(In U.S. dollars, unless noted)
TORONTO, Jan 22 (Reuters) - Frontera Copper FCC.TO said on Thursday it expects to recover less copper than previously forecast from some of its ore inventories, and will take a $9 million writedown due to the slide in copper prices last year.
Toronto-based Frontera said ore placed on leach pads at its Piedras Verdes operation in Mexico prior to the middle of last year would achieve recovery of 52.5 percent of the metal, down from the previous estimate of 61.9 percent to 62.5 percent.
Leach pads use acid to slowly remove metal from the ore.
This will result in a downward revision in the company’s copper inventory balance of 27.7 million pounds as of Oct. 1, 2008, Frontera said. It will account for this by adjusting its mining costs higher. For the fourth quarter of 2008, the cost increase will total between $2 million and $2.5 million, it said.
“The company now expects that an average life-of-mine recovery rate of 60.1 percent will be achieved for all of the remaining ores to be mined at Piedras Verdes,” Frontera said in a statement.
It also expects to take a $9 million non-cash impairment charge due to the slide by copper prices last year. The metal fell by 54 percent to about $1.40 a pound during 2008.
Frontera expects copper production of 6 million to 7 million pounds for the first quarter of 2009, at total reported cash costs of between $1.25 and $1.35 a pound.
Shares of Frontera were down 2 Canadian cents at 50 Canadian cents on the Toronto Stock Exchange.
$1=$1.26 Canadian Reporting by Cameron French; editing by Rob Wilson