May 7, 2009 / 2:04 PM / in 9 years

UPDATE 1-Lundin posts loss on low metal prices

* Loss 2 cents/share vs profit 20 cents/share

* Revenue down 60 pct on falling metals prices

* Stock up 7.3 percent at C$2.95 (In U.S. dollars, unless noted)

TORONTO, May 7 (Reuters) - Lundin Mining Corp (LUN.TO) posted a first-quarter loss due a sharp drop in base metals prices and said it plans a debt issue following the elimination of liquidity concerns surrounding the company.

The Canadian miner on Thursday reported a loss of $8.6 million, or 2 cents a share, compared with a year-earlier profit of $78.8 million, or 20 cents a share.

The result slightly beat analysts’ average forecast for a loss of 4 cents a share, according to Reuters Estimates.

In a statement, Lundin Chief Executive Phil Wright said a recent C$180.6 equity financing and a hedge on sales of 40,000 tonnes of copper had eliminated the company’s immediate liquidity concerns.

He said Lundin was now in a position to issue $225 million in debt that would meet its needs over the next few years.

Lundin said last quarter it had fallen out of compliance on terms of a credit line and had until June 5 to hammer out a new deal.

Wright said the first-quarter results probably represent a low ebb for the company on cash flow and earnings.

Quarterly revenue fell 60 percent to $123.4 million, hurt by the sharp drop in prices of copper, zinc, lead and nickel.

Lundin shares were up 7.3 percent at C$2.95 in morning trade on the Toronto Stock Exchange. ($1=$1.17 Canadian) (Reporting by Cameron French; editing by John Wallace)

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