Inmet earns $61.6 million in Q3

Vancouver – Ramp-up delays at Inmet Mining‘s (IMN-T) high grade Las Cruces copper mine in Spain pushed the company’s third-quarter profit below expectations and forced the major to reduce its 2009 production forecasts.

Inmet earned $61.55 million or $1.10 per share in the third quarter, an amount roughly 20% below company and analyst expectations. Compared to the same quarter last year, higher copper, zinc, and gold prices increased sales revenue but lower sales volumes offset the benefit.

The key stumbling block forcing lower sales volumes was a delay in achieving commercial production at the company’s new mine in Spain. The operation produced 4.9 million lbs. of copper cathode in the quarter, significantly below the expected ramp-up level and no where near the full-production level of 40 million lbs. copper each quarter. But Inmet says the start-up issues in the Las Cruces metallurgical plant are not expected to have a long-term impact on its long-term performance.

Inmet maintained its guidance that Las Cruces will achieve commercial production, which is set at 60% of design capacity, before the end of the year. By February 2010 the company expects the operation to be running at full capacity, which means producing 159 million lbs. copper annually.

The metallurgical plant issues are not Las Cruces’ first setback. Development work at the site was halted for almost a year after the Spanish water authority suspended its authorization of the project’s dewatering and re-injection system in May 2008. Work resumed in April but the incident pushed back production of the first copper cathode until June of this year.

The volcanogenic massive sulphide deposit at Las Cruces is home to 17.6 million proven and probable tonnes grading 6.2% copper; the open-pit mine is expected to produce 2.2 billion lbs. copper cathode over its 15-year life span.

The issues at Las Cruces prompted Inmet to reduce its production forecast. The company now expects to produce 87,000 tonnes copper, 76,000 tonnes zinc, 224,000 oz. gold, and 388,000 tonnes pyrite in 2009, down from its July forecast of 100,000 tonnes copper, 78,000 tonnes zinc, 230,000 oz. gold, and 411,000 tonnes pyrite.

In discussing its third-quarter results Inmet also said it expects to commence detailed engineering for the Petaquilla project in Panama by the middle of 2010 and that the project could be operational by the end of 2014. The company also commented that the search for a Petaquilla partner continues.

Inmet’s share price fell $2.74 on news of its third-quarter results to close at $60.16. The company has a 52-week trading range of $12.15 to $69.48 and has 56 million shares outstanding.