Mr. Peter Rockandel reports

LUNDIN MINING THIRD QUARTER 2023 RESULTS

Lundin Mining Corp. has released its third quarter 2023 financial results.

"Our operations continued with a strong performance in the third quarter. As a result, we are increasing our production guidance for Caserones and Eagle. The acquisition of Caserones enabled us to achieve a new record in quarterly consolidated copper production and we also achieved a record in quarterly zinc production. This led the company to an adjusted EBITDA of $415-million for the period," commented Peter Rockandel, chief executive officer.

Mr. Rockandel added: "During the integration process of Caserones, our team has identified and outlined synergies between Caserones and Candelaria, which are expected to yield initial annual savings of $20- to $30-million per year. We are excited about launching the largest exploration program at Caserones since production commenced, targeting resource extensions and near-mine discoveries. The corporate office move to Vancouver is complete and all senior executive positions are in place. As we approach 2024, Lundin Mining is strategically, operationally and financially in a strong position to continue to deliver on our plans and execute on the next phase of growth. On a personal note, as this is my last quarter as CEO, I would like to thank all our employees, partners and stakeholders for their dedication, hard work and support, all of which have been integral to our current and future success. I am extremely proud of what the team has been able to accomplish during my tenure as CEO."

Third quarter highlights:

• Copper production: The company achieved consolidated production of 89,942 tonnes of copper, a new quarterly record.
• Other production: During the quarter, a total of 49,774 tonnes of zinc, 4,290 tonnes of nickel and approximately 35,000 ounces of gold were produced. A quarterly zinc production record was achieved as the zinc expansion project (ZEP) at Neves-Corvo ramps up and a full quarter of operation from the sequential flotation project at Zinkgruvan was realized.
• Revenue: Revenue was $992.2-million in the quarter.
• Adjusted earnings: Net loss attributable to shareholders of the company was $3.0-million (nil per share). Adjusted earnings attributable to shareholders of the company (1) were $85.6-million (11 cents per share).
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): Adjusted EBITDA (1) was $415.1-million in the third quarter.
• Cash generation: Cash provided by operating activities was $303.8-million, and cash and cash equivalents at Sept. 30, 2023, were $357.3-million. Adjusted operating cash flow (1) was $316.5-million (41 cents per share), after removing the impact of working capital. Free cash flow1 was $71.1-million.
• Caserones acquisition: The company completed the acquisition of 51 per cent of the Caserones copper-molybdeum mine on July 13, 2023, adding another long-life asset in a Tier 1 jurisdiction. The company anticipates initial annual synergies from supply chain and service contracts between Caserones and Candelaria to be $20-million and $30-million per year.
• Term loan: To finance the Caserones acquisition, the company obtained a term loan in July, 2023, of a principal amount of $800.0-million with an additional $400.0-million accordion option maturing in July, 2026. As at Sept. 30, 2023, the company had a net debt (1) balance of $1,158.9-million.
• CEO succession: Mr. Rockandel announced that he will be stepping down from the role of CEO and from the board of directors as of Dec. 31, 2023. Those responsibilities will be assumed by Jack Lundin, current president and former director of the company.
• Outlook: The annual production guidance, including an increase in copper production, has been revised from 296,000 to 325,000 tonnes to 305,000 to 325,000 tonnes. Cash cost guidance was lowered at Caserones and Eagle and increased at Candelaria. Annual capital expenditure guidance is lower by $30-million.

(1) These are non-GAAP (generally accepted accounting principles) measures. Please refer to the company's discussion of non-GAAP and other performance measures in its management's discussion and analysis for the three and nine months ended Sept. 30, 2023.

Quarter ended Sept. 30, 2023:

• The company generated revenue of $992.2-million, gross profit of $197.3-million and adjusted EBITDA of $415.1-million (Q3 2022 -- $202.4-million).
• Net loss attributable to shareholders of the company was $3.0-million (nil per share) in the third quarter, impacted by higher interest expense, non-cash unrealized losses on derivative contracts and increased deferred tax expense as a result of the enactment of the mining royalty law in Chile (4).
• Adjusted earnings attributable to shareholders of the company for the quarter of $85.6-million (11 cents per share attributable to shareholders of the company) were $49.5-million higher than the prior-year quarter after adjusting for the non-cash revaluation of derivative contracts, fair value adjustments relating to the Caserones acquisition and deferred tax relating to the mining royalty rate change (4), among other things.
• Cash and cash equivalents as at Sept. 30, 2023, were $357.3-million. Cash generated from operations of $303.8-million during the quarter was used to finance investing activities of $908.8-million. Investing activities in the third quarter included $648.6-million net cash paid at closing for the acquisition of Caserones, consisting of $796.6-million upfront cash consideration after adjustments, net of $148-million cash and cash equivalents held by SCM Minera Lumina Copper Chile at closing on a 100-per-cent basis.
• Free cash flow of $71.1-million was $234.3-million higher than the prior-year comparable period and benefited from the inclusion of production from Caserones, combined with higher realized copper prices and higher overall changes in working capital.
• As at Nov. 1, 2023, the company had cash and net debt balances of approximately $368.6-million and $1,137.6-million, respectively.

(4) Refer to the management's discussion and analysis for the three and nine months ended Sept. 30, 2023, for further information related to the deferred tax relating to the mining royalty rate change.

Corporate highlights:

• Candelaria EIA (environmental impact assessment): A new EIA was granted at Candelaria for the extension of operations from 2030 to 2040.
• Exploration: Exploration programs continue at the company's existing assets while new exploration drilling campaigns are under way at Caserones and Josemaria. Drilling at Caserones will be the largest exploration program since the mine began operation in 2013. The initial phase of the drill program is expected to be over 10,000 metres and results are expected in the first half (H1) of 2024.
• Copper Mark: Caserones has achieved the Copper Mark at its operations, a designation that highlights the company's commitment to sustainable mining practices.
• Josemaria project: The company continues to derisk and advance the Josemaria project through optimization and trade-off studies. These studies will continue into 2024.
• Senior leadership appointments: The corporate office move to Vancouver has been completed. The company is pleased to announce the following executive appointments, Peter Brady has been hired as general counsel, Ricardo Checura as vice-president, health and safety, and Nathan Monash as vice-president, sustainability.

Outlook

Production and cash cost guidance for 2023 is updated from that disclosed in the company's management's discussion and analysis for the three and six months ended June 30, 2023.

Most production guidance ranges are tightening and improving, with the lower end of the range increasing for copper, nickel and gold. Cash cost guidance is lower for Caserones and Eagle, driven by higher production volumes and byproduct credits, and increasing for Candelaria, reflecting higher operating costs. Production continues to be weighted to the second half of the year, notably at Chapada due to the first-half seasonal operating conditions and forecast grade and recovery profiles.

As a result of rephasing several projects at Neves-Corvo and Zinkgruvan, capital expenditure guidance is lower by an additional $30-million for 2023. As disclosed in the company's management's discussion and analysis for the three and six months ended June 30, 2023, capital spend guidance at Josemaria was previously lowered to $350-million for 2023 due to foreign exchange, a delay in planned equipment deliveries and reduced activities.

2023 exploration investment guidance

Total exploration expenditures are on target to be $45.0-million in 2023, unchanged from previous guidance.

Operational performance

Candelaria (80 per cent owned): Candelaria produced 34,275 tonnes of copper and approximately 20,000 ounces of gold in concentrate on a 100-per-cent basis in the quarter. Copper production was lower than the prior-year quarter, primarily due to lower grades, partially offset by higher throughput. Gold production was lower than the prior-year quarter due to lower grades and recoveries. Current quarter production costs and copper cash cost of $2.19 per pound (lb) were higher than the prior-year quarter, largely owing to higher contractor and maintenance costs and unfavourable foreign exchange. Cash cost was further impacted by lower sales volumes.

Caserones (51 per cent owned): In the three months ended Sept. 30, 2023, Caserones produced 34,427 tonnes of copper and 1,321 tonnes of molybdenum on a 100-per-cent basis, of which 29,821 tonnes of copper and 1,096 tonnes of molybdenum were produced from the acquisition closing date of July 13. Copper and molybdenum production were higher than planned due to increased throughput and recoveries. Production costs in the quarter were negatively impacted by the recognition of fair market value adjustments to inventory due to the acquisition. Copper cash cost of $1.60 per lb benefited from higher-than-planned production and byproduct credits.

Chapada (100 per cent owned): Chapada produced 12,286 tonnes of copper and approximately 15,000 ounces of gold in concentrate in the quarter. Copper and gold production was lower than the prior-year quarter, primarily due to lower throughput and grades. Production costs were lower than the prior-year quarter, due to lower sales volumes. Copper cash cost of $2.28 per lb for the quarter increased from the prior-year quarter due to lower sales volumes, unfavourable foreign exchange variances, and lower byproduct credits and production.

Eagle (100 per cent owned): During the quarter, Eagle produced 4,290 tonnes of nickel and 3,245 tonnes of copper, which were lower than the prior-year quarter, due to lower planned grades. Production costs were higher than the comparable prior-year quarter due to inflationary contractual cost increases. Nickel cash cost in the quarter of $2.07 per lb was higher than the prior-year quarter, primarily due to lower byproduct credits and higher production costs.

Neves-Corvo (100 per cent owned): Neves-Corvo produced 9,016 tonnes of copper and 25,807 tonnes of zinc in the quarter. Copper production was higher than in the prior-year quarter due to higher throughput, grades and recoveries. Zinc production was higher than in the prior-year quarter primarily due to increased grades and recoveries driven by the zinc expansion project (ZEP). Production costs during the quarter were lower than the prior-year quarter despite higher sales, primarily due to reduced electricity costs. Current quarter copper cash cost per pound of $2.27 per lb was lower than the prior-year quarter, primarily as a result of lower input costs and benefited from higher production and sales.

Zinkgruvan (100 per cent owned): Zinc production of 23,967 tonnes and lead production of 8,643 tonnes were higher than the prior-year quarter, primarily due to higher throughput and grades. Copper production of 1,299 tonnes was lower than the prior-year quarter due to lower throughput. Production costs were higher than the prior-year quarter, primarily due to higher sales volumes. Zinc cash cost per pound of 28 cents per lb during the quarter was higher than the prior-year quarter, primarily as a result of lower byproduct costs per pound and higher treatment and refining charges.

Senior leadership appointments

The company is pleased to announce the executive appointments of Mr. Brady as general counsel, Mr. Checura as vice-president, health and safety, and Mr. Monash as vice-president, sustainability.

Mr. Brady as general counsel

Mr. Brady has joined Lundin Mining's executive leadership team as general counsel. He has over 20 years of experience in industry and private practice working with major international mining companies. Prior to joining Lundin Mining, he most recently was chief legal and governance officer with Vale Base Metals, responsible for advising their senior leadership team on all legal and business risk, compliance, and corporate governance matters. Previous to Vale Base Metals, he was a partner at McCarthy Tetrault. Mr. Brady holds a bachelor of laws from Queen's University and a master of arts in environmental law from the University of Windsor.

Mr. Checura as vice-president, health and safety

Mr. Checura was previously at BHP Inc., where he spent the past 12 years in various leadership roles, most recently as head of risk operations. He was a member of BHP's global risk leadership team and managed the risk management activities of its global operating assets. Prior to his most recent role, Mr. Checura served as the head of safety, minerals Americas, between 2018 and 2021. Mr. Checura's experience also includes implementing fatal risk management from his previous roles in the mining industry. He holds a bachelor of science in engineering from the University of Concepcion and a master of business administration from the University of Chile.

Mr. Monash as vice-president, sustainability

Mr. Monash has joined Lundin Mining's senior leadership team as vice-president, sustainability. He has over 20 years of experience in the mining sector, developing and integrating sustainability strategy and governance structures, and advising operations on community relations, local government relations, human rights and communications. Prior to joining Lundin Mining, he most recently led Lundin Gold's sustainability activities during the construction and operation of the Fruta del Norte mine in Ecuador and prior to that led AngloGold Ashanti's sustainability efforts in the Americas. Mr. Monash has also worked with International Finance Corp., guiding extractive industry clients on the structure and implementation of sustainable development strategies, and spent several years with the World Economic Forum, where he worked closely with leaders from business, academia and government to identify and address key economic, social and environmental issues facing the mining and metals industry. Mr. Monash holds a bachelor of science in biology from McGill University and a master of arts from the Fletcher School at Tufts University.

About Lundin Mining Corp.

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

The information in this news release is subject to the disclosure requirements of Lundin Mining under the European Union market abuse regulation. The information was submitted for publication on Nov. 1, 2023, at 3 p.m. Pacific Standard Time.

Technical information

The scientific and technical information in this news release has been prepared in accordance with the disclosure standards of National Instrument 43-101 and has been reviewed by Arman Barha, PEng, vice-president, technical services, a qualified person under NI 43-101. Mr. Barha has verified the data disclosed in this news release and no limitations were imposed on his verification process.

For further technical information on the company's material properties, refer to the following technical reports, each of which is available on the company's SEDAR+ profile: Candelaria: technical report entitled, "Technical Report for the Candelaria Copper Mining Complex, Atacama Region, Region III, Chile," dated Feb. 22, 2023; Caserones: "Caserones Mining Operation, Chile, NI 43-101 Technical Report on the Caserones Mining Operation," dated July 13, 2023; Chapada: technical report entitled, "Technical Report on the Chapada Mine, Goias State, Brazil," dated Oct. 10, 2019; Eagle mine: technical report entitled, "Technical Report on the Eagle Mine, Michigan, USA," dated Feb. 22, 2023; Neves-Corvo: technical report entitled, "NI 43-101 Technical Report on the Neves-Corvo Mine, Portugal," dated Feb. 22, 2023; and Josemaria project: technical report entitled, "NI 43-101 Technical Report, Feasibility Study for the Josemaria Copper-Gold Project, San Juan Province, Argentina," dated Sept. 28, 2020, which is available on Josemaria Resources' SEDAR+ profile.

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