Lundin Mining 1Q Rises On Copper Price, Falls Short Of Views
May 10 2011 - 5:54PM
Dow Jones News
Lundin Mining Corp.'s (LUN.T, LUNMF) net income rose by more
than a third during the first quarter but fell short of
expectations due to higher costs, weather and shipping
problems.
The international base metals miner reported net income of $71.2
million, or 12 cents a share, compared with $51.9 million, or 9
cents a share a year earlier.
Adjusted net earnings excluding the effects of foreign exchange
and other one-time items more than doubled to $84.2 million, or 14
cents a share from a year earlier, but fell below the 19 cents a
share average estimate of analysts polled by Thomson Reuters.
Sales increased 49% to $211.5 million, while copper production
also increased 49% to 19,139 tonnes. Nickel production dropped to
zero from 2,156 tonnes due to the closure of the Aguablanca mine in
Spain during the fourth quarter.
"Given the strong copper price, the increase in net income is
less than we would have liked and has been affected by suspension
of operations at Aguablanca and by shipping disruptions," Lundin
Chief Executive Phil Wright said.
Wright also said that Lundin was still engaged in searching for
strategic alternatives, including a possible sale.
The Toronto-based miner with operations in Portugal, Sweden,
Spain and Ireland, and a 25% stake in the large Tenke Fungurume
cobalt-copper mine in the Democratic Republic of the Congo has been
at the center of takeover rumors since its merger-of-equals with
Inmet Mining Corp. (IMN.T) was scuttled in March due to a hostile
takeover attempt by Equinox Minerals Ltd. (EQN.T). Equinox dropped
its bid for Lundin last month after agreeing to be acquired itself
by Barrick Gold Corp. (ABX).
Lundin's first-quarter earnings were helped by a 33% increase in
copper prices during the quarter, but were hurt by higher costs at
its Neves-Corvo mine in Portugal due to lower ore grades and wet
January weather causing milling problems. Sales also fell behind
production growth due to shipping delays in the Baltic Sea from
heavy ice.
The December closure of Lundin's Aguablanca mine in Spain due to
damage from heavy rains also cut $46.5 million from sales during
the quarter. The mine is expected to restart mid-year 2012.
Lundin shares closed down 0.3% to C$8.89 Tuesday on the Toronto
Stock Exchange.
-By Edward Welsch, Dow Jones Newswires; 403-229-9095;
edward.welsch@dowjones.com
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