Lundin maps out production growth

Vancouver – Lundin Mining (LUN-T, LMC-N) has ambitious growth plans for its Neves-Corvo copper-zinc mine in Portugal and at Zinkgruvan in Sweden.

Following Board approval for expansion programs, development of the Lombador massive sulphide zone at Neves-Corvo is anticipated following an upcoming feasibility study to spec out the optimal location for a new vertical shaft along with engineering design for the processing plant and related infrastructure.

Production from Lombador is planned by 2011 with annual output of about 130,000 contained tonnes (287 million lbs.) zinc, 20,000 contained tonnes (44 million lbs.) lead and 300,000 oz. silver over at least ten years.

Capital expenditures for the expansion will be about US$250 million, funded through internal cash flow.

Production for Neves-Corvo this year is forecast at 87,000 tonnes (192 million lbs.) copper in concentrate, 25,000 tonnes (55 million lbs.) zinc in concentrate and 850,000 oz. silver.

Once complete, Lundin Minings expansion will make Neves-Corvo Europes largest copper and zinc mine.

Ore production at the companys Zinkgruvan mine is scheduled to rise about 33%, ramping up from 900,000 tonnes to 1.2 million tonnes annually by 2010. Expansion at the Swedish mine will also see commencement of copper concentrate production with annual output of about 7,200 tonnes (16 million lbs.) over at least 12 years of operation.

A new decline, to the 350-metre level, will be constructed in the expansion program along with underground ore storage and crusher infrastructure for the copper ore with expected capital costs of about US$34 million.

Zinkgruvan is forecast churn out about 70,000 tonnes (154 million lbs.) zinc in concentrate, 35,000 tonnes (77 million lbs.) lead in concentrate and 1.8 million oz. silver in 2007.

“Once these projects have been completed, together with the Aljustrel production from the end of this year and the start-up of the Ozernoe mine development project (in Russia) in 2011, our production of zinc in concentrate will more than double from the current level of 155,000 tonnes per annum,” commented Lundin Minings president and CEO Karl-Axel Waplan in a prepared statement. “Copper production will also dramatically increase with the start-up of the Tenke Fungurume project in the fourth quarter 2008 or early 2009.”

Lundin shares perked up 7% in October 5th trading, posting a 90 gain to $13.75 apiece on strong volume. The stock has a 52-week trading range of $9.94-$15.84.