Mr. Peter Rockandel reports

LUNDIN MINING ANNOUNCES CLOSING OF THE ACQUISITION OF MAJORITY INTEREST IN THE CASERONES COPPER-MOLYBDENUM MINE IN CHILE AND COMMITMENTS FOR NEW $800 MILLION TERM LOAN

Lundin Mining Corp. has closed the acquisition of 51 per cent of the issued and outstanding equity of SCM Minera Lumina Copper Chile (Lumina Copper), which owns the Caserones copper-molybdenum mine, located in Chile, from JX Metals Corp. and certain of its subsidiaries, as previously announced on March 27, 2023. Additionally, the company has obtained commitments for a three-year term loan in a principal amount of $800-million, with an additional $400-million accordion available upon receipt of additional binding commitments, closing of up to an additional 19-per-cent interest in Lumina Copper and satisfaction of relevant conditions precedent. The term loan is subject to the execution and delivery of definitive documentation in form and substance satisfactory to the company and the term loan lenders, and satisfaction of relevant conditions precedent.

Chief executive officer Peter Rockandel commented: "With the addition of Caserones, Lundin Mining adds another long-life copper mine of meaningful size with significant growth potential to our portfolio of high-quality assets. The Caserones team has achieved material operational improvements in recent years, and I am confident that we will unlock additional upside through our considerable knowledge, experience and existing presence in the region. The Caserones acquisition further solidifies Lundin Mining as a significant contributor to Chile in the Atacama region and as a growing global producer of copper as the world shifts to a lower-carbon future. On a pro forma basis, including Caserones, Lundin Mining's operations produced over 191,000 tonnes of copper in the first half of this year."

Teitur Poulsen, senior vice-president and chief financial officer, added: "Lundin Mining's cash-generation potential has further increased with the addition of Caserones. To that end, it is very pleasing to see Lumina Copper generate approximately $120-million under the acquisition lockbox in the first six months of the year and to end June with a cash position of over $150-million on a 100-per-cent basis. In conjunction with the Caserones acquisition, the company has received $800-million in term loan commitments from our existing lenders as well as from three new banks at competitive terms, demonstrating that this acquisition has also been accretive from a credit perspective. The new $800-million term loan, combined with the existing $1.75-billion revolving facility, will ensure that the company retains a strong funding position with significant liquidity headroom as we continue progressing Josemaria and other growth projects within the portfolio."

The company paid an aggregate of approximately $800-million in cash consideration at closing. Remaining deferred cash consideration of $150-million will be payable in instalments over the six-year period following the closing date. Lundin Mining also has the right to acquire up to an additional 19-per-cent interest in Lumina Copper for $350-million over a five-year period commencing on the first anniversary of the date of closing.

Technical report for Caserones as stand-alone operation

A technical report for the Caserones mine, titled, "Caserones Mining Operation, Chile, NI 43-101 Technical Report on the Caserones Mining Operation," has been prepared and filed today in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects, and is available for review under the company's profile on SEDAR and on the company's website.

The company believes that many opportunities exist to improve upon the life-of-mine plan presented in the technical report. Proximity to Lundin Mining's Candelaria operation, approximately 160 kilometres from Caserones, and the Josemaria project, approximately 20 kilometres from Caserones, introduces clear opportunities to realize additional savings and implement effective supply, logistical and management strategies not yet reflected in the life-of-mine plan. Further, Lundin Mining believes significant exploration potential exists within the over 58,500 hectares of the Caserones land package in the highly prospective Vicuna district.

Caserones production and guidance

Caserones produced 69,704 tonnes of copper and 2,393 tonnes of molybdenum in the first half of 2023 on a 100-per-cent basis. Copper production comprised 61,333 tonnes of copper in concentrate and 8,371 tonnes of copper cathodes.

Production guidance for the second half of 2023 is 60,000 to 65,000 tonnes of copper and 1,500 to 2,000 tonnes of molybdenum on a 100-per-cent basis. Caserones 2023 copper and molybdenum production is expected to be weighted to the first half of the year primarily due to seasonal winter weather operating considerations typically experienced during the third quarter. Implied full-year 2023 production guidance may differ from estimates contained in the technical report primarily given results achieved year to date and refinement of near-term plans compared with the technical report overall effective date of Dec. 31, 2022. Annual production guidance for Caserones on a 100-per-cent basis for both 2024 and 2025 is 110,000 to 120,000 tonnes of copper and 1,500 to 2,500 tonnes of molybdenum.

Cash cost for the second half of 2023 is forecast to be $2.30 per pound to $2.45 per pound of copper, after byproduct credits, assuming an average price of $20 per pound molybdenum.

Caserones's capital expenditures for the second half of 2023 are forecast to total $110-million on a 100-per-cent basis. Of this, capitalized waste stripping and mine development are forecast to be approximately $45-million, mine and mill capital expenditures are forecast to be $30-million, and $25-million is estimated for capitalized tailings storage facilities costs.

Commitments for new $800-million term loan

The company has received commitments from 10 lenders for a new term loan in a principal amount of $800-million, which it expects to use to refinance the drawdown under the existing $1.75-billion revolving credit facility, which was used to finance the upfront cash consideration of the acquisition. The commitments remain subject to the execution and delivery of definitive documentation in form and substance satisfactory to the company and the term loan lenders, and the satisfaction of applicable conditions precedent. It is expected that the term loan will have a term of three years from closing thereof and provide for an additional $400-million non-committed accordion, which would become available upon receipt of additional binding commitments, closing of up to an additional 19-per-cent interest in Lumina Copper and satisfaction of applicable conditions precedent.

It is expected that the term loan will bear interest on U.S.-dollar-denominated drawn funds at an annual rate equal to the term secured overnight financing rate plus a credit spread adjustment plus an applicable margin of 1.60 per cent to 2.65 per cent, depending upon the company's net leverage ratio. It is expected that the term loan will be unsecured, save and except for a charge over certain assets in the United States, and will have similar covenants to the company's existing $1.75-billion revolving credit facility.

Upon execution, the term loan agreement will be available for review under the company's profile on SEDAR.

Caserones mineral resource and mineral reserve estimates

Mineral resources and mineral reserves are reported on a 100-per-cent basis (Lundin Mining holds a 51-per-cent interest) using the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definition standards for mineral resources and mineral reserves, and have an effective date of Dec. 31, 2022. The mineral resource estimate is based on 1,045 core and reverse circulation drill holes totalling 175,280 metres and includes all drilling completed up until the end of 2017.

Mineral resources are reported inclusive of mineral reserves. Mineral resources that are not mineral reserves have not demonstrated economic viability. The qualified person responsible for the mineral resource estimate is Paul Daigle, PGeo, associate principal geologist with AGP Mining Consultants Inc.

The basis for the mineral reserve estimate is the ore grade material contained within a set of operational phase designs currently being used at Caserones to guide mining operations. The qualified person responsible for the mineral reserves estimate is Kirk Hanson, PE, principal mining engineer with AGP Mining Consultants.

Technical information

The qualified person responsible for the scientific and technical information contained herein is Arman Barha, PEng, vice-president, technical services, of the company. Mr. Barha, who is a qualified person as defined under National Instrument 43-101, has reviewed and approved the technical information in this news release. For additional information, including with respect to data verification and exploration information, see the technical report.

About Lundin Mining Corp.

Lundin Mining is a diversified Canadian base metals mining company with operations and projects in Argentina, Brazil, Chile, Portugal, Sweden and the United States, primarily producing copper, zinc, gold and nickel.

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