Hudbay swings to Q4 net loss

TORONTO (miningweekly.com) – Canadian base metals producer HudBay Minerals has swung to a fourth-quarter loss of $255.5-million, or $1.09 a share, compared with a net profit of $43.6-million, or $0.19 a share, in the fourth quarter of 2014.

This was despite the Toronto-headquartered company reporting an 850% improvement in copper sales volumes to a record 58 714 t in the fourth quarter.

The company booked noncash after-tax impairment charges of $198.8-million on Constancia, in Peru, and $114.5-million on Rosemont, in Arizona, mainly owing to lower copper price expectations.

"With the successful ramp-up of our new mines in 2015, we delivered sector-leading growth in low-cost copper production and are well positioned to weather the current commodity price environment. We have taken specific action already in 2016 to capitalise on mine optimisation and sustainable cost reduction opportunities and have strengthened our liquidity position to ensure that the business is positioned to respond to a volatile metal price environment,” stated president and CEO Alan Hair.

Total revenue for the fourth quarter of 2015 was $336.6-million, $223.9-million higher than the same period in 2014. This increase was mainly owing to higher copper, gold and silver sales volumes compared with the fourth quarter of 2014, which was a result of commercial production being achieved at Constancia and significant inventory drawdown. Higher sales volumes were partially offset by lower prices for all metals and the effect of higher treatment and refining charges.

HudBay’s operating cash flow in the fourth quarter benefited from an increase in payable copper in concentrate sales volumes and significantly higher precious-metal sales volumes compared with the same quarter last year. This resulted from the Constancia mine reaching commercial production in the second quarter of 2015 and sales volumes of most metals in the Manitoba business unit growing as the Lalor mine had its first full year of commercial production. The increase in sales volumes and associated economies of scale more than offset the sharp decline in realised sales prices of all metals, compared with the same quarter last year.