EX-99.61 73 exh9961.htm EX-99.61 Lundin Mining Corporation: Exhibit 99.61 - Prepared by TNT Filings Inc.
Lundin Mining Corporation Lundin Mining AB
Vancouver office Stockholm office
Suite 2101 Hovslagargatan 5
Lundin Mining Corporation 885 West Georgia Street 111 48 Stockholm
Vancouver B.C. V6C 3E8 Sweden
Canada Tel. +46-8-545 074 70
Tel. +1 604 689 7842 www.lundinmining.com

Three Months Ended March 31, 2006 and 2005
April 27, 2006
(Amount s in United States Dollars unless otherwise stated)

Financial Highlights

  Three Three Year
  months ended months ended ended
Millions of US$, except per share data Mar 31, 2006 Mar 31, 2005 Dec 31, 2005
Sales 91.8 36.0 192.1
Net income 21.5 2.9 30.0
Basic earnings per share 0.53 0.09 0.78
Diluted earnings per share 0.52 0.09 0.78
Cash provided by operating activities 22.7 7.5 66.7
EBITDA (i) 50.3 15.0 75.4
       
(i) Non GAAP measure      

CEO Comments

Lundin Mining President and CEO, Karl-Axel Waplan said: "We are proud to present the results of the first quarter 2006 showing record earnings. Mining production during the quarter continued at stable levels and with the recent exploration success at Galmoy we are confident we are on the right track to continue to grow Lundin Mining into a major international base metal producer."

Other highlights

  • A financing arrangement with Sunridge Gold Corp. was signed in February 2006. Sunridge is a publicly traded Canadian mining company, listed on the TSX Venture Exchange ("TSXV"). Sunridge is currently drilling several advanced exploration projects in Eritrea in northeastern Africa. Lundin Mining has invested $4.5 million and holds just under 10% of the common shares of Sunridge.
  • Exploration drilling discovered significant new mineralization at the Galmoy project in Ireland.

1 (12)


Selected Financial Information      
Thousands of USD

 

 

 

 

 

 

Three months

Three months

 

 

 

ended

ended

Year ended

 

 

March 31, 2006

March 31, 2005

December 31, 2005

Sales

$

91,798

36,033

192,073

Cost of sales

$

(35,838) (16,834) (98,710)
Exploration and project investigation

$

(1,569) (1,601) (7,146)
Administration and other income (expenses)

$

(4,128) (2,643) (10,864)
EBITDA (i)

$

50,263

14,955

75,353

 

 

 

 

 

Depreciation of fixed assets

$

(4,928) (3,905) (20,267)
Amortization of mining rights

$

(9,109) (5,141) (31,732)
EBIT (i)

$

36,226

5,909

23,354

 

 

 

 

 

Result on copper and lead hedges (ii)

$

(5,977)

-

(2,095)
Net interest and other financial items

$

(774)

195

22,806

 

 

 

 

 

EBT (i)

$

29,475

6,104

44,065

 

 

 

 

 

Tax and non-controlling interest

$

(8,014) (3,169) (14,102)
Net income for the period

$

21,461

2,935

29,963

 

 

 

 

 

Operating Cash Flow

$

22,704

7,548

66,665

Capital Expenditures

$

(4,876) (2,428) (17,957)
 

 

 

 

 

(i) Non GAAP measures

 

 

 

 

(ii) Includes realized and unrealized result on metal hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

Key Financial Data
 

 

Three months

Three months

Year

 

 

ended

ended

ended

 

 

March 31, 2006

March 31, 2005

December 31, 2005

 

 

 

 

 

Shareholders´ equity/share, USD*

$

6.60

5.20

6.01

Basic earnings/share, USD

$

0.53

0.09

0.78

Diluted earnings/share, USD

$

0.52

0.09

0.78

Dividends

 

Nil

Nil

Nil

 

 

 

 

 

Basic weighted average number of shares outstanding

40,693,831

33,516,053

38,416,486

Diluted weighted average number of shares outstanding

41,027,997

33,888,553

38,658,521

 

 

 

 

 

Number of shares outstanding at period end

 

40,693,831

34,802,592

40,693,831

* Shareholders´equity/share is defined as shareholders´equity divided by total number of shares outstanding at period end.

2 (12)


Lundin Mining Corporation  

 

 

 

 

 

 

INTERIM CONSOLIDATED BALANCE SHEETS
   

 

 

 

 

 

 

   

 

(Unaudited)

 

(Unaudited)

 

(Audited)
   

 

As at March 31,

 

As at March 31,

 

As at December 31,

Thousands of US dollars Notes

 

2006

 

2005 (restated)*

 

2005

ASSETS  

 

 

 

 

 

 

Current assets  

 

 

 

 

 

 

Cash  

$

89,315

$

90,525

$

74,409

Accounts receivable  

 

32,343

 

15,462

 

20,231

Investments 5

 

-

 

22,701

 

-

Inventories  

 

8,643

 

6,690

 

9,609

Prepaid expenses  

 

1,223

 

745

 

1,340

   

 

131,524

 

136,123

 

105,589

Fixed assets  

 

 

 

 

 

 

Long term receivables  

 

5,135

 

580

 

5,121

Investments  

 

8,110

 

-

 

3,349

Properties, plant and equipment  

 

283,331

 

189,703

 

288,217

Future income tax assets  

 

2,857

 

4,436

 

2,753

Deferred financing costs  

 

1,831

 

2,305

 

1,785

   

 

301,264

 

197,024

 

301,225

   

$

432,788

$

333,147

$

406,814

   

 

 

 

 

 

 

LIABILITIES  

 

 

 

 

 

 

Current liabilities  

 

 

 

 

 

 

Accounts payable  

$

5,274

$

5,181

$

10,453

Accrued expenses  

 

13,007

 

6,973

 

7,723

Other accrued liabilities  

 

10,846

 

4,133

 

7,646

Due to related parties 7

 

-

 

51

 

-

Income taxes payable  

 

8,286

 

-

 

13,434

Current portion of deferred revenue  

 

2,573

 

3,923

 

2,509

   

 

39,986

 

20,261

 

41,765

Long-term liabilities  

 

 

 

 

 

-

Capital lease obligation  

 

1,135

 

-

 

1,547

   

 

 

 

 

 

 

Provisions  

 

 

 

 

 

 

Deferred revenue 5

 

56,312

 

67,522

 

55,667

Provisions for pension  

 

12,642

 

12,804

 

12,111

Asset retirement obligations and other provisions  

 

16,449

 

10,579

 

16,093

Future income tax liabilities  

 

36,953

 

40,609

 

34,488

   

 

122,356

 

131,514

 

118,359

   

 

 

 

 

 

 

NON-CONTROLLING INTEREST  

 

802

 

489

 

627

   

 

 

 

 

 

 

SHAREHOLDERS´EQUITY  

 

 

 

 

 

 

Share capital 6

 

243,305

 

185,005

 

243,305

Contributed surplus  

 

1,600

 

855

 

1,357

Retained earnings (deficit)  

 

46,714

 

(1,775)

 

25,253

Cumulative translation adjustments  

 

(23,110)

 

(3,202)

 

(25,399)
   

 

268,509

 

180,883

 

244,516

   

$

432,788

$

333,147

$

406,814

* See note 2  

 

 

 

 

 

 

See accompanying notes
   
Approved by the Board:  
   
   
 /s/ Lukas H. Lundin   /s/ William A. Rand  
Lukas H. Lundin William A. Rand

3 (12)


Lundin Mining Corporation

 

 

 

 

 

 

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
 

 

(Unaudited)

 

(Unaudited)

 

(Audited)

 

 

Three months

 

Three months

 

Twelve months

Thousands of US dollars

 

ended March 31,

 

ended March 31,

 

ended Dec 31,

(except per share amounts)

 

2006

 

2005 (restated)*

 

2005

 

 

 

 

 

 

 

Sales

$

91,798

$

36,033

$

192,073

Cost of sales

 

(49,875)

 

(25,880)

 

(150,709)
 

 

 

 

 

 

 

Gross margin

 

41,923

 

10,153

 

41,364

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

General exploration and project investigation

 

(1,569)

 

(1,601)

 

(7,146)
Selling, General and Administration

 

(2,313)

 

(2,643)

 

(8,976)
Stock based compensation

 

(1,815)

 

-

 

(1,887)
 

 

(5,697)

 

(4,244)

 

(18,009)
Other income/expenses

 

 

 

 

 

 

Interest income

 

444

 

403

 

1,465

Interest and bank charges

 

(141)

 

(5)

 

(511)
Foreign exchange gains/(losses)

 

(1,077)

 

(203)

 

4,041

Result on copper and lead hedges

 

(5,977)

 

-

 

(2,095)
 

 

(6,751)

 

195

 

2,900

 

 

 

 

 

 

 

Income before undernoted

 

29,475

 

6,104

 

26,255

 

 

 

 

 

 

 

Gain on sale of investment

 

-

 

-

 

17,810

 

 

 

 

 

 

 

Income before income taxes

 

 

 

 

 

 

and non-controlling interest

 

29,475

 

6,104

 

44,065

 

 

 

 

 

 

 

Income taxes

 

(7,841)

 

(2,538)

 

(13,291)
Non-controlling interest

 

(173)

 

(631)

 

(811)
 

 

 

 

 

 

 

Net income for the period

$

21,461

$

2,935

$

29,963

 

 

 

 

 

 

 

Retained earnings (deficit) beginning of period

 

25,253

 

(4,710)

 

(4,710)
Net income

 

21,461

 

2,935

 

29,963

Retained earnings (deficit) end of period

$

46,714

$

(1,775)

$

25,253

 

 

 

 

 

 

 

Basic earnings per share

$

0.53

$

0.09

$

0.78

 

 

 

 

 

 

 

Diluted earnings per share

$

0.52

$

0.09

$

0.78

 

 

 

 

 

 

 

Basic weighted average number of shares outstanding

 

40,693,831

 

33,516,053

 

38,416,486

 

 

 

 

 

 

 

Diluted weighted average number of shares outstanding

 

41,027,997

 

33,888,553

 

38,658,521

 

 

 

 

 

 

 

* See note 2

 

 

 

 

 

 

See accompanying notes

 

 

 

 

 

 

4 (12)


Lundin Mining Corporation            
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS´EQUITY
(Unaudited)            
          Cumulative  
      Contributed Retained translation  
Thousands of US dollars   Share capital surplus earnings adjustments Total
             
As at December 31, 2005 $ 243,305 1,357 25,253 (25,399) 244,516
             
Stock based compensation     243     243
             
Translation adjustment for the period         2,289 2,289
             
Net income for the period       21,461   21,461
             
As at March 31, 2006 $ 243,305 1,600 46,714 (23,110) 268,509

5 (12)


Lundin Mining Corporation            
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Unaudited)   (Unaudited)   (Audited)
  Three months   Three months   Twelve months
  ended March 31,   ended March 31,   ended Dec 31,
Thousands of US dollars   2006   2005 (restated)*   2005
Cash flow from operating activities            
Net income for the period $ 21,461 $ 2,935 $ 29,963
Add/(deduct) non-cash items            
Amortization of deferred revenue   (782)   (614)   (3,083)
Depreciation and amortization   14,037   9,046   51,999
Stock based compensation   1,815   -   1,090
(Gain)/loss on asset dispositions   82   -   (17,810)
Future income taxes   820   2,538   (769)
Provision for pensions and other   219   (998)   902
Net changes in non-cash working capital items   (14,948)   (5,359)   4,373
Total cash-flow from operating activities   22,704   7,548   66,665
             
Cash flow from financing activities            
Common shares issued   -   -   1,365
Deferred revenue   -   -   -
Financing costs   -   -   -
Due to related parties   -   -   -
Repayment of debt   -   -   (40,514)
Proceeds from loan facility   -   -   23,018
Total cash-flow used in financing activities   -   -   (16,131)
             
             
Acquisition of subsidiaries, net of cash acquired   -   -   (70,849)
Mining properties and related expenditures   (4,876)   (2,428)   (17,957)
Securities held as fixed assets   (4,609)   -   (4,294)
Proceeds on asset dispositions   -   -   37,080
Total cash-flow used in investing activities   (9,485)   (2,428)   (56,020)
             
Impact of foreign exchange on cash balances   1,687   (1,275)   (6,785)
             
Increase/(decrease) in cash   14,906   3,845   (12,271)
             
Cash, beginning of period   74,409   86,680   86,680
             
Cash, end of period $ 89,315 $ 90,525 $ 74,409
             
             
Supplementary information regarding non-cash transactions          
FINANCING AND INVESTING ACTIVITIES            
Common shares issued for acquisition of NAN/Arcon $ - $ 14,735 $ 71,074
Equipment acquired through capital lease   -   -   1,547
Common shares issued for mineral property acquisition   -   -   -
Common shares issued for acquisition expenses   -   -   -
  $ - $ 14,735 $ 72,621
             
OTHER SUPPLEMENTARY INFORMATION            
Interest paid $ 11 $ 15 $ 417
Taxes paid $ 13,225 $ - $ 3,219
             
* See note 2            
See accompanying notes            

6 (12)


Lundin Mining Corporation
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2006 and 2005 (Unaudited)
(In United States dollars)

1. Basis of Presentation

The unaudited interim consolidated financial statements of Lundin Mining Corporation (the "Company" or "Lundin Mining") are prepared in accordance with Canadian generally accepted accounting principles using the same accounting policies and methods of application as those disclosed in Note 2 to the Company's consolidated financial statements for the year ended December 31, 2005.

These interim consolidated financial statements do not contain all of the information required by Canadian generally accepted accounting principles for annual financial statements and therefore should be read in conjunction with the Company's 2005 annual audited consolidated financial statements.

These unaudited interim consolidated financial statements reflect all normal and recurring adjustments which are, in the opinion of management , necessary for a fair presentation of the respective interim periods presented.

2. Translation of foreign currencies

Effective April 1, 2005, the reporting currency of Lundin Mining was changed from the Canadian to the U.S. dollar. The board and management of Lundin Mining reassessed which currency was most suitable to its financial statement users. Based on the circumstance that most of the sales of the Lundin Mining Group (the "Group") are denominated in U.S. dollars and that most of the assets owned by the Group are valued in U.S. dollars, a decision was taken by the board to change the reporting currency from the Canadian dollar to the U.S. dollar.

As a consequence, the financial statements for all years (or periods) presented have been translated into the new reporting currency using the current rate method. Under this method, the income statement and the cash flow statement items for each year (or period) are translated into the reporting currency using the rates in effect at the date of the transactions, and assets and liabilities are translated using the exchange rate at the end of that year or period. All resulting exchange differences are reported as a separate component of shareholders' equity.

The Company has also reassessed the measurement currencies of its corporate offices and its mining operations.

Lundin Mining AB and Zinkgruvan Mining AB ("Zinkgruvan") had previously used the Canadian dollar as their measurement currency and had been considered integrated foreign operations. These entities had been accounted for using the temporal method. Under this method, monetary items are translated at the rate of exchange in effect at the year-end. Non-monetary items are translated at historical exchange rates. Revenue and expense items are translated at the average exchange rates prevailing during the year, except for depreciation and amortization, which are translated at the same exchange rates as the assets to which they relate.

Following the establishment of an executive office in Stockholm, Sweden, in April 2005, the Company decided that Zinkgruvan and Lundin Mining AB would use the Swedish Krona (SEK) as their measurement currency. ARCON will use Euro as its measurement currency and the measurement currency of Lundin Mining w ill continue to be the Canadian dollar. This will have the effect that the current rate method will be used when translating the financial statements of these companies.

North Atlantic Natural Resources ("NAN") has been considered a self -sustaining foreign operation, used the Swedish Krona as its measurement currency, and has been accounted for by using the current rate method.

The change in measurement currencies has been applied starting April 1, 2005.

7 (12)


3. Significant differences between Canadian Generally Accepted Accounting Principles ("Canadian GAAP") and International Financial Reporting Standards ("IFRS") / International Accounting Standards ("IAS").

The shares of Lundin Mining trade on the Toronto Stock Exchange and the Stockholm Stock Exchange ("SSE"). Most companies that trade on the SSE are required to report according to IFRS/IAS. However, as a Canadian company, Lundin Mining is required to report according to Canadian GAAP. The Company has reviewed the differences between Canadian GAAP and IFRS/IAS and has identified the following items which would or may have a significant impact on the financial statements of Lundin Mining.

According to IFRS 3, future costs such as restructuring items, which are expected to occur subsequent to an acquisition, should not be provided for in the purchase price allocation. Instead, these costs should be realized in the income statement when the costs actually occur. However, according to Canadian GAAP, restructuring costs that are expected to occur as a result of an acquisition should be provided for in the purchase price allocation. Restructuring costs that arose during 2005, as a result of the acquisitions of NAN and ARCON, in the amount of $2.1 million, have been provided for in the purchase price allocations.

According to Canadian GAAP, impairment test of assets should be carried out by comparing the future cash flows of the assets to their carrying values. Future cash flows are dependent on a number of assumptions, including, among other things, future metal prices, exchange rates and discount rates. According to Canadian GAAP, future cash flows should be based on undiscounted values. Lundin Mining believes that the future cash flows from the Company's assets exceed their carrying values and, accordingly, no write downs are necessary. According to IAS 36, the future cash flows would be based on discounted values.

According to Canadian GAAP, the investments the Company holds in Union Resources and Sunridge Gold Corporation should be valued at the lower of cost or fair market value. However, according to IAS 39, these investment s would be recorded at fair market value. The fair market value, as at March 31 2006, was $14.8 million, which exceeded the carried cost value by $6.7 million.

4. Acquisitions

(a)    North Atlantic Natural Resources AB

On December 30, 2004 the Company acquired all of Boliden Mineral AB' s ("Boliden's") 11,537,000 shares in NAN, representing 36.9% of the outstanding shares and votes. The consideration for all of Boliden' s NAN shares amount s to 2,176,800 newly issued Lundin Mining shares, representing 6.5% of the shares and votes in Lundin Mining on an undiluted basis. Applying the market price on the Toronto Stock Exchange for Lundin Mining' s shares of CAD $10.40 (SEK 56.32), the total consideration for all of Boliden' s NAN shares was CAD $22,638,720 (approximately $18.4 million).

Prior to the acquisition of Boliden' s NAN shares, Lundin Mining held 11,580,000 shares in NAN, representing 37.1% of the shares and votes. Following the acquisition, Lundin Mining held 23,117,000 shares in NAN, representing 74.0% of the shares and votes. A public offer (the "Offer") in line with the Swedish Industry and Commerce Stock Exchange Committee' s (Näringslivets Börskommitté (NBK)) mandatory bid rules was made to all remaining NAN shareholders in February 2005. Shareholders holding 7,367,854 shares, representing 23.6% of the total number of shares and votes of NAN, accepted the Offer. Combined with the 23,117,000 shares held by the Company prior to the Offer, Lundin Mining, as per September 30, 2005, held 30,484,854 shares in NAN, representing 97.6% of the total number of shares and votes. As consideration of the 23.6% the Company issued an additional 1,383,321 common shares at a price of CAD$13.25 (US$10.65) per share, being the average closing price of the Company's shares on the Toronto Stock Exchange the two days before, the day of, and two days after the date of announcement.

The acquisition of 36.9% of the outstanding shares from Boliden Mineral AB and 23.6% of the outstanding shares pursuant to the Offer to the remaining shareholders has been accounted for using the purchase method. The allocation of the fair value of the net assets acquired is as follows:

8 (12)


Purchase price:

 

 

Consideration paid with new shares

$

33, 420,000

Acquisition expenses paid in cash

 

2,476,000

 

$

35,896,000

Net assets acquired:

 

 

Cash

$

5,195, 000

Other working capital, net

 

2,822,000

Mining properties

 

42,078,000

Property, plant and equipment

 

198,000

Future income tax liabilities

 

(6,183,000)

Other provisions

 

(300,000)

 

$

43,810,000

Less:

 

 

Non-controlling interest

$

 (483,000)

Carrying value of prior investment in NAN

 

(7,431,000)

 

$

35,896,000

(b)    ARCON International Resources Plc

On March 3, 2005 the Board of Lundin Mining and the Board of ARCON announced that they had reached an agreement in principle on the terms of a recommended merger of the two companies.

Lundin Mining offered (the "Merger Offer") to acquire all of the issued and to be issued ARCON shares on the following basis: $36.2198 cash (the "cash component") and 3.2196 Lundin Mining Swedish Depository Receipts ("SDRs") (the "share component") for every 100 ARCON shares.

The cash component represented a value of approximately $65.3 million and the share component represented a value of approximately $56.3 million. The combined value of the offer was $121.6 million. As consideration for the share component, the Company issued an additional 5,621,239 common shares at a price of CAD$12.53 (US$10.02) per share, being the average closing price of the Company's shares on the Toronto Stock Exchange the two days before, the day of, and two days after the date of announcement.

On April 12, 2005 the Directors of Lundin Mining announced that all of the conditions of the Merger Offer had been satisfied or waived and, accordingly, the Merger Offer was declared unconditional in all respects. ARCON was consolidated in the financial statements of Lundin Mining as of May 1, 2005. The acquisition of ARCON has been accounted for using the purchase method. The allocation of the fair value of the net assets acquired is as follows:

Purchase price:

 

 

Cash paid

$

65,277,000

Consideration paid with new shares

 

56,347,000

Acquisition expenses paid in cash

 

5,347,000

 

$

126,971,000

Net assets acquired:

 

 

Cash

$

2,251,000

Other working capital, net

  (15,030,000)

Mining properties

 

135,657,000

Property, plant and equipment

 

17,773,000

Other long-term receivables

 

3,930,000

Other long-term liabilities

  (9,492,000)

Other provisions

  (8,118,000)

 

$

126,971,000

9 (12)


5. Agreement with Silver Wheaton Corporation

On December 8, 2004 the Company entered into an agreement with Silver Wheaton Corporation ("Silver Wheaton") whereby the Company agreed to sell all of its silver production from the Zinkgruvan mine in Sweden to Silver Wheaton in consideration for an upfront cash payment of $50 million (CAD60.6 million), 6 million (post -consolidation) Silver Wheaton shares and 30 million Silver Wheaton share purchase warrants with an aggregate fair value of $22.8 million, plus a per ounce payment at a price equal to the lesser of (a) $3.90 (subject to a consumer price adjustment after three years) and (b) the then prevailing market price per ounce of silver.

During 2005 Zinkgruvan sold all of the shares and warrants in Silver Wheaton for net proceeds of approximately $37.1 million and a profit before tax of approximately $17.8 million.

The Company has agreed to deliver all silver produced from Zinkgruvan over the life of mine with a minimum of 40 million ounces of silver to be delivered to Silver Wheaton over a 25-year period. If at the end of the 25 -year period, the Company has not delivered the agreed 40 million ounces, then it has agreed to pay to Silver Wheaton US$1.00 per ounce of silver not delivered.

The upfront cash payment of $50 million and the aggregate fair value of the shares and warrants of $22.8 million have been deferred in the balance sheet and are realized in the income statement when the actual deliveries of silver occur. The deferred per ounce amount which is realized in the income statement is based on deliveries of 40 million ounces and equals approximately $1.74 per ounce of silver delivered. Total revenue from silver currently equals $5.64 per ounce, including $3.90 per ounce which is invoiced to Silver Wheaton upon delivery of silver.

6. Share capital

The authorized and issued share capital is as follows:

(a)    Authorized:

Unlimited number of common shares with no par value and on e special share with no par value.

Shares issued and outstanding

 

Number of

Amount

 

shares

(US $'000)

Balance, December 31, 2004

33,419,271

170,278

Shares issued to acquire shares in NAN

1,383,321

14,727

Balance, March 31, 2005

34,802,592

185,005

Shares issued to acquire shares in ARCON

5,621,239

56,347

Exercise of options

2,000

8

Balance, June 30, 2005

40,425,831

241,360

Exercise of options

53,000

353

Balance, September 30, 2005

40,478,831

241,713

Exercise of options

215,000

1,004

Transfer of contributed surplus on exercise of stock options

-

588

Balance, December 31, 2005

40,693,831

243,305

Balance, March 31, 2006

40,693,831

243,305

10 (12)


(b)    Incentive stock options outstanding and held by directors, officers and employees of the Company are as follows:

 

  Weighted-Average

 

Number of Exercise Price

Options

Shares (CAD $)

Outstanding at December 31, 2005

667 ,500 $11.29

Granted in 200 6

45,000 $22.18

Outstanding at March 31, 2006

712,500 $11.98

 

   

Expiry dates

   

July 8, 2006

100,000  

October 5, 2006

12,500  

April 12, 2007

290,000  

August 8, 2007

85,000  

November 8, 2007

180,000  

February 13, 2008

45,000  

7. Other related party transactions

During the three months ended March 31, 2006, and March 31, 2005 charges from a company owned by the Chairman of the Company for management and administrative services were $45,000 and $39,400 respectively.

8. Guarantees

During 2006, a major Swedish bank has issued a bank guarantee of SEK 65 million (approx. $8.4 million) related to the future reclamation costs at Zinkgruvan. The beneficiary of the guarantee is the Swedish authorities. Lundin Mining has agreed to indemnify the Swedish bank for the corresponding amount of the guarantee.

9. Segmented Information

The Company is currently engaged in one operating segment, mining, exploration and development of mineral properties, primarily in Sweden and in Ireland. Geographic segmented information is as follows:

  Three months ended                   
In thousands of United March 31, March 31,
States dollars 2006 2005
Sales    
Sweden 64,389 36,033
Ireland 27,409 -
  91,798 36,033
     
Total assets    
Sweden 257,113 323,368
Ireland 162,698 -
Canada 12,977 9,779
  432,788 333,147

11 (12)


SUPPLEMENTARY INFORMATION

1.     LIST OF DIRECTORS AND OFFICERS AT MARCH 31, 2006:

(a)    Directors:

Adolf H. Lundin
Brian D. Edgar
Edward F. Posey
John H. Craig
Karl-Axel Waplan
Lukas H. Lundin, Chairman
Pierre Besuchet
William A. Rand
Tony O'Reilly Jnr

(b)    Officers:

Lukas H. Lundin, Chairman
Karl-Axel Waplan, President and Chief Executive Officer
Anders Haker, Chief Financial Officer
Kjell Larsson, Vice President Mining
Neil O'Brien, Vice President Exploration
Manfred Lindvall, Vice President Environment, Health and Safety
Kevin Hisko, Corporate Secretary

2.     FINANCIAL INFORMATION

The report for the second quarter 2006 will be published on August 10, 2006.

3.     ALLOCATION OF PROFITS

The Board of Directors proposes that no dividends are distributed to the shareholders for 2005.

4.     ANNUAL GENERAL MEETING OF SHAREHOLDERS

The Annual General Meeting of shareholders will be held in Vancouver, Canada, on May 31, 2006.

5.     OTHER INFORMATION

Address (Vancouver office):
Lundin Mining Corporation
Suite 2101
885 West Georgia Street
Vancouver B.C. V6C 3E8
Canada

Telephone: +1 604 689 7842
Fax: +1 604 689 4250

Address (Sweden office):
Lundin Mining AB
Hovslagargatan 5
SE-111 48 Stockholm
Sweden

Telephone: +46 8 545 074 70
Fax: +46 8 545 074 71

Website: www.lundinmining.com.

The corporate number of the Company is 306723 -8.

12 (12)