R/€ = 16.35 Change: -0.04
R/$ = 14.43 Change: -0.05
Au 1302.80 $/oz Change: -0.65
Pt 833.73 $/oz Change: 1.15
 
 
R/€ = 16.35 Change: -0.04
R/$ = 14.43 Change: -0.05
Au 1302.80 $/oz Change: -0.65
Pt 833.73 $/oz Change: 1.15
 
 
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Lundin says Portugal project costs revised upward

15th February 2019 BY: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online

Canada-headquartered Lundin Mining has announced a new cost estimate for its Neves-Corvo zinc expansion project (ZEP), in Portugal, with costs increasing to €320-million.

This compares with an initial approved budget of €256.5-million for the project, which will double the mine’s production to 180 000 t/y.

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The new cost estimate was reported in Lundin’s fourth-quarter and year-end financial results announcement, in which the company also stated that the Neves-Corvo ZEP was 43% complete and that the underground development was on track to contribute to mill feed in the first quarter of 2020.

Lundin’s other growth initiatives are at Candelaria, in Chile, and Eagle East, in the US. CEO Marie Inkster reported that the company had made good progress at these projects, which would be completed in 2019 and early 2020.

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At Eagle East, the access ramp is ahead of schedule and first ore is expected into the mill in the fourth quarter of 2019.

The Candelaria mill optimisation project is also progressing according to plan with construction about 40% complete at year-end. Ramp-up of the Candelaria underground north sector is currently mining about 10 200 t/d on average. The development of the south sector continues and has advanced further than planned. Lundin said that it was reviewing its development timeline and that it could bring forward the production start-up date to the end of 2019.

About 60% of the new openpit mine fleet at Candelaria had been received and placed in service, with the remaining equipment expected to be delivered in 2019 and 2020.

Lundin reported strong operational performance in 2018, with metal production achieving or exceeding its guidance; however, lower sales volumes and higher costs, coupled with lower realised metal prices, have dragged down the company’s profit for the year.

Gross profit fell by $383.7-million to $436.6-million in 2018, from $820.3-million in 2017. The company said on Friday that lower sales volumes contributed $133.6-million to the decrease, higher operating costs $185.9-million and sales prices had a $90-million impact.

For the year ended December 31, Lundin reported net earnings from continuing operations of $215.4-million, a decrease of $231.5-million in comparison to the year ended December 31, 2017. Comparative net earnings in the current year were lower due to lower gross profit, partially offset by lower income tax expenses.

Inkster pointed out that Lundin ended the year with about $800-million of cash, nominal debt and $1.4-billion of liquidity.

She said that the group was pleased with its operational performance in 2018. “We beat our overall safety performance target for the sixth consecutive year and achieved or exceeded latest production and cash cost guidance for all metals at all operations.” 

EDITED BY: Creamer Media Reporter
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