OTTAWA, Dec 18 (Reuters) -Inmet Mining Corp IMN.TO shares fell as much as 8 percent in early trade on Thursday after the Canadian metals producer issued 2009 production and spending forecasts that sparked cuts in analysts’ share-price targets.
The company said after the market close on Wednesday that it sees capital expenditures of C$246 million ($205 million) in 2009 and expects to produce 125,600 tonnes of copper, 79,000 tonnes of zinc, and 241,500 ounces of gold.
After its initial decline, Inmet stock regained ground to trade at C$18.55 on the Toronto Stock Exchange, a 4 percent decline.
UBS analyst Onno Rutten said that Inmet’s capital spending plan for 2009 was 67 percent higher than anticipated “and in sharp contrast with declining capital expenditures across the mining industry”.
Rutten, who said he also expected a decline in operating costs rather than the flat forecast that Inmet delivered, cut his 12-month stock target by 7 percent to C$27.
Inmet expects to spend C$94 million for engineering, permitting and exploration on its fully owned Petaquilla copper project in Panama in 2009 in preparation for a development decision by 2010.
Genuity Capital Markets analyst Nawojka Wachowiak downgraded her rating on Inmet stock to “hold” from “buy” and cut her target price to C$19 from C$25.
“The company’s significant capex budget for Petaquilla may highlight Inmet’s continued devotion to this project and begs the question - could this capital be better spent elsewhere,” she wrote.
The company sees its share of costs at its 70-percent owned Las Cruces copper project in Spain at C$72 million for a water treatment plant, process plant and mine development. It is awaiting a permit from Spain’s water authority and expects production to start by March, 2009.
The Toronto-based company fully owns the Cayeli copper and zinc mine in Turkey, the Pyhasalmi copper and zinc mine in Finland and the Troilus gold and copper mine in Canada. It holds an 18 percent stake in the Ok Tedi copper and gold mine in Papua New Guinea.
$1=$1.20 Canadian Reporting by Susan Taylor; editing by Peter Galloway