Lundin Mining (LUN-T) has come a long ways since the doldrums of last year.
The company, once targeted by Hudbay Minerals (HBM-T) when its share price was at rock bottom, announced a strong third quarter with net income of $3.7 million or 1¢ per share compared to a net loss of $199 million in the third quarter of 2008.
Operating earnings were $91.8 million for the quarter up from $68.9 last year.
“Our European operations remain on-track to achieve full year production guidance and our costs continue to be well in-line with expectations,” Phil Wright, Lundin’s president and chief executive said in a statement.
Wright went on to say that income from continuing operations of $35.9 million — compared to $50.2 last quarter – were below expectations and he blamed lower than expected sales volume and production.
“The lower sales volume relates mainly to an in-transit shipment at quarter end and this will correct next quarter. The lower production arose from events that, while not unexpected from time to time, were unpredicted and caused disruption to planned mining sequences,” he said.
The situation had an impact on cash flow from operations which were down $6.8 million to $40 million.
Over at the massive Tenke Fungurume copper project in the Democratic Republic of Congo – a project that Lundin is teamed up with Freeport McMoran (FXC-N) on — ramp-up continues. Wright said he expects the mine to achieve nameplate copper production capacity in “the near-term.”
During the quarter, Tenke produced roughly 24,000 tonnes of copper bringing the total amount of production to roughly 41,000 tonnes of copper cathode since start-up. Cash payments to fund Tenke during the quarter were $24.3 million.
Overall sales for the quarter came in at $171.1 million compared to sales of $191.9 million in the third quarter of 2008. The lower number was largely attributed to the closures of its Galmoy and Storliden projects.
The company also announced that it was able to pay down debt of $63.9 million in the quarter.
Production guidance for the year remained unchanged at 91,000 tonnes of copper, 100,000 tonnes of zinc, 40,000 tonnes of lead and 7,200 tonnes of nickel.
Capital expenditures for the year are expected to be roughly $170 million. That breaks down into $65 million for sustaining capital, $45 million for new investment in existing operations and $60 million for Tenke.
Lundin has operations in Portugal, Spain and Sweden, producing copper, nickel, lead and zinc.
Its project pipeline includes an expansion at Zinkgruvan in Sweden and Neves-Corvo in Portugal, along Tenke Fungurume.
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