November 4, 2008 / 4:33 PM / 10 years ago

UPDATE 1-Quadra Mining profit drops, halts projects

TORONTO, Nov 4 (Reuters) - Quadra Mining QUA.TO said on Tuesday its third-quarter profit fell 59 percent as weaker copper prices eroded revenue and prompted the Canadian producer to halt its two development projects and suspend production forecasts beyond 2008.

Net income was $20.1 million, or 30 cents a share, down from $48.8 million, or 86 cents a share, in the year-before period.

Quarterly revenue fell to $116 million from $134.6 million as the impact of lower copper prices more than offset output that rose 26 percent to 38.6 million pounds, and gold production that climbed 27 percent to 30,629 ounces.

The revenue figure included negative pricing adjustments of $64.4 million for the second and third quarters due to the practice of pricing copper sales about four months after shipment.

Copper has fallen nearly 50 percent since the beginning of July, while gold prices were up year-over-year in the third quarter, but have retreated 14 percent since the end of the quarter.

The recent price declines, combined with tight credit markets, have prompted several miners to halt projects or suspend mines, and Quadra said on Tuesday it would stop work at its Sierra Gorda copper project in Chile and its Malmbjerg molybdenum project in Greenland.

“Clearly, the current metal price environment will have an impact on Quadra going forward,” Quadra Chief Executive Paul Blythe said in a statement.

“This sharp decline in the copper price is an unexpected outcome, and one that has led to a full review of our plans for 2009 and beyond.”

He said the review would likely be completed by the end of November, and until then, the company will not provide production forecasts beyond this year.

For the remainder of 2008, however, Quadra expects to meet or exceed its production expectations of 150 million pounds of copper and 115,000 ounces of gold.

Quadra mines primarily from its Robinson mine in Nevada, and recently announced the opening of its Carlota mine in Arizona.

The company’s shares initially weakened on Tuesday, but then pushed higher and were up 58 Canadian cents, or 10.4 percent, at C$6.14, moving in line with Toronto-listed base metals producers.

$1=$1.15 Canadian Reporting by Cameron French; Editing by Peter Galloway

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