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Lundin points to production boost, increased dividend

Diversified producer Lundin Mining (TSX: LUN) anticipates a lift in copper, zinc and nickel production in 2020 and has tipped a 33% increase in its quarterly dividend to C4c.

Staff reporter
 Lundin Mining’s Chapada acquisition in Brazil this year is set to help boost copper production

Lundin Mining’s Chapada acquisition in Brazil this year is set to help boost copper production

The company said yesterday copper production was expected to increase 20% in 2020 compared with this year, zinc would increase 15% and nickel by 25%, as it released a three-year outlook.

Its copper guidance is further forecast to increase from 272,000-296,000 tonnes in 2020 to 292,000-316,000t in 2022.

Last year, the company had expected to produce 227,000-246,000t of copper in 2020.
 
Lundin said yesterday its three-year outlook had improved mainly on the inclusion of the Chapada copper-gold mine, the Brazil operation acquired from Yamana Gold earlier this year, and refining Candelaria's production profile in Chile.  

In Portugal, the Neves-Corvo zinc expansion project was on schedule for a phased ramp-up in 2020, which was expected to help lift overall zinc production from 172,000-187,000t in 2020 to 224,000-234,000t in 2022.

Nickel guidance was set at 15,000-18,000t for the next three years with the increased level expected to hold due to higher-grade ore from Eagle East in the US.

Lundin's gold guidance reduced slightly over the period, from 190,000-200,000 ounces in 2020 to 180,000-190,000oz in 2022.

The company has forecast 2020 capex of US$620 million, with the major spend of $265 million at Candelaria which it said was a decrease "compared to the reinvestment years of 2018 and 2019".

It said $15 million remained to be spent next year on Candelaria's mill optimisation investment, which was on schedule for completion in the first quarter.

Some $155 million was earmarked for the zinc expansion project at Neves-Corvo and it said the preproduction capex estimate of $430 million remained unchanged.

Lundin expected to spend $65 million on exploration next year, with the bulk to be spent on in-mine and near-mine targets.

The company also intends to renew its normal course issuer bid, which could see it purchase then cancel up to 10% of its shares over the coming year.

Lundin shares are trading towards the upper end of their 52-week range of C$5.115-$7.96 but closed down 1.6% yesterday to $7.33.

It is capitalised about $5.4 billion (US$4 billion).

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