Lundin Mining lifts copper outlook, cuts costs

Canada’s Lundin Mining (TSX: LUN) has raised its forecast for full-year copper output and cut its costs outlook after stronger-than-expected performance at its Caserones mine in Chile. 

Lundin, which generated more than $1 billion in revenue and delivered $383 million in adjusted operating cash flow during the third quarter, said Thursday this year’s copper production is on pace to increase 4% to between 319,000 and 337,000 tonnes, up from 303,000 to 330,000 tonnes. 

Consolidated copper cash costs averaged $1.61 per lb., roughly 6% lower than in 2024 and the lowest quarterly cost so far this year, the Vancouver-based miner said in the results. Copper production, revenue and earnings all improved from the first and second quarters. 

“We are updating our full-year guidance to reflect strong operational performance, particularly at Caserones,” President and CEO Jack Lundin said. “Encouraging progress continues to be made with our near-term growth initiatives at our existing operations and with the large-scale Vicuña project.”

Shares in Lundin Mining shot up 9.7% to $24.90 apiece in Toronto on Thursday morning, valuing the company at $20.9 billion. 

Caserones, Chapada

BMO Capital Markets mining analyst Matt Murphy said the strong performance at Caserones and Chapada in Brazil trimmed cost forecasts by 12% and 21%, respectively, driving the overall cost reduction down to $1.85–$2 per pound.

“The company is in position to achieve this new range, having produced 75% of the copper guidance midpoint year-to-date, and tracking below the midpoint of the revised cost guidance range,” Murphy wrote in a note. 

Lundin’s copper output reached 87,400 tonnes, beating market expectations of 81,100 tonnes. Gold production of 37,800 oz. was roughly in line with forecasts of 37,600 ounces. Copper sales totalled 78,800 tonnes, ahead of consensus at 76,400 tonnes, while gold sales of 38,800 oz. topped the expected 36,000 ounces.

BMO’s Murphy raised his price target by 14% to C$25, citing a stronger operational record and a favourable long-term growth outlook.

Vicuña

In leadership news, Ron Hochstein, who led Lundin Gold (TSX, NASDAQ: LUG) since 2015, will become on Friday the CEO of Vicuña Corp., a joint venture between Lundin Mining and BHP (ASX, NYSE: BHP) managing the Filo del Sol and Josemaría projects in the Chile-Argentina border area.

Under Hochstein’s tenure, Lundin Gold (TSX: LUG; US-OTC: LUGDF) built Fruta del Norte, one of only two large-scale operating mines in Ecuador, into what he has described as “a standard for responsible mining development.” 

The high-grade gold mine began commercial production in February 2020. The company continues to explore for another discovery in Ecuador with similar potential.