December 11, 2009 / 3:44 PM / in 9 years

UPDATE 1-Lundin Mining sees higher capex budget for 2010

* Sees 2010 capex budget of $250 mln

* Shares down 4 pct

Dec 11 (Reuters) - Lundin Mining Corp (LUN.TO) expects a higher capital expenditure budget for 2010, saying a large part of its budget will represent investment in new capacity.

The company sees capital expenditures of about $250 million in 2010, above its budget of $130 million for 2009.

Exploration and resource acquisition is expected to fall by $2 million in 2010 to $20 million, of which about $10 million will be spend on exploration drilling to delineate additional copper resources at its Neves-Corvo mine in Portugal.

“Our European operations continue to perform well and our production outlook for 2010 is largely unchanged from 2009 with the exception of zinc following the closure of full operation at Galmoy in 2009,” Chief Executive Phil Wright said in a statement.

Lundin, which remains cautious in the short term, expects to produce 92,000 tons of zinc in 2010, down from 100,000 tons forecast for 2009.

The company’s shares were down 4 percent at C$4.20 in morning trade Friday on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Ratul Ray Chaudhuri)

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