April 26, 2012 / 10:49 PM / 6 years ago

UPDATE 2-Inmet profit rises on increased copper sales

* Q1 EPS C$1.39 v. C$0.97 a year earlier

* Revenue up 16 percent at C$294.9 million

* Metal prices down, copper sales volumes up

April 26 (Reuters) - Canadian base metal miner Inmet Mining Corp reported a 62 percent increase in quarterly profit on Thursday as higher copper production outweighed a drop in zinc output and lower metal prices.

Net income from continuing operations for the quarter ended March 31 was C$96.1 million ($97.7 million), or C$1.39 a share, up from a year-earlier adjusted profit of C$59.4 million, or 97 Canadian cents a share.

Net income attributable to shareholders fell 33 percent to C$96.1 million, or C$1.39 a share. That compared with C$142.8 million, or C$2.33 a share, in the first quarter of 2011 when profit was boosted by the sale of the company’s 18 percent stake in Ok Tedi Mining.

Analysts, on average, had expected earnings of C$1.28 a share, according to Thomson Reuters I/B/E/S.

Revenue rose 16 percent to C$294.9 million on higher copper sales volumes.

Copper production rose 40 percent to 24,800 tonnes from 17,700 tonnes in the year-earlier period, as output increased at Inmet’s Las Cruces mine in Spain and Cayeli mine in Turkey. Zinc production fell 29 percent to 15,100 tonnes.

The higher copper output offset a drop in metal prices in the first quarter, Inmet said. Copper prices on the London Metal Exchange (LME) fell 14 percent to an average of $3.77 per pound, while zinc prices were down 16 percent at $0.92 per pound.

The company maintained its copper and zinc sales guidance for 2012, but warned that production costs could rise, primarily on higher electricity and royalty charges. Copper cash costs rose 5 percent to $1.00 per pound in the first quarter.

Inmet competitor Lundin Mining Corp reported an 18 percent drop in quarterly profit on Wednesday as weaker metals prices and higher costs hurt results.

Inmet, which owns the Cobre Panama copper project, is in talks with parties interested in buying a stake in the project. Inmet plans to sell a 20 percent to 40 percent stake to help it finance the development costs.

The Toronto-based miner currently owns an 80 percent stake in the project. As part of a previous agreement, the company sold a 20 percent stake to KPMC - a joint venture between LS-Nikko Copper Inc and Korea Resources Corp - earlier this month.

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