UPDATE 1-HudBay Posts Lower 2009 Production

Feb 3 (Reuters) - Canadian miner HudBay Minerals on Wednesday reported lower production for 2009 as it curtailed output at some of its mines, hurt by weak commodity price environment, but raised its exploration budget for 2010.

The company's gold production for 2009 fell more than 15 percent to 92,201 ounces, while zinc output fell more than 37 percent to 78,722 tonnes.

HudBay said that sustaining capital expenditures in 2010 are expected to return to more normal levels as compared to 2009.

"With the restart of operations at our Chisel North mine offsetting the anticipated decline in production as we near the end of mine life at Trout Lake, we expect another year of solid results in 2010," Chief Executive Warren Holmes said.

The company increased its exploration expenditures for 2010 to about C$41.8 million, with C$13.5 million of that total to be capitalized. In 2009, HudBay had spent about C$30.8 million.

The company, which mines mainly zinc and copper in western Canada, expects zinc output to be 75,000 tonnes to 90,000 tonnes and copper production to be 45,000 tonnes to 55,000 tonnes for 2010.

It forecast gold production to be 85,000 ounces to 100,000 ounces for 2010, with silver output in a range of 800,000 ounces to 900,000 ounces.

The company also set a capital program for 2010 of about C$207.9 million.

Shares of the company were up 2 Canadian cents at C$12.71 in early morning trading on the Toronto Stock Exchange.