Lundin Mining : 2022 Q2 MD&A and Financial Statements m

Management's Discussion and Analysis

For the three and six months ended June 30, 2022

This management's discussion and analysis ("MD&A") has been prepared as of July 27, 2022 and should be read in conjunction with the Company's condensed interim consolidated financial statements for the three and six months ended June 30, 2022. 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, ARS is to Argentine pesos, BRL is to Brazilian reais, C$ is to Canadian dollars, CLP is to Chilean pesos, € refers to euros, and SEK is to Swedish kronor.

About Lundin Mining

Lundin Mining Corporation ("Lundin Mining" or the "Company") is a diversified Canadian base metals mining company with projects and operations in Argentina, Brazil, Chile, Portugal, Sweden, and the United States of America, primarily producing copper, zinc, gold and nickel.

Table of Contents
Highlights ................................................................................................................................................................................	1
Financial Position....................................................................................................................................................................	2
Outlook ...................................................................................................................................................................................	3
Selected Annual Financial Information ..................................................................................................................................	5
Summary of Quarterly Results ...............................................................................................................................................	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..................................................................................................................................................................................	18
Neves-Corvo......................................................................................................................................................................	19
Zinkgruvan.........................................................................................................................................................................	21
Josemaria Project ...................................................................................................................................................................	22
Metal Prices, LME Inventories, and Smelter Treatment and Refining Charges .....................................................................	23
Liquidity and Capital Resources..............................................................................................................................................	24
Related Party Transactions.....................................................................................................................................................	25
Changes in Accounting Policies and Critical Accounting Estimates and Judgements ............................................................	25
Non-GAAPand Other Performance Measures.......................................................................................................................	26
Managing Risks .......................................................................................................................................................................	31
Management's Report on Internal Controls ..........................................................................................................................	31
Outstanding Share Data .........................................................................................................................................................	31

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; the Company's integration of acquisitions and any anticipated benefits thereof; and expectations for other economic, business, and/or competitive factors. Words such as "believe", "expect", "anticipate", "contemplate", "target", "plan", "goal", "aim", "intend", "continue", "budget", "estimate", "may", "will", "can", "could", "should", "schedule" and similar expressions identify forward-looking statements.

Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the 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 demand and prices; changing taxation regimes; delays or the inability to obtain, retain or comply with permits; reliance on a single asset; unavailable or inaccessible infrastructure, infrastructure failures, and risks related to ageing infrastructure; risks related to negative publicity with respect to the Company or the mining industry in general; health and safety risks; pricing and availability of key supplies and services; the threat associated with outbreaks of viruses and infectious diseases, including the COVID-19 virus; exchange rate fluctuations; risks relating to attracting and retaining of highly skilled employees; risks inherent in and/or associated with operating in foreign countries and emerging markets; climate change; regulatory investigations, enforcement, sanctions and/or related or other litigation; existence of significant shareholders; uncertain political and economic environments, including in Argentina, Brazil and Chile; 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; indebtedness; liquidity risks and limited financial resources; funding requirements and availability of financing; exploration, development or mining results not being consistent with the Company's expectations; risks related to the environmental regulation and environmental impact of the Company's operations and products and management thereof; activist shareholders and proxy solicitation matters; reliance on key personnel and reporting and oversight systems, as well as third parties and consultants in foreign jurisdictions; historical environmental liabilities and ongoing reclamation obligations; information technology and cybersecurity risks; risks related to mine closure activities, reclamation obligations, and closed and historical sites; social and political unrest, including civil disruption in Chile; the inability to effectively compete in the industry; financial projections, including estimates of future expenditures and cash costs, and estimates of future production may be unreliable; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; ore processing efficiency; 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; enforcing legal rights in foreign jurisdictions; community and stakeholder opposition; 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; risks associated with the structural stability of waste rock dumps or tailings storage facilities; dilution; risks relating to dividends; conflicts of interest; counterparty and credit risks and customer concentration; the estimation of asset carrying values; challenges or defects in title; internal controls; relationships with employees and contractors, and the potential for and effects of labor disputes or other unanticipated difficulties with or shortages of labor or interruptions in production; compliance with foreign laws; potential for the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights violations; compliance with environmental, health and safety regulations and laws; and other risks and uncertainties, including but not limited to those described in the "Risk and Uncertainties" section of the Company's AIF and the "Managing Risks" section of the Company's MD&A for the year ended December 31, 2021, 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 forward-looking information. Accordingly, there can be no assurance that forward-looking information will prove to be accurate and forward-looking information is not a guarantee of future performance. Readers are advised not to place undue reliance on forward-looking information. The forward-looking information contained herein speaks only as of the date of this document. The Company disclaims any intention or obligation to update or revise forward-looking information or to explain any material difference between such and subsequent actual events, except as required by applicable law.

Highlights

Operational Performance

Copper and zinc production during the current quarter was higher than the prior year quarter. Production cost and cash cost were higher this quarter than the comparable prior year quarter primarily due to the inflationary impacts on consumables, particularly diesel and electricity, as well as on contractor and maintenance costs.

Candelaria (80% owned): Candelaria produced 40,949 tonnes of copper, and approximately 23,000 ounces of gold in concentrate on a 100% basis in the quarter. Copper production was higher than the comparable prior year quarter due to grades, while gold production was lower primarily due to lower gold recoveries. Production costs were higher in the current quarter reflecting higher consumable costs, partially offset by favourable foreign exchange. Copper cash cost of $1.86/lb for the current quarter was higher than the prior year quarter largely owing to the impact of higher mining costs and lower byproduct credits.

Chapada (100% owned): Chapada produced 10,345 tonnes of copper and approximately 16,000 ounces of gold in concentrate in the quarter. Copper and gold production was lower than the prior year quarter primarily due to processed ore types impacting throughput and metal recoveries. Production costs were higher due to higher consumable costs. Copper cash cost of $2.98/lb for the quarter was higher than the prior year quarter due mainly to higher mining costs from inflationary pressures, as well as lower sales volumes.

Eagle (100% owned): Eagle produced 4,719 tonnes of nickel and 4,400 tonnes of copper during the quarter, which was lower than the prior year quarter due to lower grades. Production costs were higher due to higher consumable costs. Nickel cash cost in the quarter of $0.90/lb was higher than the prior year quarter due primarily to lower by-product copper price and higher production costs.

Neves-Corvo(100% owned): Neves-Corvo produced 7,867 tonnes of copper for the quarter and 20,647 tonnes of zinc. Copper production was lower than the prior year comparable period, due to throughput. Zinc production was higher primarily due to increased throughput driven by the ramp-up of the Zinc Expansion Project ("ZEP"). Production costs were higher due to inflationary cost increases. Copper cash cost of $2.39/lb for the quarter was higher than the prior year quarter primarily due to inflationary increases, primarily electricity, as well as lower sales volumes.

Zinkgruvan (100% owned): Zinc production of 21,265 tonnes and lead production of 9,124 tonnes were both higher than the prior year comparable period due to higher throughput. Production costs were higher due to higher sales volumes, partially offset by favourable foreign exchange. Zinc cash cost of $0.44/lb was comparable to the prior year quarter.

Total Productiona

		2022				2021
(contained metal in concentrate)
YTD	Q2	Q1	Total	Q4	Q3	Q2	Q1
Copper (t)b	129,177	64,096	65,081	262,884	76,996	65,077	63,457	57,354
Zinc (t)	74,303	41,912	32,391	143,797	36,830	38,769	34,833	33,365
Gold (koz)b	73	39	34	167	46	46	41	34
Nickel (t)	9,000	4,719	4,281	18,353	4,101	4,124	4,774	5,354
a - Tonnes (t) and thousands of ounces (koz)
b - Candelaria's production is on a 100% basis

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Corporate Updates

• On April 26, 2022, the Company executed a fourth amended and restated credit agreement that increased its revolving credit facility ("the Credit Facility") to $1,750.0 million (previously $800.0 million with a $200.0 million accordion option), reduced the cost of borrowing, and extended the term to April 2027, from August 2023. The amended Credit Facility bears interest on drawn funds at rates of Term Secured Overnight Financing Rate ("Term SOFR") + Credit Spread Adjustment ("CSA") + 1.45% to Term SOFR+CSA+2.50% depending upon the Company's net leverage ratio, reduced from LIBOR+1.75% to LIBOR+2.75%, previously. The amendment and restatement provides the Company with more favourable covenants, reduced security on assets and included other customary revisions.
• On April 28, 2022, the Company completed the previously announced plan of arrangement (the "Arrangement") to acquire all of the issued and outstanding shares of Josemaria Resources Inc. ("Josemaria Resources"). Under the terms of the Arrangement, Josemaria Resources shareholders were provided with the right to elect to receive 0.1487 of a common share of Lundin Mining ("Lundin Mining Share") per Josemaria Resources common share ("Josemaria Resources Share") plus C$0.11 for each whole Lundin Mining Share issued to such shareholder or C$1.60 in cash for each Josemaria Resources Share or any combination thereof, subject to pro-ration of a total maximum number of Lundin Mining Shares and cash consideration.
• On May 12, 2022, at the Annual Meeting, the Company announced the appointment of Mr. Adam Lundin as the Chair of the Board of Directors following the retirement of Mr. Lukas Lundin.

Financial Performance

• Gross profit for the quarter ended June 30, 2022 was $46.0 million, a decrease of $334.2 million in comparison to the prior year quarter due to lower metal prices net of price adjustments ($256.7 million) and higher production costs due to inflationary price increases. On a year-to-date basis, gross profit was also lower than the prior year comparative period due to the same impacts.
• For the three and six months ended June 30, 2022, net loss of $48.6 million and net earnings of $329.5 million were $317.1 million and $93.2 million lower than the prior year comparable periods, respectively. Lower net earnings were attributable to lower gross profit, partially offset by favourable foreign exchange.
• Adjusted loss1 of $35.3 million and adjusted earnings of $260.3 million for the three and six months ended June 30, 2022, respectively, and were lower than the prior year comparable periods due to lower net earnings.

Financial Position and Financing

• Cash and cash equivalents as at June 30, 2022 were $498.2 million, a decrease during the quarter of $235.6 million. Cash flow from operations of $366.4 million was used to fund investing activities of $333.0 million which includes the Josemaria Resources acquisition. In addition, financing activities included shareholder dividends of $171.2 million, distributions of $20.0 million to non-controlling interests and $47.0 million in Josemaria debentures which were paid in the quarter.
• On a year-to-date basis, cash and cash equivalents decreased by $95.8 million. Cash flow from operations of $683.7 million was used to fund investing activities of $505.5 million and financing activities described above.
• As at June 30, 2022, the Company had a net cash1 balance of $469.9 million. As at July 27, 2022, the Company had cash and net cash balances of approximately $485.0 million and $460.0 million, respectively.

• This is a non-GAAP measure - see the "Non-GAAP and Other Performance Measures" section of this MD&A for discussion.

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Outlook

The Company continues to experience continuing risks associated with global inflation as well as supply chain delivery. To date, there have been no significant impacts on our operations relating to supply chain availability; however, inflationary impacts on diesel, electricity and contractor costs are expected to continue to increase operating costs for the remainder of the year. The Company has implemented procurement strategies to try to mitigate the impact and continues to monitor these risks.

Chapada production guidance has been revised to reflect delayed access to planned ore types primarily as a result of above average rainfall experienced in the first half of the year which impacted planned waste stripping activities. Neves-Corvo zinc production guidance has been revised to reflect ZEP ramp-up progress achieved to date and expected underground mining rates.

Cash cost guidance for Candelaria and Chapada has been updated to reflect anticipated inflationary impacts.

2022 Production and Cash Cost Guidance

		Previous Guidancea		Revised Guidance
(contained metal in concentrate)	Production	Cash Cost ($/lb)	Production	Cash Cost ($/lb)b
Copper (t)	Candelaria (100%)	155,000 - 165,000	1.55	155,000	- 165,000	1.75c
	Chapada	53,000 - 58,000	1.60	45,000 - 50,000	2.25d
	Eagle	15,000 - 18,000		15,000 - 18,000
	Neves-Corvo	33,000 - 38,000	1.80	33,000 - 38,000	1.80c
	Zinkgruvan	2,000 - 3,000		2,000 - 3,000
	Total	258,000 - 282,000		250,000	- 274,000
Zinc (t)	Neves-Corvo	110,000 - 120,000		90,000	- 100,000
	Zinkgruvan	78,000 - 83,000	0.55	78,000 - 83,000	0.55c
	Total	188,000 - 203,000		168,000	- 183,000
Gold (koz)	Candelaria (100%)	83 - 88			83 - 88
	Chapada	70 - 75			62 - 67
	Total	153 - 163			145 - 155
Nickel (t)	Eagle	15,000 - 18,000	(0.25)	15,000 - 18,000	(0.25)

a. Guidance as outlined in the MD&A for the year ended December 31, 2021.

b. Cash costs are based on various assumptions and estimates, including but not limited to: production volumes, commodity prices (Cu: $3.75/lb, Zn:

$1.50/lb, Pb: $0.90/lb, Au: $1,850/oz), foreign exchange rates (€/USD:1.10, USD/SEK:9.00, USD/CLP:900, USD/BRL:5.00) and production costs.

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 $420/oz gold and $4.20/oz to $4.52/oz silver.

d. Chapada cash cost is calculated on a by-product basis and does 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.

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