Surging gold, lower costs help Hudbay grow profits seven-fold
The miner posted strong earnings numbers despite a 21% drop in revenue
TORONTO (Reuters) -
HudBay Minerals (HBM.TO: Quote) said on Tuesday its third-quarter profit rose seven-fold, as higher gold prices and lower costs helped offset the impact of lower copper production and prices.
The Canadian miner said it earned C$20 million ($18.7 million), or 13 Canadian cents a share, in the quarter ended Sept. 30. That compared with a profit of C$2.8 million, or 2 Canadian cents a share, in the year-before period, when its results were hurt by a C$27 million impairment charge.
Analysts polled by Thomson Reuters I/B/E/S had expected, on average, a profit of 12 Canadian cents per share.
Revenue fell 21% to C$194.6 million, as realized copper prices declined 24% and output fell 25%. Zinc production slid 8.3% while prices were flat year-on-year.
Gold production declined 15% but sales of the metal increased, and the realized price climbed 9.4%.
Unit operating costs declined due to the closure of the Chisel North mine in Manitoba and the Balmat mine in New York state, which were shut late last year and early this year due to low zinc prices.
However, HudBay, whose base of operations is the Canadian province of Manitoba, said last week it plans to restart Chisel North in early 2010.
HudBay's main development assets are the Fenix nickel property in Guatemala and the Lalor zinc and gold deposit in Manitoba, which has produced strong drilling results in the past two months that have driven the company's shares higher.
($1=$1.07 Canadian) (Reporting by Cameron French
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