Lundin Mining Corp.

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LUN has been on a major uptrend since September compared to other based metal mining companies.

Do you know why this is? I’m afraid of a major pullback. But the company seems very healthy. Could you please provide your thoughts?

Thanks so much!

All the best.

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Asked on December 30, 2020 9:17 am
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Private answer

Hey there. Important we understand that Lundin Mining production is primarily focused on copper.

In fact, 2020 production thus far has been nearly 70% copper. And, the price of copper has increased substantially since September.

I've attached a chart for you, showing Lundin's stock price and the price of copper. We can see that over the last 5 years, besides a very brief period in 2019, Lundin has followed the price of copper pretty accurately.

So, to answer your question, if copper prices continue to rise, we will likely see Lundin rise as well, at a faster pace typically than the price of copper. However if copper were to fall, we'd like see Lundin fall even more than the change in price of copper.

This is because producers are often more volatile than the underlying commodity they rely on. For example, if gold falls 5%, we can expect a producer with high exposure to gold to fall more than this, and vise versa. Same could be said with oil.

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Posted by Dan Kent
Answered on December 30, 2020 10:21 am