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Lundin Mining projects 30% copper output growth by 2021

Lundin Mining Corp. projects copper production from its current asset portfolio to rise 30% by 2021, company CEO Marie Inkster said Feb. 21.

"The growth is primarily attributed to realizing the benefits of the low-risk investments we've been making at Candelaria over the past 2 years in addition to the Chapada acquisition," Inkster said, in reference to Lundin's mining assets in Chile and Brazil, respectively. "We saw improvements during the second half of 2019, and we expect to build on that momentum through 2020."

Lundin produced 235,498 tonnes of copper in 2019, a significant increase from 199,630 tonnes produced in 2018. For 2020, the company provided copper output guidance in the range of 272,000 to 296,000 tonnes, according to a statement released Thursday. Inkster said Candelaria and Chapada were primarily responsible for Lundin's lift in 2019 copper production.

"Mine production from Candelaria's north and south sector underground mines ramped up to an average of 13,500 tonnes per day during the fourth quarter," she said. "Medium-term annual production is forecast to average over 180,000 tonnes per year over the next 10 years, including 190,000 tonnes per year in the years 2022 through 2025."

Discussing Chapada, Inkster said the integration of the mine into the company's portfolio after Lundin acquired the asset in July progressed better than expected, as copper production for the year exceeded guidance due to higher-than-planned ore grades.

Lundin's copper shipments in 2019 increased 15.6% year over year to 225,627 tonnes. The Toronto-listed company's fourth-quarter net income rose to $104.8 million on sales of $568.4 million, up from earnings of $31.8 million on sales of $407.7 million in the fourth quarter of 2018.

However, Lundin's net earnings in 2019 fell to $189.2 million on sales of $1.9 billion, compared with $215.4 million of income on $1.73 billion of revenue in 2018.

Zinc output flat as nickel drops, but outlook strong

Lundin's zinc production remained steady and nickel output fell in 2019, but the company's 2020 forecast for the metals is optimistic due to mine development in Michigan and Portugal. Lundin's 2019 zinc output totaled 151,515 tonnes, flat year over year, while nickel production slid 23% to 13,494 tonnes in the same comparison.

Inkster said nickel output was set to improve in 2020 as Lundin continues to develop its Eagle mine in Michigan.

"Mine development continued in the fourth quarter, allowing for full access to higher-grade ores in 2020," Inkster said. "As a result, 2020 nickel production is set to increase more than 3,000 tonnes, or 22%, over 2019 at reduced cash costs, as higher-grade Eagle East ore contributes to the mill feed." An expansion at Lundin's Neves-Corvo mine in Portugal this year will also double zinc production at the mine, Inkster said.

Lundin projected zinc production between 172,000 tonnes and 187,000 tonnes as well as nickel production between 15,000 tonnes and 18,000 tonnes in its 2020 guidance.

Nick Lazzaro is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.