===== SIDA 1 ===== Corporate Office 150 King Street West, Suite 2200 P .O. Box 38, Toronto, ON M5H 1J9 Phone: +1 416 342 5560 Fax: +1 416 348 0303 lundinmining.com NEWS RELEASE Lundin Mining First Quarter 2023 Results Toronto, May 3, 2023 (TSX: LUN; Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”) today reported net earnings attributable to Lundin Mining shareholders of $146.6 million ($0.19 per share) in the first quarter of 2023. The Company also generated adjusted earnings 1 of $125.7 million ($0.16 per share), adjusted EBITDA1 of $336.9 million, and adjusted cash flow from operations1 of $235.1 million ($0.30 per share). ”Our operations performed well in the first quarter of 2023, reflecting our continued focus on improving operational consistency and excellence. Copper production increased quarter -over-quarter with strong performance across our portfolio. Zinc production also increased meaningfully with the ongoing ramp -up of the Zinc Expansion Project at Neves - Corvo delivering a fourth quarter of sequential improvement and achieving record quarterly zinc production of nearly 27,800 tonnes. We remain on track to deliver our annual production guidance for all metals and cash costs ,” commented Peter Rockandel, CEO. Mr. Rockandel added, “With healthy metal prices , we generated adjusted EBITDA 1 of over $335 million and free cash flow from operations1 of over $70 million in the first quarter. We continue to be very constructive on the outlook for the metals we produce and look forward to immediately growing our business with the closing and integration of our acquisition of an initial 51% interest in the Caserones copper-molybdenum mine early in the second half of this year.” Summary Financial Results Three months ended March 31, US$ Millions (except per share amounts) 2023 2022 Revenue 751.3 991.1 Gross profit 213.3 478.8 Attributable net earnings2 146.6 345.1 Net earnings 165.3 378.1 Adjusted earnings 1,2 125.7 295.6 Adjusted EBITDA1 336.9 587.8 Basic and diluted earnings per share ("EPS")2 0.19 0.47 Adjusted EPS1,2 0.16 0.40 Cash flow from operations 211.9 317.3 Adjusted operating cash flow1 235.1 472.8 Adjusted operating cash flow per share1 0.30 0.64 Free cash flow from operations1 71.1 194.8 Free cash flow1 (34.2) 172.3 Cash and cash equivalents 184.2 733.9 Net debt1 (34.6) 704.9 1 These are non-GAAP measures. Please refer to the Company's discussion of non-GAAP and other performance measures in its Management's Discussion and Analysis for the three months ended March 31, 2023 and the Reconciliation of Non-GAAP Measures section at the end of this news release. 2 Attributable to shareholders of Lundin Mining Corporation. ===== SIDA 2 ===== Highlights For the quarter ended March 31, 2023 the Company generated revenue of $751.3 million (Q1 2022 - $991.1 million). Production costs were higher than the prior year quarter due to inflationary impacts, however cash cost1 continue on track with recent guidance. The Company generated gross profi t of $213.3 million (Q1 2022 - $478.8 million) and adjusted EBITDA of $336.9 million (Q1 2022 - $587.8 million). Overall, our operations performed well during the first quarter of 2023 and the Company remains on track to achieve production guidance. Operational Performance Candelaria (80% owned): Candelaria produced 39,167 tonnes of copper, and approximately 24,000 ounces of gold in concentrate on a 100% basis in the quarter. Copper production was lower than the comparable prior year quarter due to grades whereas gold production was higher than the prior year quarter due to throug hput. Current quarter production costs and copper cash cost of $2.21/lb were higher than the prior year quarter largely owing to higher cont ractor and maintenance costs. Cash cost was further impacted by union bonus payments for the finalization of the rem aining two union negotiations which were successfully completed during the first quarter 2023, and lower sales volumes. Chapada (100% owned): Chapada produced 9,864 tonnes of copper and approximately 12,000 ounces of gold in concentrate in the quarter. C opper production was lower than the prior year quarter primarily due to planned lower recoveries partially offset by higher throughput. Current quarter production for both metals was above expectations due to higher throughput. Production costs were lower due to lower sales volumes. Copper cash cost of $2.37/lb for the quarter was higher than the prior year quarter due to higher consumable costs and lower sales volumes. Eagle (100% owned): During the quarter Eagle produced 3,724 tonnes of nickel and 3,140 tonnes of copper which were lower than the prior year quarter due to planned lower grades and lower throughput. Production costs were higher than the comparable prior year quarter due to higher consumable costs. Nickel cash cost in the quarter of $2.43/lb was higher than the prior year quarter due primarily to lower by-product copper price and lower sales volumes. Neves-Corvo (100% owned): Neves-Corvo produced 7,574 tonnes of copper for the quarter and 27,793 tonnes of zinc. Copper production was lower tha n the prior year comparable quarter, due primarily to lower throughput and grades, while zinc production was higher primarily due to increased throughput driven by the ramp -up of the Zinc Expansion Project ("ZEP"). Production costs were higher than the pri or year due to higher zinc volumes and copper cash cost of $1.69/lb for the quarter was comparable to the prior year quarter. Zinkgruvan (100% owned): Zinc production of 20,760 tonnes, lead production of 7,407 tonnes and copper production of 1,717 tonnes were higher than the prior year quarter. Zinc and lead production were higher due to higher grades, and better than expected throughput while copper production was higher due to grades. Production costs were lower than the prior year quarter due to favourable foreign exchange. Zinc cash cost of $0.54/lb was higher than the prior year quarter due to lower by-product credits. Total Production (Contained metal in concentrate)a 2023 2022 Q1 Total Q4 Q3 Q2 Q1 Copper (t)b 61,462 249,659 56,552 63,930 64,096 65,081 Zinc (t) 48,553 158,938 44,308 40,327 41,912 32,391 Gold (koz)b 36 154 36 45 39 34 Nickel (t) 3,724 17,475 4,096 4,379 4,719 4,281 a. Tonnes (t) and thousands of ounces (koz) b. Candelaria's production is on a 100% basis. 1These are non-GAAP measures. Please refer to the Company's discussion of non -GAAP and other performance measures in its Management's Discussion and Analysis for the three months ended March 31, 2023 and the Reconciliation of Non -GAAP Measures section at the end of this news release. ===== SIDA 3 ===== Corporate Updates • On February 8, 2023, the Company reported its Mineral Resource and Miner al Reserve estimates as at December 31, 2022. • On February 22, 2023, the Company filed updated technical reports for Candelaria, Neves-Corvo and Eagle. • On March 23, 2023, the Company announced the appointment of Ms. Maria Olivia Recart to the Company's Board of Directors. • On March 27, 2023, the Company announced it entered into a binding purchase agreement with JX Nippon Mining and Metals Corporation to acquire a majority interest in the Caserones copper -molybdenum mine ("Caserones") in Chile. The Company will pay $800 million and in addition, $150 million in deferred cash consideration over a six year period following the closing date. The Company will also have the right to acquire an additional 19% interest in Caserones for $350 million over a five -year period commencing on the first anniversary of the date of closing. The transaction is expected to close in the third quarter of 2023. • On April 11, 202 3, the Company announced the Annual Meeting of Shareholders will be held on Thursday , May 11, 2023. • On April 26, 2023, the Company executed a fifth amended and restated credit agreement that extended the term of its revolving credit facility (“the Credit Facility”) to April 2028. Financial Performance • Gross profit for the quarter ended March 31, 2023 was $213.3 million, a decrease of $265.5 million in comparison to the prior year quarter due to higher operating costs impacted by inflationary impacts, lower metal prices net of price adjustments ($151.8 million) and lower sales volumes. • For the three months ended March 31, 2023, net earnings of $165. 3 million were $212.8 million lower than the prior year comparable period due to lower gross profit partially offset by lower income taxes. • Adjusted earnings of $125.7 million for the quarter ended March 31, 2023, were lower than the prior year comparable quarter due to lower net attributable earnings. Financial Position and Financing • During the quarter ended March 31, 2023, cash and cash equivalents decreased by $7.1 million. Cash flow from operations of $211.9 million was used to fund investing activities of $240.1 million. Cash from financing activities was $19.5 million which was co mprised primarily of the proceeds from debt on a net basis and the settlement of foreign currency derivatives. • As at March 31, 2023, the Company had a net debt balance of $34.6 million. • As at May 3, 2023, the Company had cash and net debt balances of approximately $ 180 million and $ 90 million, respectively. ===== SIDA 4 ===== Outlook The Company remains in a strong financial position with its producing assets generating material free cash flow from operations which continues to be allocated towards growth projects, acquisitions and shareholder distributions. All metal production conti nues to track against the most recently reported guidance ranges as outlined in the MD&A for the year ended December 31, 2022. Metal production is modestly weighted to the second half of the year for all sites except Neves-Corvo where copper is equally wei ghted and zinc production is expected to increase as initiatives to enable ZEP to consistently achieve nameplate capacity are executed and expected to result in improved overall throughput and metal recovery rates. Forecast cash costs at all sites are trending within or better than guidance ranges due to lower than anticipated production cost at all sites except Eagle, where cash cost is trending higher due to anticipated lower sales volumes. The Company continues to experience continuing risks associate d with global inflation as well as supply chain delivery. To date, there have been no significant impacts on our operations relating to supply chain availability. The Company has implemented procurement strategies and foreign exchange and diesel hedging pr ograms to mitigate the impact on costs and continues to monitor these risks. Cash based capital expenditures, are tracking well to the most recent guidance of $1,100.0 million, inclusive of capitalized costs for the Josemaria Project. Similarly, total exploration expenditures are on target of $45.0 million for 2023. About Lundin Mining Lundin Mining is a diversified Canadian base metals mining company with projects and operations in Argentina, Brazil, Chile, Portugal, Sweden and the United States of America, primarily producing copper, zinc, gold and nickel. The information in this re lease is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below on May 3, 2023 at 18:00 Eastern Time. For further information, please contact: Mark Turner, Vice President, Business Valuations and Investor Relations: +1 416 342 5565 Irina Kuznetsova, Manager, Investor Relations: +1 416 342 5583 Robert Eriksson, Investor Relations Sweden: +46 8 440 54 40 Technical Information The scientific and technical information in this press release has been prepared in accordance with the disclosure standards of National Instrument 43 -101 (“NI 43 -101”) and has been reviewed by Arman Barha, P .Eng., Vice President, Technical Services, a "Qualified Person" under NI 43 -101. Mr. Barha has verified the data disclosed in this release and no limitations were imposed on his verification process. ===== SIDA 5 ===== Reconciliation of Non-GAAP Measures The Company uses certain performance measures in its analysis. These performance measures have no standardized meaning within generally accepted accounting principles under International Financial Reporting Standards and, therefore, amounts presented may n ot be comparable to similar data presented by other mining companies. For additional details please refer to the Company’s discussion of non -GAAP and other performance measures in its Management’s Discussion and Analysis for the three months ended March 31 , 2023 which is available on SEDAR at www.sedar.com. Adjusted EBITDA can be reconciled to the Company's Consolidated Statement of Earnings as follows: Three months ended March 31, ($thousands) 2023 2022 Net earnings 165,311 378,109 Add back: Depreciation, depletion and amortization 120,247 129,837 Finance income and costs 15,699 14,972 Income taxes 48,693 77,206 349,950 600,124 Unrealized foreign exchange 8,644 7,853 Revaluation loss (gain) on derivative liability (19,250) 3,293 Sinkhole costs 4,582 — Revaluation gain on marketable securities (438) (3,892) Gain on disposal of subsidiary (5,718) (16,828) Other (827) (2,776) Total adjustments - EBITDA (13,007) (12,350) Adjusted EBITDA 336,943 587,774 Adjusted earnings and adjusted earnings per share can be reconciled to the Company's Consolidated Statement of Earnings as follows: Three months ended March 31, ($thousands, except share and per share amounts) 2023 2022 Net earnings attributable to Lundin Mining shareholders 146,620 345,078 Add back: Total adjustments - EBITDA (13,007) (12,350) Tax effect on adjustments (3,126) (2,034) Deferred tax arising from foreign exchange translation (6,007) (34,954) Other 1,202 (132) Total adjustments (20,938) (49,470) Adjusted earnings 125,682 295,608 Basic weighted average number of shares outstanding 771,216,060 736,410,739 Net earnings attributable to shareholders 0.19 0.47 Total adjustments (0.03) (0.07) Adjusted earnings per share 0.16 0.40 ===== SIDA 6 ===== Adjusted operating cash flow and adjusted operating cash flow per share can be reconciled to cash provided by operating activities as follows: Three months ended March 31, ($thousands, except share and per share amounts) 2023 2022 Cash provided by operating activities 211,875 317,257 Changes in non-cash working capital items 23,192 155,548 Adjusted operating cash flow 235,067 472,805 Basic weighted average number of shares outstanding 771,216,060 736,410,739 Adjusted operating cash flow per share 0.30 0.64 Free cash flow from operations can be reconciled to cash provided by operating activities as follows: Three months ended March 31, ($thousands) 2023 2022 Cash provided by operating activities 211,875 317,257 Sustaining capital expenditures (155,564) (130,758) General exploration and business development 14,765 (8,282) Free cash flow from operations 71,076 194,781 General exploration and business development (14,765) (8,282) Expansionary capital expenditures (90,519) (14,154) Free cash flow (34,208) 172,345 Net (debt) cash can be reconciled as follows: ($thousands) March 31, 2023 December 31, 2022 Cash and cash equivalents 184,239 191,387 Current portion of total debt and lease liabilities (177,108) (170,149) Debt and lease liabilities (37,634) (27,179) (214,742) (197,328) Deferred financing fees (netted in above) (4,070) (4,926) (218,812) (202,254) Net debt (34,573) (10,867) ===== SIDA 7 ===== Cash and All-in Sustaining Costs can be reconciled to the Company's operating costs as follows: Three months ended March 31, 2023 Operations Candelaria Chapada Eagle Neves- Corvo Zinkgruvan ($000s, unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn) Total Sales volumes (Contained metal in concentrate): Tonnes 35,570 9,072 2,735 8,031 16,612 Pounds (000s) 78,418 20,000 6,030 17,705 36,623 Production costs 417,764 Less: Royalties and other (12,086) 405,678 Deduct: By-product credits (156,965) Add: Treatment and refining 36,615 Cash cost 173,692 47,318 14,640 29,892 19,786 285,328 Cash cost per pound ($/lb) 2.21 2.37 2.43 1.69 0.54 Add: Sustaining capital 90,686 16,027 7,102 25,061 14,468 Royalties — 2,223 5,686 1,730 — Reclamation and other closure accretion and depreciation 2,307 1,801 2,958 1,324 1,061 Leases & other 3,143 966 747 158 102 All-in sustaining cost 269,828 68,335 31,133 58,165 35,417 AISC per pound ($/lb) 3.44 3.42 5.16 3.29 0.97 Three months ended March 31, 2022 Operations Candelaria Chapada Eagle Neves- Zinkgruvan ($000s, unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn) Total Sales volumes (Contained metal in concentrate): Tonnes 38,448 12,804 3,267 8,484 15,802 Pounds (000s) 84,763 28,228 7,202 18,704 34,837 Production costs 382,427 Less: Royalties and other (15,877) 366,550 Deduct: By-product credits (181,007) Add: Treatment and refining 32,155 Cash cost 133,985 51,437 (8,979) 31,797 9,458 217,698 Cash cost per pound ($/lb) 1.58 1.82 (1.25) 1.70 0.27 Add: Sustaining capital 82,964 14,455 4,460 19,516 9,039 Royalties — 3,664 7,791 2,813 — Reclamation and other closure accretion and depreciation 1,969 1,884 4,617 331 1,117 Leases & other 1,968 929 651 202 238 All-in sustaining cost 220,886 72,369 8,540 54,659 19,852 AISC per pound ($/lb) 2.61 2.56 1.19 2.92 0.57 ===== SIDA 8 ===== Cautionary Statement on Forward-Looking Information Certain of the statements made and information contained herein is “forward -looking information” within the meaning of applicable Canadian securities laws. All statements other than statements of histor ical facts included in this document constitute forward -looking information, including but not limited to statements regarding the Company’s plans, prospects and business strategies; the Company’s guidance on the timing and amount of future production and its expectations regarding the results of operations; expected costs; permitting requirements and timelines; timing and possi ble outcome of pending litigation; the results of any Preliminary Economic Assessment, Feasibility Study, or Mineral Resource and M ineral Reserve estimations, life of mine estimates, and mine and mine closure plans; anticipated market prices of metals, currency exchange rates, and interest rates; the develo pment and implementation of the Company’s Responsible Mining Management System; the Company’s ability to comply with contractual and permitting or other regulatory requirements; anticipated exploration and development activities at the Company’s projects; expectations and ability to complete the Casero nes transaction; the Company’s integration of acquisitions and any anticipated benefits thereof, including the Caserones transaction; and expectations for ot her economic, business, and/or competitive factors. Words such as “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan ”, “goal”, “aim”, “intend”, “continue”, “budget”, “estimate”, “may”, “will”, “can”, “could”, “should”, “schedule” and similar expressions identify forward -looking statements. Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectatio ns and beliefs of management, including that the Company can access financing, appropriate equipment and sufficient labour; assumed and future price of copper, nickel, zinc, gold and other metals; anticipated costs; ability to achieve goals; the prompt and effective integration of acquisition s; that the political environment in which the Company operates will continue to suppo rt the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and assumptions are considered reasonable by Lundin Mining as at the date of this document in ligh t of management’s experience and perception of current conditions and expected developments, these statements are inherently subject to significant busine ss, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materi ally from those projected in the forward - looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: global financial conditions, market volatility and inflation, including pr icing and availability of key supplies and services; risks inherent in mining including but not limited to risks to the environment, industrial accidents, catastrophic equipment failures, unusual or unexpected geological formations or unstable ground condi tions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable risks; project financing risks, liquidity risks and limited financial resources; volatility and fluctuations in metal and commodity demand and prices; delay s or the inability to obtain, retain or comply with permits; significant reliance on a single asset; reputation risks related to negative publicity with respect to the Company or the min ing industry in general; health and safety risks; risks relating to th e development of the Josemaria Project; inability to attract and retain highly skilled employees; risks associated with clima te change; compliance with environmental, health and safety laws and regulations; unavailable or inaccessible infrastructure, in frastructure failures, and risks related to ageing infrastructure; risks inherent in and/or associated with operating in foreign countries and emerging market s, including with respect to foreign exchange and capital controls; economic, political and social in stability and mining regime changes in the Company’s operating jurisdictions, including but not limited to those related to permitting and approvals, environmental and tailings management, labour, trade relations, and transportation; risks relating to indebtedness; the inability to effectively compete in the industry; the inability to currently control the Caserones mine and the ability to satisfy the conditions and consummate the Caserones transaction on the proposed terms and expected schedule; risks asso ciated with acquisitions and related integration efforts, including the ability to achieve anticipated benefits, unanticipated difficulties or expenditures relati ng to integration and diversion of management time on integration; changing taxation regimes; risks related to mine closure activities, reclamation obligations, environmental liabilities and closed and historical sites; reliance on key personnel and reporting and oversight systems, as well as third parties and cons ultants in foreign jurisdictions; information technology and cybersecurity risks; risks associated with the estimation of Mineral Resources and Mineral Reserve s and the geology, grade and continuity of mineral deposits including but not limited to models relating thereto; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing efficiency; community and stakeholder opposition; financial p rojections, including estimates of future expenditures and cash costs, and estimates of future production may not be reliable; enforcing legal rights in foreign jurisdictions; environmental and regulatory risks associated with the structural stability of w aste rock dumps or tailings storage facilities; activist shareholders and proxy solicitation matters; risks relating to dilution; regul atory investigations, enforcement, sanctions and/or related or other litigation; risks relating to payment of dividends; counterparty and customer concentration risks; the estimation of asset carrying values; risks associated with the use of derivatives; relationships with employees and contractors, and the potentia l for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; conflicts of interest; existence of a significant shareholder; exchange rate fluctuations; challenges or defects in title; internal controls; compliance with foreign laws; pot ential for the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory empl oyment practices, or human rights violations; the threat associated with outbreaks of viruses and in fectious diseases; risks relating to minor elements contained in concentrate products; and other risks and uncertainties, including but not limited to those described in the “Risk and Uncertainties” section of th e Company’s Annual Information Form and the “Managing Risks” section of the Company’s MD&A for the year ended December 31, 2022, which are available on SEDAR at www.seda r.com under the Company’s profile. All of the forward -looking statements made in this document are qualified by these cautionary statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward -looking information, there may be other factors that cause results not to be as anticipated, e stimated, forecast or intended and readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Should one or more of these risks and uncertainties materialize, or should underlying a ssumptions prove incorrect, actual results may vary materially from those described in forward -looking information. Accordingly, there can be no assurance that forward -looking information will prove to be accurate and forward -looking information is not a guarantee of f uture performance. Readers are advised not to place undue reliance on forward -looking information. The forward -looking information contained herein speaks only as of the date of this document. The Company disclaims any intention or obligation to update or revise forward ‐looking information or to explain any material difference between such and subsequent actual events, except as required by applicable law. ===== SIDA 9 ===== Management’s Discussion and Analysis For the three months ended March 31, 2023 This management’s discussion and analysis (“MD&A”) has been prepared as of May 3, 2023 and should be read in conjunction with the Company’s condensed interim consolidated financial statements for the three months ended March 31, 2023. Those financial statements are prepared in accordance with International Financial Reporting Standards ("IF RS") as issued by the International Accounting Standards Board applicable to the preparation of interim financial statements, including International Accounting Standard 34, Interim Financial Reporting. The Company’s presentation currency is United States (“US”) dollars. Reference herein of $ or USD is to United States dollars, ARS is to Argentine pesos, BRL is to Brazilian reai s, C$ is to Canadian dollars, CLP is to Chilean pesos, € refers to euros, and SEK is to Swedish kronor. About Lundin Mining Lundin Mining Corporation (“Lundin Mining” or the “Company”) is a diversified Canadian base metals mining company with projects and operations in Argentina, Brazil, Chile, Portugal, Sweden, and the United States of America, primarily producing copper, zinc, gold and nickel. Table of Contents Highlights .............................................................................................................................................................................................. 1 Financial Position and Financing .............................................................................................................................................................................................. 2 Outlook .............................................................................................................................................................................................. 3 Selected Quarterly Financial Information .............................................................................................................................................................................................. 4 Revenue Overview .............................................................................................................................................................................................. 5 Financial Results .............................................................................................................................................................................................. 8 Mining Operations .............................................................................................................................................................................................. 10 Production Overview ........................................................................................................................................................................................ 10 Cash Cost Overview ........................................................................................................................................................................................ 11 Capital Expenditures ........................................................................................................................................................................................ 12 Candelaria ........................................................................................................................................................................................ 13 Chapada ........................................................................................................................................................................................ 14 Eagle ........................................................................................................................................................................................ 15 Neves-Corvo ........................................................................................................................................................................................ 16 Zinkgruvan ........................................................................................................................................................................................ 17 Josemaria Project .............................................................................................................................................................................................. 18 Metal Prices, LME Inventories, and Smelter Treatment and Refining Charges .............................................................................................................................................................................................. 19 Liquidity and Capital Resources .............................................................................................................................................................................................. 20 Related Party Transactions .............................................................................................................................................................................................. 21 Changes in Accounting Policies and Critical Accounting Estimates and Judgements .............................................................................................................................................................................................. 21 Non-GAAP and Other Performance Measures .............................................................................................................................................................................................. 22 Managing Risks .............................................................................................................................................................................................. 27 Management's Report on Internal Controls .............................................................................................................................................................................................. 27 Outstanding Share Data .............................................................................................................................................................................................. 27 ===== SIDA 10 ===== Cautionary Statement on Forward-Looking Information Certain of the statements made and information contained herein is “forward-looking information” within the meaning of applicable Canadian securities laws. All statements other than statements of historical facts included in this document constitute forward -looking information, including but not limited to statements rega rding the Company’s plans, prospects and business strategies; the Company’s guidance on the timing and amount of future production and its expectations regarding the results of operations; expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any Preliminary Economic Assessment, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimates, and mine and mine closure plans; anticipated market prices of metals , currency exchange rates, and interest rates; the development and implementation of the Company’s Responsible Mining Management System; the Company’s ability to comply with contractual and permitting or other regulatory requirements; anticipated exploratio n and development activities at the Company’s projects; expectations and ability to complete the Caserones transaction; the C ompany’s integration of acquisitions and any anticipated benefits thereof, including the Caserones transaction; and expectations fo r other economic, business, and/or competitive factors. Words such as “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “goal”, “aim”, “intend”, “continue”, “budget”, “estimate”, “may”, “will”, “can”, “could”, “should”, “schedule” and similar expressions identify forward-looking statements. Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectatio ns and beliefs of management, including that the Company can access financing, appropriate equipment and sufficient labour; assumed and future price of copper, nickel, zinc, gold and other meta ls; anticipated costs; ability to achieve goals; the prompt and effective integration of acquisitions; that the political environment in which the Company operates will continue to support the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and assumptions are considered reasonable by Lundin Mining as at the dat e of this document in light of management’s experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unkn own factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: global financial conditions, market volatility and inflation, including pricing and availability of key supplies and services; risks inherent in mining including but not limited to risks to the environment, industrial accidents, catastrophic equipment failures, unusual or un expected geological formations or unstable ground conditions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable risks; project financing risks, liquidity risks and limited financial resources; volati lity and fluctuations in metal and commodity demand and prices; delays or the inability to obtain, retain or comply with permits; significant reliance on a single asset; reputation risks related to negative publicity with respect to the Company or the mining industry in general; health and safety risks; risks relating to the development of the Josemaria Project; inability to attract and retain highly skilled employees; risks associated with climate change; compliance with environmental, health and safety laws and regulations; unavailable or inaccessible infrastructure, infrastructure failures, and risks related to ageing infrastructure; risks inherent in and/or associated with operating in foreign countries and emerging market s, including with respect to foreign exchange and capital controls; economic, political and social instability and mining regime changes in the Company’s operating jurisdictions, including but not limited to those related to permitting and approvals, environmental and tailings management, labour, trad e relations, and transportation; risks relating to indebtedness; the inability to effectively compete in the industry; the inability to currently control the Caserones mine and the ability to satisfy the conditions and consummate the Caserones transaction on the proposed terms and expected schedule; risks associated with acquisitions and related integration efforts, including the ability to achieve antic ipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration; changing taxation regimes; risks related to mine closure activities, reclamation obligations, environmental liabilities and closed and historical sites; reliance on key personnel and reporting and oversight systems, as well as third parties and consultants in foreign jurisdictions; information technology and cybersecurity risks; risks associated with the estimation of Mineral Resources and Mineral Reserves and the ge ology, grade and continuity of mineral deposits including but not limited to models relating thereto; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Rese rve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing effici ency; community and stakeholder opposition; financial projections, including estimates of future expenditures and cash costs, and estimates of future production may not be reliable; enforcing legal rights in foreign jurisdictions; environmental and regulatory risks associated with the structural stability of waste rock dumps or tailings storage facilities; activist shareholders and proxy solicitation matters; risks relating to dilution; regulatory investigations, enforcement, sanctions and/or related or oth er litigation; risks relating to payment of dividends; counterparty and customer concentration risks; the estimation of asset carrying values; risks associated with the use of derivatives; relationships with employees and contractors, and the po tential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; conflicts of interest; existence of a significant shareholder; exchange rate fluctuations; challenges or defects in title; internal controls; compliance with foreign laws; potential for the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights violations; the threat associated with outbreaks of viruses and infectious diseases; risks relating to minor elements contained in concentrate products; and other risks and uncertainties, including but not limited to those described in the “Risk and Uncertainties” section of the Company’s Annual Information Form and the “Managing Risks” section of the Company’s MD&A for the year ended December 3 1, 2022, which are available on SEDAR at www.sedar.com under the Company’s profile. All of the forward-looking statements made in this document are qualified by these cautionary statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, forecast or intended and readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from thos e described in forward -looking information. Accordingly, there can be no assurance that forward -looking information will prove to be accurate and forward -looking information is not a guarantee of future performance. Readers are advised not to place undue reliance on forward -looking information. The forward -looking information contained herein speaks only as of the date of this document. The Company disclaims any intention or obligation to update or revise forward‐looking information or to explain any material difference between such and subsequent actual events, except as required by applicable law. ===== SIDA 11 ===== 1 This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of this MD&A for discussion. 1 Highlights For the quarter ended March 31, 2023 the Company generated revenue of $751.3 million (Q1 2022 - $991.1 million). Production costs were higher than the prior year quarter due to inflationary impacts, however cash cost 1 continues on track with recent guidance. The Company generated gross profit of $213.3 million (Q1 2022 - $478.8 million) and adjusted EBITDA1 of $336.9 million (Q1 2022 - $587.8 million). Overall, our operations performed well during the first quarter of 2023 and the Company remains on track to achieve production guidance. Operational Performance Candelaria (80% owned): Candelaria produced 39,167 tonnes of copper, and approximately 24,000 ounces of gold in concentrate on a 100% basis in the quarter. Copper production was lower than the comparable prior year quarter due to grades whereas gold production was higher than the prior year quarter due to throughput. Current quarter production costs and copper cash cost of $2.21/lb were higher than the prior year quarter largely owing to higher contractor and maintenance costs. Cash cost was further impacted by union bonus payments for the finalization of the remaining two union negotiations, which were successfully completed during the first quarter 2023, and lower sales volumes. Chapada (100% owned): Chapada produced 9,864 tonnes of copper and approximately 12,000 ounces of gold in concentrate in the quarter. Copper production was lower than the prior year quarte r primarily due to planned lower recoveries partially offset by higher throughput. Current quarter production for both metals was above expectations due to higher throughput. Production costs were lower due to lower sales volumes. Copper cash cost of $2.37 /lb for the quarter was higher than the prior year quarter due to higher consumable costs and lower sales volumes. Eagle (100% owned): During the quarter Eagle produced 3,724 tonnes of nickel and 3,140 tonnes of copper which were lower than the prior year quarter due to planned lower grades and lower throughput. Production costs were higher than the comparable prior year quarter due to higher consumable costs. Nickel cash cost in the quarter of $2.43/lb was higher than the prior year quarter due primarily to lower by-product copper price and lower sales volumes. Neves-Corvo (100% owned): Neves-Corvo produced 7,574 tonnes of copper for the quarter and 27,793 tonnes of zinc. Copper production was lower than the prior year comparable quarter, due primarily to lower throughput and grades, while zinc production was higher primarily due to increased throughput driven by the ramp -up of the Zinc Expansion Project ("ZEP"). Production costs were higher than the prior year due to higher zinc volumes and copper cash cost of $1.69/lb for the quarter was comparable to the prior year quarter. Zinkgruvan (100% owned): Zinc production of 20,760 tonnes, lead production of 7,407 tonnes and copper production of 1,717 tonnes were higher than the prior year quarter. Zinc and lead production were higher due to higher grades, and better than expected throughput while copper production was higher due to grades. Production costs were lower than the prior year quarter due to favourable foreign exchange. Zinc cash cost of $0.54/lb was higher than the prior year quarter due to lower by-product credits. Total Productiona (contained metal in concentrate) 2023 2022 Q1 Total Q4 Q3 Q2 Q1 Copper (t)b 61,462 249,659 56,552 63,930 64,096 65,081 Zinc (t) 48,553 158,938 44,308 40,327 41,912 32,391 Gold (koz)b 36 154 36 45 39 34 Nickel (t) 3,724 17,475 4,096 4,379 4,719 4,281 a - Tonnes (t) and thousands of ounces (koz) b - Candelaria's production is on a 100% basis ===== SIDA 12 ===== 1 This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of this MD&A for discussion. 2 Corporate Updates • On February 8, 2023, the Company reported its Mineral Resource and Mineral Reserve estimates as at December 31, 2022. • On February 22, 2023, the Company filed updated technical reports for Candelaria, Neves-Corvo and Eagle. • On March 23, 2023, the Company announced the appointment of Ms. Maria Olivia Recart to the Company's Board of Directors. • On March 27, 2023, the Company announced it entered into a binding purchase agreement with JX Nippon Mining an d Metals Corporation to acquire a majority interest in the Caserones copper-molybdenum mine ("Caserones") in Chile. The Company will pay $800 million and in addition, $150 million in deferred cash consideration over a six year period following the closing date. The Company will also have the right to acquire an additional 19% interest in Caserones for $350 million over a five-year period commencing on the first anniversary of the date of closing. The transaction is expected to close in the third quarter of 2023. • On April 11, 2023, the Company announced the Annual Meeting of Shareholders will be held on Thursday, May 11, 2023. • On April 26, 2023, the Company executed a fifth amended and restated credit agreement that extended the term of its revolving credit facility ("the Credit Facility") to April 2028. Financial Performance • Gross profit for the quarter ended March 31, 2023 was $213.3 million, a decrease of $265.5 million in comparison to the prior year quarter due to higher operating costs impacted by inflationary impacts, lower metal prices net of price adjustments ($151.8 million) and lower sales volumes. • For the three months ended March 31, 2023, net earnings of $165.3 million were $212.8 million lower than the prior year comparable period due to lower gross profit partially offset by lower income taxes. • Adjusted earnings1 of $125.7 million for the quarter ended March 31, 2023 , were lower than the prior year comparable quarter due to lower net attributable earnings. Financial Position and Financing • During the quarter ended March 31, 2023, cash and cash equivalents decreased by $7.1 million. Cash flow from operations of $211.9 million was used to fund investing activities of $240.1 million. Cash from financing activities was $19.5 million which was comprised primarily of the proceeds from d ebt on a net basis and the settlement of foreign currency derivatives. • As at March 31, 2023, the Company had a net debt1 balance of $34.6 million. • As at May 3, 2023, the Company had cash and net debt balances of approximately $ 180.0 million and $ 90.0 million, respectively. ===== SIDA 13 ===== 1 This is a non-GAAP measure - see section "Non-GAAP and Other Performance Measures" of this MD&A for discussion. 3 Outlook The Company remains in a strong financial position with its producing as sets generating material free cash flow from operations1 which continues to be allocated towards growth projects, acquisitions and shareholder distributions. All metal production continues to track against the most recently reported guidance ranges as out lined in the MD&A for the year ended December 31, 2022. Metal production is modestly weighted to the second half of the year for all sites except Neves-Corvo where copper is equally weighted and zinc production is expected to increase as initiatives to ena ble ZEP to consistently achieve nameplate capacity are executed and expected to result in improved overall throughput and metal recovery rates. Forecast cash costs at all sites are trending within or better than guidance ranges due to lower than anticipat ed production cost at all sites except Eagle, where cash cost is trending higher due to anticipated lower sales volumes. The Company continues to experience continuing risks associated with global inflation as well as supply chain delivery. To date, ther e have been no significant impacts on our operations relating to supply chain availability. The Company has implemented procurement strategies and foreign exchange and diesel hedging programs to mitigate the impact on costs and continues to monitor these risks. Cash based capital expenditures, are tracking well to the most recent guidance of $1,100.0 million, inclusive of capitalized costs for the Josemaria Project. Similarly, total exploration expenditures are on target of $45.0 million for 2023. ===== SIDA 14 ===== 4 Selected Quarterly Financial Information1 Three months ended March 31, ($ millions, except share and per share amounts) 2023 2022 Revenue 751.3 991.1 Costs of goods sold: Production costs (417.8) (382.4) Depreciation, depletion and amortization (120.2) (129.8) Gross profit 213.3 478.8 Net earnings attributable to: Lundin Mining shareholders 146.6 345.1 Non-controlling interests 18.7 33.0 Net earnings 165.3 378.1 Adjusted earnings3 125.7 295.6 Adjusted EBITDA3 336.9 587.8 Cash flow from operations 211.9 317.3 Adjusted operating cash flow3 235.1 472.8 Free cash flow from operations 71.1 194.8 Free cash flow3 (34.2) 172.3 Capital expenditures4 246.1 144.9 Per share amounts: Basic and diluted earnings per share ("EPS") attributable to shareholders 0.19 0.47 Adjusted EPS 0.16 0.40 Adjusted operating cash flow per share3 0.30 0.64 Dividends declared (C$/share) 0.09 0.20 March 31, 2023 December 31, 2022 Total assets 8,347.0 8,172.8 Total debt and lease liabilities 214.7 197.3 Net debt3 (34.6) (10.9) Summary of Quarterly Results1,2,5 ($ millions, except per share data) Q1-23 Q4-22 Q3-22 Q2-22 Q1-22 Q4-21 Q3-21 Q2-21 Revenue 751.3 811.4 648.5 590.2 991.1 1,018.6 756.4 872.3 Gross profit 213.3 155.2 82.5 46.0 478.8 433.2 303.9 380.2 Net earnings (loss) 165.3 145.3 (11.2) (48.6) 378.1 266.1 190.6 268.4 - attributable to shareholders 146.6 145.6 (11.2) (52.6) 345.1 228.8 173.7 242.6 Adjusted earnings (loss)3 125.7 191.5 30.9 (35.3) 295.6 281.5 168.4 226.3 Adjusted EBITDA3 336.9 353.7 202.4 148.6 587.8 623.0 411.3 480.7 EPS - Basic and Diluted 0.19 0.19 (0.01) (0.07) 0.47 0.31 0.24 0.33 Adjusted EPS3 0.16 0.25 0.04 (0.05) 0.40 0.38 0.23 0.31 Cash flow from operations 211.9 156.9 36.3 366.4 317.3 384.2 523.1 419.0 Adjusted operating cash flow per share3 0.30 0.38 0.23 0.06 0.64 0.65 0.40 0.58 Capital expenditures4 246.1 281.2 199.5 217.3 144.9 153.9 133.8 131.9 1 Except where otherwise noted, financial data has been prepared in accordance with IFRS as issued by the IASB. 2 The sum of quarterly amounts may differ from year-to-date results due to rounding. 3 This is a non-GAAP measure - see the "Non-GAAP and Other Performance Measures" section of this MD&A for discussion. 4 Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows. 5 Variability in revenues and net earnings is largely driven by metal prices and sales volumes. In recent quarters, net earnings has also been impacted by inflation factors. For further metal price trending discussion, refer to page 19 of this MD&A. ===== SIDA 15 ===== 5 Revenue Overview Sales Volumes by Payable Metal (Contained metal in concentrate) 2023 2022 Q1 Total Q4 Q3 Q2 Q1 Copper (t) Candelaria (100%) 35,570 147,251 33,561 35,587 39,655 38,448 Chapada 9,072 45,563 12,037 12,817 7,905 12,804 Eagle 2,785 14,060 2,672 3,721 4,159 3,508 Neves-Corvo 8,031 31,592 6,351 8,574 8,183 8,484 Zinkgruvan 869 4,428 886 1,570 337 1,635 56,327 242,894 55,507 62,269 60,239 64,879 Zinc (t) Neves-Corvo 23,542 66,966 20,205 18,770 16,289 11,702 Zinkgruvan 16,612 65,684 17,635 13,722 18,525 15,802 40,154 132,650 37,840 32,492 34,814 27,504 Gold (koz) Candelaria (100%) 22 83 20 20 22 21 Chapada 11 65 17 23 10 15 33 148 37 43 32 36 Nickel (t) Eagle 2,735 14,427 3,239 3,715 4,206 3,267 Lead (t) Neves-Corvo 1,039 2,908 673 654 818 763 Zinkgruvan 5,478 30,163 7,654 7,502 10,163 4,844 6,517 33,071 8,327 8,156 10,981 5,607 Silver (koz) Candelaria (100%) 295 1,442 278 305 412 447 Chapada 31 156 50 32 26 48 Eagle 6 34 9 9 9 7 Neves-Corvo 171 552 92 117 152 191 Zinkgruvan 399 2,088 551 532 650 355 902 4,272 980 995 1,249 1,048 ===== SIDA 16 ===== 6 Revenue Analysis Three months ended March 31, by Mine 2023 2022 Change ($ thousands) $ % $ % $ Candelaria (100%) 380,405 51 457,546 46 (77,141) Chapada 111,118 15 159,605 16 (48,487) Eagle 69,420 9 149,869 15 (80,449) Neves-Corvo 129,403 17 134,567 14 (5,164) Zinkgruvan 60,998 8 89,492 9 (28,494) 751,344 991,079 (239,735) Three months ended March 31, by Metal 2023 2022 Change ($ thousands) $ % $ % $ Copper 529,681 70 679,075 69 (149,394) Zinc 99,151 13 107,615 11 (8,464) Gold 57,068 8 59,717 6 (2,649) Nickel 41,959 6 106,790 11 (64,831) Lead 11,459 2 11,837 1 (378) Silver 9,236 1 13,898 1 (4,662) Other 2,790 — 12,147 1 (9,357) 751,344 991,079 (239,735) Revenue for the quarter ended March 31, 2023 amounted to $ 751.3 million which was lower in comparison to the prior quarter primarily as a result of lower realized metal prices and price adjustments ($151.8 million). Revenue from gold and silver for the quarter ended March 31, 2023 includes the partial recognition of an upfront purchase price on the sale of precious metals streams for Candelaria, Neves-Corvo, and Zinkgruvan as well as the cash proceeds which amount to approximately $425/oz for gold and between $4.25/oz and $4.57/oz for silver. Chapada’s copper revenue includes the recognition of deferred revenue from copper streams acquired with the Chapada mine, as well as the cash proceeds of 30% of the market price of the copper sold under the streams. Revenue is recorded using the metal price received for s ales that settle during the reporting period. For sales that have not been settled, an estimate is used based on the expected month of settlement and the forward price of the metal at the end of the reporting period. The difference between the estimate and the final price received is recognized by adjusting revenue in the period in which the sale is settled. Settlement dates can range from one to six months after shipment. ===== SIDA 17 ===== 7 Provisionally Valued Revenue as of March 31, 2023 Metal Payable metal Valued at Copper 88,628 t $4.08 /lb Zinc 41,644 t $1.33 /lb Gold 38 koz $1,975 /oz Nickel 2,048 t $10.75 /lb Quarterly Reconciliation of Realized Prices Three months ended March 31, 2023 ($ thousands) Copper Zinc Gold Nickel Total Current period sales1 505,239 118,233 64,506 64,657 752,635 Prior period price adjustments 52,643 5,139 3,147 (20,260) 40,669 557,882 123,372 67,653 44,397 793,304 Other metal sales 41,053 Copper stream cash effect (6,510) Gold stream cash effect (20,596) Less: Treatment & refining charges (55,907) Total Revenue 751,344 Payable Metal 56,327 t 40,154 t 32 koz 2,735 t Current period sales1,2 $4.07 $1.34 $1,978 $10.72 Prior period adjustments2 0.42 0.05 96 (3.36) Realized prices2, 3 $4.49 /lb $1.39 /lb $2,074 /oz $7.36 /lb Three months ended March 31, 2022 Copper Zinc Gold Nickel Total Current period sales1 671,395 111,706 70,530 102,516 956,147 Prior period price adjustments 34,906 7,428 732 6,757 49,823 706,301 119,134 71,262 109,273 1,005,970 Other metal sales 55,536 Copper stream cash effect (7,140) Gold stream cash effect (21,108) Less: Treatment & refining charges (42,179) Total Revenue 991,079 Payable Metal 64,879 t 27,504 t 36 koz 3,267 t Current period sales1,2 $4.69 $1.84 $1,939 $14.23 Prior period adjustments2 0.25 0.12 20 0.94 Realized prices2, 3 $4.94 /lb $1.96 /lb $1,959 /oz $15.17 /lb 1. Includes provisional price adjustments on current period sales. 2. This is a non-GAAP measure – see the "Non-GAAP and Other Performance Measures" section of this MD&A for discussion. 3. The realized price for copper inclusive of the impact of streaming agreements for the three months ended March 31, 2023 is $4.44/lb (2022: $4.89/lb). The realized price for gold inclusive of the impact of streaming agreements for the three months ended March 31, 2023 is $1,443/oz (2022: $1,379/oz). ===== SIDA 18 ===== 8 Financial Results Production Costs Production costs for the quarter ended March 31, 2023 were $417.8 million an increase of $35.3 million over the first quarter in the prior year. These production cost increases were primarily due to increased contractor and maintenance costs at Candelaria. Depreciation, Depletion and Amortization Depreciation, depletion and amortization expense for the quarter ended March 31, 2023 decreased, primarily attributable to reduced Candelaria deferred stripping amortization. Depreciation, depletion & amortization Three months ended March 31, ($ thousands) 2023 2022 Change Candelaria 58,375 68,109 (9,734) Chapada 12,081 11,117 964 Eagle 11,151 16,849 (5,698) Josemaria 38 — 38 Neves-Corvo 30,080 20,845 9,235 Zinkgruvan 8,087 12,479 (4,392) Other 435 438 (3) 120,247 129,837 (9,590) General Exploration and Business Development Total general exploration and business development expenses for the quarter ended March 31, 2023 was higher than the comparable prior year quarter due mainly to increased corporate development expenses related to the acquisition of Caserones. During the current quarter, exploration costs were spent primarily on in -mine and near -mine targets at the Company’s operations. Geophysical surveys were conducted at Candelaria, Chapada and Zinkgruvan. Drilling at Candelaria was divided between Ojos district and Candelaria North with four rigs. Exploration drilling at Neves-Corvo and Zinkgruvan was primarily focused along near-mine mineralized trends; Drilling at Chapada has primarily focused on Saúva and the Chapada District with four drill rigs operating during the quarter. Drilling and geophysical surveys will ramp up during the second quarter at Eagle. Other Income Net other income for the year ended March 31, 2023 was higher than the prior year due to foreign exchange and trading gains on equity investments of $22.1 million and realized as well as unrealized gains on foreign currency contracts of $34.2 million. In the prior year quarter, a larger tax refund was received related to a subsidiary sold in a prior period. Foreign exchange gains and losses recorded in other income primarily resulted from foreign exchange revaluation of working capital denominated in foreign currencies. Period end exchange rates having a meaningful impact on foreign exchange recorded at March 31, 2023 were: March 31, 2023 December 31, 2022 Brazilian Real (USD:BRL) 5.08 5.22 Chilean Peso (USD:CLP) 789 860 Euro (USD:€) 0.92 0.94 Swedish Kronor (USD:SEK) 10.35 10.44 Argentine Peso (USD:ARS) 209 177 ===== SIDA 19 ===== 9 Income Taxes Income tax expense (recovery) Three months ended March 31, ($ thousands) 2023 2022 Change Candelaria 42,547 72,969 (30,422) Chapada (5,349) (27,681) 22,332 Eagle 7 13,762 (13,755) Neves-Corvo 1,272 7,111 (5,839) Zinkgruvan 3,979 11,265 (7,286) Other 6,237 (220) 6,457 48,693 77,206 (28,513) Income taxes by classification Three months ended March 31, ($ thousands) 2023 2022 Change Current income tax expense 59,501 95,538 (36,037) Deferred income tax expense (recovery) (10,808) (18,332) 7,524 48,693 77,206 (28,513) Income tax expense for the quarter ended March 31, 2023 was lower than the prior year quarter primarily due to lower taxable earnings. Included in Chapada's income taxes for the quarter ended March 31, 2023 was a $6.0 million recovery recorded for deferred tax on foreign exchange revaluation of non -monetary assets and deferred taxes (2022 – $35.0 million expense). ===== SIDA 20 ===== 10 Mining Operations Production Overview (Contained metal in concentrate) 2023 2022 Q1 Total Q4 Q3 Q2 Q1 Copper (t) Candelaria (100%) 39,167 152,042 34,398 37,192 40,949 39,503 Chapada 9,864 45,739 11,306 13,988 10,345 10,100 Eagle 3,140 15,895 3,081 3,994 4,400 4,420 Neves-Corvo 7,574 31,906 7,160 7,019 7,867 9,860 Zinkgruvan 1,717 4,077 607 1,737 535 1,198 61,462 249,659 56,552 63,930 64,096 65,081 Zinc (t) Neves-Corvo 27,793 82,435 24,523 22,514 20,647 14,751 Zinkgruvan 20,760 76,503 19,785 17,813 21,265 17,640 48,553 158,938 44,308 40,327 41,912 32,391 Gold (koz) Candelaria (100%) 24 86 20 21 23 22 Chapada 12 68 16 24 16 12 36 154 36 45 39 34 Nickel (t) Eagle 3,724 17,475 4,096 4,379 4,719 4,281 Lead (t) Neves-Corvo 1,172 3,306 845 743 925 793 Zinkgruvan 7,407 30,517 7,619 7,046 9,124 6,728 8,579 33,823 8,464 7,789 10,049 7,521 Silver (koz) Candelaria (100%) 347 1,595 306 337 457 495 Chapada 56 258 65 75 60 58 Eagle 17 93 20 20 26 27 Neves-Corvo 436 1,383 370 323 346 344 Zinkgruvan 632 2,621 663 642 739 577 1,488 5,950 1,424 1,397 1,628 1,501 ===== SIDA 21 ===== 11 Production Cost and Cash Cost Overview ($ thousand, $/lb) Three months ended March 31, ($ thousands) 2023 2022 Candelaria Production costs $187,979 $152,809 Gross cost 2.58 1.96 By-product1 (0.37) (0.38) Cash Cost (Cu, $/lb) 2.21 1.58 AISC (Cu, $/lb)2 3.44 2.61 Chapada Production costs $68,634 $79,677 Gross cost 3.54 2.85 By-product (1.17) (1.03) Cash Cost (Cu, $/lb) 2.37 1.82 AISC (Cu, $/lb) 3.42 2.56 Eagle Production cost $45,449 $39,558 Gross cost 6.98 4.73 By-product (4.55) (5.98) Cash Cost (Ni, $/lb) 2.43 (1.25) AISC (Ni, $/lb) 5.16 1.19 Neves-Corvo Production costs $85,726 $78,470 Gross cost 5.06 4.32 By-product (3.37) (2.62) Cash Cost (Cu, $/lb) 1.69 1.70 AISC (Cu, $/lb) 3.29 2.92 Zinkgruvan Production costs $28,905 $31,188 Gross cost 1.03 1.07 By-product (0.49) (0.80) Cash Cost (Zn, $/lb) 0.54 0.27 AISC (Zn, $/lb) 0.97 0.57 1. By-product is after related treatment and refining charges. 2. All-in Sustaining Cost ("AISC") is a non-GAAP measure, see the "Non-GAAP and Other Performance Measures" section of this MD&A for discussion. ===== SIDA 22 ===== 12 Capital Expenditures1 Three months ended March 31, 2023 2022 ($ thousands) Sustaining Expansionary Capitalized Interest Total Sustaining Expansionary Capitalized Interest Total Candelaria 90,686 — — 90,686 82,964 — — 82,964 Chapada 16,027 — — 16,027 14,455 — — 14,455 Eagle 7,102 — — 7,102 4,460 — — 4,460 Josemaria — 90,519 36 90,555 — — — — Neves-Corvo 25,061 — — 25,061 19,516 14,154 — 33,670 Zinkgruvan 14,468 — — 14,468 9,039 — — 9,039 Other 2,220 — — 2,220 324 — — 324 155,564 90,519 36 246,119 130,758 14,154 — 144,912 1. Capital expenditures are reported on a cash basis, as presented in the condensed interim consolidated statement of cash flows. Sustaining capital expenditure is a supplementary financial measure and expansionary capital expenditure is a non -GAAP measure – see the "Non -GAAP and Other Performance Measures" section of this MD&A for discussion. ===== SIDA 23 ===== 13 Candelaria (Chile) Operating Statistics 2023 2022 (100% Basis) Q1 Total Q4 Q3 Q2 Q1 Ore mined (000s tonnes) 6,602 22,666 4,993 6,239 6,362 5,072 Ore milled (000s tonnes) 7,202 26,725 6,593 6,642 6,847 6,643 Grade Copper (%) 0.59 0.62 0.57 0.60 0.64 0.65 Gold (g/t) 0.15 0.14 0.13 0.14 0.14 0.14 Recovery Copper (%) 92.6 92.7 92.7 93.3 93.0 91.9 Gold (%) 70.3 73.9 74.0 74.6 73.8 73.0 Production (contained metal) Copper (tonnes) 39,167 152,042 34,398 37,192 40,949 39,503 Gold (000 oz) 24 86 20 21 23 22 Silver (000 oz) 347 1,595 306 337 457 495 Revenue ($000s) 380,405 1,317,223 342,348 255,330 261,999 457,546 Production costs ($000s) 187,979 697,171 207,596 168,602 168,164 152,809 Gross profit ($000s) 134,051 335,793 69,285 11,956 17,924 236,628 Cash cost ($ per pound copper) 2.21 1.96 2.52 1.97 1.86 1.58 AISC ($ per pound copper) 3.44 3.22 4.19 3.34 2.89 2.61 Gross Profit Gross profit for the quarter ended March 31, 2023 was lower than the prior year quarter, primarily due to higher production costs, lower copper prices and sales volumes. Production Copper production for the quarter ended March 31, 2023 was lower than the prior year quarter due to lower grades from the open pit partially offset by higher throughput. Gold production was higher than the prior year quarter largely due to higher throughput. Both metals performed better than fourth quarter 2022 production. Annual copper and gold production are on track to achieve guidance. Production Costs and Cash Cost Production costs and copper cash cost for the quarter ended March 31, 2023 were higher than the prior year quarter, mainly due to higher contractor services and higher maintenance costs. Cash cost was further impacted by union bonus payments for the finalization of the remaining two union negotiations, which were successfully completed during the first quarter 2023, as well as lower copper sales volumes. Annual copper cash cost guidance remains unchanged. AISC for the quarter ended March 31, 2023 was higher than that reported in the prior year quarter due to higher cash cost and higher sustaining capital expenditures. For the quarter ended March 31, 2023, approximately 14,000 oz of gold and 200,000 oz of si lver were subject to terms of a streaming agreement from which approximately $425/oz of gold and $4.25/oz of silver were received. ===== SIDA 24 ===== 14 Chapada (Brazil) Operating Statistics 2023 2022 (100% Basis) Q1 Total Q4 Q3 Q2 Q1 Ore mined (000s tonnes) 6,121 26,319 7,801 7,404 4,875 6,239 Ore milled (000s tonnes) 5,976 22,752 5,296 6,345 5,670 5,441 Grade Copper (%) 0.23 0.26 0.25 0.28 0.25 0.23 Gold (g/t) 0.13 0.16 0.16 0.19 0.17 0.13 Recovery Copper (%) 73.3 78.6 83.4 78.8 72.9 79.6 Gold (%) 48.0 56.0 59.5 58.3 50.6 55.3 Production (contained metal) Copper (tonnes) 9,864 45,739 11,306 13,988 10,345 10,100 Gold (000 oz) 12 68 16 24 16 12 Silver (000 oz) 56 258 65 75 60 58 Revenue ($000s) 111,118 477,927 142,328 118,734 57,260 159,605 Production costs ($000s) 68,634 324,096 84,247 88,665 71,507 79,677 Gross profit (loss) ($000s) 30,403 41,420 (22,522) 17,851 (22,720) 68,811 Cash cost ($ per pound copper) 2.37 2.08 1.95 1.92 2.98 1.82 AISC ($ per pound copper) 3.42 3.36 3.73 2.80 5.00 2.56 Gross Profit Gross profit for the quarter ended March 31, 2023 was lower compared to the prior year quarter, largely due to lower sales volumes and inflationary increases for production costs. Production Copper production for the quarter ended March 31, 2023 was lower than the fourth quarter of 2022, as expected during the rainy season, and was lower than the prior year quarter due to planned lower recoveries, partially offset by higher throughput. Gold production in the quarter was comparable to the prior year quarter. Both metals performed better than plan during the first quarter of 2023 and are on track to meet annual production guidance. Production Costs and Cash Cost Current quarter production costs were lower than the prior year quarter due primarily to lower volumes sold. Copper cash cost for the quarter ended March 31, 2023 was higher than the prior year quarter due to higher consumable costs and lower sales volumes. Annual copper cash cost guidance remains unchanged. AISC was higher compared to the prior year quarter due to higher cash cost. Projects The Company is continuing to evaluate options for long -term mine and plant expansion. Study work is being conducted following comprehensive exploration efforts focused on near-mine targets since acquisition. The results will be incorporated in any future expansionary or optimization plans. During the first quarter, approximately 9,400 metres of exploration drilling were completed, primarily on Saúva area targets. ===== SIDA 25 ===== 15 Eagle (USA) Operating Statistics 2023 2022 (100% Basis) Q1 Total Q4 Q3 Q2 Q1 Ore mined (000s tonnes) 156 718 165 190 181 182 Ore milled (000s tonnes) 161 718 170 187 182 179 Grade Nickel (%) 2.6 2.8 2.7 2.7 3.0 2.8 Copper (%) 2.0 2.3 1.9 2.2 2.5 2.5 Recovery Nickel (%) 88.5 86.6 88.6 85.5 87.3 85.3 Copper (%) 97.2 97.2 96.8 96.5 97.7 97.6 Production (contained metal) Nickel (tonnes) 3,724 17,475 4,096 4,379 4,719 4,281 Copper (tonnes) 3,140 15,895 3,081 3,994 4,400 4,420 Revenue ($000s) 69,420 520,472 157,060 106,715 106,828 149,869 Production costs ($000s) 45,449 193,003 50,581 47,736 55,128 39,558 Gross profit ($000s) 12,820 247,946 87,359 37,329 29,796 93,462 Cash cost ($ per pound nickel) 2.43 0.79 2.40 1.05 0.90 (1.25) AISC ($ per pound nickel) 5.16 3.01 5.23 2.77 2.93 1.19 Gross Profit Gross profit for the quarter ended March 31, 2023 was lower than the prior year quarter, primarily due to lower nickel price adjustments and lower sales volumes. Production Nickel and copper production in the current quarter was lower than the fourth quarter of 2022 and the prior year quarter, due to lower throughput and lower grades. Both metals are on track to meet full year production guidance. Production Costs and Cash Cost Production costs and nickel cash cost in the first quarter were higher than the prior year quarter due to higher costs for consumables. Cash cost was also impacted by lower by -product copper price and lower nickel sales volumes. Annual nickel cash cost guidance remains unchanged. AISC in the first quarter was higher than the prior year quarter largely as a result of higher cash cost, as well as higher sustaining capital expenditures. ===== SIDA 26 ===== 16 Neves-Corvo (Portugal) Operating Statistics 2023 2022 (100% Basis) Q1 Total Q4 Q3 Q2 Q1 Ore mined, copper (000s tonnes) 603 2,501 611 598 610 682 Ore mined, zinc (000s tonnes) 511 1,632 462 447 426 297 Ore milled, copper (000s tonnes) 604 2,499 607 596 606 690 Ore milled, zinc (000s tonnes) 510 1,633 465 449 420 299 Grade Copper (%) 1.6 1.7 1.6 1.6 1.7 1.8 Zinc (%) 6.7 6.9 6.9 6.9 6.9 7.0 Recovery Copper (%) 77.7 76.1 75.1 73.0 77.0 78.7 Zinc (%) 78.7 70.2 74.3 70.3 68.4 66.1 Production (contained metal) Copper (tonnes) 7,574 31,906 7,160 7,019 7,867 9,860 Zinc (tonnes) 27,793 82,435 24,523 22,514 20,647 14,751 Lead (tonnes) 1,172 3,306 845 743 925 793 Silver (000 oz) 436 1,383 370 323 346 344 Revenue ($000s) 129,403 433,486 102,516 102,865 93,538 134,567 Production costs ($000s) 85,726 329,232 78,402 94,572 77,788 78,470 Gross profit (loss) ($000s) 13,597 2,447 (7,570) (17,006) (8,229) 35,252 Cash cost ($ per pound copper) 1.69 2.27 2.32 2.69 2.39 1.70 AISC ($ per pound copper) 3.29 3.40 4.22 3.51 3.14 2.92 Gross Profit Gross profit for the quarter ended March 31, 2023 , was lower than the first quarter of 2022 due to lower zinc and copper price and price adjustments and higher production costs. Production Copper production for the quarter ended March 31, 2023, was higher than the fourth quarter of 2022 due to higher recoveries, though lower than the prior year quarter due to lower throughput and grades. Zinc production in the first quarter was higher than both the fourth quarter of 2022 and the prior year quarter as a result of higher throughput due to the ZEP ramp up and better recoveries. Both metals are expected to achieve annual guidance. Production Costs and Cash Cost Production costs for the quarter ended March 31, 2023, were higher than the prior year quarter, primarily due to higher zinc production volumes. Production costs benefitted from the easing of inflationary pressures on consumable prices, in particular electricity. Copper cash cost for the quarter was comparable to the prior year quarter. Annual copper cash cost guidance remains unchanged. AISC for the quarter ended March 31, 2023, was higher than the prior year quarter due to higher sustaining capital expenditures. ===== SIDA 27 ===== 17 Zinkgruvan (Sweden) Operating Statistics 2023 2022 (100% Basis) Q1 Total Q4 Q3 Q2 Q1 Ore mined, zinc (000s tonnes) 310 1,209 325 260 298 326 Ore mined, copper (000s tonnes) 55 192 48 61 38 45 Ore milled, zinc (000s tonnes) 315 1,234 309 293 327 305 Ore milled, copper (000s tonnes) 78 225 26 84 27 88 Grade Zinc (%) 7.4 7.0 7.3 6.9 7.3 6.5 Lead (%) 2.9 3.0 3.0 2.9 3.3 2.7 Copper (%) 2.4 2.1 2.6 2.4 2.3 1.6 Recovery Zinc (%) 88.7 88.4 88.3 87.5 89.1 88.7 Lead (%) 82.1 82.4 82.2 82.5 83.1 81.7 Copper (%) 90.5 87.1 89.0 86.1 87.7 87.3 Production (contained metal) Zinc (tonnes) 20,760 76,503 19,785 17,813 21,265 17,640 Lead (tonnes) 7,407 30,517 7,619 7,046 9,124 6,728 Copper (tonnes) 1,717 4,077 607 1,737 535 1,198 Silver (000 oz) 632 2,621 663 642 739 577 Revenue ($000s) 60,998 292,120 67,178 64,854 70,596 89,492 Production costs ($000s) 28,905 115,553 29,590 25,709 29,066 31,188 Gross profit ($000s) 24,006 139,828 29,800 33,703 30,500 45,825 Cash cost ($ per pound) 0.54 0.32 0.32 0.18 0.44 0.27 AISC ($ per pound) 0.97 0.68 0.77 0.50 0.82 0.57 Gross Profit Gross profit for the quarter ended March 31, 2023, was lower than the prior year quarter due to lower zinc price and price adjustments. Production Production of zinc, lead and copper in current quarter was above the prior year quarter mainly due to higher grades. Zinc and lead also benefitted from higher throughput. Current quarter zinc and copper production was also higher than the fourth quarter of 2022. Annual zinc and copper production guidance remains unchanged. Production Costs and Cash Cost Production costs for the quarter ended March 31, 2023 , were lower than the prior year quarter due to favourable foreign exchange. Zinc cash cost for the quarter was higher than the prior year quarter cash cost, due to lower copper by-product sales volumes, partially offset by favourable foreign exchange movements. Full year cash cost guidance remains unchanged. AISC for the quarter was higher than the prior year quarter due to higher cash cost and higher sustaining capital spend. ===== SIDA 28 ===== 18 Josemaria Project (Argentina) Project Development The Josemaria Project is updating its capital cost estimate and project execution schedule. The es timate report is advancing and intends to show capital cost at the Feasibility Study level. Plant engineering is at 39% completion as of March 31, 2023, including procurement of key long lead equipment. Early works continue onsite, mainly with the completi on of the Phase 1 camp construction which was 94% complete and internal access roads construction was 84% complete at the end of the quarter. The geotechnical drilling campaign began in March 2023. Additionally, work continues in water, drilling, permittin g and supply testing, and a program to initiate studies for water & permit requirements, including water balance and hydro - geological modelling, to be incorporated into the bi-annual EIA update submission in the second quarter of 2024. Agreements with provincial governments continue to progress on access road and power supply and infrastructure funding. Progress also continued on a project union agreement for construction. During the current quarter, the Company spent $84.3 million, inclusive of foreign e xchange and trading gains on equity investments of $22.1 million. Capital expenditures during the current quarter were $90.6 million. Josemaria Mineral Resources and Mineral Reserves remain unchanged since the 2020 estimates. Subsequent to the 2020 estimate cut-off date infill drilling and assaying completed in 2021 and 2022 will be incorporated into future Mineral Resource and Mineral Reserve estimates. ===== SIDA 29 ===== 19 Metal Prices, LME Inventories and Smelter Treatment and Refining Charges The average metal prices for copper, zinc and nickel were lower in the current quarter compared to the prior year quarter while gold was higher than the prior year quarter. The average metal prices for copper, zinc, nickel and gold for the first quarter of 2023 were all higher than the average prices for the last quarter of 2022 by 12% copper, 4% zinc, 3% nickel and 10% gold. The prices for copper, zinc and nickel decreased through the quarter while gold increased over the same period of time. Three months ended March 31, (Average LME Price) 2023 2022 Change Copper US$/pound 4.05 4.53 -11 % US$/tonne 8,927 9,997 Zinc US$/pound 1.42 1.70 -16 % US$/tonne 3,124 3,754 Gold US$/ounce 1,890 1,877 1 % Nickel US$/pound 11.79 11.97 -2 % US$/tonne 25,983 26,395 The LME inventories for copper and nickel decreased during the first quarter of 2023, 27% and 20%, respectively, while the LME inventory for zinc increased 41%. During the first three months of 2023 the treatment charges (“TC”) and refining charges (“RC”) in the spot market for copper concentrates between miners and commodity traders decreased from an average spot TC during January of $73 per dmt of concentrate and a spot RC of $0.073 per lb of payable copper to a spot TC of $69 per dmt of co ncentrate and a spot RC of $0.069 per lb of payable copper during March 2023. Also, the spot terms at which Chinese copper smelters were prepared to buy decreased through the quarter from a TC of $84 per dmt of concentrate and a RC of $0.084 per payable lb of copper over January to a TC of $78 per dmt of concentrate and a RC of $0.078 per payable lb of copper at the end of March. The terms for annual contracts for copper concentrates for 2023 were reached in December 2022 at a TC of $88 per dmt with a RC of $0.088 per payable lb of copper. This represents an improvement for the smelters compared to the 2022 annual terms at a TC of $65 per dmt of concentrates and a RC of $0.065 per payable lb of copper. The spot TC, delivered China, for zinc concentrates during the first three months of 2023 decreased from $275 per dmt, flat, at the beginning of the year to $245 per dmt, flat, by the end of the first quarter, on increased activity in the Chinese mar ket after the Lunar holiday and increases in refined production in Europe. The Company’s nickel concentrate production from Eagle is sold under several long-term contracts at terms in-line with market conditions. Gold production from Chapada and Candelaria is sold at terms in -line with market conditions for copper concentrates. ===== SIDA 30 ===== 20 Liquidity and Capital Resources As at March 31, 2023, the Company had cash and cash equivalents of $184.2 million. Cash flow from operations for the three months ended M arch 31, 2023 amounted to $ 211.9 million and was $105.4 million lower than the prior year quarter as a result of lower gross profit before depreciation of $275.1 million partially offset by a lower comparative change in non-cash working capital and lower cash taxes paid. Cash flow used in investing activities for the three months ended March 31, 2023 amounted to $240.1 million and was higher compared to the prior year quarter due to higher capital investments at Josemaria. During the current quarter, the Company generated $19.5 million from financing activities compared to $10.3 million used in the prior year quarter. The change is due to higher net proceeds for debt, settlement of foreign currency derivatives and lower distributions to non-controlling interests during the current quarter. Capital Resources The Company continues to expect to be able to fund all its contractual commitments with its operating cash flow, cash on hand and available capital resources. The Company expects to fund the acquisiti on of Caserones with its revolving Credit Facility. As at March 31, 2023, the Company had $189.2 million of debt and $25.5 million of lease liabilities outstanding. As at March 31, 2023 , the Company has a revolving Credit Facility of $1,750.0 million wit h $25.9 million outstanding (December 31, 2022 - $13.7 million). The Credit Facility bears interest on drawn funds at rates of Term Secured Overnight Financing Rate ("Term SOFR") + Credit Spread Adjustment ("CSA") + 1.45% to Term SOFR + CSA + 2.50% dependi ng on the Company’s net leverage ratio. The Credit Facility is subject to customary covenants. On April 26, 2023, the Credit Facility was amended extending the term to April 2028 and reducing the CSA to 0.10%. The Company also has equipment financing with an outstanding balance of $1.8 million as at March 31, 2023 (December 31, 2022 - $2.4 million) and a commercial paper program of $27.2 million (€25.0 million) which matures in May 2025. The amount outstanding as at March 31, 2023 was $21.8 million (€20.0 million) and bears interest at EURIBOR + 0.50% (December 31, 2022 - $26.7 million). As at March 31, 2023, the Company had outstanding short-term unsecured term loans of $139.8 million (December 31, 2022 - $127.4 million). During the first quarter of 2023, no shares were purchased under the Company's Normal Course Issuer Bid (Q1 2022 - nil). Contractual Obligations, Commitments and Contingencies The Company has contractual obligations and capital commitments as described in Note 19 “Commitments and Contingencies” in the Company’s Condensed Interim Consolidated Financial Statements. From time to time, the Company may also be involved in legal proceedings that arise in the ordinary course of its business. Financial Instruments The Company has entered into derivative contracts consisting of foreign currency forward and option contracts. The option contracts consist of put and call contracts in a collar structure. The Company does not currently utilize financial instruments in hedging metal price or interest rate exposure. The Company entered into diesel forward swap contracts subsequent to quarter end. For a detailed discussion of the Company’s financial instruments refer to Note 18 of the Company’s Condensed Interim Consolidated Financial Statements. ===== SIDA 31 ===== 21 Sensitivities Revenue, cost of goods sold and capital expenditures are affected by certa in external factors including fluctuations in metal prices and changes in exchange rates between the €, the SEK, the CLP , the BRL, the ARS and the $. Foreign exchange changes may be limited by the cash flow hedges previously described. Market and Liquidity Risks and Sensitivities Revenue and cost of goods sold are affected by certain external factors including fluctuations in metal prices and changes in exchange rates between the €, the SEK, the CLP , the BRL and the $. Metal Prices The following table illustrates the sensitivity of the Company's risk on final settlement of its provisionally priced revenues: Metal Payable Metal Provisional price on March 31, 2023 Change Effect on Revenue ($millions) Copper 88,628 t $4.08/lb +/- 10 % +/- $79.7 Zinc 41,644 t $1.33/lb +/- 10 % +/- $12.2 Gold 38 koz $1,975/oz +/- 10 % +/- $7.5 Nickel 2,048 t $10.75/lb +/- 10 % +/- $4.9 Related Party Transactions The Company enters into related party transactions that are in the normal course of business and on an arm’s length basis. Related party disclosures can be found in Note 21 of the Company’s March 31, 2023 Condensed Interim Consolidated Financial Statements. Changes in Accounting Policies and Critical Accounting Estimates and Judgments The Company describes its material accounting policies as well as any changes in accounting policies in Note 2 “Basis of Presentation and Summary of Material Accounting Policies” of the March 31, 2023 Condensed Interim Consolidated Financial Statements. ===== SIDA 32 ===== 22 Non-GAAP and Other Performance Measures The Company uses certain performance measures in its analysis. These performance measures have no meaning within generally accepted accounting principles under IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following are non-GAAP measures that the Company uses as key performance indicators. Net Debt Net debt is a performance measure used by the Company to assess its financial position. Management believes that in addition to conventional performance measures prepared in accordance with IFRS, net debt is a useful indicator to some investors to evaluate the Company’s financial position. Net debt is defined as cash and cash equivalents, less debt and lease liabilities, excluding deferred financing fees and can be reconciled as follows: ($thousands) March 31, 2023 December 31, 2022 Cash and cash equivalents 184,239 191,387 Current portion of total debt and lease liabilities (177,108) (170,149) Debt and lease liabilities (37,634) (27,179) (214,742) (197,328) Deferred financing fees (netted in above) (4,070) (4,926) (218,812) (202,254) Net debt (34,573) (10,867) Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share Adjusted operating cash flow per share is a performance measure used by the Company to assess its ability to generate cash from its operations. Adjusted operating cash flow is defined as cash provided by operating activities, excluding changes in non-cash working capital items. The Company believes adjusted operating cash flow per share is a relevant measure to some investors, as it removes the impact of working capital, which can experience variability period -to-period. Adjusted operating cash flow per share can be reconciled to the Company's cash provided by operating activities as follows: Three months ended March 31, ($thousands, except share and per share amounts) 2023 2022 Cash provided by operating activities 211,875 317,257 Changes in non-cash working capital items 23,192 155,548 Adjusted operating cash flow 235,067 472,805 Basic weighted average number of shares outstanding 771,216,060 736,410,739 Adjusted operating cash flow per share 0.30 0.64 Free Cash Flow from Operations and Free Cash Flow The Company believes free cash flow from operations and free cash flow are relevant measures for investors. Free cash flow from operations is indicative of the Company’s ability to generate cash from operations, after consideration of required sustaining capital expenditures necessary to maintain operations. Free cash flow is a relevant measure for some investors, as it is indicative of the Company’s available cash generated. Free cash flow from operations is defined as cash flow provided by operating act ivities, excluding exploration and project investigation costs and less sustaining capital expenditures. Free cash flow is defined as free cash flow from operations les s expansionary capex and exploration and project investigation costs. ===== SIDA 33 ===== 23 The Company has r edefined free cash flow so that it encompasses all capital expenditures, including both sustaining and expansionary, to more fully represent available cash generation. Three months ended March 31, ($thousands) 2023 2022 Cash provided by operating activities 211,875 317,257 Sustaining capital expenditures (155,564) (130,758) General exploration and business development 14,765 8,282 Free cash flow from operations 71,076 194,781 General exploration and business development (14,765) (8,282) Expansionary capital expenditures (90,519) (14,154) Free cash flow (34,208) 172,345 Adjusted EBITDA, Adjusted Earnings and Adjusted EPS Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), adjusted earnings and adjusted EPS are non -GAAP measures. These measures are presented to provide additional information to investors and other stakeholders on the Company’s underlying operational performance. The Company believes certain investors find this information useful to evaluate the Company’s ability to generate cash flow from the Company’s core operations. Certain items have been excluded from adjusted EBITDA and adjusted earnings such as unrealized foreign exchange and revaluation gains and losses, impairment charges and reversals, gain or loss on debt settlement, interest on tax refunds and assessments, litigations, settlements and other items that do no t represent the Company’s current and on -going operations and are not necessarily indicative of future operating results. Adjusted EBITDA can be reconciled to the Company's Condensed Interim Consolidated Statement of Earnings as follows: Three months ended March 31, ($thousands) 2023 2022 Net earnings 165,311 378,109 Add back: Depreciation, depletion and amortization 120,247 129,837 Finance income and costs 15,699 14,972 Income taxes 48,693 77,206 349,950 600,124 Unrealized foreign exchange 8,644 7,853 Revaluation (gain) loss on derivatives (19,250) 3,293 Sinkhole costs 4,582 — Revaluation gain on marketable securities (438) (3,892) Gain on disposal of subsidiary (5,718) (16,828) Other (827) (2,776) Total adjustments - EBITDA (13,007) (12,350) Adjusted EBITDA 336,943 587,774 ===== SIDA 34 ===== 24 Adjusted earnings and adjusted EPS can be reconciled to the Company's Condensed Interim Consolidated Statement of Earnings as follows: Three months ended March 31, ($thousands, except share and per share amounts) 2023 2022 Net earnings attributable to Lundin Mining shareholders 146,620 345,078 Add back: Total adjustments - EBITDA (13,007) (12,350) Tax effect on adjustments (3,126) (2,034) Deferred tax arising from foreign exchange translation (6,007) (34,954) Other 1,202 (132) Total adjustments (20,938) (49,470) Adjusted earnings 125,682 295,608 Basic weighted average number of shares outstanding 771,216,060 736,410,739 Net earnings attributable to Lundin Mining shareholders 0.19 0.47 Total adjustments (0.03) (0.07) Adjusted EPS 0.16 0.40 Realized Price per Pound Realized price per pound and price per ounce are non-GAAP ratios that are calculated using the non-GAAP financial measures of current period sales and prior period adjustments. Realized prices exclude the effects of the stream cash effects as well as TC/RCs. Management believes that measuring these prices enables investors to better understand performance based on the realized metal sales in the current and prior periods. Capital Expenditures Identifying capital expenditures, on a cash basis, using a sustaining or expansionary classification provides investors with a better understanding of costs required to maintain existing operations, and costs required for future growth of existing or new assets. • Sustaining capital expenditures – Expenditures which maintain existing operations and sustain production levels. • Expansionary capital expenditures – Expenditures which increase current or future production capacity, cash flow or earnings potential. Where an expenditure both maintains and expands current operations, classification would be based on the primary decision for which the expenditure is being made. Expansionary capital expenditures are reported excluding capitalized interest and therefore is a non-GAAP measure. Sustaining capital expenditure is a supplementary financial measure. Cash Cost per Pound Copper, zinc and nickel cash costs per pound are key performance measures that management uses to monitor performance. Management uses these statistics to assess how well the Company’s producing mines are performi ng and to assess overall efficiency and effectiveness of the mining operations. Cash cost is a non-GAAP measure and, although it is calculated according to accepted industry practice, the Company’s disclosed cash costs may not be directly comparable to oth er base metal producers. • Cash cost per pound, gross – Total cash costs directly attributable to mining operations, excluding any allocation of upfront streaming proceeds or capital expenditures for deferred stripping, are divided by the sales volume of the primary metal to arrive at gross cash cost per pound. As this measure is not impacted by fluctuations in sales of by-product metals, it is generally more consistent across periods. ===== SIDA 35 ===== 25 • Cash cost per pound, net of by -products – Credits for by -products sales are deducted from total cash costs directly attributable to mining operations. By-product revenue is adjusted for the terms of streaming agreements, but excludes any deferred revenue from the allocation of upfront cash received. The net cash costs are divided by the sales volume of the primary metal to arrive at net cash cost per pound. The inclusion of by-product credits provides a broader economic measurement, incorporating the benefit of other metals extracted in the production of the primary metal. All-in Sustaining Cost (“AISC”) per Pound AISC per pound is an extension of the cash cost per pound measure discussed above and is also a key performance measure that management uses to monitor performance. Management uses this measure to analyze margins achi eved on existing assets while sustaining and maintaining production at current levels. Expansionary capital and certain exploration costs are excluded from this definition as these are costs typically incurred to extend mine life or materially increase the productive capacity of existing assets, or for new operations. Corporate general and administrative expenses have also been excluded from the all -in sustaining cost measure, as any attribution of these costs to an operating site would not necessarily be reflective of costs directly attributable to the administration of the site. ===== SIDA 36 ===== 26 Cash and All-in Sustaining Costs can be reconciled to the Company's production costs as follows: Three months ended March 31, 2023 Operations Candelaria Chapada Eagle Neves-Corvo Zinkgruvan ($000s, unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn) Total Sales volumes (Contained metal in concentrate): Tonnes 35,570 9,072 2,735 8,031 16,612 Pounds (000s) 78,418 20,000 6,030 17,705 36,623 Production costs 417,764 Less: Royalties and other (12,086) 405,678 Deduct: By-product credits (156,965) Add: Treatment and refining charges 36,615 Cash cost 173,692 47,318 14,640 29,892 19,786 285,328 Cash cost per pound ($/lb) 2.21 2.37 2.43 1.69 0.54 Add: Sustaining capital expenditure 90,686 16,027 7,102 25,061 14,468 Royalties — 2,223 5,686 1,730 — Reclamation and other closure accretion and depreciation 2,307 1,801 2,958 1,324 1,061 Leases and other 3,143 966 747 158 102 All-in sustaining cost 269,828 68,335 31,133 58,165 35,417 AISC per pound ($/lb) 3.44 3.42 5.16 3.29 0.97 Three months ended March 31, 2022 Operations Candelaria Chapada Eagle Neves-Corvo Zinkgruvan ($000s, unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn) Total Sales volumes (Contained metal in concentrate): Tonnes 38,448 12,804 3,267 8,484 15,802 Pounds (000s) 84,763 28,228 7,202 18,704 34,837 Production costs 382,427 Less: Royalties and other (15,877) 366,550 Deduct: By-product credits (181,007) Add: Treatment and refining charges 32,155 Cash cost 133,985 51,437 (8,979) 31,797 9,458 217,698 Cash cost per pound ($/lb) 1.58 1.82 (1.25) 1.70 0.27 Add: Sustaining capital expenditure 82,964 14,455 4,460 19,516 9,039 Royalties — 3,664 7,791 2,813 — Reclamation and other closure accretion and depreciation 1,969 1,884 4,617 331 1,117 Leases and other 1,968 929 651 202 238 All-in sustaining cost 220,886 72,369 8,540 54,669 19,852 AISC per pound ($/lb) 2.61 2.56 1.19 2.92 0.57 ===== SIDA 37 ===== 27 Managing Risks Risks and Uncertainties The Company’s business activities are subject to a variety and wide range of inherent risks and uncertainties. Any of these risks could have an adverse effect on the Company, its business and prospects, and could cause actual outcomes and results to differ materially from those described in forward-looking statements relating to the Company. For additional discussion on Lundin Mining’s risks, refer to the “Risks and Uncertainties” section of the Company’s Annual Information Form (“AIF”) for the year ended December 31, 2022 and the “Cautionary Statement on Forward -Looking Information” of this MD&A. Management’s Report on Internal Controls Disclosure controls and procedures (“DCP”) DCP have been designed to provide reasonable assurance that all material information related to the Company is identified and communicated on a timely basis. Management of the Company, under the supervision of the Chief Executive Officer and the Chief Financial Officer, is responsible for the design and operation of DCP . Internal control over financial reporting (“ICFR”) The Company’s ICFR is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with IFRS. However, due to inherent limitations ICFR may not prevent or detect all misstatements and fraud. Management will continue to monitor the effectiveness of its ICFR and may make modifications from time to time as considered necessary. Control Framework Management assesses the effectiveness of the Company’s ICFR using the Internal Control – Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Changes in ICFR There have been no changes in the Company’s ICFR during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s financial reporting. Outstanding Share Data As at May 3, 2023, the Company has 771,908,307 common shares issued and outstanding, and 8,064,505 stock options and 1,938,797 share units outstanding under the Company's plans. Other Information Additional information regarding the Company is included in the Company’s AIF which is filed with the Canadian securities regulators. A copy of the Company’s AIF can be obtained on SEDAR (www.sedar.com) or on the Company’s website (www.lundinmining.com). ===== SIDA 38 ===== Condensed Interim Consolidated Financial Statements of Lundin Mining Corporation March 31, 2023 (Unaudited) ===== SIDA 39 ===== - 1 - LUNDIN MINING CORPORATION CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS As at (Unaudited - in thousands of US dollars) March 31, 2023 December 31, 2022 ASSETS Cash and cash equivalents (Note 3) $ 184,239 $ 191,387 Trade and other receivables (Note 4) 581,035 576,178 Income taxes receivable 70,157 72,402 Inventories (Note 5) 320,218 296,710 Current portion of derivative assets (Note 18) 58,997 43,521 Other current assets 23,683 38,571 Total current assets 1,238,329 1,218,769 Restricted funds 51,025 50,195 Long-term inventory (Note 5) 664,062 641,877 Derivative assets (Note 18) 25,520 25,111 Other non-current assets 20,994 20,035 Mineral properties, plant and equipment (Note 6) 6,107,452 5,975,686 Deferred tax assets 531 3,837 Goodwill 239,101 237,294 7,108,685 6,954,035 Total assets $ 8,347,014 $ 8,172,804 LIABILITIES Trade and other payables (Note 7) $ 624,739 $ 612,965 Income taxes payable 60,645 45,000 Current portion of derivative liabilities (Note 18) 24,725 24,423 Current portion of debt and lease liabilities (Note 8) 177,108 170,149 Current portion of deferred revenue (Note 9) 74,764 74,061 Current portion of reclamation and other closure provisions (Note 10) 20,712 23,550 Total current liabilities 982,693 950,148 Derivative liabilities (Note 18) 23,559 27,876 Debt and lease liabilities (Note 8) 37,634 27,179 Deferred revenue (Note 9) 570,061 580,045 Reclamation and other closure provisions (Note 10) 447,457 422,298 Other long-term liabilities 21,534 24,922 Provision for pension obligations 5,060 5,613 Deferred tax liabilities 696,328 709,602 1,801,633 1,797,535 Total liabilities 2,784,326 2,747,683 SHAREHOLDERS' EQUITY Share capital (Note 11) 4,561,478 4,555,125 Contributed surplus 53,767 55,769 Accumulated other comprehensive loss (323,035) (342,287) Retained earnings 687,755 592,425 Equity attributable to Lundin Mining Corporation shareholders 4,979,965 4,861,032 Non-controlling interests 582,723 564,089 Total shareholders' equity 5,562,688 5,425,121 Total liabilities and shareholders' equity $ 8,347,014 $ 8,172,804 Commitments and contingencies (Note 19) The accompanying notes are an integral part of these condensed interim consolidated financial statements. ===== SIDA 40 ===== - 2 - LUNDIN MINING CORPORATION CONDENSED INTERIM CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited - in thousands of US dollars, except for shares and per share amounts) Three months ended March 31, 2023 2022 Revenue (Note 12) $ 751,344 $ 991,079 Cost of goods sold Production costs (Note 13) (417,764) (382,427) Depreciation, depletion and amortization (120,247) (129,837) Gross profit 213,333 478,815 General and administrative expenses (15,110) (11,502) General exploration and business development (Note 15) (14,765) (8,282) Finance income (Note 16) 1,764 601 Finance costs (Note 16) (17,463) (15,573) Other income (Note 17) 46,245 11,256 Earnings before income taxes 214,004 455,315 Current tax expense (59,501) (95,538) Deferred tax recovery 10,808 18,332 Net earnings $ 165,311 $ 378,109 Net earnings attributable to: Lundin Mining Corporation shareholders $ 146,620 $ 345,078 Non-controlling interests 18,691 33,031 Net earnings $ 165,311 $ 378,109 Basic and diluted earnings per share attributable to Lundin Mining Corporation shareholders: $ 0.19 $ 0.47 Weighted average number of shares outstanding (Note 11) Basic 771,216,060 736,410,739 Diluted 771,992,179 738,172,357 The accompanying notes are an integral part of these condensed interim consolidated financial statements. ===== SIDA 41 ===== - 3 - LUNDIN MINING CORPORATION CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited - in thousands of US dollars) Three months ended March 31, 2023 2022 Net earnings $ 165,311 $ 378,109 Other comprehensive income (loss), net of taxes Item that will not be reclassified to net earnings: Remeasurements for post-employment benefit plans (258) (863) Item that may be reclassified subsequently to net earnings: Effects of foreign exchange 19,453 (23,823) Other comprehensive income (loss) 19,195 (24,686) Total comprehensive income $ 184,506 $ 353,423 Comprehensive income attributable to: Lundin Mining Corporation shareholders $ 165,872 $ 320,563 Non-controlling interests 18,634 32,860 Total comprehensive income $ 184,506 $ 353,423 The accompanying notes are an integral part of these condensed interim consolidated financial statements. ===== SIDA 42 ===== - 4 - LUNDIN MINING CORPORATION CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited - in thousands of US dollars, except for shares) Number of shares Share capital Contributed surplus Accumulated other comprehensive loss Retained earnings Non- controlling interests Total Balance, December 31, 2022 770,746,531 $ 4,555,125 $ 55,769 $ (342,287) $ 592,425 $ 564,089 $ 5,425,121 Exercise of share-based awards 999,480 6,353 (4,268) — — — 2,085 Share-based compensation — — 2,266 — — — 2,266 Dividends declared (Note 11(c)) — — — — (51,290) — (51,290) Net earnings — — — — 146,620 18,691 165,311 Other comprehensive income (loss) — — — 19,252 — (57) 19,195 Total comprehensive income — — — 19,252 146,620 18,634 184,506 Balance, March 31, 2023 771,746,011 $ 4,561,478 $ 53,767 $ (323,035) $ 687,755 $ 582,723 $ 5,562,688 Balance, December 31, 2021 734,987,154 $ 4,199,756 $ 58,166 $ (249,929) $ 437,160 $ 547,580 $ 4,992,733 Exercise of share-based awards 2,959,473 21,135 (10,243) — — — 10,892 Share-based compensation — — 3,196 — — — 3,196 Dividends declared — — — — (116,252) — (116,252) Net earnings — — — — 345,078 33,031 378,109 Other comprehensive loss — — — (24,515) — (171) (24,686) Total comprehensive (loss) income — — — (24,515) 345,078 32,860 353,423 Balance, March 31, 2022 737,946,627 $ 4,220,891 $ 51,119 $ (274,444) $ 665,986 $ 580,440 $ 5,243,992 The accompanying notes are an integral part of these condensed interim consolidated financial statements. ===== SIDA 43 ===== - 5 - LUNDIN MINING CORPORATION CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands of US dollars) Three months ended March 31, Cash provided by (used in) 2023 2022 Operating activities Net earnings $ 165,311 $ 378,109 Items not involving cash and other adjustments Depreciation, depletion and amortization 120,247 129,837 Share-based compensation 2,266 3,196 Foreign exchange loss 8,644 7,853 Finance costs, net (Note 16) 15,699 14,972 Recognition of deferred revenue (Note 9) (19,100) (20,705) Deferred tax recovery (10,808) (18,332) Revaluation of derivative liability (Note 17) 1,416 3,293 Revaluation of marketable securities (Note 17) (438) (3,892) Revaluation of foreign currency derivatives (Note 18) (34,243) — Other 6,647 (19,768) Reclamation payments (Note 10) (2,581) (1,747) Other payments (578) (551) Changes in long-term inventory (17,415) 540 Changes in non-cash working capital items (Note 22) (23,192) (155,548) 211,875 317,257 Investing activities Investment in mineral properties, plant and equipment (246,119) (144,912) Cash received from disposal of subsidiary (Note 17) 5,718 16,828 Interest received 878 230 Josemaria bridge loan — (40,500) Other (543) (4,130) (240,066) (172,484) Financing activities Proceeds from debt (Note 8) 148,830 — Interest paid (4,695) (1,459) Principal payments of lease liabilities (5,218) (4,064) Principal repayments of debt (Note 8) (130,480) (652) Proceeds from common shares issued 2,085 10,892 Distributions paid to non-controlling interests — (15,000) Proceeds from settlement of foreign currency derivatives 11,069 — Other (2,085) — 19,506 (10,283) Effect of foreign exchange on cash balances 1,537 5,316 (Decrease) increase in cash and cash equivalents during the period (7,148) 139,807 Cash and cash equivalents, beginning of period 191,387 594,069 Cash and cash equivalents, end of period $ 184,239 $ 733,876 Supplemental cash flow information (Note 22) The accompanying notes are an integral part of these condensed interim consolidated financial statements. ===== SIDA 44 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 6 - 1. NATURE OF OPERATIONS Lundin Mining Corporation is a diversified Canadian base metals mining company primarily producing copper, zinc, gold and nickel. The Company owns 80% of the Candelaria and Ojos del Salado mining complex ("Candelaria") located in Chile. The Company’s wholly -owned operating assets include the Chapada mine located in Brazil, the Eagle mine located in the United States of America (“USA”), the Neves -Corvo mine located in Portugal, and the Zinkgruvan mine located in Sweden. In addition, the Company owns the large scale copper -gold Josemaria project ("Josemaria Project"), located in Argentina. On March 27, 2023, the Company announced that it had entered into a binding purchase agreement to acquire fifty -one percent (51%) of the Caserones copper -molybdenum mine ("Caserones") located in Chile (Note 23). The Company’s common shares are listed on the Toronto Stock Exchange (“TSX”) in Canada and the Nasdaq Stockholm Exchange in Sweden. The Company is incorporated under the Canada Business Corporations Act. The Company is domiciled in Canada and its registered address is 150 King Street West, Toronto, Ontario, Canada. 2. BASIS OF PRESENTATION AND SUMMARY OF MATERIAL ACCOUNTING POLICIES (i) Basis of presentation and measurement The unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and Interpretations of the Inter national Financial Reporting Interpretations Committee which the Canadian Accounting Standards Board has approved for incorporation into Part 1 of the CPA Canada Handbook - Accounting including IAS 34 Interim financial reporting. The condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2022. The consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments which have been measured at fair value. The Company's presentation currency is United States (“US”) dollars. Reference herein of $ or USD is to US dollars, C$ or CAD is to Canadian dollars, SEK is to Swedish krona, € refers to the Euro, CLP refers to the Chilean peso, BRL refers to the Brazilian real, and ARS refers to the Argentine peso. Balance sheet items are classified as current if receipt or payment is due within twelve months. Otherwise, they are presented as non-current. These condensed interim consolidated financial statements were approved by the Board of Directors for issue on May 3, 2023. (ii) Material accounting policies The accounting policies followed in these condensed interim consolidated finan cial statements are consistent with those disclosed in Note 2 of the Company’s consolidated financial statements for the year ended December 31, 2022, except as discussed below. ===== SIDA 45 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 7 - (iii) New standards and interpretations adopted In May 2021, the IASB issued amendments to IAS 12, Income Taxes. The amendments to IAS 12 narrow the scope of the initial recognition exemption so that it no longer applies to transactions which give rise to equal amounts of taxable and deductible temporary differences. The Company i s to recognize a deferred tax asset and deferred tax liability for temporary differences arising on initial recognition for certain transactions, including leases and reclamation provisions. The amendments to IAS 12 are effective for annual reporting perio ds beginning on or after January 1, 2023, with early adoption permitted. The Company adopted the amendments effective January 1, 2023, with no material impact to the consolidated financial statements for 2023 or the comparative period. (iv) Critical accounting estimates and judgments in applying the entity’s accounting policies Areas of judgment that have the most significant effect on the amounts recognized in the financial statements are disclosed in Note 2 of the Company’s consolidated financial statements for the year ended December 31, 2022. 3. CASH AND CASH EQUIVALENTS Cash and cash equivalents are comprised of the following: March 31, 2023 December 31, 2022 Cash $ 149,424 $ 158,153 Short-term deposits 34,815 33,234 $ 184,239 $ 191,387 4. TRADE AND OTHER RECEIVABLES Trade and other receivables are comprised of the following: March 31, 2023 December 31, 2022 Trade receivables $ 416,987 $ 430,734 Prepaid expenses 70,324 53,767 Value added tax 62,711 65,028 Other receivables 31,013 26,649 $ 581,035 $ 576,178 5. INVENTORIES Inventories are comprised of the following: March 31, 2023 December 31, 2022 Ore stockpiles $ 58,680 $ 69,781 Concentrate stockpiles 56,136 42,209 Materials and supplies 205,402 184,720 $ 320,218 $ 296,710 ===== SIDA 46 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 8 - Long-term inventory is comprised of ore stockpiles. As at March 31, 2023, the Company had $403.1 million (December 31, 2022 - $394.2 million) and $261.0 million (December 31, 2022 - $247.7 million) of long- term ore stockpiles at Candelaria and Chapada, respectively. 6. MINERAL PROPERTIES, PLANT AND EQUIPMENT Mineral properties, plant and equipment are comprised of the following: Cost Mineral properties Plant and equipment Assets under construction1 Development project2 Software intangible assets Total As at December 31, 2021 $ 5,279,143 $ 3,441,171 $ 342,592 $ 6,631 $ 14,678 $ 9,084,215 Additions 83,204 7,287 63,490 — 793 154,774 Disposals and transfers 8,075 95,342 (107,178) — 3,258 (503) Effects of foreign exchange (38,028) (17,438) (4,822) — (41) (60,329) As at March 31, 2022 5,332,394 3,526,362 294,082 6,631 18,688 9,178,157 Josemaria acquisition — 22,233 — 646,605 — 668,838 Additions 239,261 85,362 213,759 228,462 13,477 780,321 Disposals and transfers 85,030 164,088 (262,509) (5,279) 783 (17,887) Effects of foreign exchange (109,762) (45,868) (9,276) — (322) (165,228) As at December 31, 2022 5,546,923 3,752,177 236,056 876,419 32,626 10,444,201 Additions 73,485 8,453 80,020 76,149 22 238,129 Disposals and transfers 4,278 1,188 (12,495) — 99 (6,930) Effects of foreign exchange 28,534 17,374 1,030 — 98 47,036 As at March 31, 2023 $ 5,653,220 $ 3,779,192 $ 304,611 $ 952,568 $ 32,845 $ 10,722,436 Accumulated depreciation, depletion and amortization Mineral properties Plant and equipment Assets under construction1 Development project2 Software intangible assets Total As at December 31, 2021 $ 2,620,196 $ 1,405,084 $ — $ — $ 8,036 $ 4,033,316 Depreciation 76,102 56,479 — — 462 133,043 Disposals and transfers (79) (64) — — — (143) Effects of foreign exchange (23,293) (8,057) — — (16) (31,366) As at March 31, 2022 2,672,926 1,453,442 — — 8,482 4,134,850 Depreciation 232,729 195,524 — — 3,367 431,620 Disposals and transfers — (5,397) — — (119) (5,516) Effects of foreign exchange (70,224) (22,130) — — (85) (92,439) As at December 31, 2022 2,835,431 1,621,439 — — 11,645 4,468,515 Depreciation 69,765 58,429 — — 1,056 129,250 Disposals and transfers — (6,870) — — — (6,870) Effects of foreign exchange 17,096 6,968 — — 25 24,089 As at March 31, 2023 $ 2,922,292 $ 1,679,966 $ — $ — $ 12,726 $ 4,614,984 ===== SIDA 47 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 9 - Net book value Mineral properties Plant and equipment Assets under construction1 Development project2 Software intangible assets Total As at December 31, 2022 $ 2,711,492 $ 2,130,738 $ 236,056 $ 876,419 $ 20,981 $ 5,975,686 As at March 31, 2023 $ 2,730,928 $ 2,099,226 $ 304,611 $ 952,568 $ 20,119 $ 6,107,452 ¹ Represent assets under construction at the Company's operating mine sites which are currently non-depreciable. 2 Assets relate to the Josemaria Project which are currently non-depreciable. During the second quarter of 2022, the Company completed the Josemaria Resources Inc. acquisition acquiring $668.8 million of mineral properties, plant and equipment related to the Josemaria Project. During the fourth quarter of 2022, the Company began to capitalize the Josemaria Project development costs. During the three months ended March 31, 2023, the Company capitalize d $3.3 million of finance costs to the Josemaria Project (first quarter ("Q1") 2022 - $1.1 million capitalized to assets under construction), at a weighted average interest rate of 5.5% (2022 - 5.5%). During the three months ended March 31, 2023, the Company capitalized $41.3 million (Q1 2022 - $58.9 million) of deferred stripping costs to mineral properties. The depreciation expense related to deferred stripping for the quarter was $25.6 million (Q1 2022 - $27.9 million). Included in the mineral properties balance at March 31, 2023 is $177.8 million (December 31, 2022 - $681.7 million) related to deferred stripping at Candelaria, which is currently non - depreciable. The Company leases various assets including buildings, rail cars, vehicles, machinery and equipment. The following table summarizes the changes in right-of-use assets within plant and equipment: Net book value As at December 31, 2021 $ 27,597 Additions 1,546 Depreciation (4,796) Effects of foreign exchange (103) As at March 31, 2022 24,244 Josemaria acquisition 32 Additions 20,525 Depreciation (16,492) Disposals (75) Effects of foreign exchange (311) As at December 31, 2022 27,923 Additions 3,187 Depreciation (5,606) Effects of foreign exchange 333 As at March 31, 2023 $ 25,837 ===== SIDA 48 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 10 - 7. TRADE AND OTHER PAYABLES Trade and other payables are comprised of the following: March 31, 2023 December 31, 2022 Trade payables $ 289,039 $ 315,948 Unbilled goods and services 107,258 122,390 Employee benefits payable 91,038 88,086 Dividends payable 51,342 — Sinkhole provision 33,200 38,000 Pricing provisions on concentrate sales 25,768 8,484 Royalties payable 14,531 16,283 Prepayment from customers 362 389 Other 12,201 23,385 $ 624,739 $ 612,965 The sinkhole provision relates to expected remediation costs and potential fines directly related to the sinkhole near the Company's Ojos del Salado operations. Included in pricing provisions on concentrate sales are balances owing to customers and provisions arising from forward market price adjustments. 8. DEBT AND LEASE LIABILITIES Debt and lease liabilities are comprised of the following: March 31, 2023 December 31, 2022 Revolving credit facility (a) $ 25,930 $ 13,730 Term loans (b) 139,750 127,400 Lease liabilities (c) 25,522 27,166 Commercial paper (d) 21,750 26,665 Line of credit (e) 1,790 2,367 Debt and lease liabilities 214,742 197,328 Less: current portion 177,108 170,149 Long-term portion $ 37,634 $ 27,179 ===== SIDA 49 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 11 - The changes in debt and lease liabilities are comprised of the following: Leases Debt Total As at December 31, 2021 $ 25,878 $ 5,125 $ 31,003 Additions 1,544 — 1,544 Payments (4,381) (652) (5,033) Interest 317 — 317 Effects of foreign exchange 1,238 (87) 1,151 As at March 31, 2022 24,596 4,386 28,982 Josemaria acquisition 38 47,000 47,038 Additions 19,654 282,938 302,592 Payments (17,270) (160,172) (177,442) Disposals (26) — (26) Interest 1,117 — 1,117 Financing fee amortization — 656 656 Financing fee reclassification — (4,926) (4,926) Effects of foreign exchange (943) 280 (663) As at December 31, 2022 27,166 170,162 197,328 Additions 3,117 148,830 151,947 Payments (5,590) (130,480) (136,070) Interest 372 — 372 Financing fee amortization — 200 200 Effects of foreign exchange 457 508 965 As at March 31, 2023 25,522 189,220 214,742 Less: current portion 13,818 163,290 177,108 Long-term portion $ 11,704 $ 25,930 $ 37,634 a) The Company has a secured revolving credit facility of $1,750.0 million, originally maturing April 2027. The credit facility bears interest on drawn funds at rates of Term Secured Overnight Financing Rate (“Term SOFR”) + Credit Spread Adjustment (“CSA”) + 1.45% to Term SOFR+CSA+2.50%, depending on the Company’s net leverage ratio. The revolving credit facility is subject to customary covenants. On April 26, 2023, the credit facility was amended, extending the term by one year to April 2028 and reducing the credit spread adjustment to 10 basis points. During the first quarter of 2023, the Company drew down $25.0 million and subsequently repaid $13.0 million. As at March 31, 2023, the balance outstanding was $30.0 million (December 31, 2022 - $18.0 million) with deferred financing fees of $4.1 million (December 31, 2022 - $4.3 million) netted against borrowings. b) During 2022, Candelaria obtained an unsecured fixed term loan in the amount of $50.0 million which remains outstanding as at March 31, 2023 (December 31, 2022 - $50.0 million). The loan matures on December 20, 2023 and accrues interest at a rate of 6.13% per annum, with interest payable upon maturity. ===== SIDA 50 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 12 - During 2022, Mineração Maracá Indústria e Comércio S/A (“Chapada”), a subsidiary of the Company which owns the Chapada mine, obtained eleven unsecured fixed term loans totalling $101.4 million. The term loans accrue interest at rates ranging from 4.00% to 6.70% per annum with interest payable upon maturity. The maturity dates range from November 3, 2022 to May 18 , 2023. Two term loans totalling $24.0 million were repaid in full upon their respective maturity dates in 2022. Chapada obtained an additional twelve unsecured fixed term loans totalling $59.5 million during the quarter . The term loans accrue interest at rates ranging from 5.74% to 6.74% per annum with interest payable upon maturity. The maturity dates range from March 20, 2023 to June 20, 2023. Chapada subsequently repaid seven term loans totalling $47.1 million on their respective maturity dates ranging from January 5, 2023 to March 27, 2023. As at March 31, 2023, the total balance outstanding for all fourteen term loans at Chapada was $89.8 million (December 31, 2022 - $77.4 million). In April 2023, Chapada obtained four additional unsecured fixed term loans totalling $12.8 million, accruing interest at rates of 6.19% and 6.95% per annum with interest payable upon maturity. The maturity dates range from August 9, 2023 to August 23, 2023. Additionally, Chapada repaid o ne term loan in the amount of $7.5 million. c) Lease liabilities relate to leases on buildings, rail cars, vehicles, machinery and equipment which have remaining lease terms of one to twelve years and interest rates of 0.8% - 8.0% over the terms of the leases. Additionally, the Company acts as lessee in certain leases that contain variable lease payment terms that are primarily based on usage of the right-of-use assets. d) Sociedade Mineira de Neves -Corvo, S.A. (“Somincor”), a subsidiary of the Company w hich owns the Neves- Corvo mine, has a commercial paper program which matures in May 2025. The $27.2 million (€25.0 million) program bears interest on drawn funds at EURIBOR+0.50%. As at December 31, 2022, the credit facility was fully drawn at $26.7 million (€25.0 million). During 2023, Somincor made several repayments totalling $69.8 million (€65.0 million) and made several drawdowns totalling $64.4 million (€60.0 million). As at March 31, 2023, the credit facility remains drawn at $21.8 million (€20.0 million). e) As at March 31, 2023, the balance outstanding for Somincor equipment financing was $1.8 million (€1.6 million) (December 31, 2022 - $2.4 million). Interest rates vary from a fixed rate of 0.88% to EURIBOR+0.84%, dependent on the piece of equipment, with the debt maturing throughout 2023 and 2024. The schedule of undiscounted lease payment and debt obligations is as follows: Leases Debt Total Less than one year $ 14,893 $ 163,290 $ 178,183 One to five years 11,658 30,000 41,658 More than five years 2,139 — 2,139 Total undiscounted obligations as at March 31, 2023 $ 28,690 $ 193,290 $ 221,980 ===== SIDA 51 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 13 - 9. DEFERRED REVENUE The following table summarizes the changes in deferred revenue: As at December 31, 2021 $ 693,467 Recognition of revenue (20,705) Finance costs 9,477 Effects of foreign exchange (1,574) As at March 31, 2022 680,665 Recognition of revenue (53,028) Variable consideration adjustment 3,492 Finance costs 28,144 Effects of foreign exchange (5,167) As at December 31, 2022 654,106 Recognition of revenue (19,100) Finance costs 9,010 Effects of foreign exchange 809 As at March 31, 2023 644,825 Less: current portion 74,764 Long-term portion $ 570,061 Consideration received under the Company’s gold, silver and copper streaming agreements is deemed to be variable and can be subject to cumulative adjustments when the contractual volume to be delivered changes. In 2022, as a result of changes to the Compan y’s Mineral Resources and Mineral Reserves estimates, an adjustment was made to the deferred revenue liability which was recognized through revenue and finance costs. ===== SIDA 52 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 14 - 10. RECLAMATION AND OTHER CLOSURE PROVISIONS Reclamation and other closure provisions relating to the Company's mining operations are as follows: Reclamation provisions Other closure provisions Total Balance, December 31, 2021 $ 406,966 $ 39,089 $ 446,055 Accretion 3,613 — 3,613 Changes in estimate 29,317 2,749 32,066 Changes in discount rate (20,668) — (20,668) Payments (700) (1,047) (1,747) Effects of foreign exchange (2,843) 2,043 (800) Balance, March 31, 2022 415,685 42,834 458,519 Accretion 10,731 — 10,731 Changes in estimate 16,449 8,625 25,074 Changes in discount rate (22,999) — (22,999) Payments (10,475) (3,681) (14,156) Effects of foreign exchange (8,371) (2,950) (11,321) Balance, December 31, 2022 401,020 44,828 445,848 Accretion 5,209 — 5,209 Changes in estimate 10,393 1,113 11,506 Changes in discount rate 2,635 — 2,635 Payments (2,169) (412) (2,581) Effects of foreign exchange 1,864 3,688 5,552 Balance, March 31, 2023 418,952 49,217 468,169 Less: current portion 15,264 5,448 20,712 Long-term portion $ 403,688 $ 43,769 $ 447,457 The Company expects these liabilities to be settled between 2023 and 2062. The reclamation provisions are discounted using current market pre-tax discount rates which range from 2.2% to 13.1% (December 31, 2022 - 2.0% to 13.5%). 11. SHARE CAPITAL a) Basic and diluted weighted average number of shares outstanding Three months ended March 31, 2023 2022 Basic weighted average number of shares outstanding 771,216,060 736,410,739 Effect of dilutive securities 776,119 1,761,618 Diluted weighted average number of shares outstanding 771,992,179 738,172,357 Antidilutive securities 1,257,075 574,829 The effect of dilutive securities relates to in-the-money outstanding stock options and share units ("SUs"). ===== SIDA 53 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 15 - b) Stock options and SUs granted/issued Three months ended March 31, 2023 2022 Stock options 1,862,433 1,753,520 SUs 1,247,573 480,429 c) Dividends During the three months ended March 31, 2023, the Company declared dividends in the amount of $51.3 million (Q1 2022 - $116.3 million) or C$0.09 per share (Q1 2022 - C$0.20 per share), which were paid on April 12, 2023. 12. REVENUE The Company's analysis of revenue from contracts with customers, segmented by product, is as follows: Three months ended March 31, 2023 2022 Revenue from contracts with customers: Copper $ 480,980 $ 623,785 Zinc 98,489 100,208 Nickel 63,630 84,732 Gold 53,343 57,426 Lead 12,840 11,453 Silver 9,266 13,896 Other 4,455 11,059 723,003 902,559 Provisional pricing adjustments on concentrate sales 28,341 88,520 Revenue $ 751,344 $ 991,079 The Company's geographical analysis of revenue from contracts with customers, segmented based on the destination of product, is as follows: Three months ended March 31, 2023 2022 Revenue from contracts with customers: Japan $ 194,338 $ 325,244 China 140,565 62,953 Spain 132,568 65,807 Canada 91,116 124,792 Finland 67,052 103,250 Germany 27,788 80,098 Other 69,576 140,415 723,003 902,559 Provisional pricing adjustments on concentrate sales 28,341 88,520 Revenue $ 751,344 $ 991,079 ===== SIDA 54 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 16 - 13. PRODUCTION COSTS The Company's production costs are comprised of the following: Three months ended March 31, 2023 2022 Direct mine and mill costs $ 377,643 $ 339,360 Transportation 30,482 28,799 Royalties 9,639 14,268 Total production costs $ 417,764 $ 382,427 14. EMPLOYEE BENEFITS The Company's employee benefits recognized in the consolidated statement of earnings are comprised of the following: Three months ended March 31, 2023 2022 Production costs Wages and benefits $ 79,762 $ 75,733 Retirement benefits 576 420 Share-based compensation 542 730 80,880 76,883 General and administrative expenses Wages and benefits 5,573 5,842 Retirement benefits 402 200 Share-based compensation 1,640 2,336 Termination benefits 1,849 — 9,464 8,378 General exploration and business development Wages and benefits 1,658 1,243 Retirement benefits 12 6 Share-based compensation 84 130 1,754 1,379 Total employee benefits $ 92,098 $ 86,640 ===== SIDA 55 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 17 - 15. GENERAL EXPLORATION AND BUSINESS DEVELOPMENT The Company's general exploration and business development costs are comprised of the following: Three months ended March 31, 2023 2022 General exploration $ 9,203 $ 7,060 Corporate development 5,026 — Project development 536 1,222 Total general exploration and business development $ 14,765 $ 8,282 For the three months ended March 31, 2023, corporate development expenses include $4.8 million in transaction costs incurred related to the acquisition of Caserones (Note 23). Project development expenses include study costs related to potential expansion projects at the Company's operating sites. During the fourth quarter of 2022, the Company began to capitalize the Josemaria Project development costs. 16. FINANCE INCOME AND COSTS The Company's finance income and costs are comprised of the following: Three months ended March 31, 2023 2022 Interest income $ 883 $ 601 Interest expense and bank fees (6,209) (1,310) Deferred revenue finance costs (5,673) (8,415) Accretion expense on reclamation provisions (5,209) (3,613) Lease liability interest (372) (317) Other 881 (1,918) Total finance costs, net $ (15,699) $ (14,972) Finance income $ 1,764 $ 601 Finance costs (17,463) (15,573) Total finance costs, net $ (15,699) $ (14,972) ===== SIDA 56 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 18 - 17. OTHER INCOME AND EXPENSE The Company's other income and expense are comprised of the following: Three months ended March 31, 2023 2022 Foreign exchange and trading gains on equity investments (a) $ 22,078 $ — Unrealized gain on revaluation of foreign currency contracts (Note 18) 20,666 — Realized gain on foreign currency contracts (Note 18) 13,577 — Gain on disposal of subsidiary (b) 5,718 16,828 Revaluation of marketable securities 438 3,892 Foreign exchange loss (9,945) (10,784) Ojos del Salado sinkhole expenses (c) (4,582) — Revaluation of Chapada derivative liability (1,416) (3,293) (Loss)/income from equity investment in associate (54) 4,696 Other expense (235) (83) Total other income, net $ 46,245 $ 11,256 a) Foreign exchange and trading gains on equity investments include the changes in fair value of equity instruments supporting capital funding for the Josemaria Project. b) Pursuant to the terms of the original sale agreement of Rio Narcea Recursos, S.A. in 2016, the Company received a $16.8 million payment during the first quarter of 2022, and a further $5.7 million payment in the first quarter of 2023, which were contingent on historical tax assessments which have now been closed. c) Ojos del Salado sinkhole expenses include idle costs related to the sinkhole near the Company's Ojos del Salado operations. 18. FINANCIAL INSTRUMENTS Derivative instruments From time to time, the Company uses derivative contracts as part of its risk management strategy to mitigate exposure to foreign currencies and commodities. During 2022, the Company entered into EUR, BRL, CLP , SEK and CAD foreign currency options and forward contracts intended to limit the foreign exchange exposure of its forecasted foreign currency de nominated after-tax attributable operating and capital expenditures. The foreign exchange contracts have not been designated as hedges for purposes of hedge accounting and are measured at fair value with changes in fair value recognized in the consolidated statement of earnings. The following table shows the remaining contract positions and their expiry dates: Expired in Expiring throughout: Foreign currency forward contracts Q1 2023 remainder of 2023 2024 EUR/USD forwards Average contract price 1.01 1.01 1.02 Position (EUR millions) 62 187 155 USD/SEK forwards Average contract price 11.1 11.1 10.9 Position (SEK millions) 309 927 900 ===== SIDA 57 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 19 - Expired in Expiring throughout: Foreign currency zero cost collar contracts Q1 2023 remainder of 2023 2024 USD/BRL collars Average contract price 5.00/6.40 5.00/6.40 5.00/6.40 Position (BRL millions) 285 857 974 USD/CLP collars Average contract price 900/1,050 900/1,050 900/1,050 Position (CLP millions) 61,628 184,885 143,426 USD/CAD collars Average contract price 1.34/1.38 1.33/1.38 1.30/1.40 Position (CAD millions) 9 27 19 The Company’s net unrealized and realized gains on foreign currency derivative contracts are as follows: Three months ended March 31, 2023 2022 Unrealized gain on derivative financial instruments: Foreign currency contracts $ 20,666 $ — Realized gain on derivative financial instruments Foreign currency contracts 13,577 — Total unrealized and realized gain on foreign currency derivative contracts: $ 34,243 $ — A summary of the fair values of unsettled derivative contracts recorded on the consolidated balance sheet is as follows: March 31, 2023 December 31, 2022 Foreign currency contracts: Current asset position $ 58,997 $ 43,521 Non-current asset position 25,520 25,111 Current liability position 10 — Non-current liability position 83 5,524 Other contracts: Chapada derivative current liability 24,715 24,423 Chapada derivative non-current liability 23,476 22,352 Diesel forward swap contracts In April 2023, the Company entered into forward swap contracts intended to limit exposure to changes in the price of diesel fuel purchases at Candelaria. Positions taken represent approximately 75% and 50% of Candelaria's forecasted attributable diesel fuel purchases for the remainder of 2023 and 2024, respectively. ===== SIDA 58 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 20 - Fair values of financial instruments The Company’s financial assets and financial liabilities have been classified into categories that determine their basis of measurement. The following table shows the carrying values, fair values and fair value hierarchy of the Company’s financial instruments as at March 31, 2023 and December 31, 2022: March 31, 2023 December 31, 2022 Level Carrying value Fair value Carrying value Fair value Financial assets Fair value through profit or loss Restricted funds 1 $ 51,025 $ 51,025 $ 50,195 $ 50,195 Trade receivables (provisional) 2 398,811 398,811 403,300 403,300 Marketable securities and equity investments 1 12,517 12,517 12,075 12,075 Foreign currency contracts 2 84,517 84,517 68,632 68,632 $ 546,870 $ 546,870 $ 534,202 $ 534,202 Financial liabilities Amortized cost Debt 3 $ 189,220 $ 189,220 $ 170,162 $ 170,162 Fair value through profit or loss Pricing provisions on concentrate sales 2 $ 18,436 $ 18,436 $ 5,006 $ 5,006 Chapada derivative liability 2 48,191 48,191 46,775 46,775 Foreign currency contracts 2 93 93 5,524 5,524 $ 66,720 $ 66,720 $ 57,305 $ 57,305 Fair values of financial instruments are determined by valuation methods depending on hierarchy levels as defined below: Level 1 – Quoted market price in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted market prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. observed prices) or indirectly (i.e. derived from prices). Level 3 – Inputs for the assets or liabilities are not based on observable market data. The Company calculates fair values based on the following methods of valuation and assumptions: Marketable securities/equity investments/restricted funds – The fair value of investments in shares is determined based on the quoted market price. Trade receivables/pricing provisions on concentrate sales – The fair value of trade receivables that contain provisional pricing sales arrangements are va lued using quoted forward market prices. The Company recognized positive pricing adjustments of $28.3 million in revenue during the three months ended March 31, 2023 (Q1 2022 - $88.5 million positive pricing adjustments). Foreign currency contracts – The fair value of these derivatives are determined by the counterparties to the contracts and are assessed by Management using pricing models based on active market prices. ===== SIDA 59 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 21 - Chapada derivative liability – The fair value of this derivative is de termined using a valuation model that incorporates such factors as metal prices, metal price volatility, expiry date, and risk-free interest rate. Debt – The fair values approximate carrying values as the interest rates are comparable to current market rates. The carrying values of certain financial instruments maturing in the short -term approximate their fair values. These financial instruments include cash and cash equivalents, trade and other receivables other than those provisionally priced, and trade and other payables other than those provisionally priced, which are classified as amortized cost. 19. COMMITMENTS AND CONTINGENCIES a) The Company has capital commitments of $592.9 million on various initiatives, of which $357.0 million is expected to be paid during 2023. b) The Company may be involved in legal proceedings arising in the ordinary course of business. The potential amount of the liability with respect to such legal proceedi ngs is not expected to materially affect the Company's financial position. c) There were no significant changes to contingencies since those reported at December 31, 2022. 20. SEGMENTED INFORMATION The Company is engaged in mining, exploration and development of mineral properties, primarily in Chile, Brazil, USA, Argentina, Portugal and Sweden. Operating segments are reported in a manner consistent with the internal reporting provided to executive management who act as the c hief operating decision -maker. Executive management are responsible for allocating resources and assessing performance of the operating segments. ===== SIDA 60 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 22 - For the three months ended March 31, 2023 Candelaria Chapada Eagle Josemaria Neves-Corvo Zinkgruvan Other Total Chile Brazil USA Argentina Portugal Sweden Revenue $ 380,405 $ 111,118 $ 69,420 $ — $ 129,403 $ 60,998 $ — $ 751,344 Cost of goods sold Production costs (187,979) (68,634) (45,449) — (85,726) (28,905) (1,071) (417,764) Depreciation, depletion and amortization (58,375) (12,081) (11,151) (38) (30,080) (8,087) (435) (120,247) Gross profit (loss) 134,051 30,403 12,820 (38) 13,597 24,006 (1,506) 213,333 General and administrative expenses — — — — — — (15,110) (15,110) General exploration and business development (3,840) (1,504) (586) — (1,136) (1,620) (6,079) (14,765) Finance (costs) income (8,001) (6,034) (1,084) 2,810 (565) (1,103) (1,722) (15,699) Other income (expense) 13,311 6,368 (182) 15,313 2,569 (248) 9,114 46,245 Income tax (expense) recovery (42,547) 5,349 (7) — (1,272) (3,979) (6,237) (48,693) Net earnings (loss) $ 92,974 $ 34,582 $ 10,961 $ 18,085 $ 13,193 $ 17,056 $ (21,540) $ 165,311 Capital expenditures $ 90,686 $ 16,027 $ 7,102 $ 90,555 $ 25,061 $ 14,468 $ 2,220 $ 246,119 ===== SIDA 61 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 23 - For the three months ended March 31, 2022 Candelaria Chapada Eagle Neves-Corvo Zinkgruvan Other Total Chile Brazil USA Portugal Sweden Revenue $ 457,546 $ 159,605 $ 149,869 $ 134,567 $ 89,492 $ — $ 991,079 Cost of goods sold Production costs (152,809) (79,677) (39,558) (78,470) (31,188) (725) (382,427) Depreciation, depletion and amortization (68,109) (11,117) (16,849) (20,845) (12,479) (438) (129,837) Gross profit (loss) 236,628 68,811 93,462 35,252 45,825 (1,163) 478,815 General and administrative expenses — — — — — (11,502) (11,502) General exploration and business development (2,585) (1,876) (245) (1,556) (959) (1,061) (8,282) Finance costs (7,003) (4,582) (470) (1,546) (904) (467) (14,972) Other (expense) income (4,217) (11,076) (320) (150) 143 26,876 11,256 Income tax (expense) recovery (72,969) 27,681 (13,762) (7,111) (11,265) 220 (77,206) Net earnings $ 149,854 $ 78,958 $ 78,665 $ 24,889 $ 32,840 $ 12,903 $ 378,109 Capital expenditures $ 82,964 $ 14,455 $ 4,460 $ 33,670 $ 9,039 $ 324 $ 144,912 ===== SIDA 62 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 24 - 21. RELATED PARTY TRANSACTIONS a) Transactions with associates - The Company may enter into transactions related to its investment in associate. These transactions are entered into in the normal course of business and on an arm’s length basis. b) Key management personnel - The Company has identified its directors and senior officers as its key management personnel. Employee benefits for key management personnel are as follows: Three months ended March 31, 2023 2022 Wages and salaries $ 1,294 $ 1,366 Pension benefits 44 41 Share-based compensation 743 1,235 Termination benefits 1,406 — $ 3,487 $ 2,642 c) Other related parties - For the three months ended March 31, 2023, the Company incurred $0.3 million (Q1 2022 – $nil) for services provided by a company owned by a member of key management personnel. 22. SUPPLEMENTARY CASH FLOW INFORMATION Three months ended March 31, 2023 2022 Changes in non-cash working capital items consist of: Trade and income taxes receivable, inventories, and other current assets $ (14,169) $ (173,872) Trade and income taxes payable, and other current liabilities (9,023) 18,324 $ (23,192) $ (155,548) Operating activities included the following cash payments: Income taxes paid $ 39,857 $ 81,109 23. PURCHASE AGREEMENT TO ACQUIRE MAJORITY INTEREST IN CASERONES MINE On March 27, 2023, the Company announced that it had entered into a binding purchase agreement with JX Nippon Mining & Metals Corporation and certain of its subsidiaries (collectively, “JX”), to acquire fifty-one percent (51%) of the issued and outstanding equity of SCM Minera Lumina Copper Chile (“Lumina Copper”), a wholly owned subsidiary of JX which operates the Caserones copper-molybdenum mine (“Caserones”) located in Chile (the “Acquisition”). Under the terms of the Acquisition, JX will receive upfront cash consideration from the Company of $800 million subject to any adjustments from the effective locked box date of December 31, 2022, until closing. In addition, $150 million in deferred cash consideration will be payable by the Company in installments over a six -year period following the closing date. The Company will also have the right to acquire up to an additional 19% interest in Caserones for $350 million over a five-year period commencing on the first anniversary of the date of closing. The Acquisition is based on Lumina Copper cont aining zero debt and zero cash as of the locked box date of December 31, 2022. The purchase price is expected to be funded from the Company's revolving credit facility. ===== SIDA 63 ===== LUNDIN MINING CORPORATION Notes to condensed interim consolidated financial statements For the three months ended March 31, 2023 and 2022 (Unaudited - Tabular amounts in thousands of US dollars, except for shares and per share amounts) - 25 - The Acquisition has been unanimously approved by the Board of Directors of both the Company and JX and is expected to close in the third quarter of 2023 subject to typical closing conditions, including third -party and requisite regulatory approvals. The transaction does not require shareholder approval of either party. ===== SIDA 64 ===== Corporate Office 150 King Street West, Suite 2200, P.O. Box 38, Toronto, ON M5H 1J9 Phone: +1 416 342 5560 Fax: +1 416 348 0303 lundinmining.com