Operator: Ladies and gentlemen, thank you for standing by and welcome to the Lundin Mining Third Quarter Results Call. [Operator Instructions] Thank you. I would now like to hand the conference over to your speaker for today Marie Inkster, President and CEO. Please go ahead.

Marie Inkster: Thank you, operator, and thank you everyone for joining Lundin Mining's third quarter 2019 results call.

I would like to draw your attention to the cautionary statements on Slide 2, as we will be making several forward-looking statements throughout the course of this presentation and most likely in the Q&A. On the call to assist me with the presentation and answering questions are Jinhee Magie, our Senior Vice President and Chief Financial Officer and Peter Richardson, our Senior Vice President and Chief Operating Officer. Just a few comments before I turn the call over to Jinhee to run through our financial results. We are very pleased with our overall results for the quarter. Collectively, our mines are achieving strong operational performance.

At Candelaria, copper production increased and cash cost decreased significantly over the last several quarters. The capital outlay of our reinvestment initiatives are starting to wind down and we are beginning to realize the benefits of these investments in our results. The acquisition of Chapada was successfully concluded and integrated, as evidenced by an excellent first quarter as Lundin mining operation. Earlier this month, we filed a 43-101 technical report for the mine to support the updated mineral reserves and resources as well as make clear the near-term operating plans as we evaluate potential expansion scenarios and do work to understand the potential for expanding the resource. We continue to make meaningful progress on the Zinc Expansion Project at Neves-Corvo, both underground and on surface.

The project is advancing on track for stage commissioning next year with phase ramp up to full production by the end of the year. As can be seen in the picture, on this slide, development of Eagle East achieved an important milestone with first ore extracted at the end of September. The team successfully achieved this ahead of budget and schedule. The investments we’ve made during the last two years have positioned the company for multiple years of production growth, decreased cash cost and free cash flow generation. The strong performance of this quarter is the first step in realizing these efforts.

With that, I will turn the call over to Jinhee to highlight the third quarter financial results. Jinhee?

Jinhee Magie: Thank you, Marie. Looking at a summary of our results on Slide 4. As mentioned, our operations had a strong quarter. In aggregate, we produced over 120,000 tons of base metal.

Of particular note, copper production increased 56% over last quarter with the inclusion Chapada and the 21% increase achieved at Candelaria. We sold over 106,000 tons of payable base metals for total revenue of $539 million. The $539 million of revenue includes provisional price adjustments of prior period sales, which were more muted this quarter than last. Overall, there's a negative impact on revenue of $6 million or $0.01 per share as negative copper and zinc adjustments were partially offset by positive nickel settlement. A detailed breakdown is included in our MD&A.

Timing of sales also had a slight negative impact on revenue this quarter. The delayed arrival of an incoming vessel for Chapada pushed a plant concentration into the fourth quarter. Copper generated 68% of our revenues in the quarter with a contribution of unencumbered gold production from Chapada and the increase in the gold price, both contributed -- increased 13%. Zinc, nickel and lead contributed a combined 17% to total revenue. We remain predominantly leveraged to copper and well diversified geographically.

Slide 5, presents a summary of the quarter's financial results. The details of which are in our financial statements in MD&A issued last night. Early in the quarter, we completed the acquisition of Chapada. This has had a dramatic impact on the comparative changes in third quarter of last year presented in this table. Third quarter revenue was higher than same period last year, mainly due to the acquisition of the Chapada mine in the quarter as well as higher copper sales volume mainly from Candelaria as discussed.

Similarly, gross profit for the quarter was higher when compared to the third quarter of 2018 and last quarter, primarily owing to the acquisition of Chapada. Attributable net earnings from operations was $0.04 per share. Included in those results are some non-cash non-operating expenses which had a negative impact on reported earnings of $0.04 per share. We generated $112 million in cash flow from operations and operating cash flow before non-cash working capital adjustments of $155 million or $0.21 per share. As we will discuss our capital projects for best in line with plan during the quarter and expenditures on a cash basis were $167 million.

We ended the quarter with a $185 million in cash and equivalents and net debt of $185 million, which reflects the acquisition of Chapada. Chapada's net purchase price of $757 million was funded from cash on hand and a drawdown of $285 million on the company's revolving credit facility. Our Board of Directors approved our regular quarterly dividend of CAD$0.03 per share for an annual dividend of CAD$0.12 per share. And lastly, as of October 23, we had cash and net debt balances of approximately $167 million and $192 million, respectively. We remain in a strong financial position.

I will now turn the call back to Marie to discuss our operations and projects.

Marie Inkster: Thanks, Jinhee. Moving on to Slide 6, Candelaria performed very well in the quarter. Production and cash costs improved as planned primarily on more ore being sourced directly from the open pit. No throughput limited what could have been an even stronger quarter.

An extended maintenance stop while changing the motor on the line to ball mill and ore segmentation in the mill feed impacted our throughput. Operationally, we are on track to meet full-year production and cash cost guidance. However, as you are likely aware, Chile has been experiencing widespread civil unrest that started in Santiago late last week and has spread to other regions including Atacama. Our operations continue with a focus on maintaining the safety and security of our employees as well as the environment and our facilities. So far, there has not been a material impact on our operations, though situation in Chile continues to evolve.

We made good progress on advancing our reinvestment initiatives this quarter. We delivered a key milestone with a handover of the Candelaria South Sector underground mine to the operations team ahead of schedule. The South Sector is currently achieving approximately 1,000 tons per day and ramping up towards 4,000 tons per day. Candelaria North Sector is producing at approximately 11,500 tons per day. Our targets are to generally produce up to 11,000 tons per day from the North Sector and up to 4,000 tons per day from the South Sector.

So that in aggregate, we can be sure to meet the permit limit of 14,000 tons per day from both mines. The mill optimization project is progressing well. It is now forecast to be complete by early in the first quarter of 2020 and that's a change from late Q4 of this year and the schedule was optimized to correspond to the expected to mill maintenance stops and that is to minimize the disruption to production. The first bar mill motor was installed during maintenance downtime in September. Installation of the second is underway as part of a plan down and is progressing ahead of schedule.

Overall, construction was approximately 60% complete at the end of the third quarter. Our mine fleet reinvestment initiative is continuing very well. All new pieces of major equipment expected this year are now on site. 2019 CapEx guidance for the mine fleet reinvestment of $75 million has effectively been completed. Borrowing external impacts, Candelaria is on track to deliver annual production and cash cost guidance.

Moving on to Chapada. The integration has progressed extremely well and the third-quarter results speak to that. The acquisition closed in early July and cash consideration was $757 million net of cash acquired and working capital adjustments. Both copper and gold production exceeded expectations as a result of better than planned head grades and throughput. Lower-than-expected maintenance downtime and softer ore drove better-than-expected mill throughput.

Copper cash costs of $0.35 per pound were better than expected, benefiting from higher byproduct credit and a favorable Brazilian real exchange rate, in addition to lower operating costs. Cash cost guidance has been lowered by 28% to $0.80 per pound of copper on this performance, as well as a higher precious metal price and revised exchange-rate forecast. Sustaining capital guidance of $25 million for the second half of the year and exploration investment of $4 million both remain unchanged. In early October, we filed a technical report for Chapada to support the minimum reserve and resource estimates announced in September, as well as make clear our near-term operating and capital expectations for the mine. We are continuing to optimize the production schedule at the current 24 million tons per annum throughput rate, while evaluating options for future mine and planned expansion, as well as working on prioritizing exploration programs and understanding the potential for resource expansion.

Slide 8 presents the life of mine copper and gold production profile at Chapada based on the current 24 million tons per annum throughput. Similar to the incremental and iterative improvements that we have been able to achieve at Candelaria, we believe there are significant opportunities to create value at Chapada with aggressive copper focused exploration leading to improved mine plans and production improvement. A significant increase in exploration efforts are underway largely focused on near mine targets with results to be incorporated in any expansion plans. On Slide 9, Neves-Corvo had an excellent operating quarter as well. Copper production increased 25% and cash costs reduced 15% over last quarter on improved copper recoveries and plant throughput.

Copper recovery improved quarter-over-quarter and was over 80%. Stockwork copper ore comprised a greater proportion of the mill feed and ore types were more effectively separated in the mine, allowing for better control blending on surface. Though zinc production was in line with of recent quarters, recovery increased to over 80%. We improved zinc concentrate regrind, which allowed for greater liberation of pyrite from sphalerite and we were able to recover more zinc. Cash costs of a $1.60 per pound of copper were a 15% improvement over last quarter, despite a lower zinc byproduct credit, as gross operating costs were better-than-expected helped by a favorable year-over-year U.S dollar exchange rate.

The operation is on track to achieve the tightened zinc and copper production guidance as well as the reduced cash cost guidance for the year. The zinc expansion project advanced well and is tracking on a revised schedule and budget announced with the Q2 2019 results. Total preproduction project cost estimates are unchanged from our last update as is the 2019 guidance. Through the third quarter, $230 million or €197 million have been capitalized on the project. I'll turn the call over to Peter to walk through the ZEP progress in a little more detail.

Peter?

Peter Richardson: Thanks, Marie. We have made good progress advancing the underground aspects of the ZEP project since earlier this year. Slide 10 shows some of the progress achieved in the quarter. Materials handling civil works progressed well and are nearing completion. This can be seen in the picture on the left of the steel works nearing completion in Transfer Tower 2.

As seen in the center photograph, civil works in the Crusher Chamber is complete and mechanical installation of the jaw crusher is underway. Lastly, remaining concrete work progressed well through the quarter, including ore storage silos as can be seen prepore in the photograph on the right side of the slide. Not shown in these pictures, conveyor systems, mechanical and electrical equipment installations are well advanced as well. And again, not shown on this slide, mine development of the lower stopes is continuing with development of the first sublevel accesses ongoing in the lower Lombador orebody. On Slide 11, surface construction continue to advance during the quarter with particular focus on the ZEP up contractor management in the field.

Work focused on mechanical and electrical installation of the surface material handling system as well as continuing installation of the SAG mill flotation circuit, tailings and water supply piping systems. As can be seen in the photographs, in the center and the right hand side, the backfill cyclone station has been installed, not shown direction of the new zinc filtration building commenced and advanced well during the quarter. In summary, we continue to make meaningful progress underground and on surface. Overall, ZEP is advancing on track for commissioning to commence in the first quarter of next year and under our phase approach ramped to full production by the end of the year 2020. I will now turn it back to Marie to go through our remaining operations and projects.

Marie?

Marie Inkster: Thanks, Peter. Eagle performed well during the quarter with production trending lower, reflecting planned lower grades due to mine sequencing [ph] ahead of Eagle East coming online. While gross operating costs were lower than second quarter of 2019 and better than our plans, cash costs were above recent quarters on higher per unit operating costs, resulting from the lower sales volumes of both copper and nickel. Development of Eagle East reached a significant milestone with first ore extracted at the end of September ahead of budget and schedule. First ore was successfully processed at the Humboldt mill on October 1, 2019.

Access ramp development and vertical development for ventilation and the emergency egress system progressed during the quarter and are ongoing. 2019 expansionary capital guidance remains $30 million with approximately $4 million remaining to be spend in the fourth quarter. After significant investment in the last several years, the regional exploration program at Eagle was concluded during the quarter. Definition drilling around the Eagle East orebody continues. Eagle is well positioned to achieve annual production and cash cost guidance.

Looking forward, with the Eagle East expansionary capital investment mostly behind, an expected increase in nickel and copper production, Eagle is well-positioned to generate significant free cash flow in the coming years. And lastly at Zinkgruvan. Zinc production was lower than recent quarters as zinc ore availability on surface as well as no maintenance impacted throughput during the quarter. The zinc ore shortfall was largely a result of availability of the loader fleet and stope availability. Both issues have been addressed with a full fleet achieving standard availability since mid September and a backlog in drilling and production delay in a major stope now recovered.

Mill throughput was lower than expected on the zinc ore availability as well as maintenance. There are no ongoing issues as actions taken have addressed any issues. Improved zinc recovery partially help to offset this lower mill throughput. Lead production was in line with recent quarters as higher realized grades largely offset the ore shortfall. And copper production was much higher than recent quarters on a combination of higher mill throughput as more copper ores were processed when the zinc ore was in shortage as well as improved head grade and recovery.

Zinkgruvan remains on track to deliver annual production and cash cost guidance of 76,000 to 81,000 tons of zinc and 2,000 to 3,000 tons of copper at a cash cost of $0.40 per pound of zinc. Exploration efforts continue to target Dalby, which remains a high priority. Exploration drifting progressed ahead of schedule when Dalby mining concession was granted in July. Conceptual mine design work is ongoing. Over 16,000 meters were drilled in the quarter from six surface and three underground rigs.

We expect to drill approximately 65,000 meters of Zinkgruvan this year. On Slide 14, total capital expenditures excluding capitalized interest are unchanged from our previous guidance of $695 million. While there still remains capital to be spent in the fourth quarter, our large investment initiatives at Candelaria and Eagle are heading towards successful conclusion as we have previously discussed. Turning to Slide 15. A familiar slide from our current assets, we have excellent growing production profile.

We are beginning to see this with Candelaria's strong performance this quarter. Positive momentum is expected to continue through the fourth quarter, accelerating early next year as Eagle East contributes and the zinc expansion project ramps up. Annual copper production is expected to increase nearly 50% in 2020 over that of 2018 and approximately 300,000 tons of copper starting next year. A 55% increase in total zinc production is forecasted by 2021 over that of 2018 as the zinc expansion project is commissioned next year and fully ramped up doubling zinc production from that asset. And lastly, nickel production is set to increase as the higher grade ores of Eagle East are brought into production.

Before opening the line for questions, I would like to reiterate the investments we made the last two years have set up the company from multiple years of production growth, decrease cash costs and free cash flow generation. We are excited to see this start to be reflected in our operating and financial results. We look forward to updating you on our continuing efforts in the coming months. And with that, operator, I would like to open the line for questions. Thank you.

Operator: Certainly. [Operator Instructions] Your first question comes from the line of Orest Wowkodaw with Scotiabank. Your line is open.

Orest Wowkodaw: Hi. Good morning.

Couple of operational questions for me today. First of all, at Candelaria, I was really impressed on how the grade picked up so quickly there up to .7 in Q3. Do you anticipate you can maintain that kind of grade going into the fourth quarter and into early next year, or should we anticipate kind of a pullback there?

Marie Inkster: Well, we don't forecast the grade by quarter. We did at the beginning of the year highlight the technical report, which had the grade .6 for the year. So if you average it out over the year, we should continue to see good grades in the fourth quarter.

Orest Wowkodaw: Okay. Should we see though throughput step up fill from what we saw in Q3 at Candelaria?

Marie Inkster: The throughput should be a little bit higher base on the lower stopes. Now you saw that we did push out the CMOP completion to 2020 and that's because the December maintenance won't be required until January. So we are able to push out that maintenance, so that's going to affect the throughput as well. Peter, I don’t know if you have anything to add?

Peter Richardson: No, that's the main thing.

More operating hours.

Orest Wowkodaw: Okay. How much of that maintenance impacts in Q1? Is that like a week-long thing, or …?

Marie Inkster: Yes, thereabouts. I mean, it's fairly normal maintenance. So what will happen is when you -- if that one goes to January, then all likelihood the next one will be pushed out.

It really depends on ore hardness and how quickly we were through the liners, is that right Peter?

Peter Richardson: That's correct. And also as you said, we will be replacing the two ball mill motors beginning of next year too, so that -- those will be in conjunction with the SAG mill downs.

Orest Wowkodaw: Okay. And then shifting gears to Chapada, I was really impressed with the production there in your first quarter of ownership. Should we -- I mean, your guidance would imply a big pullback in Q4 versus Q3, given your half-year guidance.

Is -- are you just being conservative there, or do you anticipate a big shift down in grades and obviously an increase in cost to get your guidance?

Marie Inkster: Yes. So we were also quite impressed with the first quarter and the guys worked really hard I think to deliver good first quarter for us. We did have above expectation on the grades there as well as the material was quite soft. We are able to run through it quicker than normal. So the throughput was very high.

So a combination of reduction in throughput and a little bit less on the grades. I don’t know if there is anything else, Peter, but rely on the guidance is I would say.

Peter Richardson: Yes.

Orest Wowkodaw: Okay. It sounds like you are being conservative.

Thank you.

Operator: Ralph Profiti with Eight Capital. Your line is open.

Ralph Profiti: Great. Thanks very much.

I have two questions. The first one is on Candelaria. I see that you're going to hit 14,000 tons per day. Is that still the permitted limit for the underground? Are there plans to increase that, or are you finding that 14,000 tons a day is kind of the optimal rate?

Marie Inkster: Yes. So 14,000 is a permitted rate and we do have a study ongoing to expand that and -- above 20,000 tons.

So we are looking at those studies and carrying them forward, continue to do them next year. So I wouldn't see any kind of results or announcement on any expansion within the near-term, but it is something that we are studying.

Ralph Profiti: Okay. Yes. And I would like to come back to the Chapada technical report.

Is there no downtime expected as you relocate the infrastructure? Because the technical report maintains 24 million tons a year through the plant. How is that going to be managed?

Marie Inkster: Yes. Peter, I will hand them over to you.

Peter Richardson: So, we're still evaluating all the expansion alternatives to go through all the details, going forward. That is not -- all those details haven't been ironed out yet.

Ralph Profiti: Do you have -- do you actually have a location chosen for the infrastructure yet?

Marie Inkster: Yes, the locations are detailed in the technical report. There is actually a draw -- picture that show where things will go. However, we are not sure about that will be our ultimate plan. So that is the plan that is in place now. That was in place our acquisition, but we are looking at different scenarios and we feel that we need to do some more drilling before we make final decisions on that.

Ralph Profiti: And assuming that that's just to sterilize the area?

Marie Inkster: Yes, I am not sure there is any way that could be sterilized in the area. To be honest, I think all the buildings are on mineralization, but we need to figure what we have there. We need to do a lot more work on the drilling.

Ralph Profiti: Okay. All right.

That's it. Thank you.

Operator: Jackie Przybylowski with BMO Capital Markets. Your line is open.

Jackie Przybylowski: Thanks very much.

Maybe just to start off a follow-up on Ralph's last question. You just mentioned that you are doing some more studies and some more drilling on Chapada. Is it possible for you to talk may be a little bit about what the timeline might be on those? Are we expecting more info in sort of full in early mid 2020? And do you think you'll be able to speak a little bit more to that on the upcoming site visit?

Marie Inkster: We will be able to tell you what we're doing on the exploration side of things. But until we do a lot of that drilling and that's going to take some time. We won't have answers.

So I would say any expectation of a near-term new story is a little premature. We need to do our homework. So we have a lot of work to do in order to set things. Peter, I don't know if you have any expectation on that?

Peter Richardson: No. Just got to drill to understand what’s there first.

Jackie Przybylowski: Okay. And on Chapada again, the tax rate that we saw in Q3 was a little higher at least than I expected. And I understand there are some sort of noncash items in there. Can you just talk a little bit about how we should be maybe thinking about Chapada's tax and the impact of FX adjustments on that going forward, or how we may be able to better model that?

Marie Inkster: Yes. No, problem.

I am going to hand that one over to Jinhee, who has been taking a crash course in [indiscernible].

Jinhee Magie: Yes. Hi, Jackie. For the statutory tax rate in Brazil its 34%. So I would say, it's best to assume that as the [technical difficulty] any given period there will be adjustments and true ups, but those are really hard to estimate and predict.

On the adjustment that we had at Q3, which relates to foreign exchange translation, it's -- because our financial statements are in U.S dollars and our tax is -- are paid in Brazilian real, there is a foreign exchange translation that is done. And again, those are hard to predict period-over-period. So, again, I think a 34% tax rate assumption is the way to go.

Jackie Przybylowski: Okay. Fair enough.

And if I could just bother you for one more question. I know in Q2, we talked a lot about Neves-Corvo and the zinc expansion. And I know you guys were doing a lot of work to get that back on track and bringing in some people from Candelaria and elsewhere. Can you maybe give us a bit of an update on how that's going? It sounds like it's going a lot better and you are on schedule. So maybe can you just give us an update on to what steps you have taken and how things are going there?

Marie Inkster: Yes.

I guess, we are -- most of the hard work is still ahead. We have a lot still to do. However, we are on track, I think. We have improved our systems for managing the contractors, in particular, the contractor management has been a problem. Getting behind the backlog of engineering was also one of the challenges that we had and that's improved quite a bit.

So when I talked to the Board about this early -- earlier this week, I’ve said we continue to march uphill on this and it's not going to be easy, but we are on track for commissioning plant. So, Peter, I don't know if you have anything else to add about the team, or the progress?

Peter Richardson: Well, no. One thing that we have identified the crucial items and we are focused on those and getting those done and also working hard on the phase approach. So we need to do the things on phase first, the first phase to get that done and we are prioritizing the work that needs to be done.

Marie Inkster: Yes.

It's just a matter of getting to it. That's just doing the work right now.

Jackie Przybylowski: Sounds good. Sounds like you guys are making good progress there. I will leave it there.

Thanks very much.

Operator: Lawson Winder with Bank of America Merrill Lynch. Your line is open.

Lawson Winder: Yes, good morning. Thanks for taking the question.

Just a quick couple for me. So back to Candelaria, grades look great. The throughput was a tad lower than I had expected. I'm just curious if you guys can provide any guidance on the expectant ramp up post the mill optimization completions next year. Do you have a target on when you expect you get to the 79,000 tons per day?

Marie Inkster: It comes and sees.

Peter, I will hand that one.

Peter Richardson: So the ramp up is gradual. So you'll get a ramp up as soon as you install one ball mill, because you get more power. So we will see a gradual ramp up, because we are adding more power. And as Marie said earlier, we did our first ball mill replacement in September and we encountered some additional work that we took those learnings into account when we did the second ball mill replacement that was done here in October, that’s gone better than planned.

So we hope to be able to learn as we go and then save more and more time. But we'll see the ramp up is not going to come over a day. It's going to be gradual ramp up.

Lawson Winder: Would you expect by the end of next year that the Candelaria mill will be close to 79,000 tons?

Marie Inkster: Yes, we should see the benefit after the final motors are installed in January.

Lawson Winder: Okay.

Peter Richardson: Yes. But I would call, it's not constant because it's all depending on ore hardness and fragmentation. So it's going to go -- it's going to vary over time. We're going to see some days above and some days below, all depends what comes in the mill.

Lawson Winder: Okay.

All right. Now that's super helpful. And then if I might just ask on the civil unrest in Chile and some of the protests. Some media outlets have reported that there was a work stoppage at the port of Calderra. Just curious, you can confirm or not confirm whether or not your port was impacted by that at all? And then just any comments you might have on how things have progressed?

Marie Inkster: Yes.

So overall in the country, the Stevedores are on strike regardless to where they are. So the issue is with both stocking and leaving. So when the Stevedores are striking, then nobody is unloading or loading. So our core operations as it pertains to taking concentrate into our shed and being able to produce in our shed, that's going normal. We’ve stopped a few times just for the safety and concern for our workers not having to try to go through demonstration to blockade.

But we’ve stopped for a couple of hours, keep the truck loaded up and then hit the road as soon as it's clear to go. So that hasn't been affected, but it is the Stevedores union, that will affect every port in the country. So we may see some delay in sales and being able to dock and unload the boat [ph]. Other than that, we have continued to operate. We have been able to do shift changes per normal.

The workers have been very supportive and have -- it's quite trying for people I think because -- for example, because of the demonstrations have been violent, a lot of the stores are closed. So people can't get food and things like that. So when you see looting in Caldara, it was not for people running to get TVs, it was people going to loot the supermarket to get food. So I think this will continue to evolve. I know that Panera had a statement on Tuesday and announced a number of social programs, changes, that people are demanding.

It has been -- some parties deem it not enough. So today it will be interesting. It's been a call for general strike and demonstrations across the country and I think that will set the tone for what happens in the next few days.

Lawson Winder: Okay. Thank you for your comments.

Operator: Greg Barnes with TD Securities. Your line is open.

Greg Barnes: Yes. Thanks. It was a step change in recoveries and that was this quarter, up to 80% on the copper side.

Is that something we should see going forward?

Marie Inkster: That will vary depending on where we're getting the ore from. It varies according to which ore body, the grades, and in particular characteristics of what’s in the ore. And really it has to do with the salaried and what we have to suppress. And Peter, I don’t know if you can add some color to that?

Peter Richardson: Yes, exactly. This ore combination we have on the copper to distinct copper ore types and depending on the mix combination we will see better.

Marie Inkster: Yes. So sometimes we have an ore type called MCZ and basically it will have a high zinc content. Although it is a copper ore and it goes to the copper plant, we will have high zinc and we typically get lower recoveries on that type of ore. So it will vary. I wouldn't stick 80% going forward in a model, Greg.

Greg Barnes: Okay.

Greg Barnes: But we have been -- what challenges with regard to chemistry there as well in the recovery, is that in result?

Marie Inkster: Yes. It will be resolved as long as we continue regular maintenance and make sure that we get the gunk to the lines and are able to make sure that we keep the recycled water clear. That's essentially, as I said, we need to maintain regularly, but I think the water chemistry has improved quite a bit.

Peter Richardson: [Indiscernible]

Greg Barnes: Okay.

Thank you.

Operator: Stefan Ioannou with Cormark Securities. Your line is open.

Stefan Ioannou: Great. Thanks very much, guys.

Just shifting over to Michigan, just it sounds like the regional exploration program is done there now and it was maybe spend a little bit less than you had initially expected. Just wondering did it bear any fruit? And do you plan on putting any of those results out, or talking about any of those results in the future? And are you seeing a sideline to sort of life in Michigan beyond 2025?

Marie Inkster: Yes. So I guess the results that at Bor were reflected in the new reserve statement where we added another year to the life of mine there, which was a great success. So we're going to continue to do the underground definition drilling. Where we curtailed the program was in the regional exploration programs and budgets there.

So -- and that’s just an evaluation of the likelihood of finding something that we would be able to find drill, study and put into production by the time Eagle would run out of ore, the likelihood of being able to do that within that 5 to 6 years of timeframe, it was not likely for us. So we have redirected at the exploration dollars elsewhere.

Stefan Ioannou: Okay. So just in terms of thinking of sort of Eagle going forward and start to say, ongoing exploration will focus on sort of just extensions of the existing mine or very near mine targets, if you will?

Marie Inkster: Yes, that's correct.

Stefan Ioannou: Okay.

Okay, great. Thanks very much, guys.

Operator: Oscar Cabrera with CIBC Global Markets. Your line is open.

Oscar Cabrera: Thank you, operator, and good morning, everyone.

Marie, if I can start just with the capital allocation question. Now that you have had the opportunity to see the operations in Chapada, how are you thinking about returning cash to shareholders versus growth, i.e. the potential for another acquisition in the current macro environment?

Marie Inkster: Well, I have always said those two things are not mutually exclusive and we look at both. We continue to look at opportunities on the M&A side of things. Not a lot out there in public processes and -- but we continue to try hard to look for opportunities.

On the dividend and buyback, we do have the buyback in place still. We did exercise our discretion on the buyback throughout the quarter and bought back shares at various times. Jinhee, what was the total buyback? I think it was 1.3 million shares in the quarter?

Jinhee Magie: That's correct. 1.3 million in the quarter and 2.6 approximately for the year.

Marie Inkster: Yes.

So we have done some small buybacks. When we will probably take a harder look at the program and be able to announce something as soon we announced our 3-year guidance and outlook in November, because that's when we will recommend to our Board the dividend policy and any buyback program.

Oscar Cabrera: Okay. That's helpful, Marie. Thank you.

And then if I may just getting back to Chile. Could you remind me what the level of inventory can you carry through the supply chain there, mine and port and where is that inventory at the moment?

Marie Inkster: Okay. So concentrate storage, you mean?

Oscar Cabrera: Correct.

Marie Inkster: Well we have I think 6 to 7 days at site and then gosh at least a month at work.

Peter Richardson: So we can store in total -- around 60,000 tons, we can store in total both at site and the port.

So we still -- we still have space.

Oscar Cabrera: You still have space, okay. Terrific. And then the other thing, this situation in Chile is quite remarkable. But can you remind me -- do you -- obviously, this is a nationwide strike for Stevedores in the country, but are there subcontractors in there, or how are you managing the situation together with the government in order to bank this forward, so that you don't run into any more disruptions?

Marie Inkster: Well, it's not just as that's affected will stop I'm in there is list of all the -- everybody is affected by what's happening.

So the types of things that we have done and Phil Brumit and team has done a remarkable job there in a very short time and -- trying to mobilize a team to look at any possible scenario and issues that can happen and make sure they have a plan for those. So they had I think a 130 action items after this week and have gone through a lot. So -- and that's everything from taking steps to make sure that their safety and security at the site, getting additional food at the site so that people don't worry about having food during working hours. I think, in general, the strikes at mining operations have been limited to the Codelco operations and from what we understand even some of the Codelco operations are working, the big ones are working. And most of the mining companies other than those that are in legal strike position and in a separate collective bargain process have continued to work.

So we have done things in addition to looking at security and those type of issues. We seek approval, for example for the workers to do shift change and be in transit during their curfew, because as you know there is martial law been imposed, and so there is a curfew between 8 PM and 6 AM in the morning. So we have people that need to be on the road, they have documentation that will show that they are allowed to be. So things like that, there is a lot of different things that the team at site has done in order to make sure that we are well-positioned to kind of get through whatever happens.

Oscar Cabrera: Right.

But I mean if I may -- the -- so then the government is the one that is taking the lead in terms of negotiating with workers at the port. Is that right?

Marie Inkster: Well that's the National unions that will really drive how -- what happens at the port. So we -- it's the Stevedores are -- it's not up to us to negotiate with them. The National union will dictate whether they go back to work or not. And as I said, at every port in the country, so it's not just our Stevedores.

Oscar Cabrera: [Indiscernible] that’s all. Thank you very much, Marie.

Operator: Jack Harrison with Crake Asset Management. Your line is open.

Jack Harrison: Hi there.

I was just hoping you could comment on some of the mismatch between production reported and the sales in the quarter, especially for -- more generally those, especially for zinc. I noticed the sales were a lot lower than the production. So can we expect that to partially averse next quarter? Thanks.

Marie Inkster: Okay. So some of the -- some of that is just payabilities.

So we're never going to have the amount of payable sales, because the payabilities on zinc are much lower than copper, so typically in the mid-80s as opposed to being over 95%. So you will always see a disconnect between the produced and the payable. But in addition to that, we had I think one zinc shipment was postponed at Neves-Corvo and that's just transportation related. And in Zinkgruvan, we also had zinc shipment that was pushed to October and that was a railway bridge needed to be repaired. So we did not get those shipments off, so expect those to come in the fourth quarter.

Jack Harrison: Okay. And then for the other commodities, copper, gold, should I expect this is an indicative quarter, so there were no timing issues, so to speak?

Marie Inkster: No. In Chapada we mentioned earlier that there was a shipment pushed into October, that we had generally planned for September. So the copper, gold at Chapada will be a bit lower. We are carrying a bit higher inventories than we typically will carryover at quarter end.

But those are the other ones. I mean, at Candelaria all the shipments were executed as planned. Eagle, I think one -- part of one of the shipments planned for Q4 was actually brought forward. And then at Neves, other than that one, zinc shipments, copper shipments all went as planned.

Jack Harrison: Got it.

Okay. Thanks very much. Very helpful.

Marie Inkster: Our commercial guys are motivated to try to reduce our quarter end inventories. So …

Jack Harrison: Okay.

Marie Inkster: … We do keep a [indiscernible] on that.

Operator: Orest Wowkodaw with Scotiabank. Your line is open.

Orest Wowkodaw: Hi. Thanks for taking my follow-up.

Just a strategic question. Just curious how much of a priority it might be for you to add a greenfield project to the portfolio? Is it nice to have, or is it something that you're pushing hard for?

Marie Inkster: We're not pushing hard for anything that doesn't give us a good return in a reasonable amount of time. So if it's a greenfield project where we invest a $1 billion and then don't see a return for over the next years, then it wouldn't be something we are interested in. So I would say, we are pushing hard for a good offer that makes sense, but it doesn't necessarily have to be a greenfield project.

Orest Wowkodaw: Okay.

I see. And this sort of an accounting question, with Chapada now in the portfolio, can you give us a sense of what the depreciation might look like for the company next year?

Marie Inkster: Oh, that's a tough one. Jinhee, I don't know if you have that one.

Jinhee Magie: That's a mix match of different variable that will go in there. So -- but if you -- I guess, if you consider Chapada, that's the one that's new to us this quarter.

I think the depreciation this quarter was pretty much in line with what we would expect. So if you use that as a basis for our future production, that should give you a pretty good basis.

Orest Wowkodaw: Okay. So that's $17 million at Chapada, that’s a decent run rate per quarter?

Marie Inkster: Units of production ore, so [multiple speakers].

Orest Wowkodaw: Yes, so that is higher than, okay.

Marie Inkster: Yes, you do a unit of production basis.

Jinhee Magie: Yes. And also I think [indiscernible] maybe expect that to be higher next year because I think the quarterly depreciation reflects a good run rate. But it is higher this quarter than it was in prior quarters and this quarter we had Phase 10 brought in. So that’s additional amortization also will have those -- the -- again, next year the last peaks amortization on a Phase 10.

So I would say that this quarter's `amortization rate is a good run rate.

Orest Wowkodaw: Okay, great. Thanks so much.

Marie Inkster: I think that's it operator. We will call it.

We will take one more call or one more question, sorry, and then we will conclude the call.

Operator: Certainly. Lawson Winder with Bank of America. Your line is open.

Lawson Winder: Yes.

Thanks for taking the follow-up. I appreciate it. Just another question on capital allocation. Now going forward when, I mean, clearly you are set to generate a lot of free cash flow. How are you thinking about the various options here between paying down those small debt that you have versus investments in the assets and then dividends and buybacks? Thanks.

Marie Inkster: Yes. So we do have -- that’s similar to the response to Orest. We do have our discretionary issuer bid and we will be making a recommendation to our Board in November as to what we do in terms of buybacks and whether to extend that or increase the amount we can buy and also will be looking at our dividend policy when we have our budget and 5-year plan presentations to the Board in November. So are we able to give a little more information on that when we do our quarter -- sorry, our outlook news release at that time.

Lawson Winder: Great.

Thank you.

Marie Inkster: All right. Thank you everyone and I look forward to talking to you all in the next call.

Operator: This concludes the Lundin Mining third quarter results call. Thank you for your participation.

You may now disconnect.