July 27, 2010 / 4:11 PM / 8 years ago

REFILE-UPDATE 2-Inmet quarterly profit hit by forex losses

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* Q2 EPS C$0.86 vs C$1.37 year ago

* Revenue up 1 pct at $215 million (Adds details on results, share price move)

TORONTO, July 27 (Reuters) - Inmet Mining Corp IMN.TO said on Tuesday its second-quarter profit fell 27 percent, as foreign exchange related losses weighed on its results, and its shares eased.

The Canadian base metals miner, which is still working through teething issues at its newly commissioned Las Cruces copper mine in Spain, also said it has ended operations at its Troilus gold-copper mine in Quebec — the shutdown resulted in significantly lowering gold output in the quarter.

Quarterly copper and zinc output rose 17 percent and 18 percent, respectively, but Inmet said its gold production fell by 27 percent in the quarter to 36,700 ounces.

The Toronto-based company earned C$48.4 million, or 86 Canadian cents a share, in the second quarter. That compares with a profit of C$66.5 million, or C$1.37 a share in the year-before period.

Operating earnings rose to C$87 million, from C$85 million, a year earlier.

Revenue rose 1 percent to C$215 million, driven by higher realized copper and zinc prices in the quarter.

Analysts on average had forecast quarterly earnings of C$1.10 a share on revenue of C$230.6 million, according to Thomson Reuters I/B/E/S.

Inmet shares were down 11 Canadian cents at C$49.14 on the Toronto Stock Exchange.


For Sector Comparison: link.reuters.com/wyv79m



Inmet said last week that equipment failures at Las Cruces hurt second-quarter copper cathode production. It produced 6,600 tonnes of copper cathode during the second quarter, well below a target of 12,400 tonnes.

The company cut its full-year outlook for copper cathode production at Las Cruces to 20,000 to 30,000 tonnes, from 36,400 tonnes, due to the operational issues at the project.

Inmet believes it has identified the bottlenecks to production and is taking steps to significantly increase operating reliability at Las Cruces.

The company expects copper and zinc sales volumes to be higher than 2009, driven by Las Cruces, its Cayeli mine in Turkey and its Pyhasalmi mine in Finland. It expects gold sales volumes to decline on the Troilus production stop.

Inmet’s largest project is the Cobre Panama copper-gold project in Panama, which is expected to start production in the third quarter of 2015. It estimates that the $5 billion project will produce an average of 255,000 tonnes of copper a year. (Reporting by Euan Rocha and Julie Gordon; editing by Janet Guttsman)

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