By Cameron French
TORONTO, Oct 28 (Reuters) - Inmet Mining IMN.TO said on Tuesday its third-quarter profit fell a larger-than-expected 35 percent due to weaker copper and zinc prices and higher costs, sending the company’s shares lower.
The Canadian metals producer also cut its full-year production outlook, and said the operating license for its Cerattepe development project in Turkey had been suspended.
Inmet, which operates mines in Turkey, Finland and Canada earned C$75.1 million ($58.2 million), or C$1.55 a share, in the quarter that ended Sept. 30. That was down from C$114.8 million, or C$2.38 a share, in the year-before period.
The results missed analysts’ estimates for a profit of C$1.96 a share, according to Reuters estimates.
Inmet also trimmed its 2008 production outlook to 82,400 tonnes of copper, 74,000 tonnes of zinc, and 248,200 ounces of gold, citing lower throughput at the OK Tedi mine in Papua New Guinea and the Troilus mine in Canada, a change in mine plan at the Cayeli mine in Turkey and delays at the Las Cruces project in Spain.
“Overall, I thought it was pretty negative,” said Orest Wowkodaw, an analyst at Canaccord Adams, noting the lowered production outlook.
About 30 minutes after the open, Inmet’s stock was down 9 Canadian cents, or 0.4 percent, at C$24.00, underperforming a 6.6 percent rise among other Toronto Stock Exchange-listed materials producers.
Revenue slid 9 percent to C$247.5 million, as slightly stronger copper and gold production was more than offset by a 28 percent drop in zinc output and weaker copper and zinc prices.
Cash costs more than doubled to 60 cents a pound on the copper side and climbed 18 percent to $432 an ounce for gold.
At Cerattepe, construction had been on care and maintenance since April following a Turkish appeal court decision to uphold an injunction preventing development of the copper site.
The company said on Tuesday an administrative court had ruled to cancel the operating licenses.
“We will continue to keep the project on care and maintenance and also suspend all work on the project and reassess our development plans in light of the court decision,” Inmet said in a statement.
Inmet is also in the process of taking over Petaquilla Copper PTC.TO, which would give it control of the big Petaquilla copper property in Panama. ($1=$1.29 Canadian) (Reporting by Cameron French; Editing by Peter Galloway)