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Lundin boosts copper outlook by 25%

Lundin Mining has forecast a 25% increase in copper production next year and flagged the prospect of a 50% increase in its quarterly dividend.
Lundin boosts copper outlook by 25% Lundin boosts copper outlook by 25% Lundin boosts copper outlook by 25% Lundin boosts copper outlook by 25% Lundin boosts copper outlook by 25%

Lundin Mining’s Chapada operations in Brazil are expected to return to full capacity in December

Staff reporter

The company boosted its copper outlook for 2021, based on increasing grades at Candelaria in Chile and expected "full-year, uninterrupted contributions" from both Candelaria and Chapada in Brazil.

Candelaria had been suspended in October due to strike action and Chapada's processing plant was significantly damaged in September following an electrical fault.

Lundin last week reached agreement at Candelaria with a union representing about 350 workers and said it had now reached agreements with all five unions at the mine, where a ramp-up to full capacity was underway.

Its reintroduced guidance for 2020 at Candelaria was 120,000-125,000 tonnes of copper at a cash cost of $1.50/lb, net of credits from forecast gold production of 70,000-75,000oz. Candelaria had previously been expected to produce 160,000-175,000 tonnes of copper and 90,000-100,000 ounces of gold on a 100% basis.

Chapada was "on track" to return to full production capacity in December and its 2020 production guidance remained at 45,000-50,000t of copper and 80,000-85,000oz of gold, the company said.

Lundin said its total 2021 copper production was forecast to increase 25% to 275,000-299,000t, then up to 281,000-305,000t in 2022 and 278,000-302,000 in 2023.

"Over the next 10 years, copper production is forecast to average nearly 180,000tpa," Lundin said.

Zinc production of 141,000-151,000t was expected next year, followed by a 30% jump to 183,000-198,000t in 2022 as the Zinc Expansion Project, set to restart in January at Neves-Corvo in Portugal, ramped up.

Nickel output was expected to increase 10% in 2022 to 17,000-20,000t due to higher grade ore at Eagle East in the US.

Gold production guidance was put at 170,000-180,000oz in 2021, 162,000-172,000oz in 2022 and 175,000-185,000oz in 2023.

Lundin forecast 2021 capex of US$610 million and earmarked $40 million for exploration.

It said a dividend increase to C6c per share, or 24c on an annualised basis, was expected to be declared alongside full-year results in February, pending board approval.

Lundin's shares (TSX: LUN) reached a one-year high intraday of $10.43 as the copper price reached its highest point since 2013 on the London Metal Exchange.

They closed up 0.58% to $10.38 to capitalise it at $7.6 billion (US$5.9 billion).