HudBay Minerals reports C$163.6m attributable loss for 2011

For the fifth consecutive year, HudBay Minerals has met its production targets for copper, zinc and precious metals.

HudBay Minerals reported an attributable loss of Cdn$163.6 million or negative C$0.92 per share last year, compared to an attributable net profit of C$21.02 million or C$0.16 per share in 2010.

Nevertheless, a semi-annual dividend of C$0.10 per share has been declared, payable on March 30, 2012.

Meanwhile HudBay CEO David Garofalo said, “Consistent operating performance from our reliable northern Manitoba operations enabled us to meet our production targets in 2011 for the fifth consecutive year. Our focus in 2012 is on our robust portfolio of development assets, which are expected to provide significant copper, gold and zinc production growth once they are brought into production.”

HudBay produced 54,324 tonnes of copper in 2011, up from the 52,413 tonnes produced in 2010.  The company also reported 2011 production of 75,780 tonnes of zinc, down from 774,413 tonnes in 2010.

Last year 94,610 gold ounces were produced, up from 87,176 ounces in 2010. The company produced 875,817 ounces of silver in 2011, up from 843,401 ounces in 2010.

HudBay expected contained metal production in concentrate to be somewhat lower this year as the Trout Lake and Chisel North mines reach the end of their mine lives. Copper production is also expected to be impacted by lower copper grades at the 777 mine, as normal mine sequencing brings copper grades back in line with reserve grades.

The company expected to produce between 35,000 to 40,000 tonnes of copper this year, as well as 70,000 to 85,000 tonnes of zinc. Precious metals guidance is between 85,000 to 105,000 ounces.

2011 production and operating costs targets were achieved with strong fourth-quarter operating results, according to HudBay. The company mined 13,834 tonnes of copper during the fourth-quarter, up from 13,660 tonnes during the same period of 2010, as well as 21,534 tonnes of zinc during the fourth-quarter 2011, up from 19,120 tonnes in fourth-quarter 2010.

Gold output was 27,059 ounces in fourth-quarter 2011, up from 22,375 ounces a year earlier, while silver production was 245,216 ounces in 4Q11, up from 209,788 ounces in 4Q10.

HudBay said Lalor project construction and development remains on schedule with first ore production expected in mid-2012. The Reed copper project is slightly ahead of schedule with first ore production anticipated in the first quarter of 2013.

The company also announced that Tom Goodman, senior vice president and COO, was retiring effective June 2012 and will stand for election to the HudBay Board of Directors. Alan Hair, currently senior vice president, business development and technical services, will become HudBay COO upon Goodman’s retirement.


In September of last year, HudBay completed the sale of its Fenix ferro nickel project in Guatemala for the Solway Group for US$140 million in cash. During the second quarter of 2011, the company recognized an impairment of the carrying value of Fenix of $212.7 million. A further loss of $22.5 million was recognized at the end of the sale.

On Nov. 1, 2011, HudBay sold zinc oxide production facility Zochem to a third party for a cash consideration of US$15.1 million and recognized an impairment loss of $6.8 million as a result.

During the third quarter of 2011, the company recorded $19 million in deferred tax expense as a result of Peruvian mining tax laws.

Including losses from discontinued operations, HudBay recorded a loss of C$163.6 million in 2011 as compared to a profit of C$21 million in 2010.

For the fourth-quarter 2011 HudBay reported profit of C$34.3 million or 21-cents per share, up substantially from the $7.9 million or 7-cents per share reported during the same period of 2010.

The company has budgeted $54 million for exploration in 2012.


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