Lundin Mining Q3 Earnings Call Highlights

Key Points

• Severe winter storms at Caserones cut Lundin Mining’s 2026 copper forecast to 285,000–310,000 tons, including a lower mine-level outlook of 105,000–115,000 tons. Power outages and snow-related operating constraints delayed access to some higher-grade ore until 2027.
• Record copper prices supported strong third-quarter results: revenue reached $1.1 billion, adjusted EBITDA was $648 million, and free cash flow from operations rose 16% sequentially to $418 million. Cash costs were $2.01 per pound, excluding weather-related Caserones standby costs.
• Lundin is targeting a Vicuña stage-one sanction decision before year-end, with an updated capital estimate and schedule to come; the prior $7.2 billion estimate may face inflationary pressure. The company also raised its remaining-2026 share repurchase authorization by up to $100 million.

Lundin Mining TSE: LUN reduced its 2026 copper production forecast after severe winter storms disrupted its Caserones mine, even as record realized copper prices helped lift third-quarter revenue to $1.1 billion.

The company now expects consolidated copper production of 285,000 to 310,000 tons this year. It lowered its Caserones forecast to 105,000 to 115,000 tons from 120,000 to 130,000 tons, while maintaining consolidated cash cost guidance of $1.95 to $2.15 per pound.

President and Chief Executive Officer Jack Lundin said two major storms in July and August damaged transmission towers and left Caserones without power for approximately 30 days. Snowmelt has continued to affect operations in the fourth quarter, reducing haulage rates and limiting ore deliveries to the mill.

“While we continue to navigate the challenges at Caserones, our underlying business remains strong,” Lundin said.

Storm disruption weighs on output

Consolidated copper production totaled 63,000 tons in the third quarter, bringing the year-to-date total to 219,000 tons. Caserones produced 15,000 tons during the quarter.

Chief Operating Officer Juan Andrés Morel said the site received 1.4 meters of snow in October. Muddy pit conditions reduced haulage speeds by 20%, while difficult conditions affected maintenance schedules and truck availability.

The delays also pushed access to some higher-grade ore into 2027. Morel said the company expects an improved grade profile in the first quarter of next year, but does not anticipate major changes to the long-term mine sequence.

Candelaria produced 35,000 tons of copper in the third quarter, up 13% from the second quarter, as higher-grade ore from Phase 12 contributed more to production. Chapada produced 12,600 tons, up 5% sequentially and its highest quarterly output in two years, along with 16,900 ounces of gold. Both mines remain on track to meet their full-year copper production guidance, Morel said.

Higher prices support cash flow

Third-quarter revenue marked the fourth consecutive quarter above $1 billion, Chief Financial Officer Teitur Poulsen said. The company’s realized copper price, including adjustments to prior-period provisional pricing, reached a record $6.85 per pound.

Adjusted EBITDA was $648 million, while adjusted earnings attributable to shareholders were $277 million, or $0.32 per share. Free cash flow from operations rose 16% from the second quarter to $418 million. Net cash stood at $237 million at quarter-end, compared with $79 million at the end of the previous quarter.

Consolidated cash costs were $2.01 per pound, excluding $66 million in Caserones mine standby costs associated with the weather-related suspension. The standby costs were also excluded from adjusted EBITDA and adjusted earnings, Poulsen said.

Poulsen told analysts that the stoppages were not long enough for business interruption insurance to apply. He said it was early to assess the fourth quarter but that he did not believe there would be further standby charges.

During the quarter, Lundin Mining repurchased approximately 2.4 million shares for $62 million and declared its 39th consecutive quarterly dividend. The board also approved an increase of up to $100 million to the share repurchase program for the remainder of 2026.

Vicuña sanction decision targeted by year-end

Lundin said the company is aiming to make a stage-one sanction decision for the Vicuña project before year-end. The remaining work includes completing a bottom-up capital estimate, execution plan and schedule, which are undergoing independent peer reviews before being presented to shareholders for approval.

Asked whether stage-one capital costs were likely to face inflationary pressure above the previous $7.2 billion estimate, Lundin said that was fair. He said the updated estimate would incorporate recent input prices, including diesel, as well as inflation and escalation in Argentina. He did not provide a new estimate.

The company secured a long-term royalty agreement with the government of San Juan and approval from Argentina’s electricity regulator to build a high-voltage power line connecting the project to the national grid. The royalty agreement includes a five-year payment holiday on infrastructure trust contributions in exchange for an upfront commitment of $250 million on a 100% basis, or $125 million for Lundin Mining’s 50% share.

Lundin said the company expects to provide a stage-one capital and schedule update with a sanction decision, followed by a district-level prefeasibility study targeted for the second half of 2027.

At Chapada, the company has sanctioned an additional ball mill as part of the Saúva growth project, with commissioning targeted for late 2027. Lundin said the project is expected to add approximately 15,000 tons of annual copper production and 45,000 ounces of gold.

The company’s revised 2026 capital spending guidance is $980 million, including $530 million in sustaining capital and $395 million for Vicuña. Poulsen said the reductions to other capital plans reflected deferred equipment and payment timing.

About Lundin Mining (TSE:LUN)

Lundin Mining is a Canadian mining company headquartered in Vancouver, Canada with three operating mines in Brazil and Chile. We produce metals that underpin global development, supporting infrastructure, electrification, technological innovation, and economic resilience. Our strategic vision is to become a top ten global copper producer. To get there, we are executing a clear growth strategy, which includes advancing one of the world's largest copper, gold, and silver projects in the Vicuna District on the border of Argentina and Chile, where we hold a 50% interest.

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