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 |
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| Three months | Three months |
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| 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 |
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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 |
| �� |
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Result on copper and lead hedges (ii) | $ | (5,977) | - | (2,095) |
Net interest and other financial items | $ | (774) | 195 | 22,806 |
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EBT (i) | $ | 29,475 | 6,104 | 44,065 |
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Tax and non-controlling interest | $ | (8,014) | (3,169) | (14,102) |
Net income for the period | $ | 21,461 | 2,935 | 29,963 |
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Operating Cash Flow | $ | 22,704 | 7,548 | 66,665 |
Capital Expenditures | $ | (4,876) | (2,428) | (17,957) |
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(i) Non GAAP measures |
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(ii) Includes realized and unrealized result on metal hedges |
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Key Financial Data | ||||
| Three months | Three months | Year | |
| ended | ended | ended | |
| March 31, 2006 | March 31, 2005 | December 31, 2005 | |
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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 |
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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 | |
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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 |
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INTERIM CONSOLIDATED BALANCE SHEETS | |||||||
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| (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 |
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Current assets |
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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 |
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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 | ||
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LIABILITIES |
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Current liabilities |
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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 |
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| - | |
Capital lease obligation |
| 1,135 |
| - |
| 1,547 | |
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Provisions |
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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 | ||
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NON-CONTROLLING INTEREST |
| 802 |
| 489 |
| 627 | |
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SHAREHOLDERS´EQUITY |
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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 |
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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 |
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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 |
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Sales | $ | 91,798 | $ | 36,033 | $ | 192,073 |
Cost of sales |
| (49,875) |
| (25,880) |
| (150,709) |
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Gross margin |
| 41,923 |
| 10,153 |
| 41,364 |
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Expenses |
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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 |
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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 | |
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Income before undernoted |
| 29,475 |
| 6,104 |
| 26,255 |
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Gain on sale of investment |
| - |
| - |
| 17,810 |
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Income before income taxes |
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and non-controlling interest |
| 29,475 |
| 6,104 |
| 44,065 |
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Income taxes |
| (7,841) |
| (2,538) |
| (13,291) |
Non-controlling interest |
| (173) |
| (631) |
| (811) |
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Net income for the period | $ | 21,461 | $ | 2,935 | $ | 29,963 |
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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 |
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Basic earnings per share | $ | 0.53 | $ | 0.09 | $ | 0.78 |
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Diluted earnings per share | $ | 0.52 | $ | 0.09 | $ | 0.78 |
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Basic weighted average number of shares outstanding |
| 40,693,831 |
| 33,516,053 |
| 38,416,486 |
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Diluted weighted average number of shares outstanding |
| 41,027,997 |
| 33,888,553 |
| 38,658,521 |
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* See note 2 |
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See accompanying notes |
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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: |
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Consideration paid with new shares | $ | 33, 420,000 |
Acquisition expenses paid in cash |
| 2,476,000 |
| $ | 35,896,000 |
Net assets acquired: |
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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: |
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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 |
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(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 |
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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.
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