BASE METALS

Inmet reports 69% increase in profit with copper production up 22%

The aborted merger with Lundin Mining cost Inmet Mining $6 million in expenses during the first-quarter 2011, Inmet estimated.

RENO, NV - 

Although copper production was lower than expected during the first quarter of the year, Inmet Mining said Thursday, "We remain confident that we will achieve our production guidance of 94,400 tonnes of copper this year."

Inmet reported a 69% increase in net income of C$142.84 million or $2.33 per share during the first-quarter 2011, compared to $84.7 million or $1.51 per share reported during the same quarter of last year.

The company reported copper production increased 22% from 14,500 tonnes in the first quarter of 2010 to 17,700 tonnes during the first-quarter 2011.

Zinc production was up 13% from 18,700 tonnes in the first-quarter 2010 to 21,200 tonnes in the first quarter of this year.

Meanwhile, pyrite production dropped 6% from 197,500 tonnes in the first quarter of last year to 186,100 tonnes in the first quarter of this year.

However, with production ended at Troilus in 2010 and the sale of Ok Tedi in January 2011, Inmet expects no gold sales this year, compared to 19,300 ounces sold in the first quarter of 2010.

Inmet Mining expects 2011 zinc sales volumes to be similar to 2010 volumes "because zinc production should be approximately as it was in 2010."

Copper production at Las Cruces should more than double this year as the operation ramps up to its capacity of 72,000 ounces of copper cathode "and because we increased our ownership in Las Cruces from 70% to 100% in December 2010," the company said.

Inmet expects capital spending to be C$303 million this year, including C$224 million for work on the development at the Cobre Panama project as well as $52 million for mine development and plant improvements at Las Cruces.

The company also incurred C$6 million of expenses during the first quarter related to Inmet's agreement with Lundin Mining, which was terminated on March 29, 2011. The company also recognized forex losses of $10 million on U.S. dollar proceeds Inmet received from the sale of its equity interest in Ok Tedi.