Hudbay net earnings rise 22% as output rises in Manitoba, Peru

VANCOUVER (miningweekly.com) – Canadian base metals miner Hudbay Minerals has posted a 22% improvement in third-quarter profit as the company's Manitoba and Peru operations produced more metals at lower costs.

The Toronto-headquartered company reported a net profit of $40.9-million, or $0.17 a share, for the three months ended September, compared with $33.6-million, or $0.14 a share, a year earlier.

Cash generated from operating activities was $167.9-million, up from $95.9-million in the same period of 2016. Operating cash flow before change in non-cash working capital increased to $153.9-million in the third quarter, from $124.2-million in the same quarter of 2016. The increase in net profit and operating cash flow is the result of growth in sales volumes of zinc and gold and higher realised copper and zinc prices, partially offset by decreases in the sales volumes of copper.

The company’s consolidated cash cost per pound of copper produced, net of by-product credits, was $0.86, a decrease compared to $0.91/lb in the same period last year. Incorporating sustaining capital, capitalised exploration, royalties and corporate selling and administrative expenses, consolidated all-in sustaining cash cost per pound of copper produced, net of by-product credits, in the third quarter was $1.64/lb, up from $1.46/lb in the third quarter of 2016, owing to higher planned sustaining capital expenditures in Peru and lower copper production compared with the third quarter of 2016.

Net debt declined by $300.2-million from June 30, to $649.6-million at the end of the quarter, as a result of cash flow from operations and $187.4-million of net proceeds from an equity issuance. At September 30, total liquidity including cash and available credit facilities was $749.9-million, up from $496.8-million at June 30.

Hudbay said its Peru operations were on track to meet production, operating cost and capital cost guidance for 2017, while its Manitoba operations are on track to meet production guidance for 2017, albeit at moderately higher operating costs relative to guidance.

“We continued to generate growing positive free cash flow and we significantly reduced our debt balances during the quarter. We remain committed to delivering on our operating targets and advancing the in-house brownfield opportunities at Lalor and Pampacancha, while continuing to progress the Rosemont project," stated president and CEO Alan Hair.

The company's TSX-listed stock closed in positive territory on Wednesday, up 4.28% at C$10 apiece.