NEW YORK HudBay Minerals Inc. returned to profitability in the third quarter despite a drop in revenue due to lower copper sales volumes and pricing.
The Toronto-based company posted net income of nearly Canadian $3 million ($2.9 million) for the three months ended Sept. 30 vs. a net loss of more than C$5.35 million in the same period last year despite a 10-percent drop in sales to C$130.18 million ($124.2 million).
"The (revenue) decrease was primarily due to lower copper sales volumes, mainly as a result of the planned permanent closures of the companys Trout Lake and Chisel north mines in 2012, and lower metal prices compared to the third quarter of 2012, partially offset by higher zinc, gold and silver volumes," HudBay president and chief executive officer David A. Garofalo said in a conference call with analysts.
The companys copper sales totaled 14.4 million pounds in the third quarter, down 27.4 percent from 19.8 million pounds a year earlier.
HudBay expects its full-year production of contained copper in concentrate to be slightly below the 2013 guidance range of 33,000 to 38,000 tonnes, while full-year contained zinc production is expected to be at the upper end of the 2013 guidance range of 85,000 to 100,000 tonnes.
"The lower copper production is mainly due to the deferral of higher copper grade zones from the 777 Mine plan to future years as a result of temporary limitations in paste backfill availability and requirements for ground support in the higher copper grade zones," the company said.
HudBay said its Constancia copper project in Peru was 47-percent complete as of Oct. 31, with initial production still projected for late 2014 and commercial production projected for the second quarter of 2015.
HudBays 70-percent-owned Reed copper mine in Manitoba started production in the third quarter and is expected to reach full production of about 1,300 tonnes of ore per day in the first half of 2014.
Sinking of the main production shaft at the Lalor copper project in Manitoba also was substantially completed at the end of the third quarter.
"Third-quarter 2013 ore production at HudBays Manitoba business unit was 29-percent higher than the prior years third quarter as a result of a full quarter of production at Lalor, additional production from the 777 north mine and production commencing at the Reed Mine," the company said.