Thursday, March 4, 2010

HudBay Reports 54% Profit Fall

Canadian copper producer Hudbay Minerals has reported Q4 2009 profits of $7.3million, down 54% over the same period in 2008. Lower sales of copper cathode and spent anode production along with $6.9 million in executive severance costs caused the slump.

Demand for North American copper cathode from Chinese customers wasn’t as strong in Q4 as it was in Q2 and Q3, while domestic demand remained weak.

Inventory at the end of the quarter was approximately 3800 tonnes of copper.
Commenting on the results W. Warren Holmes, HudBay's executive vice chairman and interim chief executive officer said: "Our operations in Manitoba continue to perform well, including record production levels from the 777 mine in 2009, and we look forward to another year of strong production in 2010." He added "Although our fourth quarter results were affected by lower copper sales, we are already seeing a drawdown of HudBay's inventory levels and we look forward to stronger results beginning in the first quarter of 2010."

"During 2009, we executed positive steps to advance HudBay's strategic goals," said Mr. Holmes. "Most importantly, Phase 1 development of Lalor is underway and the project is moving forward on schedule. In 2009, we saw discovery of the copper-gold zone and approval of an $85 million capital expenditure program at Lalor, the decision to restart mining at Chisel North, progress on an updated feasibility study for the Fenix Project and the creation of option and joint venture agreements with several junior mining companies. These are all examples of action by HudBay in 2009, which combined with our strong cash balance, position the company well to pursue key growth initiatives in 2010."

The company also set out its strategic goals for the next two years:


Advance the Lalor Project, including additional exploration work to better define the new copper-gold zone, continuing to drive the ramp from the Chisel North mine to Lalor, completing pre-feasibility studies
to support development of a production shaft and initiating development of the shaft


Execute the restart of the Chisel North mine


Complete the closure of the Flin Flon copper smelter and White Pine copper refinery


Expand grassroots exploration program in the Flin Flon Greenstone Belt


Update the Fenix Project feasibility study, evaluate financing alternatives for the project and make a decision on restarting construction


Advance the Back Forty Project towards completion of a feasibility study and the required permit applications

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