Hudbay Minerals narrows third-quarter loss to $6.1 million, but revenues fall

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TORONTO - Hudbay Minerals Inc. (TSX:HBM.TO - News) says its third-quarter loss narrowed to $6.1 million compared to the quarter a year earlier, when it booked millions in one-time costs.

The Toronto-based miner said the most recent quarterly loss amounted to three cents per share, compared to $41.1 million, or 23 cents per share in the same quarter of 2011, when the company took a hit from an asset disposal of $28.4 million and a tax expense of $26.8 million.

However, revenue fell to $144.6 million from $212.3 million in the 2011 quarter, when the company saw "unusually high sales volumes" and excess inventory was drawn down.

Provisional pricing adjustments contributed $3.3 million to after-tax revenues as a result of increases in copper, gold and silver during the quarter and zinc price increases on purchase contracts added another $3.1 million in after-tax gains.

During the most recent quarter, the company booked a $3.5-million after-tax loss on mark-to-market adjustments related to junior mining investments, $2.5-million in after-tax costs related to precious metals and senior unsecured notes and a $12.1-million loss on foreign exchange.

"Gross profit was lower in the third quarter of 2012 compared to the same period in 2011 as a result of lower revenues mainly due to lower copper and gold volumes, partially offset by lower cost of sales," the company said in its release.

"As a result of the lower gross profit, the tax expense was lower in the third quarter of 2012, resulting in a lower loss for the period compared to the third quarter of 2011."

Still, David Garofalo, Hudbay's president and chief executive officer, said Hudbay's year-to-date production and performance remains within its expectations.

"The consistency of our underlying business in northern Manitoba coupled with the US$1.25 billion of capital secured in the third quarter, has allowed Hudbay to advance its plans for significant growth in copper, gold and zinc production over the next three years from three new mines now under construction."

Ore production at its Manitoba business was 20 per cent lower than the prior year's third quarter due to the permanent closure of the Trout Lake mine in June, offset slightly by the start of production at its Lalor mine.

Mine operating costs were 15 per cent lower than in the 2011 quarter as development fell of at the Chisel North mine, which permanently closed in September.

Shares in the company were up one per cent or 10 cents to $9.37 in afternoon trading Thursday on the Toronto Stock Exchange.