Lundin Mining Locks in 40-Year Stability for Vicuña Project with Strategic Export Designation, Unveils Path to 500,000 Tonnes Copper Production
June 17, 2026 Capital Markets Day
Lundin Mining secured a critical milestone for its flagship Vicuña copper development just ahead of its second annual Capital Markets Day, receiving approval for a RIGI application under Argentina's long-term strategic export designation. The enhanced regulatory framework extends benefits to 40 years versus the standard 30-year RIGI package and accelerates access to revenue repatriation and export duty exemptions, further strengthening what the company characterizes as a once-in-a-generation project.
The approval represents the first such designation for a copper project in Argentina and arrives as the company prepares to make a final investment decision on Vicuña's Stage 1 by year-end. Ronald Hochstein, President of Vicuña Corp, told investors the company submitted the RIGI PEELP application on December 14, noting "without RIGI, this project wouldn't be happening. That's how important this is."
Transforming the Portfolio Through District Consolidation
The company's strategic evolution has accelerated dramatically since 2022, when Lundin Mining began assembling what it now calls the Vicuña District in Chile and Argentina. The acquisition of Josemaria Resources in 2022 provided the initial entry point, followed by the purchase of a 51% stake in the Caserones mine in 2023, which has since been increased to 75% ownership. Caserones alone has generated approximately 60% return on capital invested since acquisition.
The portfolio transformation culminated with the joint acquisition of Filo Corp with BHP for approximately USD 3 billion, forming Vicuña Corp as a 50-50 joint venture in January 2025. Concurrent with these additions, Lundin Mining divested its non-South American assets, selling Zinkgruvan and Neves-Corvo in 2025 and Eagle earlier this year, while retaining a 20% stake in Talon Metals.
The reshaping has fundamentally altered the company's profile. Copper production increased from 250,000 tonnes in 2022 to 330,000 tonnes in 2025, while revenue grew from USD 3 billion to USD 4.1 billion. More significantly, copper now represents a higher proportion of revenues with stronger EBITDA margins, even as the company tripled its market capitalization from USD 5.7 billion at end-2022 to current levels.
CEO Jack Lundin emphasized the per-share accretion despite issuing approximately 140 million shares for the Josemaria and Filo acquisitions, offset partially by buybacks of 31 million shares. On an attributable basis, the company now controls 47 million tonnes of copper resources, 96 million ounces of gold, and 1.8 billion ounces of silver, representing significant per-share growth in all metrics.
Decade of Growth Anchored by Brownfield Expansions
The company outlined a clear pathway from current midpoint guidance of 323,000 tonnes copper and 142,000 ounces gold to over 500,000 tonnes copper and 550,000 ounces gold through near-term brownfield expansions at Chapada, Candelaria, and Caserones, followed by staged development at Vicuña. This growth trajectory translates to approximately 5% compound annual growth rate from 2026 to 2035.
At Chapada in Brazil, the company accelerated construction of a second ball mill to boost recoveries, with earthworks commencing next month and commissioning expected by end-2027. The Chapada Plant Upgrade requires USD 70 million total capital, with USD 35 million being spent this year. The enhanced recovery rates are essential to unlocking the Saúva deposit, located 15 kilometers north of the existing operation.
Saúva Phase 1 now carries a reduced capital estimate of USD 110 million, down from USD 150 million previously disclosed, for capital intensity under USD 7,500 per tonne of copper. The project will mine approximately 28 million tonnes at 0.4% copper and 0.3 grams per tonne gold over four years starting Q1 2029, adding 15,000 tonnes copper and 45,000 ounces gold annually. Importantly, Saúva Phase 1 represents only a small portion of the 250 million tonne deposit at significantly higher grades than the base Chapada orebody.
VP of Exploration Tim Walmsley indicated the company is "quite optimistic" about finding another Saúva along the mineralized trend, given the "huge footprint of underdrilled and underexplored opportunity." Recent drilling extending Saúva at depth returned results showing the high-grade core "maintains open and continues at depth to date."
Full Potential Program Drives Industry-Leading Cost Performance
COO Juan Andres Morel detailed the company's Full Potential initiative, a rigorous system focused on unlocking maximum value from existing orebodies through both operational excellence and low-capital intensity improvements. The program has delivered measurable results across all three operations, with total operating cost per tonne milled declining 11% at Chapada (from USD 11.8 to USD 10.6), 10% at Caserones (from USD 20.0 to USD 17.9), and 4% at Candelaria (from USD 19.9 to USD 19.0) despite inflationary pressures.
At Chapada, specific initiatives reduced fuel consumption by 11%, increased truck payload by 2%, and boosted mill throughput by 9%. The operation also achieved a 40% reduction in sustaining capital per tonne milled and optimized the long-term mine plan to reduce the strip ratio by 29%. CFO Teitur Poulsen noted the company reduced Chapada's C1 cost guidance for 2026 from USD 1.00-1.20 per pound to USD 0.75-0.95 per pound, "an incredible C1 for such a low-grade operation."
At Candelaria, the company made the strategic decision to in-source substantially all underground mining operations before proceeding with the planned expansion from 14,000 to 22,000 tonnes per day. The in-sourcing process, now 97% complete, has delivered "incredibly lower cost than what we expected initially" according to Morel. The operation reached its underground development target of 400 meters per month in May and expects to hit the full 1,200 meters per month target in the second half of 2026.
The underground expansion, once stabilized at 14,000 tonnes per day by second half 2027, will gradually increase to 22,000 tonnes per day, adding 12,000 to 14,000 tonnes of annual copper production. Additionally, Candelaria's streaming agreement with Franco-Nevada steps down from 68% to 40% in first half 2027 after reaching 720,000 ounces produced, releasing an additional 15,000 to 20,000 ounces annually to Lundin Mining and generating USD 56 million to USD 90 million in incremental free cash flow at current gold prices.
Caserones Upside Through Cathode Optimization and Hidden Gold
At Caserones, the company increased utilization of the SX-EW cathode plant from 55% pre-acquisition to 80% currently, with cathode production rising from 15,000 tonnes in 2022 to nearly 26,000 tonnes in 2025 and a target of 30,000 tonnes for 2026. The improvement came through adding 5 million tonnes annually of material to the dump leach, expanding irrigation area by over 100,000 square meters, and increasing sulfuric acid dosage.
Phase 2 of the cathode optimization will debottleneck the electrowinning plant by repowering the cooling system of existing rectifiers, increasing nameplate capacity from 35,000 to 40,000 tonnes annually for less than USD 1 million capital investment. The base case now assumes 35,000 tonnes annually, with the additional 5,000 tonnes classified as growth opportunity.
Morel revealed that Caserones produced 15,000 ounces of gold in 2025, generating USD 46 million in revenue that was not previously guided to the market. "Our current block model doesn't have yet the precision to guide on gold, but we are working on improving the grade modeling so we can start guiding gold in Caserones in 2027," he stated. The unexpected gold production represents a "significant boost on our free cash flow" and highlights the asset's optionality.
Exploration at Caserones has identified at least four to five new higher-grade breccia bodies within the existing resource that were unrecognized historically, when drilling focused primarily on the shallow enrichment blanket. At the nearby Angelica prospect, the company completed 20 kilometers of drilling in 2025 and is one-third through an additional 27 kilometers planned for this year, with an initial resource targeted for early next year if the system can be adequately defined.
Los Helados Optionality With Multiple Development Pathways
The company's Q2 acquisition of 31% of the Los Helados project from NGEx Minerals, located 17 kilometers south of Caserones, adds significant optionality with "exceptional synergies" according to Walmsley. The project contains 8.4 million tonnes of measured and indicated copper resources and 10.2 million ounces of gold, with a high-grade core of 2.9 million tonnes copper and 3.5 million ounces gold at 0.72% copper equivalent.
VP of Mining and Resources Eduardo Cortes outlined three development scenarios under evaluation in a scoping study launching this month with results expected Q1 2027. The extension option would truck ore to the existing Caserones plant, extending mine life with higher-grade feed that would likely displace lower-grade Caserones material and boost production. The expansion option would increase Caserones plant capacity, requiring more capital but generating higher throughput. The standalone option would build a new plant at Los Helados, requiring the highest capital but offering maximum flexibility for plant sizing given the 3 billion tonne resource.
Cortes noted that Los Helados' resource estimate uses "significantly lower metal prices" from 2023 and mining costs associated with block caving, whereas "now we are exploring other options or mining methods, including an open pit, which comes with lower mining costs. So you put that into perspective, like higher metal prices and lower mining costs, we see room for growth for this project as well."
All three scenarios require common enablers including power, tailings, and water infrastructure. The company is actively examining opportunities to leverage existing infrastructure at Candelaria, including port facilities, desalinated water, and pipelines, with a more complete update expected toward end-2027.
Vicuña Stage 1 Progressing Toward Year-End Sanction
Hochstein provided a detailed update on Vicuña, emphasizing that despite the PEA designation, "there was a heck of a lot of work done on Josemaria" given the asset's history under previous ownership and subsequent work by Dave Dicaire after joining Lundin Mining. The current focus centers on preparing a sanctioning decision before year-end 2026, with engineering projected to reach approximately 50% completion by that time.
The company has already committed significant resources to the project, with over 400 suppliers engaged and long-lead items secured. All SAG mill and ball mill shells and motors are purchased and stored in climate-controlled warehouses in San Juan, ready for transport. High-voltage equipment procurement is "very close" to being finalized. Earthworks is not only engineered but actively underway, with 25 Scania 40-tonne trucks on site and 7 Komatsu 150-tonne trucks arriving in September, earlier than the October timeline previously indicated.
Major vertical construction packages for the wet and dry process plant components will be issued early next year. The team has grown rapidly, hiring over 70 people last month and already 50 people this month, with headcount ramping in San Juan. At Fluor Daniel, the engineering team has 2.5 times more personnel than two months ago.
When questioned about capital estimates, Hochstein indicated the team is conducting "a brand-new estimate" from first principles rather than updating the PEA number, with results forming part of the FID package. He characterized the current state as "tightrope walkers right now, not leaning one way or the other" regarding whether the USD 7.1 billion Stage 1 estimate will increase or decrease, noting "you start to see pluses and minuses as you keep working through."
Beyond Stage 1: Optimization Opportunities in Oxides and Sulfides
Hochstein outlined substantial optimization work underway for Stages 2 and 3, particularly around the Filo oxides processing flowsheet. "The process that was there that we walked through that's in the PEA, we know we can improve on that," he stated. The company has extensive metallurgical test work underway along with new mine plans, and is examining whether to blend material between Josemaria and Filo oxides and sulfides to "increase the grade and throughput."
On concentrate treatment, the company is "stepping back" on the roaster concept shown in the PEA. "Does a roaster make sense? Does a smelter roaster make sense? Do some other technologies that we're doing the work maybe make more sense?" Hochstein explained. One possibility involves a combined smelter-roaster with partners, though definitive concentrate treatment remains to be determined.
The binational treaty between Chile and Argentina presents both opportunity and complexity, as the Filo oxides and sulfides partly sit in Chile. An exploitation protocol Phase 1 for Josemaria, while not required for concentrate export, "would help in construction and operations" by facilitating cross-border movement of supplies and materials. An exploitation protocol Phase 2 for actual operations becomes necessary when mining ore in Chile for processing in Argentina.
Hochstein emphasized the favorable political alignment with President Milei in Argentina and President-elect Kast in Chile, noting "the first place -- first meeting Kast had was with Milei. And guess what, Vicuña was brought up. So this is a project that these governments are focused on."
Financial Projections Show Exceptional Cash Generation
Poulsen extended the company's financial outlook from five years to ten years to capture the full impact of Vicuña's production. For 2026, the company guides to USD 4.3 billion EBITDA and USD 700 million adjusted free cash flow after USD 480 million in expansionary capital (including USD 395 million net to Vicuña and USD 35 million for Chapada's ball mill) and USD 550 million sustaining capital. The company projects finishing 2026 in a net cash position of USD 60 million before working capital changes.
Over the next five years through 2030, cumulative EBITDA reaches USD 13 billion at the base case USD 5.50 copper price, with adjusted free cash flow from operations of USD 10.5 billion. After USD 2.5 billion in total sustaining capital, the company generates USD 8.1 billion in adjusted free cash flow from operations, up from USD 4.9 billion projected at last year's Capital Markets Day albeit at a lower commodity price deck.
After deducting USD 1.1 billion in shareholder distributions, USD 1.4 billion in dividends to minority partners at Caserones and Candelaria, USD 600 million in other expansionary capital primarily for Saúva and Candelaria, and USD 4.9 billion for Vicuña Stages 1 and 2, the company projects a net debt position of only USD 700 million at end-2030.
The financial profile transforms dramatically in the subsequent five years from 2031 to 2035 as Vicuña ramps up. Cumulative EBITDA rises 70% to USD 22 billion, while adjusted free cash flow from operations increases 90% to USD 15.5 billion, with Vicuña contributing approximately 51% of that cash generation. After another USD 1.1 billion in shareholder distributions, USD 1.3 billion to minority partners, and USD 3.9 billion in continued Vicuña capital for Stages 2 and 3, the company projects a net cash position of USD 8.2 billion at end-2035.
At a higher USD 6.50 copper price sustained throughout the period, net cash reaches USD 11.6 billion by 2035. Even at a lower USD 4.50 copper price, the company maintains USD 4.5 billion net cash, with peak leverage of only 1.2 times attributable net debt to attributable EBITDA.
Poulsen emphasized the company secured a USD 4.5 billion revolving credit facility with 17 international banks, though the financial projections suggest it may barely be utilized. "We took out the RCF really to mitigate against any downturn in commodity prices," he explained. The facility currently provides USD 2.25 billion in committed capacity, stepping to USD 3.5 billion upon completion of an ESG gap analysis at Vicuña, and the full USD 4.5 billion upon Stage 1 sanction.
Conservative Assumptions Underpin Projections
The company presents all projections in real 2026 terms with no inflation assumptions on either commodity prices or input costs, though it does assume one additional cycle of union wage negotiations in Chile over the ten-year period. On the cost side, Poulsen noted the company sources 100% renewable power across all operations, with competitive power purchase agreements at less than USD 40 per megawatt hour in Brazil, though Chilean operations face USD 55-73 per megawatt hour for electrons plus USD 30-40 in grid fees for all-in costs of USD 90-110 per megawatt hour.
The copper price assumption of USD 5.50 represents a substantial increase from the USD 4.50 used in last year's projections and the USD 4.40 longer-term assumption, but remains well below current spot levels. Gold starts at USD 4,000 per ounce and steps down to USD 3,700 in the long term. The Chilean peso is assumed to correlate with copper prices, strengthening as copper rises.
For Vicuña specifically, the projections assume 100% equity funding, meaning the company pays 0.5% equity tax annually rather than utilizing debt financing that would create interest deductions. Poulsen indicated "we will optimize that funding structure when we sanction the project" but chose to be conservative in the projections. The assumed equity funding results in a lower tax loss position when Vicuña commences production, though still substantial given the development phase capital expenditure.
On shareholder distributions, the company maintains its commitment to USD 220 million annually through a blend of CAD 0.11 quarterly dividends and share buybacks. Year-to-date through the presentation, the company repurchased 2.25 million shares for USD 62 million at an average price of approximately USD 27 per share. The company pledged that any shortfall in the USD 150 million allocated to buybacks would be distributed as a special dividend to ensure shareholders receive the full USD 220 million.
Lundin emphasized the minimum nature of this commitment when asked about potential increases. "We've got a minimum shareholder distribution framework that has been established, and we do have the flexibility to look at that," he stated, noting the framework "fits into all of our scenario planning for capital allocation" while providing shareholders assurance it can be maintained throughout the growth period.
At 2035 production levels of 500,000 tonnes copper annually, the company will still maintain a resource-to-production ratio of 40 years based on producing assets plus the 31% interest in Los Helados. This longevity, combined with a net cash position potentially exceeding USD 8 billion, positions the company for additional growth beyond the current ten-year outlook either through further development of existing assets, new discoveries within the district, or potential acquisitions.