Boliden Limited reports first quarter 2001 results

(All dollar amounts are in United States dollars)



Overview



- Ronnskar +200 expansion project reaches full production.



- Lower operating income due to lower metal prices and lower treatment

and refining charges (TCs/RCs) at the Ronnskar smelter.



- Sale of 50% interest in Norzink completed.



Apr 27, 2001, 01:00 ET from Boliden Limited

    TORONTO, CANADA and STOCKHOLM, SWEDEN, April 27 /PRNewswire/ - Boliden
 Limited today reported its operating results for the first quarter of 2001.
     The Company reported an operating loss of $8.9 million for the quarter
 compared with an operating loss of $6.4 million for the first quarter of 2000.
 The operating loss for the quarter compares with operating income of $0.4
 million (excluding pension income and write-down and unusual charges) for the
 fourth quarter of 2000. The principal reasons for the changes between the
 quarter and the first and fourth quarters of 2000 are lower metal prices and
 lower treatment and refining charges (TCs/RCs) at the Ronnskar smelter.
     The Company's foreign currency hedge contracts negatively affected the
 Company's operating results by $18.0 million for the quarter, $10.2 million
 for the first quarter of 2000 and $15.8 million for the fourth quarter of 2000
 (see Metal Prices, Currencies and Interest Rates below).
     After accounting for interest expense and income taxes (including $5
 million of non-recurring items), the Company reported a net loss of $21.5
 million or $0.11 per common share for the quarter compared with a net loss of
 $18.3 million or $0.18 per common share for the first quarter of 2000.
     Cash used in operations before non-cash working capital changes was $5.6
 million or $0.03 per common share for the quarter compared with cash provided
 by operations of $11.2 million or $0.10 per common share for the first quarter
 of 2000 and $6.1 million or $0.03 per common share for the fourth quarter of
 2000.
     Cash used in operating activities after net change in non-cash operating
 working capital was $19.3 million for the quarter compared with cash provided
 by operating activities of $9.3 million for the first quarter of 2000 and $4.1
 million for the fourth quarter of 2000.
 
     CAPITAL MANAGEMENT PROGRAM
 
     The Company is carrying out a Capital Management Program aimed at
 restoring its financial strength and operating flexibility. The capital
 management program includes reducing costs, increasing productivity,
 postponing discretionary expenditures, securing partners for those operations
 that require non-discretionary expenditures and selling assets.
     On April 17, 2001, the Company's subsidiary, Boliden Mineral AB, and Rio
 Tinto completed the sale to Outokumpu Oyj of their respective 50% interests in
 Norzink A/S, the owner and operator of the Norzink zinc smelter and refinery
 and aluminum floride plant located near Odda on the west coast of southern
 Norway, for a total cash purchase price of $180 million. The Company realized
 a net gain before tax of approximately $30 million on the sale. This gain will
 be reflected in the Company's operating results for the second quarter of
 2001.
     On February 28, 2001, the Company signed a letter of intent to sell its
 interests in Compania Minera Lomas Bayas and Compania Minera Boliden Westmin
 Chile Limitada, the owners of the Lomas Bayas SX-EW copper project and
 adjacent Fortuna de Cobre copper deposit located in Chile, to Noranda Inc. and
 Falconbridge Limited (Purchasers) for a purchase price of:
 
     (a) $175 million plus cash balances ($2.1 million) less outstanding
         third party debt obligations ($112.7 million); plus
 
     (b) $15 million if the Purchasers exercise their right to retain
         the Fortuna de Cobre copper deposit before the fifth anniversary
         of closing.
 
      The transaction is subject to completion of satisfactory due diligence,
 negotiation and settlement of satisfactory definitive agreements, receipt of
 all required regulatory and other third party consents and approval of the
 boards of directors of the Purchasers and the Company. On April 2, 2001, the
 Company and the Purchasers agreed to extend the term of the letter of intent
 to April 30, 2001 to enable the Purchasers to complete their due diligence and
 the parties to complete their negotiations with respect to an agreement of
 purchase and sale.
     The possible transaction announced in the fourth quarter 2000 report with
 respect to the sale of the BCZ Group has been put on hold pending resolution
 of regulatory issues. The possible transaction announced in the fourth quarter
 2000 report with respect to the sale of Gusum has been cancelled for lack of
 purchaser financing.
 
     METAL PRICES, CURRENCIES AND INTEREST RATES
 
     Prices for the metals produced by the Company as reported by the London
 Metal Exchange (LME) and the London Bullion Market Association (LBM) for the
 quarter compared with the first quarter of 2000 were as follows:
 
     ------------------------------------------------------
     Average                           Three months ended
     LME/LBM                                March 31,
     Prices                           2001            2000
     ------------------------------------------------------
     Zinc $/lb                        0.46            0.51
     Copper $/lb                      0.80            0.81
     Lead $/lb                        0.22            0.21
     Gold $/oz                         264             290
     Silver $/oz                      4.54            5.17
     ------------------------------------------------------
     >>
     The Company periodically manages its exposure to changes in prices for
 the metals that it produces through hedge transactions, including forward
 sales contracts and put and call options. The Company's exposure to changes in
 metal prices was largely unhedged at the end of the quarter.
     Most of the Company's costs are in Swedish, Canadian and Norwegian
 currencies. The average rates of exchange for Swedish kronor (SEK), Canadian
 dollars (C$) and Norwegian kroner (NOK) per United States dollar for the
 quarter compared with the first quarter of 2000 were as follows:
 
     ------------------------------------------------------
     Average                           Three months ended
     Exchange Rates                         March 31,
     per US$                          2001            2000
     ------------------------------------------------------
     SEK                              9.75            8.60
     C$                               1.53            1.45
     NOK                              8.88            8.21
     ------------------------------------------------------
     >>
     The Company has had a program to manage its ongoing exposure to changes
 in exchange rates through the use of forward contracts and put and call
 options to hedge future transactions and investments denominated in foreign
 currencies. The program was designed to fix foreign currency, principally
 Swedish krona, exchange rates against the United States dollar at levels which
 were considered advantageous in relation to historical levels and which were
 above the Company's long-term planning levels. The Company does not have
 credit facilities available to it to continue the program beyond the current
 positions. At March 31, 2001, the Company had in place forward contracts
 covering approximately one and one-quarter years exposure to changes in
 foreign currency, principally Swedish krona, exchange rates against the United
 States dollar. The mark-to-market position of the contracts at the end of the
 quarter was negative $147.2 million, of which $14.2 million is accrued in the
 accompanying unaudited consolidated financial statements. Assuming that
 foreign currency, principally Swedish krona, exchange rates against the United
 States dollar remain at their current levels, the contracts will negatively
 affect the Company's cash flow over the remaining terms of the contracts. See
 Other Matters - Hedge Facilities below.
     The Company periodically manages its exposure to changes in interest
 rates through interest rate swaps. The interest rates on the Company's debt
 are floating rates and were largely unhedged at the end of the quarter.
 
     OPERATIONS
 
     The operating income (loss) at the Company's operating segments for the
 quarter compared with the first quarter of 2000 was as follows:
 
     ------------------------------------------------------
                                       Three months ended
     Operating Segment                      March 31,
     ($ thousands)                    2001            2000
     ------------------------------------------------------
     Mining                        $(8,434)       $(16,114)
     Smelting                        2,329          14,066
     Fabrication                       778             890
     Corporate and other            (3,544)         (5,249)
     ------------------------------------------------------
     Total                         $(8,871)        $(6,407)
     ------------------------------------------------------
     >>
     Mining
 
     The Company's mining operations reported an operating loss of $8.4
 million for the quarter compared with an operating loss of $16.1 million for
 the first quarter of 2000. The operating loss for the quarter compares with
 operating income of $1.4 million for the fourth quarter of 2000 (excluding
 write-down and unusual charges taken during that quarter).
     The principal reasons for the change between the quarter and the first
 quarter of 2000 are lower depreciation and deferred stripping charges because
 of the write-off of Los Frailes in the third quarter of 2000 and lower
 depreciation because of the write-down of Lomas Bayas in the fourth quarter of
 2000 partially offset by lower metal prices and lower metal production. The
 principal reasons for the change between the quarter and the fourth quarter of
 2000 are lower metal prices and lower metal production partially offset by
 lower depreciation because of the write-down of Lomas Bayas.
     The Company's mines produce primarily copper and zinc, with by-product
 lead, gold and silver. Contained metal production at each of the Company's
 mines for the quarter compared with the first quarter of 2000 was as follows:
 
     ------------------------------------------------------
                                       Three months ended
                                            March 31,
     Mine                             2001            2000
     ------------------------------------------------------
     Boliden Area
       Operations (BAO)(1)
         Zinc (tonnes)              14,582          14,163
         Copper (tonnes)             2,256           2,319
         Lead (tonnes)               1,074             742
         Gold (ounces)              17,178          11,854
         Silver (000s ounces)          662             474
     Garpenberg
         Zinc (tonnes)               8,359           7,821
         Copper (tonnes)               250             169
         Lead (tonnes)               3,887           3,600
         Gold (ounces)               2,533           2,408
         Silver (000s ounces)          790             804
     Aitik
         Copper (tonnes)            14,725          16,053
         Gold (ounces)              11,110          11,626
         Silver (000s ounces)          393             527
     Laisvall
         Lead (tonnes)              14,699          16,864
         Zinc (tonnes)               2,812           3,755
         Silver (000s ounces)          111             125
     Los Frailes(2)
         Zinc (tonnes)              18,361          21,404
         Copper (tonnes)               594             699
         Lead (tonnes)               8,068          10,463
         Silver (000s ounces)          343             403
     Myra Falls
         Zinc (tonnes)              13,232          14,155
         Copper (tonnes)             3,569           4,922
         Gold (ounces)               5,533           5,361
         Silver (000s ounces)          110             116
     Lomas Bayas
         Copper (tonnes)            12,769          12,502
     -----------------------------------------------------
     >>
     Notes:
     (1)  BAO comprises four underground mines, one open pit mine and one
          mill.
     (2)  In October 2000, the Company's Spanish subsidiary, Boliden Apirsa
          SL (Apirsa), decided to complete the current phase of the mine
          plan for Los Frailes -- the mining out of pit 2, but not to
          proceed with the next phase -- the pushback for pit 3. In order
          to preserve its assets, to pay creditors in an orderly manner and
          to ensure that operations at Los Frailes continue until the planned
          completion of pit 2 in October 2001, Apirsa filed a court
          application for "suspension de pagos" proceedings (similar
          to Canadian CCAA and United States Chapter 11 proceedings).
 
     Total contained metal production at the Company's mining operations for
 the quarter compared with the first quarter of 2000 was as follows:
 
     ------------------------------------------------------
                                       Three months ended
                                            March 31,
     Metal                            2001            2000
     ------------------------------------------------------
     Zinc (tonnes)                  57,346          61,298
     Copper (tonnes)                34,163          36,664
     Lead (tonnes)                  27,728          31,669
     Gold (ounces)                  36,354          31,249
     Silver (000s ounces)            2,409           2,449
     ------------------------------------------------------
     >>
     Zinc
 
     Zinc production for the quarter was lower than the first and fourth
 quarters of 2000 due principally to lower production at Los Frailes.
 
     Copper
 
     Copper production for the quarter was lower than the first and fourth
 quarters of 2000 due principally to lower metal production at Aitik.
 Production at Aitik fluctuates with the grades encountered in mining
 operations.
 
     Smelting
 
     The Company's smelting operations reported operating income of $2.3
 million for the quarter compared with operating income of $14.1 million for
 the first quarter of 2000. The operating income for the quarter compares with
 operating income of $10.5 million for the fourth quarter of 2000.
     The principal reasons for the change between the quarter and the first
 and fourth quarters of 2000 are lower treatment and refining charges (TCs/RCs)
 in the smelting contracts for 2001 at the Ronnskar smelter and changes in the
 carrying value of inventories to reflect changes in metal prices partially
 offset by higher production due to the start-up of the Ronnskar +200 expansion
 project.
     The Company's smelters produce primarily copper, zinc and lead, with
 significant quantities of gold and silver. Metal production at each of the
 Company's smelters for the quarter compared with the first quarter of 2000 was
 as follows:
 
     ------------------------------------------------------
                                       Three months ended
                                            March 31,
     Smelter                          2001            2000
     ------------------------------------------------------
     Ronnskar
         Copper (tonnes)            50,307          28,388
         Lead (tonnes)               9,410          10,531
         Zinc clinker (tonnes)(1)    8,658           8,827
         Gold (kilos)                2,719           2,095
         Silver (kilos)             97,131          97,721
     Norzink(2)
         Zinc (tonnes)              18,167          17,801
     Bergsoe
         Lead alloys (tonnes)       12,717          12,195
     -------------------------------------------------------
 
     Notes:
     (1)  Zinc clinker produced at Ronnskar is sold as feed to Norzink.
     (2)  Represents the Company's 50% share of production from Norzink.
 
     Ronnskar
 
     Production at Ronnskar for the quarter was higher than the first quarter
 of 2000 due to the start-up of the Ronnskar +200 expansion project. Production
 for the quarter was higher than the fourth quarter of 2000 for the same
 reason.
     Ronnskar reached full production at the end of March 2001.
 
     Fabrication
 
     The Company's copper tubing and brass fabrication operations reported
 operating income of $0.8 million for the quarter compared with operating
 income of $0.9 million for the first quarter of 2000. The operating income for
 the quarter compares with operating income of $1.8 million for the fourth
 quarter of 2000.
 
     OTHER MATTERS
 
     Debt Facilities
 
     During the quarter, the Company initiated discussions with the lenders
 under its unsecured credit facilities with a view to refinancing its
 obligations under the facilities. As part of these discussions, the lenders
 agreed to waive their rights with respect to any existing or future breaches
 of the financial covenants contained in the facilities until May 31, 2001. At
 the end of the quarter, the Company submitted a formal refinancing proposal to
 the lenders for approval.
 
     Hedge Facilities
 
     Also, during the quarter, the Company initiated discussions with the
 counterparties to its foreign currency hedge contracts with a view to
 restructuring its obligations under the contracts.
 
     Appointment of New Chief Financial Officer
 
     During the quarter, Anders Haker, formerly Treasurer and Controller of
 the Company, was appointed Senior Vice-President and Chief Financial Officer
 of the Company.
 
     DIVIDEND ON CONVERTIBLE PREFERRED SHARES
 
     On December 17, 1999, the Company's board of directors decided to
 postpone payment of dividends on the Company's convertible preferred shares
 pending completion of the Ronnskar +200 expansion. The expansion was completed
 during August 2000. The Company's board of directors has made no decision with
 respect to the resumption of payment of dividends on the convertible preferred
 shares.
 
     UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS TO FOLLOW
 
 
 
     BOLIDEN LIMITED
     Consolidated Balance Sheets
     (In thousands of United States dollars)
 
     -------------------------------------------------------------------------
                                                    March 31,     December 31,
                                                      2001            2000
     -------------------------------------------------------------------------
                                                   (Unaudited)     (Audited)
     Assets
 
     Current assets:
       Cash and short-term investments            $    39,662     $    45,211
       Accounts and metal settlements receivable      149,133         153,922
          Inventories                                 197,269         231,098
                                                 -----------------------------
                                                      386,064         430,231
 
     Capital assets                                   753,912         803,341
     Future income tax assets                          55,632          63,341
     Deferred expenses and other assets                55,346          30,905
                                                 -----------------------------
 
                                                  $ 1,250,954     $ 1,327,818
     -------------------------------------------------------------------------
 
 
     Liabilities and Shareholders' Equity
 
     Current liabilities:
       Accounts payable and accrued charges       $   293,028     $   327,601
       Debt                                           780,205         772,716
                                                 -----------------------------
                                                    1,073,233       1,100,317
 
     Long-term debt                                    33,044          36,299
     Future income tax liabilities                      1,904           1,904
     Provision for reclamation costs                   60,261          63,987
     Other long-term liabilities                       24,677          27,158
                                                 -----------------------------
                                                    1,193,119       1,229,665
 
     Shareholders' equity:
       Common shares                                  790,963         790,878
       Preferred shares                                79,115          78,872
       Retained deficit                              (784,133)       (762,317)
       Foreign currency translation account           (28,110)         (9,280)
                                                 -----------------------------
                                                       57,835          98,153
 
                                                  $ 1,250,954     $ 1,327,818
     -------------------------------------------------------------------------
 
     See accompanying notes to unaudited consolidated financial statements.
 
 
 
     BOLIDEN LIMITED
     Consolidated Statements of Operations
     (In thousands of United States dollars, except per share data)
 
     -------------------------------------------------------------------------
                                                        Three months ended
                                                             March 31,
                                                       2001            2000
     -------------------------------------------------------------------------
                                                   (Unaudited)     (Unaudited)
 
 
     Revenues                                     $   311,764     $   292,771
 
     Operating expenses:
       Costs of metal and other product sales         282,163         246,872
       Depreciation, depletion and amortization        22,372          30,704
       Selling, general and administrative             13,503          17,765
       Exploration, research and development            2,597           3,837
                                                 -----------------------------
                                                      320,635         299,178
     -------------------------------------------------------------------------
 
     Operating loss                                    (8,871)         (6,407)
 
     Interest and other expense (Note 3)              (18,200)        (11,720)
     Gain on asset dispositions                         1,694               -
                                                 -----------------------------
                                                      (16,506)        (11,720)
     -------------------------------------------------------------------------
 
     Loss before income taxes                         (25,377)        (18,127)
     Income taxes expense (recovery)                   (3,889)            174
                                                 -----------------------------
     Net loss                                     $   (21,488)    $   (18,301)
     -------------------------------------------------------------------------
 
     Basic loss per share                         $     (0.11)    $     (0.18)
 
     Diluted loss per share                       $     (0.11)    $     (0.18)
 
 
     Retained deficit
     Balance, beginning of year                   $  (762,317)    $  (105,448)
       Net loss for the period                        (21,488)        (18,301)
       Accretion on convertible preferred shares         (328)           (328)
                                                 -----------------------------
     Balance, for the period                      $  (784,133)    $  (124,077)
     -------------------------------------------------------------------------
 
     See accompanying notes to unaudited consolidated financial statements.
 
 
 
     BOLIDEN LIMITED
     Consolidated Statements of Cash Flows
     (In thousands of United States dollars, except per share data)
 
     -------------------------------------------------------------------------
                                                        Three months ended
                                                             March 31,
                                                       2001            2000
     -------------------------------------------------------------------------
                                                            (Unaudited)
 
     Cash provided by (used in):
 
     Operating Activities:
       Net loss for the period                    $   (21,488)    $   (18,301)
       Items not affecting cash:
         Depreciation, depletion and amortization      22,372          30,704
         Gain on asset dispositions                    (1,694)              -
         Future income taxes                           (4,748)         (1,237)
     -------------------------------------------------------------------------
       Cash provided by (used in) operations
        before non-cash working capital changes        (5,558)         11,166
 
       Net change in non-cash operating working
        capital                                       (13,770)         (1,830)
     -------------------------------------------------------------------------
     Cash provided by (used in) operating
      activities                                      (19,328)          9,336
 
     Financing Activities:
       Additions to debt                               10,000          35,310
       Issuance of common shares, net of issue costs        -         142,600
     -------------------------------------------------------------------------
     Cash provided by (used in) financing
      activities                                       10,000         177,910
 
     Investing Activities:
       Capital expenditures                           (18,356)        (35,605)
       Proceeds on asset dispositions                  21,685               -
     -------------------------------------------------------------------------
     Cash used in investing activities                  3,329         (35,605)
 
     Effect of exchange rate changes on cash
      balances in foreign currencies                      450             549
     -------------------------------------------------------------------------
     Cash provided (used) during the period            (5,549)        152,190
 
     Cash and short-term investments, beginning
      of period                                        45,211          66,463
     -------------------------------------------------------------------------
     Cash and short-term investments, end
      of period                                   $    39,662     $   218,653
     -------------------------------------------------------------------------
 
     Cash provided by (used in) operations before
      non-cash working capital changes, per share $     (0.03)    $      0.10
 
     -------------------------------------------------------------------------
 
     See accompanying notes to unaudited consolidated financial statements.
 
 
 
     NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
     (All tabular amounts are in thousands of United States dollars)
 
     1.  Going Concern Basis
 
         The accompanying unaudited consolidated financial statements of the
         Company are prepared in accordance with Canadian generally accepted
         accounting principles and on a going concern basis which assumes that
         the Company will be able to discharge its liabilities and realize the
         carrying value of its assets in the normal course of operations.
         Accordingly, the accompanying unaudited consolidated financial
         statements do not include any adjustments to the recoverability and
         classification of recorded asset amounts, classification of
         liabilities or recognition of unrealized losses of $147.2 million on
         contracts accounted for as hedges that might be necessary if the
         Company is unable to continue as a going concern.
 
         At March 31, 2001, the Company was not in compliance with, and was
         operating under temporary waivers of, covenants under certain of its
         loan agreements. Accordingly, most of the Company's debt has been
         classified as current, resulting in a working capital deficiency. In
         addition, the Company continues to record a significant loss from
         operations and negative operating cash flow after net change in non-
         cash operating working capital.
 
         The Company is pursuing several initiatives to address these matters,
         including refinancing its debt, restructuring its obligations under
         its hedge contracts, sourcing additional financing and carrying out
         its capital management program (CMP) which is aimed at reducing
         costs, increasing productivity, postponing discretionary
         expenditures, securing partners for those operations (eg, Myra Falls)
         that require non-discretionary expenditures to maintain continued
         operations and selling assets.
 
         On April 17, 2001, the Company's subsidiary, Boliden Mineral AB, and
         Rio Tinto completed the sale to Outokumpu Oyj of their respective 50%
         interests in Norzink A/S, the owner and operator of the Norzink zinc
         smelter and refinery and aluminum floride plant located near Odda on
         the west coast of southern Norway, for a total cash purchase price of
         $180 million. The Company realized a net gain before tax of
         approximately $30 million on the sale. This gain will be reflected in
         the Company's operating results for the second quarter of 2001.
 
         On February 28, 2001, the Company signed a letter of intent to sell
         its interests in Compania Minera Lomas Bayas and Compania Minera
         Boliden Westmin Chile Limitada, the owners of the Lomas Bayas SX-EW
         copper project and adjacent Fortuna de Cobre copper deposit located
         in Chile, to Noranda Inc. and Falconbridge Limited (Purchasers) for a
         purchase price of:
 
         (a)  $175 million plus cash balances ($2.1 million) less outstanding
              third party debt obligations ($112.7 million); plus
 
         (b)  $15 million if the Purchasers exercise their right to retain the
              Fortuna de Cobre copper deposit before the fifth anniversary of
              closing.
 
         The transaction is subject to completion of satisfactory due
         diligence, negotiation and settlement of satisfactory definitive
         agreements, receipt of all required regulatory and other third party
         consents and approval of the boards of directors of the Purchasers
         and the Company. If the transaction proceeds, the outstanding third
         party debt obligations of $112.7 million will be repaid or assumed by
         the Purchasers. On April 2, 2001, the Company and the Purchasers
         agreed to extend the term of the letter of intent to April 30, 2001
         to enable the Purchasers to complete their due diligence and the
         parties to complete their negotiations with respect to an agreement
         of purchase and sale.
 
         The Company's ability to discharge its liabilities and realize the
         carrying value of its assets in the normal course of operations is
         dependent upon, among other things, achieving satisfactory
         arrangements with its lenders and its hedge contract counterparties
         and successfully implementing the CMP. There can be no assurance that
         the Company will be successful with those initiatives.
 
     2.  General
 
         The accompanying unaudited consolidated financial statements should
         be read in conjunction with the notes to the Company's audited
         consolidated financial statements for the year ended December 31,
         2000.
 
         The accompanying unaudited consolidated financial statements reflect
         all normal and recurring adjustments which are, in the opinion of
         management, necessary for a fair presentation of the interim periods
         presented.
 
     3.  Debt, Hedges and Interest
 
         At March 31, 2001, the Company's debt position was as follows:
 
         -------------------------------------------------------------------
         $300 million revolving credit facility                    $300,000
         $230 million term loan facility                            230,000
         Bridge facility                                            100,000
         Lomas Bayas facility                                       112,700
         SEK 250 million medium-term bonds                           24,100
         Other                                                       46,449
         -------------------------------------------------------------------
         Total debt                                                 813,249
         Less amounts classified as current                         780,205
         -------------------------------------------------------------------
                                                                    $33,044
         -------------------------------------------------------------------
 
         As discussed in note 1, at March 31, 2001, the Company was not in
         compliance with, and was operating under temporary waivers of,
         covenants under certain of its loan agreements. Accordingly, most of
         the Company's debt has been classified as current. The Company has
         initiated discussions with the lenders under its unsecured credit
         facilities with a view to refinancing its obligations under these
         facilities. As part of these discussions, the lenders have agreed to
         waive their rights with respect to any breaches of the financial
         covenants contained in these facilities until May 31, 2001.
 
         At March 31, 2001, the Company's principal currency hedge positions
         were as follows:
 
         Maturing in                           2001                    2002
         -------------------------------------------------------------------
                                  $ Million    Rate       $ Million    Rate
         -------------------------------------------------------------------
         Swedish kronor:
             Forward sales              277    7.78             315    8.50
         Norwegian kroner:
             Forward sales               29    7.67               8    7.86
             Call options sold            4    7.80              18    7.80
         Spanish pesetas:
             Forward sales               52     151               -       -
         Canadian dollars:
             Forward sales               51    1.47               -       -
         -------------------------------------------------------------------
 
         The fair value of these currency contracts was an unrealized loss of
         $147.2 million (2000 -  $128.3 million) of which $14.2 million is
         accrued in the accompanying unaudited consolidated financial
         statements.
 
         During the quarter, the Company incurred interest expense of $16.0
         million (2000 - $12.4 million) on long-term debt classified as
         current.
 
     4.  Per Share Information
 
         Per share information for the quarter is based on the weighted
         average number of common shares outstanding during the quarter (218.7
         million; 1999 - 109.3 million). On March 30, 2000, the Company
         completed a common share rights offering pursuant to which it issued
         107.1 million common shares. At March 31, 2001, there were 218.8
         million common shares outstanding.
 
     5.  Segmented Data
 
         The Company operates principally in three operating segments: mining,
         smelting and fabrication.
 
         The Company's operating income (loss) at each of these operating
         segments was as follows:
 
 
     -------------------------------------------------------------------------
     QUARTER          Mining  Smelting  Fabrica- Corporate  Consoli-   Total
     ENDED                                tion   and other   dation
     March 31, 2001                                        Adjustment
     -------------------------------------------------------------------------
     Revenues         79,314   212,243   70,091    4,691   (54,575)   311,764
     -------------------------------------------------------------------------
     Operating income
      (loss)          (8,434)    2,329      778   (3,544)        -     (8,871)
     -------------------------------------------------------------------------
     Depreciation,
      Depletion      (14,113)   (6,531)  (1,614)    (114)        -    (22,372)
     -------------------------------------------------------------------------
     Capital
      Expenditures    12,339     5,268      702       47         -     18,356
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     QUARTER          Mining  Smelting  Fabrica- Corporate  Consoli-   Total
     ENDED                                tion   and other   dation
     March 31, 2000                                        Adjustment
     -------------------------------------------------------------------------
     Revenues         98,279   165,045   68,396    4,238   (43,187)   292,771
     -------------------------------------------------------------------------
     Operating income
      (loss)         (16,114)   14,066      890   (5,249)        -     (6,407)
     -------------------------------------------------------------------------
     Depreciation,
      Depletion      (23,961)   (4,595)  (1,976)    (172)        -    (30,704)
     -------------------------------------------------------------------------
     Capital
      Expenditures    12,610    22,113      781      101         -     35,605
     -------------------------------------------------------------------------
 
 
 
 

SOURCE Boliden Limited
    TORONTO, CANADA and STOCKHOLM, SWEDEN, April 27 /PRNewswire/ - Boliden
 Limited today reported its operating results for the first quarter of 2001.
     The Company reported an operating loss of $8.9 million for the quarter
 compared with an operating loss of $6.4 million for the first quarter of 2000.
 The operating loss for the quarter compares with operating income of $0.4
 million (excluding pension income and write-down and unusual charges) for the
 fourth quarter of 2000. The principal reasons for the changes between the
 quarter and the first and fourth quarters of 2000 are lower metal prices and
 lower treatment and refining charges (TCs/RCs) at the Ronnskar smelter.
     The Company's foreign currency hedge contracts negatively affected the
 Company's operating results by $18.0 million for the quarter, $10.2 million
 for the first quarter of 2000 and $15.8 million for the fourth quarter of 2000
 (see Metal Prices, Currencies and Interest Rates below).
     After accounting for interest expense and income taxes (including $5
 million of non-recurring items), the Company reported a net loss of $21.5
 million or $0.11 per common share for the quarter compared with a net loss of
 $18.3 million or $0.18 per common share for the first quarter of 2000.
     Cash used in operations before non-cash working capital changes was $5.6
 million or $0.03 per common share for the quarter compared with cash provided
 by operations of $11.2 million or $0.10 per common share for the first quarter
 of 2000 and $6.1 million or $0.03 per common share for the fourth quarter of
 2000.
     Cash used in operating activities after net change in non-cash operating
 working capital was $19.3 million for the quarter compared with cash provided
 by operating activities of $9.3 million for the first quarter of 2000 and $4.1
 million for the fourth quarter of 2000.
 
     CAPITAL MANAGEMENT PROGRAM
 
     The Company is carrying out a Capital Management Program aimed at
 restoring its financial strength and operating flexibility. The capital
 management program includes reducing costs, increasing productivity,
 postponing discretionary expenditures, securing partners for those operations
 that require non-discretionary expenditures and selling assets.
     On April 17, 2001, the Company's subsidiary, Boliden Mineral AB, and Rio
 Tinto completed the sale to Outokumpu Oyj of their respective 50% interests in
 Norzink A/S, the owner and operator of the Norzink zinc smelter and refinery
 and aluminum floride plant located near Odda on the west coast of southern
 Norway, for a total cash purchase price of $180 million. The Company realized
 a net gain before tax of approximately $30 million on the sale. This gain will
 be reflected in the Company's operating results for the second quarter of
 2001.
     On February 28, 2001, the Company signed a letter of intent to sell its
 interests in Compania Minera Lomas Bayas and Compania Minera Boliden Westmin
 Chile Limitada, the owners of the Lomas Bayas SX-EW copper project and
 adjacent Fortuna de Cobre copper deposit located in Chile, to Noranda Inc. and
 Falconbridge Limited (Purchasers) for a purchase price of:
 
     (a) $175 million plus cash balances ($2.1 million) less outstanding
         third party debt obligations ($112.7 million); plus
 
     (b) $15 million if the Purchasers exercise their right to retain
         the Fortuna de Cobre copper deposit before the fifth anniversary
         of closing.
 
      The transaction is subject to completion of satisfactory due diligence,
 negotiation and settlement of satisfactory definitive agreements, receipt of
 all required regulatory and other third party consents and approval of the
 boards of directors of the Purchasers and the Company. On April 2, 2001, the
 Company and the Purchasers agreed to extend the term of the letter of intent
 to April 30, 2001 to enable the Purchasers to complete their due diligence and
 the parties to complete their negotiations with respect to an agreement of
 purchase and sale.
     The possible transaction announced in the fourth quarter 2000 report with
 respect to the sale of the BCZ Group has been put on hold pending resolution
 of regulatory issues. The possible transaction announced in the fourth quarter
 2000 report with respect to the sale of Gusum has been cancelled for lack of
 purchaser financing.
 
     METAL PRICES, CURRENCIES AND INTEREST RATES
 
     Prices for the metals produced by the Company as reported by the London
 Metal Exchange (LME) and the London Bullion Market Association (LBM) for the
 quarter compared with the first quarter of 2000 were as follows:
 
     ------------------------------------------------------
     Average                           Three months ended
     LME/LBM                                March 31,
     Prices                           2001            2000
     ------------------------------------------------------
     Zinc $/lb                        0.46            0.51
     Copper $/lb                      0.80            0.81
     Lead $/lb                        0.22            0.21
     Gold $/oz                         264             290
     Silver $/oz                      4.54            5.17
     ------------------------------------------------------
     >>
     The Company periodically manages its exposure to changes in prices for
 the metals that it produces through hedge transactions, including forward
 sales contracts and put and call options. The Company's exposure to changes in
 metal prices was largely unhedged at the end of the quarter.
     Most of the Company's costs are in Swedish, Canadian and Norwegian
 currencies. The average rates of exchange for Swedish kronor (SEK), Canadian
 dollars (C$) and Norwegian kroner (NOK) per United States dollar for the
 quarter compared with the first quarter of 2000 were as follows:
 
     ------------------------------------------------------
     Average                           Three months ended
     Exchange Rates                         March 31,
     per US$                          2001            2000
     ------------------------------------------------------
     SEK                              9.75            8.60
     C$                               1.53            1.45
     NOK                              8.88            8.21
     ------------------------------------------------------
     >>
     The Company has had a program to manage its ongoing exposure to changes
 in exchange rates through the use of forward contracts and put and call
 options to hedge future transactions and investments denominated in foreign
 currencies. The program was designed to fix foreign currency, principally
 Swedish krona, exchange rates against the United States dollar at levels which
 were considered advantageous in relation to historical levels and which were
 above the Company's long-term planning levels. The Company does not have
 credit facilities available to it to continue the program beyond the current
 positions. At March 31, 2001, the Company had in place forward contracts
 covering approximately one and one-quarter years exposure to changes in
 foreign currency, principally Swedish krona, exchange rates against the United
 States dollar. The mark-to-market position of the contracts at the end of the
 quarter was negative $147.2 million, of which $14.2 million is accrued in the
 accompanying unaudited consolidated financial statements. Assuming that
 foreign currency, principally Swedish krona, exchange rates against the United
 States dollar remain at their current levels, the contracts will negatively
 affect the Company's cash flow over the remaining terms of the contracts. See
 Other Matters - Hedge Facilities below.
     The Company periodically manages its exposure to changes in interest
 rates through interest rate swaps. The interest rates on the Company's debt
 are floating rates and were largely unhedged at the end of the quarter.
 
     OPERATIONS
 
     The operating income (loss) at the Company's operating segments for the
 quarter compared with the first quarter of 2000 was as follows:
 
     ------------------------------------------------------
                                       Three months ended
     Operating Segment                      March 31,
     ($ thousands)                    2001            2000
     ------------------------------------------------------
     Mining                        $(8,434)       $(16,114)
     Smelting                        2,329          14,066
     Fabrication                       778             890
     Corporate and other            (3,544)         (5,249)
     ------------------------------------------------------
     Total                         $(8,871)        $(6,407)
     ------------------------------------------------------
     >>
     Mining
 
     The Company's mining operations reported an operating loss of $8.4
 million for the quarter compared with an operating loss of $16.1 million for
 the first quarter of 2000. The operating loss for the quarter compares with
 operating income of $1.4 million for the fourth quarter of 2000 (excluding
 write-down and unusual charges taken during that quarter).
     The principal reasons for the change between the quarter and the first
 quarter of 2000 are lower depreciation and deferred stripping charges because
 of the write-off of Los Frailes in the third quarter of 2000 and lower
 depreciation because of the write-down of Lomas Bayas in the fourth quarter of
 2000 partially offset by lower metal prices and lower metal production. The
 principal reasons for the change between the quarter and the fourth quarter of
 2000 are lower metal prices and lower metal production partially offset by
 lower depreciation because of the write-down of Lomas Bayas.
     The Company's mines produce primarily copper and zinc, with by-product
 lead, gold and silver. Contained metal production at each of the Company's
 mines for the quarter compared with the first quarter of 2000 was as follows:
 
     ------------------------------------------------------
                                       Three months ended
                                            March 31,
     Mine                             2001            2000
     ------------------------------------------------------
     Boliden Area
       Operations (BAO)(1)
         Zinc (tonnes)              14,582          14,163
         Copper (tonnes)             2,256           2,319
         Lead (tonnes)               1,074             742
         Gold (ounces)              17,178          11,854
         Silver (000s ounces)          662             474
     Garpenberg
         Zinc (tonnes)               8,359           7,821
         Copper (tonnes)               250             169
         Lead (tonnes)               3,887           3,600
         Gold (ounces)               2,533           2,408
         Silver (000s ounces)          790             804
     Aitik
         Copper (tonnes)            14,725          16,053
         Gold (ounces)              11,110          11,626
         Silver (000s ounces)          393             527
     Laisvall
         Lead (tonnes)              14,699          16,864
         Zinc (tonnes)               2,812           3,755
         Silver (000s ounces)          111             125
     Los Frailes(2)
         Zinc (tonnes)              18,361          21,404
         Copper (tonnes)               594             699
         Lead (tonnes)               8,068          10,463
         Silver (000s ounces)          343             403
     Myra Falls
         Zinc (tonnes)              13,232          14,155
         Copper (tonnes)             3,569           4,922
         Gold (ounces)               5,533           5,361
         Silver (000s ounces)          110             116
     Lomas Bayas
         Copper (tonnes)            12,769          12,502
     -----------------------------------------------------
     >>
     Notes:
     (1)  BAO comprises four underground mines, one open pit mine and one
          mill.
     (2)  In October 2000, the Company's Spanish subsidiary, Boliden Apirsa
          SL (Apirsa), decided to complete the current phase of the mine
          plan for Los Frailes -- the mining out of pit 2, but not to
          proceed with the next phase -- the pushback for pit 3. In order
          to preserve its assets, to pay creditors in an orderly manner and
          to ensure that operations at Los Frailes continue until the planned
          completion of pit 2 in October 2001, Apirsa filed a court
          application for "suspension de pagos" proceedings (similar
          to Canadian CCAA and United States Chapter 11 proceedings).
 
     Total contained metal production at the Company's mining operations for
 the quarter compared with the first quarter of 2000 was as follows:
 
     ------------------------------------------------------
                                       Three months ended
                                            March 31,
     Metal                            2001            2000
     ------------------------------------------------------
     Zinc (tonnes)                  57,346          61,298
     Copper (tonnes)                34,163          36,664
     Lead (tonnes)                  27,728          31,669
     Gold (ounces)                  36,354          31,249
     Silver (000s ounces)            2,409           2,449
     ------------------------------------------------------
     >>
     Zinc
 
     Zinc production for the quarter was lower than the first and fourth
 quarters of 2000 due principally to lower production at Los Frailes.
 
     Copper
 
     Copper production for the quarter was lower than the first and fourth
 quarters of 2000 due principally to lower metal production at Aitik.
 Production at Aitik fluctuates with the grades encountered in mining
 operations.
 
     Smelting
 
     The Company's smelting operations reported operating income of $2.3
 million for the quarter compared with operating income of $14.1 million for
 the first quarter of 2000. The operating income for the quarter compares with
 operating income of $10.5 million for the fourth quarter of 2000.
     The principal reasons for the change between the quarter and the first
 and fourth quarters of 2000 are lower treatment and refining charges (TCs/RCs)
 in the smelting contracts for 2001 at the Ronnskar smelter and changes in the
 carrying value of inventories to reflect changes in metal prices partially
 offset by higher production due to the start-up of the Ronnskar +200 expansion
 project.
     The Company's smelters produce primarily copper, zinc and lead, with
 significant quantities of gold and silver. Metal production at each of the
 Company's smelters for the quarter compared with the first quarter of 2000 was
 as follows:
 
     ------------------------------------------------------
                                       Three months ended
                                            March 31,
     Smelter                          2001            2000
     ------------------------------------------------------
     Ronnskar
         Copper (tonnes)            50,307          28,388
         Lead (tonnes)               9,410          10,531
         Zinc clinker (tonnes)(1)    8,658           8,827
         Gold (kilos)                2,719           2,095
         Silver (kilos)             97,131          97,721
     Norzink(2)
         Zinc (tonnes)              18,167          17,801
     Bergsoe
         Lead alloys (tonnes)       12,717          12,195
     -------------------------------------------------------
 
     Notes:
     (1)  Zinc clinker produced at Ronnskar is sold as feed to Norzink.
     (2)  Represents the Company's 50% share of production from Norzink.
 
     Ronnskar
 
     Production at Ronnskar for the quarter was higher than the first quarter
 of 2000 due to the start-up of the Ronnskar +200 expansion project. Production
 for the quarter was higher than the fourth quarter of 2000 for the same
 reason.
     Ronnskar reached full production at the end of March 2001.
 
     Fabrication
 
     The Company's copper tubing and brass fabrication operations reported
 operating income of $0.8 million for the quarter compared with operating
 income of $0.9 million for the first quarter of 2000. The operating income for
 the quarter compares with operating income of $1.8 million for the fourth
 quarter of 2000.
 
     OTHER MATTERS
 
     Debt Facilities
 
     During the quarter, the Company initiated discussions with the lenders
 under its unsecured credit facilities with a view to refinancing its
 obligations under the facilities. As part of these discussions, the lenders
 agreed to waive their rights with respect to any existing or future breaches
 of the financial covenants contained in the facilities until May 31, 2001. At
 the end of the quarter, the Company submitted a formal refinancing proposal to
 the lenders for approval.
 
     Hedge Facilities
 
     Also, during the quarter, the Company initiated discussions with the
 counterparties to its foreign currency hedge contracts with a view to
 restructuring its obligations under the contracts.
 
     Appointment of New Chief Financial Officer
 
     During the quarter, Anders Haker, formerly Treasurer and Controller of
 the Company, was appointed Senior Vice-President and Chief Financial Officer
 of the Company.
 
     DIVIDEND ON CONVERTIBLE PREFERRED SHARES
 
     On December 17, 1999, the Company's board of directors decided to
 postpone payment of dividends on the Company's convertible preferred shares
 pending completion of the Ronnskar +200 expansion. The expansion was completed
 during August 2000. The Company's board of directors has made no decision with
 respect to the resumption of payment of dividends on the convertible preferred
 shares.
 
     UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS TO FOLLOW
 
 
 
     BOLIDEN LIMITED
     Consolidated Balance Sheets
     (In thousands of United States dollars)
 
     -------------------------------------------------------------------------
                                                    March 31,     December 31,
                                                      2001            2000
     -------------------------------------------------------------------------
                                                   (Unaudited)     (Audited)
     Assets
 
     Current assets:
       Cash and short-term investments            $    39,662     $    45,211
       Accounts and metal settlements receivable      149,133         153,922
          Inventories                                 197,269         231,098
                                                 -----------------------------
                                                      386,064         430,231
 
     Capital assets                                   753,912         803,341
     Future income tax assets                          55,632          63,341
     Deferred expenses and other assets                55,346          30,905
                                                 -----------------------------
 
                                                  $ 1,250,954     $ 1,327,818
     -------------------------------------------------------------------------
 
 
     Liabilities and Shareholders' Equity
 
     Current liabilities:
       Accounts payable and accrued charges       $   293,028     $   327,601
       Debt                                           780,205         772,716
                                                 -----------------------------
                                                    1,073,233       1,100,317
 
     Long-term debt                                    33,044          36,299
     Future income tax liabilities                      1,904           1,904
     Provision for reclamation costs                   60,261          63,987
     Other long-term liabilities                       24,677          27,158
                                                 -----------------------------
                                                    1,193,119       1,229,665
 
     Shareholders' equity:
       Common shares                                  790,963         790,878
       Preferred shares                                79,115          78,872
       Retained deficit                              (784,133)       (762,317)
       Foreign currency translation account           (28,110)         (9,280)
                                                 -----------------------------
                                                       57,835          98,153
 
                                                  $ 1,250,954     $ 1,327,818
     -------------------------------------------------------------------------
 
     See accompanying notes to unaudited consolidated financial statements.
 
 
 
     BOLIDEN LIMITED
     Consolidated Statements of Operations
     (In thousands of United States dollars, except per share data)
 
     -------------------------------------------------------------------------
                                                        Three months ended
                                                             March 31,
                                                       2001            2000
     -------------------------------------------------------------------------
                                                   (Unaudited)     (Unaudited)
 
 
     Revenues                                     $   311,764     $   292,771
 
     Operating expenses:
       Costs of metal and other product sales         282,163         246,872
       Depreciation, depletion and amortization        22,372          30,704
       Selling, general and administrative             13,503          17,765
       Exploration, research and development            2,597           3,837
                                                 -----------------------------
                                                      320,635         299,178
     -------------------------------------------------------------------------
 
     Operating loss                                    (8,871)         (6,407)
 
     Interest and other expense (Note 3)              (18,200)        (11,720)
     Gain on asset dispositions                         1,694               -
                                                 -----------------------------
                                                      (16,506)        (11,720)
     -------------------------------------------------------------------------
 
     Loss before income taxes                         (25,377)        (18,127)
     Income taxes expense (recovery)                   (3,889)            174
                                                 -----------------------------
     Net loss                                     $   (21,488)    $   (18,301)
     -------------------------------------------------------------------------
 
     Basic loss per share                         $     (0.11)    $     (0.18)
 
     Diluted loss per share                       $     (0.11)    $     (0.18)
 
 
     Retained deficit
     Balance, beginning of year                   $  (762,317)    $  (105,448)
       Net loss for the period                        (21,488)        (18,301)
       Accretion on convertible preferred shares         (328)           (328)
                                                 -----------------------------
     Balance, for the period                      $  (784,133)    $  (124,077)
     -------------------------------------------------------------------------
 
     See accompanying notes to unaudited consolidated financial statements.
 
 
 
     BOLIDEN LIMITED
     Consolidated Statements of Cash Flows
     (In thousands of United States dollars, except per share data)
 
     -------------------------------------------------------------------------
                                                        Three months ended
                                                             March 31,
                                                       2001            2000
     -------------------------------------------------------------------------
                                                            (Unaudited)
 
     Cash provided by (used in):
 
     Operating Activities:
       Net loss for the period                    $   (21,488)    $   (18,301)
       Items not affecting cash:
         Depreciation, depletion and amortization      22,372          30,704
         Gain on asset dispositions                    (1,694)              -
         Future income taxes                           (4,748)         (1,237)
     -------------------------------------------------------------------------
       Cash provided by (used in) operations
        before non-cash working capital changes        (5,558)         11,166
 
       Net change in non-cash operating working
        capital                                       (13,770)         (1,830)
     -------------------------------------------------------------------------
     Cash provided by (used in) operating
      activities                                      (19,328)          9,336
 
     Financing Activities:
       Additions to debt                               10,000          35,310
       Issuance of common shares, net of issue costs        -         142,600
     -------------------------------------------------------------------------
     Cash provided by (used in) financing
      activities                                       10,000         177,910
 
     Investing Activities:
       Capital expenditures                           (18,356)        (35,605)
       Proceeds on asset dispositions                  21,685               -
     -------------------------------------------------------------------------
     Cash used in investing activities                  3,329         (35,605)
 
     Effect of exchange rate changes on cash
      balances in foreign currencies                      450             549
     -------------------------------------------------------------------------
     Cash provided (used) during the period            (5,549)        152,190
 
     Cash and short-term investments, beginning
      of period                                        45,211          66,463
     -------------------------------------------------------------------------
     Cash and short-term investments, end
      of period                                   $    39,662     $   218,653
     -------------------------------------------------------------------------
 
     Cash provided by (used in) operations before
      non-cash working capital changes, per share $     (0.03)    $      0.10
 
     -------------------------------------------------------------------------
 
     See accompanying notes to unaudited consolidated financial statements.
 
 
 
     NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
     (All tabular amounts are in thousands of United States dollars)
 
     1.  Going Concern Basis
 
         The accompanying unaudited consolidated financial statements of the
         Company are prepared in accordance with Canadian generally accepted
         accounting principles and on a going concern basis which assumes that
         the Company will be able to discharge its liabilities and realize the
         carrying value of its assets in the normal course of operations.
         Accordingly, the accompanying unaudited consolidated financial
         statements do not include any adjustments to the recoverability and
         classification of recorded asset amounts, classification of
         liabilities or recognition of unrealized losses of $147.2 million on
         contracts accounted for as hedges that might be necessary if the
         Company is unable to continue as a going concern.
 
         At March 31, 2001, the Company was not in compliance with, and was
         operating under temporary waivers of, covenants under certain of its
         loan agreements. Accordingly, most of the Company's debt has been
         classified as current, resulting in a working capital deficiency. In
         addition, the Company continues to record a significant loss from
         operations and negative operating cash flow after net change in non-
         cash operating working capital.
 
         The Company is pursuing several initiatives to address these matters,
         including refinancing its debt, restructuring its obligations under
         its hedge contracts, sourcing additional financing and carrying out
         its capital management program (CMP) which is aimed at reducing
         costs, increasing productivity, postponing discretionary
         expenditures, securing partners for those operations (eg, Myra Falls)
         that require non-discretionary expenditures to maintain continued
         operations and selling assets.
 
         On April 17, 2001, the Company's subsidiary, Boliden Mineral AB, and
         Rio Tinto completed the sale to Outokumpu Oyj of their respective 50%
         interests in Norzink A/S, the owner and operator of the Norzink zinc
         smelter and refinery and aluminum floride plant located near Odda on
         the west coast of southern Norway, for a total cash purchase price of
         $180 million. The Company realized a net gain before tax of
         approximately $30 million on the sale. This gain will be reflected in
         the Company's operating results for the second quarter of 2001.
 
         On February 28, 2001, the Company signed a letter of intent to sell
         its interests in Compania Minera Lomas Bayas and Compania Minera
         Boliden Westmin Chile Limitada, the owners of the Lomas Bayas SX-EW
         copper project and adjacent Fortuna de Cobre copper deposit located
         in Chile, to Noranda Inc. and Falconbridge Limited (Purchasers) for a
         purchase price of:
 
         (a)  $175 million plus cash balances ($2.1 million) less outstanding
              third party debt obligations ($112.7 million); plus
 
         (b)  $15 million if the Purchasers exercise their right to retain the
              Fortuna de Cobre copper deposit before the fifth anniversary of
              closing.
 
         The transaction is subject to completion of satisfactory due
         diligence, negotiation and settlement of satisfactory definitive
         agreements, receipt of all required regulatory and other third party
         consents and approval of the boards of directors of the Purchasers
         and the Company. If the transaction proceeds, the outstanding third
         party debt obligations of $112.7 million will be repaid or assumed by
         the Purchasers. On April 2, 2001, the Company and the Purchasers
         agreed to extend the term of the letter of intent to April 30, 2001
         to enable the Purchasers to complete their due diligence and the
         parties to complete their negotiations with respect to an agreement
         of purchase and sale.
 
         The Company's ability to discharge its liabilities and realize the
         carrying value of its assets in the normal course of operations is
         dependent upon, among other things, achieving satisfactory
         arrangements with its lenders and its hedge contract counterparties
         and successfully implementing the CMP. There can be no assurance that
         the Company will be successful with those initiatives.
 
     2.  General
 
         The accompanying unaudited consolidated financial statements should
         be read in conjunction with the notes to the Company's audited
         consolidated financial statements for the year ended December 31,
         2000.
 
         The accompanying unaudited consolidated financial statements reflect
         all normal and recurring adjustments which are, in the opinion of
         management, necessary for a fair presentation of the interim periods
         presented.
 
     3.  Debt, Hedges and Interest
 
         At March 31, 2001, the Company's debt position was as follows:
 
         -------------------------------------------------------------------
         $300 million revolving credit facility                    $300,000
         $230 million term loan facility                            230,000
         Bridge facility                                            100,000
         Lomas Bayas facility                                       112,700
         SEK 250 million medium-term bonds                           24,100
         Other                                                       46,449
         -------------------------------------------------------------------
         Total debt                                                 813,249
         Less amounts classified as current                         780,205
         -------------------------------------------------------------------
                                                                    $33,044
         -------------------------------------------------------------------
 
         As discussed in note 1, at March 31, 2001, the Company was not in
         compliance with, and was operating under temporary waivers of,
         covenants under certain of its loan agreements. Accordingly, most of
         the Company's debt has been classified as current. The Company has
         initiated discussions with the lenders under its unsecured credit
         facilities with a view to refinancing its obligations under these
         facilities. As part of these discussions, the lenders have agreed to
         waive their rights with respect to any breaches of the financial
         covenants contained in these facilities until May 31, 2001.
 
         At March 31, 2001, the Company's principal currency hedge positions
         were as follows:
 
         Maturing in                           2001                    2002
         -------------------------------------------------------------------
                                  $ Million    Rate       $ Million    Rate
         -------------------------------------------------------------------
         Swedish kronor:
             Forward sales              277    7.78             315    8.50
         Norwegian kroner:
             Forward sales               29    7.67               8    7.86
             Call options sold            4    7.80              18    7.80
         Spanish pesetas:
             Forward sales               52     151               -       -
         Canadian dollars:
             Forward sales               51    1.47               -       -
         -------------------------------------------------------------------
 
         The fair value of these currency contracts was an unrealized loss of
         $147.2 million (2000 -  $128.3 million) of which $14.2 million is
         accrued in the accompanying unaudited consolidated financial
         statements.
 
         During the quarter, the Company incurred interest expense of $16.0
         million (2000 - $12.4 million) on long-term debt classified as
         current.
 
     4.  Per Share Information
 
         Per share information for the quarter is based on the weighted
         average number of common shares outstanding during the quarter (218.7
         million; 1999 - 109.3 million). On March 30, 2000, the Company
         completed a common share rights offering pursuant to which it issued
         107.1 million common shares. At March 31, 2001, there were 218.8
         million common shares outstanding.
 
     5.  Segmented Data
 
         The Company operates principally in three operating segments: mining,
         smelting and fabrication.
 
         The Company's operating income (loss) at each of these operating
         segments was as follows:
 
 
     -------------------------------------------------------------------------
     QUARTER          Mining  Smelting  Fabrica- Corporate  Consoli-   Total
     ENDED                                tion   and other   dation
     March 31, 2001                                        Adjustment
     -------------------------------------------------------------------------
     Revenues         79,314   212,243   70,091    4,691   (54,575)   311,764
     -------------------------------------------------------------------------
     Operating income
      (loss)          (8,434)    2,329      778   (3,544)        -     (8,871)
     -------------------------------------------------------------------------
     Depreciation,
      Depletion      (14,113)   (6,531)  (1,614)    (114)        -    (22,372)
     -------------------------------------------------------------------------
     Capital
      Expenditures    12,339     5,268      702       47         -     18,356
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     QUARTER          Mining  Smelting  Fabrica- Corporate  Consoli-   Total
     ENDED                                tion   and other   dation
     March 31, 2000                                        Adjustment
     -------------------------------------------------------------------------
     Revenues         98,279   165,045   68,396    4,238   (43,187)   292,771
     -------------------------------------------------------------------------
     Operating income
      (loss)         (16,114)   14,066      890   (5,249)        -     (6,407)
     -------------------------------------------------------------------------
     Depreciation,
      Depletion      (23,961)   (4,595)  (1,976)    (172)        -    (30,704)
     -------------------------------------------------------------------------
     Capital
      Expenditures    12,610    22,113      781      101         -     35,605
     -------------------------------------------------------------------------
 
 
 
 SOURCE Boliden Limited