Lundin Mining Corporation - Management Reports 2021

Management’s Discussion and Analysis For the three and nine months ended September 30, 2021

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This management’s discussion and analysis (“MD&A”) has been prepared as of October 27, 2021 and should be read in conjunction with the Company’s condensed interim consolidated financial statements for the three and nine months ended September 30, 2021. Those financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. The Company’s presentation currency is United States (“US”) dollars. Reference herein of $ or USD is to United States dollars, C$ is to Canadian dollars, CLP is to Chilean pesos, BRL is to Brazilian reais, € 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 operations in Brazil, Chile, Portugal, Sweden, and the United States of America, primarily producing copper, zinc, gold and nickel.

Highlights .................................................................................................................................... 1 Financial Position ........................................................................................................................ 2 Outlook ....................................................................................................................................... 3 Selected Quarterly Financial Information .................................................................................. 5 Revenue Overview ...................................................................................................................... 6 Financial Results ......................................................................................................................... 10 Mining Operations ...................................................................................................................... 12 Production Overview ............................................................................................................. 12 Cash Cost Overview ............................................................................................................... 13 Capital Expenditures .............................................................................................................. 14 Candelaria .............................................................................................................................. 15 Chapada ................................................................................................................................. 16 Eagle ....................................................................................................................................... 17 Neves-Corvo........................................................................................................................... 18 Zinkgruvan ............................................................................................................................. 20 Metal Prices, LME Inventories and Smelter Treatment and Refining Charges .......................... 21 Liquidity and Financial Condition ............................................................................................... 22 Related Party Transactions ......................................................................................................... 23 Changes in Accounting Policies and Critical Accounting Estimates and Judgments .................. 23 Non-GAAP Performance Measures ............................................................................................ 24 Managing Risks ........................................................................................................................... 30 Management’s Report on Internal Controls ............................................................................... 30 Outstanding Share Data .............................................................................................................. 30

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 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 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 exploration and development activities at the Company’s projects; and the Company’s integration of acquisitions and any anticipated benefits thereof. 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 expectations and beliefs of management, including that the Company can access financing, appropriate equipment and sufficient labor; assumed and future price of copper, nickel, zinc, gold and other metals; 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 date 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 unknown 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: 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 conditions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable risks; global financial conditions and inflation; changes in the Company’s share price, and volatility in the equity markets in general; volatility and fluctuations in metal and commodity prices; the threat associated with outbreaks of viruses and infectious diseases, including the COVID-19 virus; changing taxation regimes; reliance on a single asset; delays or the inability to obtain, retain or comply with permits; risks related to negative publicity with respect to the Company or the mining industry in general; health and safety risks; exploration, development or mining results not being consistent with the Company’s expectations; unavailable or inaccessible infrastructure and risks related to ageing infrastructure; 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; risks associated with the estimation of Mineral Resources and Mineral Reserves and the geology, grade and continuity of mineral deposits including but not limited to models relating thereto; ore processing efficiency; community and stakeholder opposition; information technology and cybersecurity risks; 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; regulatory investigations, enforcement, sanctions and/or related or other litigation; uncertain political and economic environments, including in Brazil and Chile; risks associated with the structural stability of waste rock dumps or tailings storage facilities; estimates of future production and operations; estimates of operating, cash and all-in sustaining cost estimates; civil disruption in Chile; the potential for and effects of labor disputes or other unanticipated difficulties with or shortages of labor or interruptions in production; risks related to the environmental regulation and environmental impact of the Company’s operations and products and management thereof; exchange rate fluctuations; reliance on third parties and consultants in foreign jurisdictions; climate change; risks relating to attracting and retaining of highly skilled employees; compliance with environmental, health and safety laws; counterparty and credit risks and customer concentration; litigation; risks inherent in and/or associated with operating in foreign countries and emerging markets; risks related to mine closure activities and closed and historical sites; changes in laws, regulations or policies including but not limited to those related to mining regimes, permitting and approvals, environmental and tailings management, labor, trade relations, and transportation; internal controls; challenges or defects in title; the estimation of asset carrying values; historical environmental liabilities and ongoing reclamation obligations; the price and availability of key operating supplies or services; competition; indebtedness; compliance with foreign laws; existence of significant shareholders; liquidity risks and limited financial resources; funding requirements and availability of financing; enforcing legal rights in foreign jurisdictions; dilution; risks relating to dividends; risks associated with acquisitions and related integration efforts, including the ability to achieve anticipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration; activist shareholders and proxy solicitation matters; and other risks and uncertainties, including but not limited to those described in the “Risk and Uncertainties” section of the Annual Information Form and the “Managing Risks” section of the Company’s MD&A for the year ended December 31, 2020, 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 those described in forwardlooking 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.

Highlights

Operational Performance

Total copper, zinc and gold production for the third quarter of 2021 were higher than the prior year quarter and previous quarter while nickel production declined as expected, due to lower grades. Chapada set a new record for throughput in the quarter, approximately 5% higher than the previous quarter and 34% higher than the third quarter of 2020. Production and cash costs[1] for the quarter for all sites are on track to meet annual guidance.

Candelaria (80% owned): Candelaria produced 35,929 tonnes of copper, and approximately 20,000 ounces of gold in concentrate on a 100% basis in the quarter. Copper and gold production was comparable to the prior year quarter. Copper cash costs of $1.62/lb for the current quarter were higher than the prior year quarter largely owing to the impact of higher mining costs.

Chapada (100% owned): Chapada produced 16,050 tonnes of copper and approximately 26,000 ounces of gold in concentrate in the quarter. Copper and gold production increased compared to the prior year quarter and also over the previous quarter primarily due to record quarterly throughput. Copper cash costs of $0.62/lb for the quarter were higher than the prior year quarter due mainly to higher mining costs resulting from inflationary pressures though were better than the previous quarter.

Eagle (100% owned): Eagle produced 4,124 tonnes of nickel and 4,165 tonnes of copper during the quarter, which was lower than the prior year quarter due to lower throughput, grades and recoveries. By-product credits, aided by favourable copper prices, exceeded gross cash costs in the quarter resulting in nickel cash costs of negative $0.80/lb.

Neves-Corvo (100% owned): Neves-Corvo produced 8,083 tonnes of copper for the quarter and 15,909 tonnes of zinc with production of both metals exceeding the prior year comparable period. Higher copper production resulted from higher head grades, while zinc production was higher primarily due to improved throughput and recoveries. Copper cash costs of $2.05/lb for the quarter were higher than the prior year quarter primarily due to inflationary increases in consumables, as well as unfavourable foreign exchange.

The Zinc Expansion Project (“ZEP”) continues to progress on schedule and on budget. Upgrades to the shaft were completed during the annual maintenance shutdown which impacted production in the quarter as planned. Production ramp up to full production rates is scheduled for the first half of 2022.

Zinkgruvan (100% owned): Zinc production of 22,860 tonnes and lead production of 6,952 tonnes were both higher than the prior year comparable period as well as the previous quarter due to higher grades and recoveries. Zinc cash costs of $0.32/lb were better than the prior year quarter largely due to higher sales volumes.

Total production

(Contained metal in concentrate) 2021 YTD Q3 Q2 Q1	2020 Total Q4 Q3 Q2 Q1
Copper (t)a 185,888 65,077 63,457 57,354 Zinc (t) 106,967 38,769 34,833 33,365 Gold (koz)a 121 46 41 34 Nickel(t) 14,252 4,124 4,774 5,354	230,781 41,885 61,444 65,285 62,167 142,744 41,428 32,787 31,582 36,947 163 35 45 44 39 16,718 4,909 4,854 3,380 3,575

a - Candelaria's production is on a 100% basis.

1 This is a non-GAAP measure – see page 24 of this MD&A for discussion of non-GAAP measures.

Financial Performance

Gross profit for the quarter ended September 30, 2021 was $303.9 million, an increase of $104.6 million compared to the prior year quarter. On a year-to-date basis, gross profit was $936.6 million, an increase of $617.8 million over the prior year comparative period. The increases were primarily due to higher realized metal prices net of price adjustments (Q3 - $119.6 million, YTD - $761.8 million), partially offset by higher production costs and, on a year-to-date basis, the unfavourable effects of foreign exchange ($29.7 million). Total production costs were in line with expectations.
Net earnings for the quarter ended September 30, 2021 were $190.6 million, an increase of $57.0 million compared to the prior year quarter. On a year-to-date basis, net earnings were $613.2 million, an increase of $544.9 million from the prior year comparative period. The increases were attributable to higher gross profit partially offset by higher income tax expense.
Adjusted earnings[1] for the quarter were $168.4 million, an increase of $62.0 million over the prior year quarter. On a year-to-date basis, adjusted earnings were $539.1 million, $419.1 million higher than the prior year. The increases were primarily due to higher gross profit partially offset by higher income taxes and higher net earnings attributable to non-controlling interests.

Corporate Updates

On September 9, 2021, the Company announced that the Company’s President and Chief Executive Officer, Ms. Marie Inkster, will be stepping down and that Mr. Peter Rockandel, currently Senior Vice President, Corporate Development and Investor Relations, will assume the role. The transition has progressed extremely well and the Board of Directors, management and Ms. Inkster have agreed the process will be successfully complete at the end of October. Mr. Rockandel will assume the role of President and Chief Executive Officer as of November 1, 2021. Ms. Inkster will remain on the Company’s Board of Directors until December 31, 2021.
On September 13, 2021, the Company reported its Mineral Resource and Mineral Reserve estimates as at June 30, 2021. On a consolidated and attributable basis, estimated contained metal in the Proven and Probable Mineral Reserve categories totalled 5,302 kt of copper, 2,813 kt of zinc, 77 kt of nickel, 913 kt of lead and 6.6 million ounces of gold.

Financial Position and Financing

Cash and cash equivalents of $428.3 million as at September 30, 2021 represents an increase of $133.4 million during the quarter. Cash flow from operations of $523.1 million was used to invest in capital expenditures ($133.8 million), pay shareholder dividends of $104.7 million (including an inaugural performance dividend) and for distributions to non-controlling interests ($20.0 million). The Company also repaid $100.7 million in debt on a net basis.

On a year-to-date basis, cash and cash equivalents increased by $286.9 million. Cash flow from operations of $1,100.8 million was used to invest in capital expenditure ($378.2 million), to repay debt ($162.0 million), pay shareholder dividends ($175.9 million) and for distributions to non-controlling interests ($36.0 million).

Free cash flow[1] for the three and the nine months ended September 30, 2021 has increased (Q3 - $212.6 million, YTD - $641.6 million) over the prior year comparative periods due to higher cash provided by operating activities.
As at September 30, 2021, the Company had a net cash[1] balance of $390.7 million. As at October 27, 2021, the Company had a cash and net cash balance of approximately $445.0 million and $405.0 million, respectively.

1 This is a non-GAAP measure – see page 24 of this MD&A for discussion of non-GAAP measures.

Outlook

Production guidance and full year cash cost guidance remains unchanged for all operations.

While the Company has not experienced significant disruptions to production, shipments of concentrate, or its supply chain due to COVID-19, we continue to caution that a localized outbreak at the operations may require the need to implement increased isolation and containment measures which could impact production, delay maintenance activities or disrupt supply chains. Given the uncertainty of the duration and magnitude of the impact of COVID-19, production and cash cost estimates are subject to a higher than normal degree of uncertainty. The guidance below does not reflect any potential for additional suspensions or other significant disruption to operations due to COVID-19.


Copper (t)	Candelaria (100%)	150,000 - 155,000 _1.55_c
	Chapada	48,000 - 50,000 _1.10_d
	Eagle	18,000 - 20,000
	Neves-Corvo	36,000 - 38,000 _2.10_c
	Zinkgruvan	3,000 - 4,000
Zinc (t) Gold (oz)	Total	255,000 - 267,000
	Neves-Corvo Zinkgruvan	67,000 - 70,000 73,000 - 76,000 _0.65_c
	Total	140,000 - 146,000
	Candelaria (100%)	85,000 - 90,000
	Chapada	73,000 - 76,000
	Total	158,000 - 166,000
Nickel(t)	Eagle	18,000 - 20,000 (1.00)

a. Guidance as outlined in the Management's Discussion and Analysis for the three and six months ended June 30, 2021 in the Outlook section.

b. Cash costs are based on various assumptions and estimates, including but not limited to: production volumes, as noted above, commodity prices (Cu: $4.30/lb, Zn: $1.25/lb, Pb: $0.95/lb, Au: $1,800/oz), foreign exchange rates (€/USD:1.20, USD/SEK:8.50, USD/CLP:730, USD/BRL:5.10) and production costs for the remainder of 2021.

c. 68% of Candelaria's total gold and silver production are subject to a streaming agreement and silver production at Zinkgruvan and Neves-Corvo are also subject to streaming agreements. Cash costs are calculated based on receipt of approximately $416/oz gold and $4.16/oz to $4.48/oz silver.

d. Chapada cash costs are calculated on a by-product basis and do not include the effects of its copper stream agreements. Effects of the copper stream agreements are reflected in copper revenue and will impact realized price per pound.

2021 Capital Expenditure Guidance

Total capital expenditure guidance has been decreased by $40.0 million after taking into account current spend to date.

spend to date.
($millions)	Previous Guidancea	Revisions	Revised Guidance
Candelaria (100% basis)	345	(20)	325
Chapada	65	(10)	55
Eagle	20	-	20
Neves-Corvo	65	(5)	60
Zinkgruvan	50	(5)	45
Total Sustaining Capital	545	(40)	505
Zinc Expansion Project (Neves-Corvo)	70	-	70
Total Capital Expenditures	615	(40)	575

a. Guidance as outlined in the Management's Discussion and Analysis for the three and six months ended June 30, 2021 in the Outlook section.

2021 Exploration Investment Guidance

Total planned exploration expenditures are expected to be $40.0 million in 2021, unchanged from previous guidance. Approximately $36.0 million will be spent supporting significant in-mine and near-mine targets at our operations ($16.0 million at Chapada, $11.0 million at Candelaria, $6.0 million at Zinkgruvan and $3.0 million at Neves-Corvo). The remaining amount supports corporate exploration initiatives and new business development projects.

Selected Quarterly Financial Information[1]

($ millions, except share and per share amounts) Revenue Cost of goods sold: Production costs Depreciation, depletion and amortization Gross profit Net earnings attributable to: Lundin Mining shareholders Non-controlling interests Net earnings Adjusted earnings2 Adjusted EBITDA2 Cash flow from operations Adjusted operating cash flow2 Free cash flow2 Capital expenditures3 Per share amounts: Basic and diluted earnings per share attributable to shareholders Adjusted earnings per share2 Adjusted operating cash flow per share2 Dividends declared (C$/share) Total assets Total debt and lease liabilities Net cash (debt)2	Three months ended September 30, 2021 2020 756.4 600.7 (331.8) (279.4) (120.6) (122.0) 303.9 199.3 173.7 122.4 16.8 11.2 190.6 133.6 168.4 106.4 411.3 300.3 523.1 272.2 294.1 262.0 407.0 194.5 133.8 89.8 0.24 0.17 0.23 0.14 0.40 0.36 0.18 0.04	Nine months ended September 30,	Nine months ended September 30,
		2021 2,310.2 (996.2) (377.4) 936.6 551.6 61.7 613.2 539.1 1,246.5 1,100.8 1,005.6 762.0 378.2 0.75 0.73 1.36 0.30 September 30, 2021 7,246.5 37.6 390.7	2020
			1,512.0 (831.1) (362.1)
			318.8
			49.6 18.7
			68.3
			120.0 622.1 393.2 468.9 120.4 331.0 0.07 0.16 0.64 0.12 December 31, 2020
			7,058.5 203.0 (63.2)

Summary of Quarterly Results[1,4]

Summary of Quarterly Results1,4
($ millions, except per share data)	Q3-21	Q2-21	Q1-21	Q4-20	Q3-20	Q2-20	Q1-20	Q4-19
Revenue	756.4	872.3	681.5	529.5	600.7	533.3	378.0	568.4
Cost of goods sold	(452.4)	(492.2)	(429.0)	(350.1)	(401.4)	(391.2)	(400.7)	(422.9)
Gross profit (loss)	303.9	380.2	252.5	179.4	199.3	142.1	(22.7)	145.5
Net earnings (loss) - attributable to shareholders	190.6 173.7	268.4 242.6	154.2 135.2	120.8 119.2	133.6 122.4	48.3 38.7	(113.6) (111.5)	104.8 97.0
EPS- Basic and diluted	0.24	0.33	0.18	0.16	0.17	0.05	(0.15)	0.13
Cash flow from operations	523.1	419.0	158.7	172.7	272.2	37.6	83.4	186.4
Adjusted operating cash flow per share2	0.40	0.58	0.38	0.24	0.36	0.24	0.04	0.28
Capital expenditures3	133.8	131.9	112.5	100.2	89.8	100.2	141.1	139.6

Except where otherwise noted, financial data has been prepared in accordance with IFRS as issued by the IASB.
These are non-GAAP measures please see 24 of this MD&A for discussion of non-GAAP measures.
Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows.

The sum of quarterly amounts may differ from year-to-date results due to rounding.

Revenue Overview

Sales Volumes by Payable Metal

Revenue Overview Sales Volumes by Payable Metal	Revenue Overview Sales Volumes by Payable Metal
(Contained metal in concentrate) 2021 Total Q3 Q2 Q1		2020 Total Q4 Q3 Q2 Q1
Copper (tonnes) Candelaria (100%) 104,796 33,743 Chapada 33,495 13,869 Eagle 13,367 3,792 Neves-Corvo 25,950 9,071 Zinkgruvan 1,787 859	35,537 35,516 12,247 7,379 5,257 4,318 10,314 6,565 926 2	123,183 16,574 34,713 34,130 37,766 47,119 10,966 11,220 13,446 11,487 17,111 4,312 4,732 3,668 4,399 30,799 4,708 6,892 11,471 7,728 3,212 830 929 910 543
179,395 61,334	64,281 53,780	221,424 37,390 58,486 63,625 61,923
Zinc (tonnes) Neves-Corvo 38,564 12,516 Zinkgruvan 46,051 16,043	14,443 11,605 14,305 15,703	58,029 12,506 14,563 15,896 15,064 62,150 22,399 15,002 10,465 14,284
84,615 28,559	28,748 27,308	120,179 34,905 29,565 26,361 29,348
Gold (000 oz) Candelaria (100%) 64 20 Chapada 50 22	23 21 16 12	73 11 21 19 22 81 23 18 23 17
114 42	39 33	154 34 39 42 39
Nickel (tonnes) Eagle 11,622 3,246	4,258 4,118	12,481 3,714 3,539 2,419 2,809
Lead (tonnes) Neves-Corvo 3,298 999 Zinkgruvan 14,458 4,825	1,054 1,245 4,928 4,705	4,149 748 794 1,309 1,298 23,556 5,475 6,352 5,705 6,024
17,756 5,824	5,982 5,950	27,705 6,223 7,146 7,014 7,322
Silver (000 oz) Candelaria (100%) 856 297 Chapada 60 26 Eagle 40 16 Neves-Corvo 653 183 Zinkgruvan 1,002 354	287 272 14 20 9 15 228 242 356 292	966 119 254 272 321 131 40 26 31 34 79 21 16 22 20 779 159 170 270 180 1,544 327 441 427 349
2,611 876	894 841	3,499 666 907 1,022 904

Revenue Analysis

Revenue Analysis
by Mine ($thousands)	Three months ended September 30, 2021 2020 Change $ % $ % $			Nine months ended September 30, 2021 2020 Change $ % $ % $
	$ %	$ %		$ %	$ %	$
Candelaria (100%) Chapada Eagle Neves-Corvo Zinkgruvan	326,903 43 160,332 21 101,311 13 108,083 14 59,765 9	280,417 47 113,586 19 91,314 15 69,287 12 46,069 7	46,486 46,746 9,997 38,796 13,696	1,078,800 47 394,687 17 354,072 15 323,339 14 159,298 7	708,521 47 311,832 21 191,340 13 196,252 13 104,032 6	370,279 82,855 162,732 127,087 55,266
	756,394	600,673	155,721	2,310,196	1,511,977	798,219

by Metal ($thousands)	Three months ended September 30, 2021 2020 Change $ % $ % $			Nine months ended September 30, 2021 2020 Change $ % $ % $
	$ %	$ %		$ %	$ %	$
Copper Zinc Gold Nickel Lead Silver Other	521,046 69 71,078 9 66,816 9 62,403 8 10,815 1 9,127 1 15,109 3	396,592 66 51,890 9 68,038 11 54,788 9 11,197 2 11,568 2 6,600 1	124,454 19,188 (1,222) 7,615 (382) (2,441) 8,509	1,626,571 70 199,017 9 170,097 7 207,637 9 32,477 1 28,902 1 45,495 3	1,016,611 67 119,114 8 194,267 13 109,252 7 29,546 2 31,201 2 11,986 1	609,960 79,903 (24,170) 98,385 2,931 (2,299) 33,509
	756,394	600,673	155,721	2,310,196	1,511,977	798,219

Revenue for the three and nine months ended September 30, 2021 increased in comparison to the prior year comparative periods, mainly due to higher realized metal prices.

Revenue from gold and silver for the three and nine months ended September 30, 2021 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 $416/oz for gold and between $4.16/oz and $4.48/oz for silver.

Revenue from copper for the three and nine months ended September 30, 2021 includes the recognition of deferred revenue from the copper streams acquired with the Chapada mine, as well as the cash proceeds of 30% of the market price of copper sold.

Revenue is recorded using the metal price received for sales 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.

Provisionally valued revenue as of September 30, 2021

Metal	Payable metal	Valued at
Copper	71,769 t	$4.05 /lb
Zinc	11,684 t	$1.35 /lb
Gold	37 koz	$1,753 /oz
Nickel	1,146 t	$8.14 /lb

Quarterly Reconciliation of Realized Prices

Three months ended September 30, 2021
($thousands) Copper Zinc Gold Nickel	Total
Current period sales1 555,897 85,443 76,325 59,152	776,817
Priorperiodprice adjustments (11,800) 24 (230) 3,424	(8,582)
544,097 85,467 76,095 62,576	768,235
Other metal sales	50,335
Copper stream cash effect	(4,594)
Gold stream cash effect	(18,050)
Less: Treatment & refiningcharges	(39,532)
Total Revenue	756,394
Payable Metal 61,334 t 28,559 t 42 koz 3,246 t
Current period sales1 $4.11 $1.36 $1,792 $8.27
Priorperiod adjustments (0.09) - (5) 0.47
Realizedprices2 $4.02 /lb $1.36 /lb $1,787 /oz $8.74 /lb
Three months ended September 30, 2020 Copper Zinc Gold Nickel Current period sales1 385,901 69,784 75,713 52,875 Priorperiodprice adjustments 31,590 3,435 2,790 1,991 417,491 73,219 78,503 54,866 Other metal sales Copper stream cash effect Gold stream cash effect Less: Treatment & refining charges Total Revenue Payable Metal 58,486 t 29,565 t 39 koz 3,539 t Current period sales1 $2.99 $1.07 $1,910 $6.78 Priorperiod adjustments 0.25 0.05 70 0.25 Realizedprices2 $3.24/lb $1.12/lb $1,980/oz $7.03/lb	Total 584,273 39,806 624,079 45,772 (2,851) (19,634) (46,693) 600,673

Includes provisional price adjustments on current period sales.
The realized price for copper inclusive of the impact of streaming agreements for 2021 is $3.99/lb (2020: $2.97/lb). The realized price for gold inclusive of the impact of streaming agreements for 2021 is $1,363/oz (2020: $1,402/oz).

Year-to-Date Reconciliation of Realized Prices

Nine months ended September 30, 2021
($thousands) Copper Zinc Gold Nickel	Total
Current period sales1 1,654,561 248,369 204,990 215,627	2,323,547
Priorperiodprice adjustments 37,551 948 (5,013) (6,859)	26,627
1,692,112 249,317 199,977 208,768	2,350,174
Other metal sales	154,206
Copper stream cash effect	(11,611)
Gold stream cash effect	(58,250)
Less: Treatment & refiningcharges	(124,323)
Total Revenue	2,310,196

Payable Metal 179,395 t 84,615 t 114 koz 11,622 t

Current period sales1 $4.18 $1.33 $1,791 $8.42
Priorperiod adjustments 0.10 0.01 (44) (0.27)
Realized prices2 $4.28 /lb $1.34 /lb $1,747 /oz $8.15 /lb

Nine months ended September 30, 2020 Copper Zinc Gold Nickel Current period sales1 1,124,143 184,499 218,996 120,506 Priorperiodprice adjustments (39,944) (8,081) 1,120 (12,148) 1,084,199 176,418 220,116 108,358 Other metal sales Copper stream cash effect Gold stream cash effect Less: Treatment & refining charges Total Revenue Payable Metal 184,034 t 85,274 t 120 koz 8,767 t Current period sales1 $2.77 $0.98 $1,822 $6.23 Priorperiod adjustments (0.10) (0.04) 9 (0.62) Realizedprices2 $2.67/lb $0.94/lb $1,832/oz $5.61/lb	Total
	1,648,144 (59,053)
	1,589,091 123,670 (9,328) (54,152) (137,304)
	1,511,977

Includes provisional price adjustments on current period sales.
The realized price for copper inclusive of the impact of streaming agreements for 2021 is $4.25/lb (2020: $2.75/lb). The realized price for gold inclusive of the impact of streaming agreements for 2021 is $1,238/oz (2020: $1,374/oz).

Financial Results

Production Costs

Production costs for the quarter ended September 30, 2021 were $52.4 million higher than the prior year quarter and on a year-to-date basis production costs were higher by $165.2 million over the prior year period. These production cost increases were as a result of higher consumable costs at Candelaria, Chapada and Neves-Corvo due to inflationary increases, as well as the effects of unfavourable foreign exchange rates for the nine months ended September 30, 2021.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization expense for the quarter ended September 30, 2021 was comparable to the prior year period. For the nine months ended September 30, 2021 depreciation, depletion and amortization expense increased, primarily attributable to higher overall sales volumes.

Depreciation by operation ($thousands)	Three months ended September 30, 2021 2020 Change	Nine months ended September 30,
		2021 2020 Change
Candelaria Chapada Eagle Neves-Corvo Zinkgruvan Other	65,533 71,309 (5,776) 10,568 9,305 1,263 18,918 17,707 1,211 15,939 13,299 2,640 9,250 9,864 (614) 429 473 (44)	207,061 210,443 (3,382)
		30,941 31,735 (794)
		62,360 53,613 8,747
		45,745 40,892 4,853 29,934 24,107 5,827 1,356 1,346 10
	120,637 121,957 (1,320)	377,397 362,136 15,261

General Exploration and Business Development

General exploration and business development expenses for the three months ended September 30, 2021 decreased compared to the third quarter of 2020. For the nine months ended September 30, 2021 general exploration and business development expenses increased against the prior year comparable period due primarily to a significantly increased volume of surface exploration drilling at Chapada. This increase was partially offset by a decrease in surface exploration drilling at Zinkgruvan where the primary focus has been on known mineralized trends within the underground workings. The Chapada, Candelaria and Neves-Corvo programs are currently on track to meet or exceed 2021 drilling targets of 65,000, 40,000 and 15,000 metres, respectively.

Finance Income and Costs

Net finance costs decreased in the current quarter as well as year-to-date compared to the prior year comparable periods. The decrease was mainly due to lower interest expense as a result of more non-cash interest being capitalized to ZEP in the current year period and, for the year-to-date period, lower interest expense resulting from a lower debt balance.

Income from Equity Investment in Associate

Income from equity investment in associate has increased during the current quarter and on a year-to-date basis compared to the prior year comparatives, primarily due to the sale of the specialty cobalt business. Partial cash distributions of $17.2 million from the transaction were received during the quarter.

Other Income and Expenses

Net other income for the three months ended September 30, 2021 was $9.3 million higher than the net other expense recorded in the prior year quarter, largely due to foreign exchange gains recorded in the current year quarter.

Net other expense for the nine months ended September 30, 2021 was lower than the prior year-to-date period. The decrease was due to a revaluation of derivative liability, partially offset by lower foreign exchange gains

recorded in the current year period. A negative revaluation of $23.2 million of the derivative liability was recorded in the prior year comparative period.

As a result of a change in accounting policy for fiscal 2020, other income and expenses have been restated. This change is described in Note 2(iv) “Voluntary change in accounting policy” of the September 30, 2021 Condensed Interim Consolidated Financial Statements.

Foreign exchange gains and losses recorded in other income and expenses relate to working capital denominated in foreign currencies that were held by the Company. Period end exchange rates having a meaningful impact on foreign exchange recorded at September 30, 2021 were as follows:

	September 30, 2021	June 30, 2021	December 31, 2020
Chilean Peso (USD:CLP)	804	735	711
Euro (USD:€)	0.86	0.84	0.81
Brazilian Real (USD:BRL)	5.44	5.00	5.20
Swedish Kroner(USD:SEK)	8.79	8.51	8.19

Income Taxes

Income Taxes
Income tax expense (recovery) by mine	Three months	ended September 30,		Nine months	ended September 30,
($thousands)	2021	2020	Change	2021	2020	Change
Candelaria	38,308	19,011	19,297	130,643	39,219	91,424
Chapada	50,479	20,704	29,775	59,834	101,270	(41,436)
Eagle	2,320	1,777	543	18,101	1,694	16,407
Neves-Corvo	4,191	(13,235)	17,426	12,838	(19,455)	32,293
Zinkgruvan	7,089	(89)	7,178	13,217	(312)	13,529
Other	3,288	1,769	1,519	3,558	11,612	(8,054)
	105,675	29,937	75,738	238,191	134,028	104,163

Income taxes by classification	Three months	ended September 30,	ended September 30,	Nine months	ended September 30,	ended September 30,
($thousands)	2021	2020	Change	2021	2020	Change
Current income tax expense	89,580	(11,464)	101,044	149,560	24,370	125,190
(recovery)
Deferred income tax expense	16,095	41,401	(25,306)	88,631	109,658	(21,027)
	105,675	29,937	75,738	238,191	134,028	104,163

Income tax expense for the three months ended September 30, 2021 was higher than the prior year quarter due to higher taxable earnings. Included in Chapada’s income taxes was $14.4 million expense recorded for deferred tax on revaluation of non-monetary assets and translation of deferred taxes (Q3 2020 – $1.1 million expense).

Income tax expense for the nine months ended September 30, 2021 was higher than the prior year comparable period due primarily to higher taxable earnings, partially offset by $48.4 million lower deferred tax expense on revaluation of non-monetary assets and translation of deferred taxes at Chapada (YTD 2020 – $51.6 million expense).

As a result of a change in accounting policy for fiscal 2020, income taxes have been restated. This change is described in Note 2(iv) “Voluntary change in accounting policy” of the September 30, 2021 Condensed Interim Consolidated Financial Statements.

Mining Operations

Production Overview

Production Overview
(Contained metal in concentrate) 2021 Total Q3 Q2 Q1	2020 Total Q4 Q3 Q2 Q1
Copper (tonnes) Candelaria (100%) 106,146 35,929 36,014 34,203 Chapada 37,149 16,050 11,258 9,841 Eagle 14,783 4,165 5,227 5,391 Neves-Corvo 25,841 8,083 10,317 7,441 Zinkgruvan 1,969 850 641 478	126,702 19,509 35,836 35,060 36,297 50,038 11,368 12,990 13,799 11,881 18,663 5,128 5,055 4,102 4,378 32,032 5,880 6,518 10,559 9,075 3,346 - 1,045 1,765 536
185,888 65,077 63,457 57,354	230,781 41,885 61,444 65,285 62,167
Zinc (tonnes) Neves-Corvo 47,281 15,909 16,662 14,710 Zinkgruvan 59,686 22,860 18,171 18,655	69,143 16,750 15,459 18,986 17,948 73,601 24,678 17,328 12,596 18,999
106,967 38,769 34,833 33,365	142,744 41,428 32,787 31,582 36,947
Gold (000 oz) Candelaria (100%) 65 20 24 21 Chapada 56 26 17 13	76 13 21 21 21 87 22 24 23 18
121 46 41 34	163 35 45 44 39
Nickel (tonnes) Eagle 14,252 4,124 4,774 5,354	16,718 4,909 4,854 3,380 3,575
Lead (tonnes) Neves-Corvo 3,775 1,359 1,343 1,073 Zinkgruvan 16,756 6,952 5,095 4,709	5,108 1,321 760 1,559 1,468 24,128 6,745 5,571 3,799 8,013
20,531 8,311 6,438 5,782	29,236 8,066 6,331 5,358 9,481
Silver (000 oz) Candelaria (100%) 939 341 318 280 Chapada 177 72 55 50 Eagle 85 30 25 30 Neves-Corvo 1,114 362 407 345 Zinkgruvan 1,535 658 457 420	1,074 155 283 305 331 242 55 61 69 57 140 37 33 35 35 1,557 420 281 479 377 2,064 514 499 389 662
3,850 1,463 1,262 1,125	5,077 1,181 1,157 1,277 1,462

Cash Cost Overview

Cash Cost Overview
($/lb)	Three months ended September 30, 2021 2020	Nine months ended September 30,
		2021 2020
Candelaria (cost/lb Cu) Gross cost By-product1	2.02 1.73 (0.40) (0.36)	1.98 1.66 (0.38) (0.32)
Net Cash Cost	1.62 1.37	1.60 1.34
All-In Sustaining Cost2	2.67 2.05	2.63 2.14
Chapada (cost/lb Cu) Gross cost By-product	1.98 1.73 (1.36) (1.52) 0.62 0.21 1.36 0.73	2.23 1.77 (1.19) (1.33)
Net Cash Cost		1.04 0.44
All-In Sustaining Cost		1.75 0.85
Eagle (cost/lb Ni) Gross cost By-product	4.64 4.05 (5.44) (4.68)	4.18 4.76 (5.71) (4.25)
Net Cash Cost	(0.80) (0.63)	(1.53) 0.51
All-In Sustaining Cost	0.93 0.54	0.11 2.02
Neves-Corvo (cost/lb Cu) Gross cost By-product	3.68 3.73 (1.63) (1.76) 2.05 1.97 2.86 2.93	3.73 3.13 (1.70) (1.18)
Net Cash Cost		2.03 1.95
All-In Sustaining Cost		2.79 2.77
Zinkgruvan (cost/lb Zn) Gross cost By-product	0.83 1.10 (0.51) (0.55)	0.96 1.04 (0.46) (0.50)
Net Cash Cost	0.32 0.55	0.50 0.54
All-In Sustaining Cost	0.61 0.74	0.83 0.83

By-product is after related treatment and refining charges.
All-in Sustaining Cost ("AISC") is a non-GAAP measure – see page 24 of this MD&A for discussion of non-GAAP measures.

Capital Expenditures[1,2]

Three months ended September 30,

by Mine ($thousands)	2021 Sustaining Expansionary Capitalized Interest Total	2020 SustainingExpansionary Capitalized Interest Total 49,534 - - 49,534 7,959 - - 7,959 1,283 - - 1,283 12,217 11,210 838 24,265 6,677 - - 6,677 55 - - 55
Candelaria Chapada Eagle Neves-Corvo Zinkgruvan Other	74,326 - - 74,326 16,425 - - 16,425 3,539 - - 3,539 13,191 17,721 - 30,912 8,486 - - 8,486 102 - - 102
	116,069 17,721 - 133,790	77,725 11,210 838 89,773

by Mine ($thousands)	Nine months ended September 30, 2021 2020 Sustaining Expansionary Capitalized Interest Total SustainingExpansionary Capitalized Interest Total 226,641 - - 226,641 179,729 - - 179,729 37,856 - - 37,856 19,987 - - 19,987 12,414 - - 12,414 8,928 - - 8,928 33,348 39,030 336 72,714 39,748 56,867 1,289 97,904 28,312 - - 28,312 24,182 - - 24,182 242 - - 242 270 - - 270	Nine months ended September 30, 2021 2020 Sustaining Expansionary Capitalized Interest Total SustainingExpansionary Capitalized Interest Total 226,641 - - 226,641 179,729 - - 179,729 37,856 - - 37,856 19,987 - - 19,987 12,414 - - 12,414 8,928 - - 8,928 33,348 39,030 336 72,714 39,748 56,867 1,289 97,904 28,312 - - 28,312 24,182 - - 24,182 242 - - 242 270 - - 270
Candelaria Chapada Eagle Neves-Corvo Zinkgruvan Other	226,641 - - 226,641 37,856 - - 37,856 12,414 - - 12,414 33,348 39,030 336 72,714 28,312 - - 28,312 242 - - 242
	338,813 39,030 336 378,179	272,844 56,867 1,289 331,000

Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows.
Sustaining and expansionary capital expenditures are non-GAAP measures – see page 24 of this MD&A for discussion of non-GAAP measures.

Candelaria (Chile)

Operating Statistics

Candelaria (Chile) Operating Statistics
2021 (100% Basis) Total Q3 Q2 Q1	2020 Total Q4 Q3 Q2 Q1
Ore mined (000s tonnes) 16,755 6,098 5,062 5,595 Ore milled(000s tonnes) 20,783 6,838 7,012 6,933	29,739 3,596 8,977 9,085 8,081 22,858 4,007 7,040 6,104 5,707
Grade Copper (%) 0.56 0.58 0.56 0.53 Gold(g/t) 0.13 0.13 0.13 0.13	0.60 0.53 0.55 0.62 0.67 0.14 0.13 0.13 0.14 0.15 93.4 92.6 92.6 93.5 94.7 74.9 75.1 75.1 74.0 73.0 126,702 19,509 35,836 35,060 36,297 76 13 21 21 21 1,074 155 283 305 331
Recovery Copper (%) 92.1 91.8 91.5 93.1 Gold(%) 75.2 73.8 77.5 74.7
Production (contained metal) Copper (tonnes) 106,146 35,929 36,014 34,203 Gold (000 oz) 65 20 24 21 Silver(000 oz) 939 341 318 280
Revenue ($000s) 1,078,800 326,903399,907 351,990 Gross profit ($000s) 445,671 121,007182,867 141,797 Cash cost ($ per pound copper) 1.60 1.62 1.52 1.65 AISC($ perpound copper) 2.63 2.67 2.61 2.59	875,348 166,827 280,417 255,132 172,972 170,624 27,354 88,511 71,544 (16,785) 1.45 2.17 1.37 1.36 1.31 2.29 3.24 2.05 2.10 2.26

Gross Profit

Gross profit for the three and nine months ended September 30, 2021 was higher than the prior year comparable periods primarily due to higher realized metal prices.

Production

Copper production for the three months ended September 30, 2021 was slightly higher compared to the prior year quarter as a result of higher head grades which was partially offset by lower throughput and recoveries. Mill throughput in the quarter was in line with expectations, with major maintenance completed. On a year-to-date basis, copper production was lower than the prior year comparable period as a result of lower grades and recoveries, partially offset by better throughput.

Gold production for the three and nine months ended September 30, 2021 was consistent with the prior year comparable periods.

Copper and gold production guidance remains unchanged from that previously reported.

Cash Costs

Copper cash costs for the three and nine months ended September 30, 2021 were higher than cash costs in the prior year comparable periods. The increase was largely due to higher maintenance and diesel costs, higher labour costs as a result of the union negotiations finalized last year as well as lower sales volumes.

Cash cost guidance for the full year remains at $1.55/lb of copper.

All-in sustaining costs for the three and nine months ended September 30, 2021 were higher than those of the corresponding periods in 2020 due to higher cash costs and higher capitalized deferred stripping.

For the nine months ended September 30, 2021, approximately 42,000 oz of gold and 585,000 oz of silver were subject to terms of a streaming agreement in which $416/oz and $4.16/oz were received for gold and silver, respectively.

Chapada (Brazil)

Operating Statistics

Chapada (Brazil) Operating Statistics
2021 Total Q3 Q2 Q1	2020 Total Q4 Q3 Q2 Q1
Ore mined (000s tonnes) 26,449 11,227 8,725 6,497 Ore milled(000s tonnes) 18,410 6,435 6,132 5,843	29,386 5,575 7,831 7,528 8,452 19,192 3,618 4,808 5,278 5,488
Grade Copper (%) 0.26 0.30 0.25 0.23 Gold(g/t) 0.18 0.21 0.17 0.15	0.30 0.35 0.31 0.30 0.27 0.24 0.30 0.25 0.23 0.20
Recovery Copper (%) 78.1 84.1 75.7 72.1 Gold(%) 53.2 58.3 52.3 46.2	86.2 90.7 87.7 86.1 80.9 59.7 64.6 62.7 60.0 51.0
Production (contained metal) Copper (tonnes) 37,149 16,050 11,258 9,841 Gold (000 oz) 56 26 17 13 Silver(000 oz) 177 72 55 50	50,038 11,368 12,990 13,799 11,881 87 22 24 23 18 242 55 61 69 57
Revenue ($000s) 394,687 160,332 148,137 86,218 Gross profit ($000s) 201,610 90,275 72,023 39,312 Cash cost ($ per pound copper) 1.04 0.62 1.32 1.33 AISC($ perpound copper) 1.75 1.36 1.98 2.11	445,399 133,567 113,586 114,125 84,121 228,541 84,830 62,558 59,320 21,833 0.29 (0.18) 0.21 0.21 0.92 0.84 0.82 0.73 0.64 1.22

Gross Profit

Gross profit for the three and nine months ended September 30, 2021 was higher than the prior year comparable periods largely due to higher realized metal prices.

Production

The production of both copper and gold for the three months ended September 30, 2021 was higher than the prior year quarter as well as the previous quarter as a result of record throughput for the quarter. A mill throughput record, processing over 6.4 million tonnes, was for set for the quarter.

Production of both copper and gold for the nine months ended September 30, 2021 was in line with expectations, though lower than the comparable periods in 2020 due primarily to lower grades and recoveries from increased use of the low-grade stockpile.

Chapada full year production guidance remains unchanged from previously reported.

Cash Costs

Copper cash costs for the three and nine months ended September 30, 2021 were higher than the same periods in the prior year. The higher per-unit costs resulted from higher average haulage distances, increased material tonnages moved, and higher consumable prices for diesel and other operating contracts impacted by inflationary increases. Production costs on a per tonne milled basis were in-line with expectations.

Full year cash cost guidance remains unchanged at $1.10/lb of copper.

All-in sustaining costs for the three and nine months ended September 30, 2021 were higher than the prior year comparable periods as a result of higher cash costs.

Projects

The Company is continuing to evaluate options for long-term mine and plant expansion. Study work advanced in parallel with exploration efforts, largely focused on near-mine targets, with results to be incorporated in any potential future expansionary plans.

During the current quarter, 20,112 metres of drilling were completed, for a total of 49,364 metres year-to-date.

Eagle (USA)

Operating Statistics

Eagle (USA) Operating Statistics	Eagle (USA) Operating Statistics
2021 Total Q3 Q2 Q1		2020 Total Q4 Q3 Q2 Q1
Ore mined (000s tonnes) 532 169 Ore milled(000s tonnes) 532 166	177 186 180 186	758 204 180 185 189 761 205 179 183 194
Grade Nickel (%) 3.2 3.0 Copper(%) 2.9 2.6	3.2 3.3 3.0 3.0	2.6 2.8 3.2 2.2 2.2 2.5 2.6 2.9 2.3 2.4
Recovery Nickel (%) 84.2 82.4 Copper(%) 97.4 97.4	83.9 86.1 97.2 97.5	83.9 84.4 84.3 82.5 83.9 96.7 96.7 97.2 96.6 96.3
Production (contained metal) Nickel (tonnes) 14,252 4,124 Copper(tonnes) 14,783 4,165	4,774 5,354 5,227 5,391	16,718 4,909 4,854 3,380 3,575 18,663 5,128 5,055 4,102 4,378
Revenue ($000s) 354,072 101,311 Gross profit (loss) ($000s) 163,284 42,752 Cash cost ($ per pound nickel) (1.53) (0.80) AISC($ perpound nickel) 0.11 0.93	133,893 118,868 62,228 58,304 (2.01) (1.62) (0.23) (0.17)	294,280 102,940 91,314 52,689 47,337 77,413 45,805 36,634 3,762 (8,788) 0.10 (0.89) (0.63) 1.13 1.43 1.51 0.32 0.54 2.48 3.50

Gross Profit

Gross profit for the three and nine months ended September 30, 2021 was higher than the prior year comparable periods due to higher realized metal prices and, for the nine months, higher sales volumes.

Production

Nickel and copper production for the three months ended September 30, 2021 was lower than the prior year comparable quarter on lower throughput due to lower ore volumes as a result of mine sequencing constraints. Lower grades and recoveries also impacted the production of both metals when compared to the third quarter of 2020. Nickel and copper production for the nine months ended September 30, 2021 was higher than the prior year period due to increased mining volumes in the high-grade Eagle East zone.

Full year production guidance for both nickel and remains unchanged.

Cash Costs

Nickel cash costs for the three and nine months ended September 30, 2021 were significantly lower than the cash costs reported in the prior year comparable periods. The decrease in cash costs is primarily due to higher byproduct metal prices and, for the nine months, higher nickel sales volume.

Cash cost guidance remains unchanged at negative $1.00/lb of nickel.

All-in sustaining costs for the three months ended September 30, 2021 were higher than the prior year comparable quarter due to higher sustaining capital expenditures. All-in sustaining costs for the nine months ended September 30, 2021 were lower than those of the corresponding period in 2020, as a result of lower cash costs.

Neves-Corvo (Portugal)

Operating Statistics

Neves-Corvo (Portugal) Operating Statistics	Neves-Corvo (Portugal) Operating Statistics
2021 Total Q3 Q2 Q1		2020 Total Q4 Q3 Q2 Q1
Ore mined, copper (000 tonnes) 1,857 580 Ore mined, zinc (000 tonnes) 784 251 Ore milled, copper (000 tonnes) 1,840 565 Ore milled,zinc(000 tonnes) 776 242	646 631 275 258 655 620 280 254	2,396 475 566 715 640 1,091 291 242 272 286 2,427 489 565 734 639 1,106 296 240 286 284
Grade Copper (%) 1.8 1.8 Zinc(%) 7.7 8.2	1.9 1.5 7.5 7.4	1.7 1.5 1.5 1.8 1.8 8.1 7.5 8.4 8.5 8.0
Recovery Copper (%) 80.0 77.8 Zinc(%) 76.7 76.5	81.7 80.0 77.5 76.0	79.1 79.0 78.4 81.3 77.4 76.2 74.2 75.9 76.7 77.7
Production (contained metal) Copper (tonnes) 25,841 8,083 Zinc (tonnes) 47,281 15,909 Lead (tonnes) 3,775 1,359 Silver(000 oz) 1,114 362	10,317 7,441 16,662 14,710 1,343 1,073 407 345	32,032 5,880 6,518 10,559 9,075 69,143 16,750 15,459 18,986 17,948 5,108 1,321 760 1,559 1,468 1,557 420 281 479 377
Revenue ($000s) 323,339 108,083 Gross profit (loss) ($000s) 73,218 22,313 Cash cost (€ per pound copper) 1.70 1.74 Cash cost ($ per pound copper) 2.03 2.05 AISC($ perpound copper) 2.79 2.86	134,496 80,760 44,085 6,820 1.37 2.17 1.65 2.61 2.34 3.38	257,046 60,794 69,287 81,188 45,777 (13,993) (3,320) 2,954 6,299 (19,926) 1.84 2.37 1.69 1.58 2.03 2.09 2.85 1.97 1.75 2.24 3.16 5.35 2.93 2.32 3.28

Gross Profit

Gross profit for the three and nine months ended September 30, 2021 was higher than the comparable periods in 2020 largely due to higher realized metal prices.

Production

Copper production for the current quarter was higher than the prior year quarter as a result of higher throughput and grades. Copper production for the nine months ended September 30, 2021 was higher than the prior year comparable period as higher grades and recoveries were partially offset by lower throughput due to planned maintenance during which the shaft upgrade was complete and preparations were made for ZEP tie-ins.

Zinc production for the three months ended September 30, 2021 was higher than the prior year comparable quarter primarily due to higher throughput and, despite lower head grades, higher zinc recovery from copper ore. Zinc production for the nine months ended September 30, 2021 was lower than the prior year comparable period due to lower throughput and grades.

Full year production guidance remains unchanged.

Cash Costs

Copper cash costs for the three and nine months ended September 30, 2021 were higher than those of the corresponding periods in 2020 largely due to higher mine and mill costs resulting from inflationary increases in consumables, electricity and contractor prices, as well as unfavourable foreign exchange.

Full year copper cash cost guidance remains unchanged at $2.10/lb.

All-in sustaining costs for the three and nine months ended September 30, 2021 were higher than the corresponding period in 2020 due to higher cash costs.

Projects

ZEP continues to progress on schedule and on budget and it is expected construction will be substantially completed by the end of 2021 with the commencement of commissioning of the mine materials handling system and the expanded zinc processing plant. Upgrades to the shaft were completed during the planned prolonged annual maintenance shutdown and preparations were made for reticulation system tie-ins for the zinc plant. Production ramp up to full production rates is planned for the first half of 2022.

An estimated $70.0 million of expansionary capital is expected to be spent in 2021, with a further $30.0 million in 2022 to complete the project, primarily reflecting timing of payments. Total pre-production capital cost estimate of $430.0 million (€360.0 million) for the project remains unchanged.

Zinkgruvan (Sweden)

Operating Statistics

Zinkgruvan (Sweden) Operating Statistics	Zinkgruvan (Sweden) Operating Statistics
2021 Total Q3 Q2 Q1		2020 Total Q4 Q3 Q2 Q1
Ore mined, zinc (000 tonnes) 905 279 Ore mined, copper (000 tonnes) 175 66 Ore milled, zinc (000 tonnes) 890 289 Ore milled,copper(000 tonnes) 126 52	298 328 66 43 267 334 50 24	1,208 323 282 279 324 215 29 61 81 44 1,208 324 316 239 329 181 - 62 98 21
Grade Zinc (%) 7.5 8.9 Lead (%) 2.4 3.1 Copper(%) 1.8 1.9	7.6 6.3 2.4 1.8 1.5 2.2	6.7 8.3 6.2 5.9 6.4 2.5 2.7 2.3 2.0 2.9 2.2 - 2.0 2.1 2.8
Recovery Zinc (%) 89.0 89.1 Lead (%) 77.5 77.4 Copper(%) 87.6 88.5	89.1 88.8 78.7 76.5 85.0 89.5	90.4 91.9 88.8 89.5 90.4 79.5 78.5 77.0 78.1 83.0 85.2 - 83.3 84.8 90.6
Production (contained metal) Zinc (tonnes) 59,686 22,860 Lead (tonnes) 16,756 6,952 Copper (tonnes) 1,969 850 Silver(000 oz) 1,535 658	18,171 18,655 5,095 4,709 641 478 457 420	73,601 24,678 17,328 12,596 18,999 24,128 6,745 5,571 3,799 8,013 3,346 - 1,045 1,765 536 2,064 514 499 389 662
Revenue ($000s) 159,298 59,765 Gross profit ($000s) 56,047 28,630 Cash cost (SEK per pound zinc) 4.27 2.78 Cash cost ($ per pound zinc) 0.50 0.32 AISC($ perpound zinc) 0.83 0.61	55,891 43,642 20,100 7,317 3.58 6.43 0.42 0.76 0.76 1.10	169,433 65,401 46,069 30,185 27,778 39,012 24,905 9,665 2,239 2,203 4.77 4.22 4.90 5.50 4.96 0.52 0.50 0.55 0.56 0.51 0.82 0.78 0.74 1.03 0.79

Gross Profit

Gross profit for the three and nine months ended September 30, 2021 was higher than the comparable periods in 2020 largely attributable to higher realized metal prices.

Production

Zinc production for the quarter ended September 30, 2021 as well as on a year-to-date basis was higher than the prior year comparable periods due to higher grades and, for the nine months, higher throughput.

Lead production for the quarter ended September 30, 2021 was higher than the prior year quarter as a result of higher grades and recoveries. Lead production for the nine months ended September 30, 2021 was lower than the prior year comparable periods as a result of lower grades in the first quarter of 2021.

Full year production guidance remains unchanged from that previously reported.

Cash Costs

Zinkgruvan’s cash costs for the three and nine months ended September 30, 2021 were lower than the prior year due to lower per unit production costs as well as lower treatment and refining charges partially offset by the impact of unfavourable foreign exchange.

Full year zinc cash cost guidance remains unchanged at $0.65/lb.

All-in sustaining costs for the three and nine months ended September 30, 2021 were lower than those reported in the corresponding periods in 2020 due to lower cash costs.

Metal Prices, LME Inventories and Smelter Treatment and Refining Charges

The average metal prices for zinc and nickel for the third quarter of 2021 were higher than the average prices for the second quarter of 2021 by 3% and 10%, respectively. The average copper and gold prices for the third quarter of 2021 were lower than the average price for the second quarter of 2021 by 3% and 1%, respectively.

All metal prices, with the exception of gold, were higher in the current quarter compared to the prior year quarter. On a year-to-date basis, all metal prices were higher than the prior year comparative.

(Average LME Price)	Three months ended September 30, 2021 2020 Change	Nine months ended September 30, 2021 2020 Change
Copper US$/pound	4.25 2.96 44%	4.17 2.65 57%
US$/tonne	9,372 6,519	9,188 5,849
Zinc US$/pound US$/tonne	1.36 1.06 28% 2,991 2,335	1.31 0.97 35% 2,886 2,145
Gold US$/ounce	1,790 1,909 -6%	1,800 1,735 4%
Nickel US$/pound US$/tonne	8.67 6.45 35% 19,125 14,210	8.18 5.93 38% 18,036 13,068

LME inventory for copper increased by 4% during the third quarter of 2021 while the inventories for zinc and nickel decreased by 22% and 48%, respectively.

During the third quarter of 2021, the treatment charges (“TC”) and refining charges (“RC”) in the spot market for copper concentrates between miners and commodity traders increased from an average spot TC during July of $45 per dmt of concentrate and a spot RC of $0.045 per lb of payable copper to a spot TC of $51 per dmt of concentrate and a spot RC of $0.051 per lb of payable copper during September 2021. Also, the spot terms at which Chinese copper smelters were prepared to buy increased through the quarter from a TC of $50 per dmt of concentrate and a RC of $0.05 per payable lb of copper over July to a TC of $61 per dmt of concentrate and a RC of $0.061 per payable lb of copper at the end of September.

The spot TC, delivered China, for zinc concentrates during the third quarter of 2021 hovered between $82 per dmt, flat, at the beginning of July and $80 per dmt, flat, by the end of the quarter, on very limited activity. As of the beginning of April, a settlement in the negotiations between the mines and smelters for annual contracts for zinc concentrates was reported at $159 per dmt, flat which represents a significant improvement in favour of the mines compared to the settlement for 2020 which was $299.75 per dmt, flat.

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.

Liquidity and Capital Resources

As at September 30, 2021, the Company had cash and cash equivalents of $428.3 million. With the ongoing COVID19 pandemic, there is still uncertainty in the marketplace, as well as potential risks to production, supply chain, delivery of concentrates, commodity prices and many other variables. However, the Company continues to expect to be able to fund all its contractual commitments and obligations through operating cash flow generated, cash on hand and available debt facilities.

Cash flow from operations for the three and nine months ended September 30, 2021 were $250.9 million and $707.6 million higher than the comparative periods in the prior year. The increase was primarily attributable to higher gross profit (Q3 - $104.6 million, YTD - $617.8 million) largely due to higher realized metal prices and price adjustments. For the current quarter and year-to-date, there was a positive comparative change in non-cash working capital (Q3 - $218.8 million, YTD - $170.8 million). Offsetting these cash flow increases was increased income tax.

Cash flow used in investing activities was higher $32.0 million higher in the current quarter compared to the prior year quarter. In addition to capital expenditures being $44.0 million higher, the Company paid a contingent liability of $25.0 million, and received partial proceeds of $17.2 million from the Company’s sale of its interest in the Freeport Cobalt specialty cobalt business. On a year-to-date basis, cash flow used in investing activities was higher than the prior year period due primarily to capital expenditures.

Cash flow used in financing activities increased on a current quarter and year-to-date basis compared to the prior year periods by $22.8 million and $333.9 million owing to higher dividends paid to shareholders and lower net debt proceeds received.

Capital Resources

As at September 30, 2021, the Company had $37.6 million of debt and lease liabilities.

As at September 30, 2021, the Company has no amounts drawn on its credit facility and outstanding term loans were fully repaid during the current quarter. Additionally, the Company has $5.9 million of equipment financing and $31.7 million of lease liabilities. The Company has approximately $779.0 million available for drawdown on its credit facility.

During the third quarter and nine months ended September 30, 2021, the Company purchased 1.1 million shares under its Normal Course Issuer Bid for consideration of $7.5 million (2021 YTD – 3.8 million shares, $35.9 million consideration). In the third quarter of 2020, 0.6 million shares were repurchased for total consideration of $3.7 million (2020 YTD – 2.2 million shares, $11.1 million consideration).

Contractual Obligations, Commitments and Contingencies

The Company has contractual obligations and capital commitments as described in the 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 does not currently utilize complex financial instruments in hedging metal price, foreign exchange or interest rate exposure. The Company will not hold or issue derivative instruments for speculation or trading purposes.

For details of the Company’s financial instruments refer to Note 18 of the Company’s Condensed Interim Consolidated Financial Statements.

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:

revenues:
		Provisional price on		Effect on Revenue
Metal	Payable Metal	September 30, 2021	Change	($millions)
Copper	71,769 t	$4.05/lb	+/- 10%	+/- $64.1
Zinc	11,684 t	$1.35/lb	+/- 10%	+/- $3.5
Gold	37 koz	$1,753/oz	+/- 10%	+/- $6.5
Nickel	1,146 t	$8.14/lb	+/- 10%	+/-$2.1

Related Party Transactions

The Company may enter 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 September 30, 2021 Condensed Interim Consolidated Financial Statements.

Changes in Accounting Policies and Critical Accounting Estimates and Judgments

Significant accounting policies as well as any changes in accounting policies are discussed in Note 2 “Basis of Presentation and Significant Accounting Policies” of the September 30, 2021 Condensed Interim Consolidated Financial Statements.

Non-GAAP 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 Cash (Debt)

Net cash (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 cash (debt) is a useful indicator to some investors to evaluate the Company’s financial position. Net cash (debt) is defined as cash and cash equivalents, less debt and lease liabilities, excluding deferred financing fees and can be reconciled as follows:

as follows:
($thousands)	September 30, 2021		June 30,2021	December 31,2020
Cash and cash equivalents		428,300	294,914	141,447
Current portion of debt and lease liabilities		(17,660)	(119,780)	(116,942)
Debt and lease liabilities		(19,974)	(21,752)	(86,106)
		(37,634)	(141,532)	(203,048)
Deferred financingfees(netted in above)		-	-	(1,622)
		(37,634)	(141,532)	(204,670)
Net cash(debt)		390,666	153,382	(63,223)

Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share

Adjusted operating cash flow is a performance measure used by the Company to assess its ability to generate cash from its operations, while also taking into consideration changes in the number of outstanding shares of the Company. 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 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 is adjusted operating cash flow divided by the basic weighted average number of shares outstanding.

Adjusted operating cash flow and adjusted operating cash flow per share can be reconciled to cash provided by operating activities as follows:

($thousands,except share andper share amounts)	Three months ended September 30, Nine months ended September 30,
	2021 2020 2021 2020
Cash provided by operating activities Changes in non-cash workingcapital items	523,104 272,201 1,100,777 393,223 (228,989) (10,187) (95,190) 75,643
Adjusted operating cash flow Weighted average common shares outstanding	294,115 262,014 1,005,587 468,866 736,443,985 733,825,007 737,314,204 733,981,090
Adjusted operating cash flowper share	0.40 0.36 1.36 0.64

Free Cash Flow

The Company believes free cash flow is a relevant measure for some investors, as it is indicative of the Company’s ability to generate cash from operations after consideration for required sustaining capital expenditures necessary to maintain operations. Free cash flow is defined as cash flow provided by operating activities, less sustaining capital expenditures.

Free cash flow can be reconciled to cash provided by operating activities as follows:

($thousands)	Three months ended September 30, Nine months ended September 30,
	2021 2020 2021 2020
Cash provided by operating activities Sustainingcapital expenditures	523,104 272,201 1,100,777 393,223 (116,069) (77,725) (338,813) (272,844)
Free cash flow	407,035 194,476 761,964 120,379

Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings per Share

Earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted earnings and adjusted earnings per share 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 liquidity 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 not represent the Company’s current and on-going operations and are not necessarily indicative of future operating results.

As a result of a change in accounting policy, foreign currency translation differences on deferred tax liabilities and assets have been retrospectively restated. This change is described in Note 2 (iv) “Voluntary change in accounting policy” of the September 30, 2021 Condensed Interim Consolidated Financial Statements.

Adjusted EBITDA can be reconciled to the Company's Consolidated Statement of Earnings as follows:

($thousands)	Three months ended September 30, 2021 2020	Nine months ended September 30,
		2021 2020
Net earnings Add back: Depreciation, depletion and amortization Finance income and costs Income taxes	190,580 133,595 120,637 121,957 10,143 6,785 105,675 29,937	613,231 68,285 377,397 362,136 30,317 38,221 238,191 134,028
Unrealized foreign exchange Revaluation gain on derivative asset/liability Income from investment in associates Project standby and suspension costs Other	427,035 292,274 (2,731) 4,786 1,274 5,553 (21,088) (1,034) - - 6,806 (1,301)	1,259,136 602,670 3,527 (7,934) (745) 23,217 (22,234) (2,980) - 6,341 6,778 770
Total adjustments - EBITDA	(15,739) 8,004	(12,674) 19,414
Adjusted EBITDA	411,296 300,278	1,246,462 622,084

Adjusted earnings and adjusted earnings per share can be reconciled to the Company's Consolidated Statement of Earnings as follows:

($thousands,except share andper share amounts)	Three months ended September 30,	Nine months ended September 30,
	2021 2020	2021 2020
Net earnings attributable to: Lundin Mining shareholders Add back: Total adjustments - EBITDA Tax effect on adjustments Deferred tax arising from foreign exchange on non-monetary balances Deferred tax arising from foreign exchange translation Prior period tax refund and interest Tax asset revaluations Other	173,740 122,355 (15,739) 8,004 (3,556) (453) 22,645 4,483 (8,209) (3,390) - (19,161) - (5,388) (460) (50)	551,568 49,599 (12,674) 19,414 (2,729) 10,609 4,944 80,145 (1,733) (28,543) - (19,161) - 8,174 (305) (194)
Total adjustments	(5,319) (15,955)	(12,497) 70,444
Adjusted earnings	168,421 106,400	539,071 120,043
Weighted average number of shares outstanding: Basic Diluted Basic and diluted earnings (loss) per share attributable to Lundin Net earnings Total adjustments	736,443,985733,825,007 738,663,357735,514,039 Mining shareholders: 0.24 0.17 (0.01) (0.03)	737,314,204733,981,090 739,906,402734,981,419 0.75 0.07 (0.02) 0.09
Adjusted earnings per share	0.23 0.14	0.73 0.16

Capital Expenditures

Identifying capital expenditures, on a cash basis, using a sustaining or expansionary classification provides management 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. Sustaining and expansionary capital expenditures are reported excluding capitalized interest.

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 performing and to assess overall efficiency and effectiveness of the mining operations. Cash cost is not an IFRS measure and, although it is calculated according to accepted industry practice, the Company’s disclosed cash costs may not be directly comparable to other 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.
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 achieved 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.

Cash Cost and AISC can be reconciled to the Company's production costs as follows:

Cash Cost and AISC can be reconciled to the Company's production costs as follows:	Cash Cost and AISC can be reconciled to the Company's production costs as follows:	Cash Cost and AISC can be reconciled to the Company's production costs as follows:
Three months ended September 30, 2021
Operations Candelaria Chapada	Eagle Neves-Corvo Zinkgruvan
($000s,unless otherwise noted) (Cu) (Cu)	(Ni) (Cu) (Zn)	Total
Sales volumes (Contained metal in concentrate):
Tonnes 33,743 13,869	3,246 9,071 16,043
Pounds(000s) 74,390 30,576	7,156 19,998 35,369

Production costs		331,816
Less: Royalties and other		(13,626)
		318,190
Deduct: By-product credits		(160,394)
Add: Treatment and refiningcharges		28,459
Cash cost 120,512 19,097	(5,703) 40,987 11,362	186,255
Cash costperpound($/lb) 1.62 0.62	(0.80) 2.05 0.32

Add: Sustaining capital expenditure 74,326 16,425	3,539 13,191 8,486
Royalties - 4,157	6,459 1,839 -
Interest expense 1,263 859	177 18 18
Leases & other 2,778 987	2,173 1,201 1,692
All-in sustaining cost 198,879 41,525	6,645 57,236 21,558
AISCperpound($/lb) 2.67 1.36	0.93 2.86 0.61

Three months ended September 30, 2020
Operations Candelaria Chapada Eagle Neves-Corvo Zinkgruvan ($000s,unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn)	Total
Sales volumes (Contained metal in concentrate): Tonnes 34,713 11,220 3,539 6,892 15,002 Pounds(000s) 76,529 24,736 7,802 15,194 33,074
Production costs Less: Royalties and other Deduct: By-product credits Add: Treatment and refiningcharges	279,373 (10,109)
	269,264 (146,095) 30,110
Cash cost 104,811 5,221 (4,934) 29,974 18,207 Cash costperpound($/lb) 1.37 0.21 (0.63) 1.97 0.55	153,279
Add: Sustaining capital expenditure 49,534 7,959 1,283 12,217 6,677 Royalties - 2,927 5,459 510 - Interest expense 1,022 1,110 313 78 (82) Leases & other 1,763 768 2,131 1,786 (390)
All-in sustaining cost 157,130 17,985 4,252 44,565 24,412 AISCperpound($/lb) 2.05 0.73 0.54 2.93 0.74

Nine months ended September 30, 2021	Nine months ended September 30, 2021
Operations Candelaria Chapada Eagle Neves-Corvo Zinkgruvan
($000s,unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn)	Total
Sales volumes (Contained metal in concentrate):
Tonnes 104,796 33,495 11,622 25,950 46,051
Pounds(000s) 231,035 73,844 25,622 57,210 101,525

Production costs	996,246
Less: Royalties and other	(42,695)
	953,551
Deduct: By-product credits	(466,556)
Add: Treatment and refining	86,367
Cash cost 368,583 76,527 (39,260) 116,351 51,161	573,362
Cash costperpound($/lb) 1.60 1.04 (1.53) 2.03 0.50

Add: Sustaining capital expenditure 226,641 37,856 12,414 33,348 28,312
Royalties - 9,797 21,934 5,576 -
Interest expense 3,547 2,577 531 57 54
Leases & other 7,930 2,483 7,234 4,164 4,248
All-in sustaining cost 606,701 129,240 2,853 159,496 83,775
AISCperpound($/lb) 2.63 1.75 0.11 2.79 0.83

Nine months ended September 30, 2020
Operations Candelaria Chapada Eagle Neves-Corvo Zinkgruvan ($000s,unless otherwise noted) (Cu) (Cu) (Ni) (Cu) (Zn)	Total
Sales volumes (Contained metal in concentrate): Tonnes 106,609 36,153 8,767 26,091 39,751 Pounds(000s) 235,032 79,704 19,328 57,521 87,636
Production cost Less: Royalties and other Deduct: By-product credits Add: Treatment and refining	831,082 (27,215) 803,867 (373,242) 89,385
Cash cost 315,590 34,781 9,937 112,354 47,348 Cash costperpound($/lb) 1.34 0.44 0.51 1.95 0.54	520,010
Add: Sustaining capital expenditure 179,729 19,987 8,928 39,748 24,182 Royalties - 7,874 13,200 1,821 - Interest expense 3,202 3,327 938 226 47 Leases & other 5,096 1,926 6,014 4,963 1,544
All-in sustaining cost 503,617 67,895 39,017 159,112 73,121 AISCperpound($/lb) 2.14 0.85 2.02 2.77 0.83

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.

Tax regime changes in the jurisdictions in which the Company operates can have a material effect on income and royalty taxes. In Chile, there is a proposed mining royalty tax that if approved would result in increased royalty payments for Candelaria. In Brazil, a bill of law proposing increased mining royalty rates and changes to other taxes are also under discussion and, if approved, would result in increased royalty obligations and potentially other tax payments.

Rising global inflation and increased potential supply chain disruptions could have a significant impact on the Company’s operations, inventory and costs.

While vaccination rates are continuing to increase and rates of infection are on the decline worldwide, impacts from the global COVID-19 pandemic and the emergence of more virulent strains of the virus continue to affect the jurisdictions in which the Company operates.

For a detailed discussion on Lundin Mining’s risks, refer to the “Risks and Uncertainties” section of the Company’s most recently filed Annual Information Form (“AIF”).

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 President and 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 three-month period ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s financial reporting.

Outstanding Share Data

As at October 27, 2021, the Company has 735,475,804 common shares issued and outstanding, and 8,769,757 stock options and 2,473,500 share units outstanding under the Company's incentive 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).

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Lundin Mining Corporation — Management Reports 2021

46142_rns_2021-10-27_8ac96332-65f1-4305-b1ed-d970213cd1eb.pdf

About Lundin Mining

Table of Contents

Cautionary Statement on Forward-Looking Information

Highlights

Operational Performance

Financial Performance

Corporate Updates

Financial Position and Financing

Outlook

2021 Capital Expenditure Guidance

2021 Exploration Investment Guidance

Selected Quarterly Financial Information[1]

Summary of Quarterly Results[1,4]

Revenue Overview

Sales Volumes by Payable Metal

Revenue Analysis

Provisionally valued revenue as of September 30, 2021

Quarterly Reconciliation of Realized Prices

Year-to-Date Reconciliation of Realized Prices

Financial Results

Production Costs

Depreciation, Depletion and Amortization

General Exploration and Business Development

Finance Income and Costs

Income from Equity Investment in Associate

Other Income and Expenses

Income Taxes

Mining Operations

Production Overview

Cash Cost Overview

Capital Expenditures[1,2]

Three months ended September 30,

Candelaria (Chile)

Operating Statistics

Gross Profit

Production

Cash Costs

Chapada (Brazil)

Operating Statistics

Gross Profit

Production

Cash Costs

Projects

Eagle (USA)

Operating Statistics

Gross Profit

Production

Cash Costs

Neves-Corvo (Portugal)

Operating Statistics

Gross Profit

Production

Cash Costs

Projects

Zinkgruvan (Sweden)

Operating Statistics

Gross Profit

Production

Cash Costs

Metal Prices, LME Inventories and Smelter Treatment and Refining Charges

Liquidity and Capital Resources

Capital Resources

Contractual Obligations, Commitments and Contingencies

Financial Instruments

Sensitivities

Metal Prices

Related Party Transactions

Changes in Accounting Policies and Critical Accounting Estimates and Judgments

Non-GAAP Performance Measures

Net Cash (Debt)

Adjusted Operating Cash Flow and Adjusted Operating Cash Flow per Share

Free Cash Flow

Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings per Share

Capital Expenditures

Cash Cost per Pound

All-in Sustaining Cost (“AISC”) per Pound

Managing Risks

Lundin Mining Corporation Management Reports 2021