Winnipeg Free Press cited Mr David Garofalo CEO of HudBay Minerals Inc as saying that development of its Lalor mine in Manitoba is on time and on budget.
Mr Garofalo said that the company recently signed a contract for the construction of the mine's main production shaft. With this contract secured, 55% of the USD 560 million planned construction commitment at Lalor has been fixed and no material cost escalations have been realized.
He said that initial production at the underground Lalor mine is expected to start next year. The company has not made a decision on whether to refurbish its operation at nearby Snow Lake, Man or build a new concentrator at the Lalor mine which would increase capital costs but could reduce operating expenses.
Traditionally a zinc producer, HudBay will add significant copper and gold production as well as zinc when the Lalor mine is in full production. Diversifying production was a key goal of a strategic plan set out by the company last year.
Mr Garofalo said that in 2011, we are committed to executing against this strategy by continuing to make significant operating and exploration investments at our projects. In addition to Lalor, HudBay is developing its Constancia project in Peru which it acquired with the purchase of Norsemont Mining last year. The company hopes to make a construction decision on that mine next year.
HudBay reported a profit of USD 16.8 million or 11 cents per share, compared with USD 10.6 million or seven cents in the Q1 of 2010. Revenues were USD 177.3 million down from USD 241.3 million in the same 2010 period as a shortage of rail cars hampered its ability to ship copper. Earnings in the Q1 of 2011 included a charge of USD 5.8 million or four cents per share for costs associated with the acquisition of Norsemont.
UBS analyst Mr Matt Murphy rated HudBay neutral with an USD 18.50 price target as the quarterly results fell short, but noted the company has exploration potential. He said that we remain encouraged by HudBay's operational stability and the continued delivery of its strategic plan.
HudBay's main operations are in Manitoba where it has its flagship mine in Flin Flon. The company also owns the Fenix nickel project in Guatemala. Earlier this year, a group of 11 women from Guatemala filed a suit in Canada against the company alleging gang rapes in 2007 at the Fenix project.
HudBay which didn't own the mining operations when the alleged offences occurred, has said it would investigate allegations that security personnel, along with members of the police and military attacked the women. However, the company said the accusations in the lawsuit contradict available information and that it would defend itself vigorously against them.
(Sourced from www.winnipegfreepress.com)
