BASE METALS

Lundin Mining announces a return to profit

The group said Thursday it earned 6 US cents per share in the fourth quarter of 2009, boosted by rising metal prices

Posted: Friday , 26 Feb 2010

TORONTO (Reuters) - 

Lundin Mining (LUN.TO: Quote, Profile,Research) said on Thursday it rebounded to a fourth-quarter profit from a year-earlier loss, helped by rising metal prices.

The base metals producer earned $35.1 million, or 6 cents a share, in the quarter ended Dec. 31.

That compared with a year-earlier loss of $728.5 million, or $1.77 a share, when the Toronto-based company's results were decimated by a crash in metal prices and resulting writedowns of assets.

Stripping out a $27.4 million loss on derivative contracts and a $37.1 million writedown on the Salave gold project in Spain, the company earned 17 cents a share.

Analysts polled by Thomson Reuters I/B/E/S had expected, on average, a profit of 11 cents a share, before exceptional items.

Sales more than quintupled to $256.7 million, due to rebounding prices of copper, zinc, nickel and lead.

Shares of Lundin were down 5 Canadian cents at C$4.35, but have risen nearly 400 percent over the past 12 months, as the rebound in metals markets has allowed the company to rebuild its balance sheet.

Lundin's net debt position as of Feb. 22 was $9.2 million, compared with $145.3 million at the end of 2008, when it was also struggling to renegotiate terms on a C$575 million credit line that it has since restructured.

Cash on hand at the end of 2009 was $141.6 million.

"This puts us in a strong position to pursue our growth ambitions for 2010," Lundin Chief Executive Phil Wright said in a statement.

Lundin produces at three mines in Europe, and also owns about 25 percent of the Tenke Fungurume copper-cobalt mine in the Democratic Republic of Congo.

The mine, which is currently ramping up and produced 70,000 tonnes of copper cathode last year, is majority-owned by U.S. miner Freeport-McMoRan (FCX.N: Quote, Profile, Research).

($1=$1.07 Canadian) (Reporting by Cameron French; editing by Rob Wilson)

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