Thursday May 7, 2015, 2:55pm PDT
HudBay Minerals (TSX:HBM,NYSE:HBM) reported its financial results for Q1 of 2015 and announced that its Constancia mine in Peru achieved commercial production on April 30. Ocean shipments from the mine began in April, and the mine and concentrator are currently operating at or above design capacity.
As quoted in the press release:
In the first quarter of 2015, operating cash flow before stream deposit and change in non-cash working capital increased to $24.1 million from negative $4.6 million in the first quarter of 2014.
The net loss and loss per share in the first quarter of 2015 were $23.7 million and $0.10, respectively, compared to a net loss and loss per share of $27.2 million and $0.15, respectively, in the first quarter of 2014.
Cash flow from operations and net earnings were positively impacted by increased revenue as a result of significant increases in production of all metals as the Reed and Lalor mines achieved commercial production in 2014. While substantially improved when compared to the prior year, cash flow from operations, net earnings and cash cost per pound of copper were all negatively impacted by unsold copper and gold during the quarter. More specifically, Hudbay continues to have approximately 6,000 tonnes of unsold copper in concentrate as a result of logistical and other issues, as well as approximately 9,000 ounces of unstreamed gold produced in the first quarter of 2015 that was not sold.
Net earnings were also negatively affected by higher depreciation expense resulting from commercial production at Reed and Lalor, as well as higher depreciation expense due to revised mine planning assumptions at 777.
Hudbay president and CEO, David Garofalo, said:
Reaching commercial production on schedule at the Constancia mine is a major milestone for Hudbay. This achievement strengthens our position as a low cost, high quality copper and zinc producer. Constancia has allowed us to broaden our skills as a mine developer, and given its ongoing ramp up, we continue to expect to meet our corporate production and cost guidance for 2015.