NEW YORK HudBay Minerals Inc. will reduce capital investments and defer spending on mining projects after its second-quarter net loss jumped 78 percent to Canadian $52.69 million ($50.82 million) from C$29.61 million a year earlier.
The Toronto-based company blamed the deeper loss and a 31.2-percent decline in sales to C$130.66 million ($125.97 million) on lower production following the closure of its Trout Lake and Chisel North mines in Manitoba in 2012, as well as a foreign currency translation loss and lower prices.
An 11-percent drop in ore production was offset by an increase in production at the Lalor copper mine project in Manitoba, the company said. Although still in development, Lalor began production in late 2012, according to the miner.
Due to the net loss, the company plans to defer the construction of a concentrator at Lalor, which will save the company $325 million. "We will have enough production capacity to sustain production through 2016 while we get the new concentrator online," president and chief executive officer David Garofalo said during a conference call Aug. 1. The company plans to invest $9 million in its Snow Lake concentrator in Manitoba to help meet production needs, he added.
The company said it will cut an additional $100 million in spending through the end of 2014 by reducing exploration and deferring some capital expenditures.
"We remain focused on achieving our growth objectives, meeting our production and cost targets at our operations and managing future expenditures prudently so we can maintain our strong liquidity position during the execution of our construction programs," Garofalo said in a statement.
The company is on track to complete the Constancia copper project in Peru, with 90 percent of engineering done and 40 percent of construction complete, Garofalo said.