TORONTO, ONTARIO--(Marketwired - June 12, 2013) - Lundin Mining Corporation (TSX:LUN)(OMX:LUMI) ("Lundin Mining" or the "Company") is pleased to announce that it has entered into a definitive agreement with Rio Tinto Nickel Company, a subsidiary of Rio Tinto plc ("Rio Tinto") to purchase its 100% ownership stake in Rio Tinto Eagle Mine, LLC, which owns the high grade Eagle nickel/copper underground mine located in northern Michigan, U.S.A. The agreed purchase price is approximately US$325 million, consisting of a US$250 million purchase amount plus project expenditures from January 1, 2013 until transaction closing of approximately $75 million, payable in cash, and subject to customary adjustments.

Paul Conibear, President and CEO commented, "The acquisition of the Eagle Mine fits ideally within Lundin Mining's asset base and is the result of the disciplined approach we have been focused on for some time to acquire high quality, advanced stage assets in low risk, mining oriented jurisdictions. The Eagle Mine represents a very unique opportunity to acquire a high-grade project which is under construction and expected to begin generating significant levels of metal production and cash flow prior to the end of next year. Northern Michigan has an outstanding iron ore, gold and base metals mining history and consequently excellent regional power, road and rail infrastructure, with extensive mining expertise within local communities to support and staff Eagle Mine."

The Eagle Mine is located in Marquette County in the Upper Peninsula of Michigan. Project construction is slightly more than 50% complete with initial production expected to commence in Q4 2014. Annual production over the first three full years (2015 - 2017) is expected to average approximately 23,000 tonnes of nickel and 20,000 tonnes of copper per annum, with additional by-product credits of precious metals and cobalt. Due to the high nickel grades and strong by-product credits, C1 cash costs for the first three years are expected to average approximately $2.00/lb nickel, thereby strongly positioning the asset in the lowest quartile of the nickel producer cost curve.

Key Investment Highlights

• High grade nickel/copper deposit in a low-risk jurisdiction
• High quality nickel and copper concentrates with low technical and processing risk
• Project construction is just over 50% completed
• Production expected to commence Q4 2014
• Expected to be lowest quartile cost nickel producer
• Short payback period and strong cash flows
• Exploration upside with potential for increase in resources

Eagle Mine Overview

The Eagle Mine is a high grade nickel/copper deposit with Probable Ore Reserves estimated in accordance with JORC of 5.18 million tonnes at 2.93% nickel and 2.49% copper anticipated to produce on average approximately 17,000 tonnes per annum nickel and 17,000 tonnes per annum copper, with gold, cobalt, platinum and palladium by-products over the current life of mine of approximately 8 years. In close proximity to the Eagle Mine deposit, several exploration targets have been identified. Exploration efforts will be advanced in this highly prospective area of interest to identify additional resources.

Rio Tinto discovered the Eagle deposit in 2002 and after completion of pre-feasibility (2005) and feasibility studies (2007), a decision to build was announced in July 2010. Construction of the project is now slightly more than 50% completed, with first production expected to occur in Q4 2014. Total project capex is estimated at $770 million of which approximately $355 million has already been spent as of the end of May 2013. In addition to the total acquisition price of approximately $325 million, remaining investment by Lundin Mining for the balance of 2013 and 2014 to bring Eagle Mine into production is estimated at $400 million.

The Eagle assets being acquired comprise the in-development Eagle nickel-copper underground mine, the historic Humboldt mill site and mineral, water, access and surface rights around the mine. The Eagle deposit is an ultramafic-intrusive-hosted Ni-Cu deposit, with cobalt, platinum group metals (PGMs) and gold. The mine is located 45 km north west of the city of Marquette, Michigan and served by good infrastructure in a region with a long history and local support of mining activities.

The underground mine, which is in an advanced stage of development, is served by a mine ramp, with some 3,000 m of total development having been completed as of the end of May. The planned mine production rate is 2,000 tonnes per day from long-hole open stopes with cemented rock backfill. Ore will be transported from the mine to the Humboldt mill site on upgraded existing roads (approximately 105 km) by truck.

Mill facilities are under construction as a brownfields project by refurbishing the Humboldt mill buildings and infrastructure. Processing at a rate of 2,000 tonnes per day, will comprise conventional crushing, grinding and flotation to produce separate nickel and copper concentrates. The concentrates will be transported by existing rail infrastructure from the mill site to final smelter or port destinations. Tailings will be deposited sub-aqueously in the adjacent flooded Humboldt open pit. Power is supplied from the grid already connected to the site.

Transaction Overview

The purchase price will be paid in cash and is subject to certain adjustments dependent on the exact time of closing. The purchase price will be funded from Lundin Mining's current net cash balance of approximately $250 million and a portion of its existing $350 million revolving credit facility. The remaining balance of project capital to be spent will be funded by the Company's existing credit facility, from ongoing cash flow and if necessary from an expanded debt facility or similar flexible funding instrument. The transaction is not conditional upon financing.

The purchase agreement includes typical closing conditions, including regulatory approvals. The transaction is expected to be completed in July 2013.

Probable Ore Reserves

As reported by Rio Tinto, Probable Ore Reserves, estimated in accordance with JORC as of 31 December 2012 (using a cut-off of NSR>$118/tonne) are shown below. Lundin Mining intends to file a NI 43-101 Technical Report on the Eagle project within 45 days.

The reserve estimates reported in this release have been prepared by Rio Tinto, using accepted industry practice and have been classified in accordance with the JORC Code. There are no material differences between the definitions of Proven and Probable Mineral Reserves under the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM Definition Standards") and the corresponding equivalent definitions in the JORC Code for Proven and Probable Ore Reserves.

The Probable Ore Reserves have been calculated using Net Smelter Return (NSR) values. The NSR is calculated on a recovered payable basis taking into account nickel, copper, gold, platinum and palladium grades, metallurgical recoveries, prices and realization costs.

Qualified Person

The Qualified Person for the scientific and technical information contained herein is Stephen Gatley, Vice President Technical Services, Lundin Mining. Mr. Gatley has reviewed and approved the contents of this news release. Mr. Gatley has verified the Probable Ore Reserves prepared by Rio Tinto and believes that the assumptions and parameters are reasonable and that there is sufficient data to support the estimate.

Eagle Conference Call and Webcast

Lundin Mining will hold a conference call and webcast on Thursday June 13th, 2013 at 8:45 am Eastern time. Details of the call are provided below:

Please call in 10 to 15 minutes before the conference starts and stay on the line (an operator will be available to assist you).

Call-in number for the conference call (North America): +1416-340-8527

Call-in number for the conference call (North America Toll Free): +1 877-240-9772

Call-in number for the conference call (Europe Toll Free): +00 800-2787-2090

To take part in the interactive presentation, please log on using this direct link: http://www.investorcalendar.com/IC/CEPage.asp?ID=171118

The presentation slideshow will also be available in PDF format for download from the Lundin Mining website www.lundinmining.com before the conference call.

A replay of the telephone conference will be available approximately one hour after the completion of the conference call until June 20, 2013.

Replay number in North America: +1 905 694 9451

North America (Toll Free) is: +1 800 408 3053

Europe (Toll Free) is: +00 800 3366 3052

The pass code for the replay is: 5231720

About Lundin Mining

Lundin Mining Corporation is a diversified base metals mining company with operations in Portugal, Sweden and Spain, producing copper, zinc, lead and nickel. In addition, Lundin Mining holds a 24% equity stake in the world-class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and in the Kokkola cobalt refinery located in Finland.

On Behalf of the Board,

Paul Conibear, President and CEO

Forward Looking Statements

Certain of the statements made and information contained herein is "forward-looking information" within the meaning of the Ontario Securities Act. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to the estimated purchase price of the proposed transaction, the timing of closing the proposed transaction, estimated cash costs, the timing and amount of production from the Eagle Mine, the cost estimates for the Eagle Mine, foreign currency fluctuations; risks inherent in mining including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; risks associated with the estimation of mineral resources and reserves and the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations; uncertain political and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; and other risks and uncertainties, including those described under Risk Factors Relating to the Company's Business in the Company's Annual Information Form and in each management discussion and analysis. Forward-looking information is in addition based on various assumptions including, without limitation, the expectations and beliefs of management, the assumed long term price of copper, nickel, lead and zinc; that the Company can access financing, appropriate equipment and sufficient labour and that the political environment where the Company operates will continue to support the development and operation of mining projects. 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 forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements.