Lundin Mining (TSX: LUN) has lowered its 2026 copper production forecast for the second time in two months as lingering damage from severe winter storms in Chile continues to hamper operations at its Caserones mine.
The Canadian miner cut Caserones’ full-year guidance to 105,000–115,000 tonnes from 120,000–130,000 tonnes, bringing its company-wide forecast to 285,000–310,000 tonnes. The latest revision follows an August reduction from an initial target of 130,000–140,000 tonnes.
“Importantly, these are deferred tonnes rather than lost production, and we expect to see a recovery in operational performance through 2027,” the company said in its third-quarter results.
The repeated cuts highlight the operational challenges facing Lundin at one of its key Chilean assets, even as record copper prices strengthen its balance sheet and help fund an expanding pipeline of growth projects. Caserones’ recovery will be important to restoring production momentum next year.
Storm disruption
Severe winter storms suspended operations at Caserones for about 30 days during the third quarter, while subsequent snowmelt has continued to restrict haulage rates and ore deliveries to the mill into the fourth quarter.
Lundin produced 62,610 tonnes of copper in the three months ended Sept. 30, matching BMO Capital Markets’ estimate of 62,600 tonnes but falling short of the 68,000-tonne analyst consensus, BMO analyst Matthew Murphy said in a note on Thursday.
Gold production reached 36,763 oz., exceeding BMO’s 34,900-oz. forecast and roughly matching consensus expectations of 37,300 ounces.
Despite the weaker output, Lundin maintained Caserones’ cash cost guidance at $2.15–$2.35 per lb., following an increase in August, and reduced sustaining capital expenditure guidance by $20 million to $215 million. Consolidated cash cost guidance remains at $1.95–$2.15 per lb.
Other operations performed more strongly. Copper production at the Candelaria complex in Chile rose 13% from the second quarter, while Brazil’s Chapada mine recorded its highest quarterly copper and gold output of the year.
Growth pipeline
Record realized copper prices helped Lundin Mining generate more than $1.1 billion in quarterly revenue, marking its fourth consecutive quarter above $1 billion. Free cash flow from operations reached $418 million, leaving the company with a net cash position of $237 million at quarter-end.
“Supported by record realized copper prices in the year to date, our adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of $1.9-billion and free cash flow from operations of $1.2-billion have both already surpassed their full-year 2025 totals, positioning the company for what we expect to be another record beating financial year,” president and CEO Jack Lundin said.
At Caserones, the company is pursuing leach optimization initiatives aimed at raising copper cathode production to the plant’s existing annual capacity of 35,000 tonnes. A second phase would expand capacity to 40,000 tonnes through rectifier upgrades.
Exploration has also suffered setbacks. Drilling at the Angélica target is expected to resume by the end of the fourth quarter, while work at Cordillera is scheduled for the first half of 2027 following completion of a 16-km access road.
At Chapada, construction of an additional ball mill is about 15% complete, with commissioning targeted for late 2027.
Lundin is also advancing the Vicuña copper-gold project on the Chile-Argentina border, a 50:50 joint venture with BHP (ASX: BHP; NYSE: BHP) comprising the Filo del Sol and Josemaría deposits.
The venture secured a long-term agreement with Argentina’s San Juan province and approval to construct a high-voltage powerline connecting the project to the national grid. Lundin is targeting a sanction decision before year-end.
The development timetable puts further emphasis on Lundin’s ability to sustain cash generation while addressing operational setbacks at Caserones. Progress at Vicuña and Chapada could support the company’s longer-term ambition of becoming a top-10 global copper producer, although major investment decisions and project execution remain ahead.
Source: https://www.mining.com/lundin-cuts-copper-outlook-again-as-wild-chile-weather-bites/
