April 28, 2009 / 1:29 PM / in 9 years

UPDATE 2-Inmet Mining profit tumbles with metal prices

* Profit falls by 52 pct on lower metal prices

* Sees Las Cruces copper output in June

* Shares down 2.3 pct at C$37.04 (Adds details, changes dateline from OTTAWA)

TORONTO, April 28 (Reuters) - Inmet Mining IMN.TO said on Tuesday its quarterly profit fell 52 percent, hit hard by a year-over-year decline in copper and zinc prices.

The Canadian base metals miner also pushed back the expected production start date for its Las Cruces copper mine in Spain to June from April, and said it planned to raise the expected capacity of its Petaquilla copper project in Panama.

Inmet earned C$51.3 million ($42 million), or C$1.06 a share, in the first quarter ended March 31. That compared with a profit of C$106.6 million, or C$2.21 a share, in the year-before period.

Prices for copper and zinc have recovered somewhat from last year’s plunge, but average realized copper prices in U.S. dollars were still down 52 percent from the 2008 quarter.

Inmet sold copper at $2.01 a pound during a quarter, while cash costs were 56 cents a pound, up from 33 cents a pound in the year-before quarter due to the declining value of produced zinc used to offset the costs.

Revenue slid 13 percent to C$239 million.

However, Inmet said it did not expect market conditions to have any impact on its production, and said it planned to maintain capital spending and pursue growth opportunities.

“We will monitor the metal and financial markets, our financial performance and resources, and our capital spending to make sure we maintain the financial strength we need in these volatile and uncertain markets,” the company said in a statement.

Inmet said it expects copper treatment and refining costs to increase in 2009 to $75 per tonne.

Copper production rose 4 percent over last year to 20,000 tonnes, while zinc output fell 25 percent to 15,300 tonnes and gold output rose 40 percent to 78,800 tonnes.

Inmet said its Las Cruces mine, which has been delayed from its projected start last year due to problems with water permitting, will begin producing copper at the beginning of June, following the lifting of a mining suspension by local authorities on April 7.

Inmet had been hoping to begin producing copper at Las Cruces at the beginning of the second quarter.

Regarding Petaquilla, which Inmet took full control of last year after buying out Petaquilla Copper and taking over a 26 percent stake abandoned by Teck Cominco TCKb.TO, Inmet said it is working to raise expected annual output to 275,000 tonnes of copper over its first 10 years, from the previous target of 223,000 tonnes.

Inmet has said it expects Petaquilla to begin production in 2014.

The company’s shares were down 2.3 percent at C$37.04 on the Toronto Stock Exchange on Tuesday morning.

$1=$1.22 Canadian Reporting by Cameron French, additional reporting by Susan Taylor in Ottawa; editing by Peter Galloway

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