us getting into first production actually in 2029, not in 2028.

[Juan Andrés Morel, COO at Lundin Mining]

Yep.

[Sathish Kasinathan, Equity Research Analyst at Bank of America]

Okay, understood. Thanks for the color. Maybe one question on the Chapada stream. So, Chapada currently has a stream on the primary metal production, with the change in ownership there, with the acquisition of Sandstorm. So, have you had any initial talks with the new owners and whether you can potentially take advantage of the current strong gold price and convert it into a gold stream instead of a primary metal stream?

[Jack Lundin, President and CEO at Lundin Mining]

No, we haven't had any discussions since the change of ownership on that stream, but, something that we'd obviously, you know, entertain potentially in the future. Okay, thank you.

[Operator]

Our next question comes from Cody Hayden with Deutsche Bank.

[Cody Hayden, Metals and Mining Equity Research Analyst at Deutsche Bank]

Hi, good morning. You kind of touched on it already, but as we approach a potential sanctioning decision at earlier this year, I was wondering if you could comment on how we should be thinking about the balance sheet and capital allocation. Is there any consideration on updating any of your policies, or are you sort of in a holding period until a financing agreement is confirmed at Vicuña? And then second, I noticed the calculation of net debt has been updated to exclude lease liabilities. I was wondering if you could just explain a bit of the rationale behind this change. Thank you.

[Teitur Poulsen, CFO at Lundin Mining]

Yeah, I can address just on the capitalized leases. Most of those actually relate to the Caserones operations.

[Teitur Poulsen, CFO at Lundin Mining]

But we just think it's a cleaner story. It's less confusing if you just segregate the actual external debt as debt when we talk about the net debt. The leases are, you know, financially, it has to be classified as debt, but they really relate to the operations of the Caserones mines. So that's why we prefer to separate the two, and we are always very clear as to when we talk about net debt, that it excludes capitalized leases. So there's nothing more to it than that. We just feel it's a simpler way to communicate the position of the balance sheet.

[Jack Lundin, President and CEO at Lundin Mining]

Yeah, and with respect to kind of our capital allocation, I think we've, you know, been very consistent in our messaging. We will look to remain distributing capital to shareholders in absolute terms, around $220 million through dividends and our buyback policy. We've got growth opportunities that we're pursuing, and then we've got, you know, this upsizing of our Revolving Credit Facility that we're on the cusp of finalizing. And so that puts us in a really good position, right? Being in a net cash position. We entered 2025 with a debt of around $1.3 billion. Thankfully to the, you know, conclusion of the sales of our European assets and other transactions, we've been able to pay down our debt in addition to the strong cash flows being generated.

[Jack Lundin, President and CEO at Lundin Mining]

So I think we're in a, you know, very strong position, which gives us the ability to maintain returns to shareholders, pursue our brownfield opportunities at our existing operations, and then go after the big growth opportunity with Vicuña. So, we're in good shape.

[Cody Hayden, Metals and Mining Equity Research Analyst at Deutsche Bank]

Great. Thanks, team. Appreciate it.

[Operator]

Our next question comes from Craig Hutchison with TD Cowen.

[Craig Hutchison, Director of Equity Research at TD Cowen]

Hi, guys. Good morning. Most of my questions have been answered, but just wanted to circle back on Saúva. Just looking at the production profile, it was—it seemed to me pretty accretive, particularly given, you know, the high gold grades in year one. But is any possibility you give us some kind of sense in terms of what the NPV uplift would be from this project? It's just difficult to kind of understand this based on only having initial capital and, and some of the grades. But is, is this a pretty material uplift in terms of how you view the NPV for, for Chapada overall? Thanks.

[Jack Lundin, President and CEO at Lundin Mining]

Yeah, absolutely. It definitely impacts the overall value of Chapada, adds a, you know, significant amount of NPV to the asset. You know, we use base case, kind of, consensus pricing for the sanctioning decision and for our economic model. But if you were to use spot pricing, I mean, this would significantly enhance the overall value of Chapada. And so these are the exact type of projects that we're tasking our sites to go out and look to pursue, given that Chapada has, you know, stabilized the operation and is generating strong cash flows year-over-year. You know, I think Saúva plays a key role to improving the overall value.

[Jack Lundin, President and CEO at Lundin Mining]

And I will say as well, targeting before the end of this year, we're going to be updating the Technical Report, which will update the resource and reserve for Chapada. It will incorporate Saúva as a reserve as well, and it will, you know, include kind of the development plan and overall strategy for making that part of the core of the operation.

[Craig Hutchison, Director of Equity Research at TD Cowen]

Okay, great. I guess you can't give us some kind of a sense of what that up NPV uplift is at this point, or we have to wait till sort of year-end?

[Jack Lundin, President and CEO at Lundin Mining]

Yeah, we're not disclosing that at this time, but yeah, but you'll be able to see it in the near term.

[Craig Hutchison, Director of Equity Research at TD Cowen]

Okay. Thanks, guys.

[Operator]

Our next question comes from Matt Greene with Goldman Sachs.

[Matt Greene, Mining Analyst at Goldman Sachs]

Good morning, gents. Congrats on a great year. If I could just carry on that question on Saúva, Juan Andrés, what do you... I guess, firstly, just for clarification points, because I think the language is changing a bit here. With, at your CMD, you talk about incremental production, and now we're talking about offsetting low-grade materials. So I just want to confirm that is still incremental production on top of what the mine plan you presented at the CMD. And then just kind of how you since the scoping study in this PEA, has your approach to how you're thinking about this project changed at all? I mean, metal pricing has gone up. I guess, are you solving for NPV? Are you solving for capital intensity, the ability to bring this to market quickly?

[Matt Greene, Mining Analyst at Goldman Sachs]

I'm just kind of keen to know if your approach towards this project has changed at all since you CMD?

[Juan Andrés Morel, COO at Lundin Mining]

Good. No, and in general, the approach has not changed, Matt, and we're still aiming for, bringing production earlier in the, in the life of mine of, Chapada and taking advantage of the current commodity prices. So we're aiming for, low capital intensity opportunities, as we've highlighted during the, CMD. And, and to your, initial question, it, it is incremental production, so we're basically deferring or delaying low-grade material from Chapada and replacing that with higher-grade material from Saúva.

[Juan Andrés Morel, COO at Lundin Mining]

And those 17,000 tons of copper are actually incremental over the previous life of mine of Chapada.

[Matt Greene, Mining Analyst at Goldman Sachs]

That's very, very clear. Thanks so much.

[Juan Andrés Morel, COO at Lundin Mining]

To add one more comment, this is the first phase of this project, which is the near-term opportunity. But as we continue with the study of the project, the feasibility study, we'll also be working on the pre-feasibility study of the remaining of the ore body, which is still very attractive, but we need to understand more the deposit and how we're going to bring that project forward.

[Matt Greene, Mining Analyst at Goldman Sachs]

Yeah, yep, got it. Thanks. That's clear. And I, I guess just taking a step back on the concentrate markets, you know, you touched on TCRCs earlier, but I don't think that really tells the whole story. And just given the tightness, you know, not getting as penalized as much on impurities, free metal, I think your bargaining power as a mining right, concentrate producer right now is, is quite favorable. So is this, I guess, changing the way you're thinking about how you produce your concentrates across the, across your mines? I mean, are you able to lower the grade of your concentrates, perhaps, you know, mine material, if you do have it, that has higher impurities and be quite opportunistic in this market? Is this something that, is perhaps opening up a few opportunities?

[Juan Andrés Morel, COO at Lundin Mining]

Yes, we have been looking at opportunities from that regard. We are testing some different approaches in Chapada, for example, where we're making a trade-off between lowering the grade of the concentrate and increase our recovery significantly. So we are testing those opportunities. We have seen, on the other side, an incredible increase in the concentrate grade in Caserones as we mine through an area of the deposit where recoveries are higher and concentrate grades are highest. It's basically driven by the metallurgy, but those are the kind of trade-offs that we're testing now.

[Matt Greene, Mining Analyst at Goldman Sachs]

Okay, thanks. And is that looking quite promising? Is that at all reflected in your guidance, or could that be a little bit of upside, you think?

[Juan Andrés Morel, COO at Lundin Mining]

No, they're, they're not yet totally reflected in our guidance.

[Matt Greene, Mining Analyst at Goldman Sachs]

Okay, got it. Thanks, Juan. Cheers.

[Operator]

That will conclude our question and answer session. This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Jack Lundin, President and CEO
• Juan Andrés Morel, COO
• Teitur Poulsen, CFO

Analysts

• Cody Hayden, Metals and Mining Equity Research Analyst at Deutsche Bank
• Craig Hutchison, Director of Equity Research at TD Cowen
• Daniel Major, Metals and Mining Analyst at UBS
• Johannes Grunselius, Analyst at SB1 Markets
• Matt Greene, Mining Analyst at Goldman Sachs
• Sathish Kasinathan, Equity Research Analyst at Bank of America
• Video Narrator