Inmet Says it Can Meet New Las Cruces Timeline Despite Labour Delays
By Romina Maurino
31 Oct 2007 at 04:25 PM GMT-04:00
resourceinvestor.com
TORONTO (CP) -- Inmet Mining Corp. [TSX:IMN] says it can meet a new 2008 timeline for plant construction at its Las Cruces copper project in Spain despite labour delays.
''We are confident that we should meet our deadlines going forward and that the fourth quarter of 2008 is a realistic start-up date for the process plant,'' Jochen Tilk, Inmet's president and chief operating officer, told a conference call with analysts Wednesday.
''The commissioning and operating team is already at site and well into the preparations for start-up and ramp-up activities.''
In reporting slightly higher quarterly profits, the Toronto-based miner had said Tuesday that plant construction at Las Cruces had been delayed and was slated for completion in 2008. The company planned to selectively mine and crush about 100,000 to 150,000 tonnes of high grade copper ore at Las Cruces and sell it to copper smelters to manage the impact of the delay.
''We are very disappointed to report a delay in the start-up of production,'' CEO Richard Ross told analysts.
''The human resource constrains in the mining sector right now are significant, and the impact on both capital costs and project schedules is being felt by all mining companies.''
Analyst Tony Lesiak of UBS downgraded the company because of the issues at Las Cruces, saying the brokerage was lowering its price target to C$98 per share from C$101.
''Construction at Las Cruces has been pushed back by six months due to engineering delays and poor contractor performance,'' he said in a note to clients.
''We have lowered our 2008 Las Cruces copper production forecast from (30,000 tonnes to 10,000). Our 2008 earnings have decreased from C$11.72 per share to C$9.05 per share, accordingly.''
RBC Dominion Securities Inc., meanwhile, maintained its ''outperform'' recommendation.
''The delay at Las Cruces is not out of line with the rest of the mining industry and does not unduly concern us,'' analyst Fraser Phillips said.
''While the shares appear fairly valued in the near term, we continue to feel that Inmet offers investors excellent growth potential and exposure to copper, zinc and gold in a mid-size North American mining company.''
Inmet posted a third-quarter profit of C$114.8 million or C$2.38 per share Tuesday, up from C$111.6 million or C$2.31 per share for the same period last year.
Gross sales were C$272.3 million, down from C$301.1, revenue and earnings were took a hit from the strengthening Canadian dollar.
''The main drivers of our earnings continue to be strong metal prices and a good overall performance strong metal prices and a good overall performance by our operations,'' Ross said during the call.
''The stronger Canadian dollar, however, reduced our Canadian-dollar denominated revenues.''
Northern Star Mining in Option Deal With Kinross/Inmet to Acquire Gold Project
Northern Star Mining Corp. [TSX-V:NSM] has signed an option agreement with a Kinross/Inmet joint venture [NYSE:KGC; TSX:K] to acquire the Callahan gold project just west of Val d'Or, Que., for shares and an initial C$2.5 million spending commitment.
The Callahan project consists of 79 claims comprising 2,181 hectares and is next to the northeast corner of Northern Star's Malartic-Midway project.
The property is amid some of the largest gold producers in the Val d'Or gold camp of northwestern Quebec, an area that has a historic gold production of 25 million ounces, Northern Star said in a release.
The gold mineralization known to date on the Callahan project is described as banded quartz veins with visible gold and narrow shear zones with graphite and gold-bearing pyrite.
To acquire the full interest, the agreement calls for total spending of $2.5 million within 30 months, 550,000 shares on the effective date, 550,000 on the first anniversary, 550,000 on the second anniversary and a cash payment of $200,000 on the effective date. Northern Star has about 89 million shares outstanding.
When commercial production begins, the company must pay another C$2.5 million.
Wednesday afternoon on the TSX Venture Exchange, Northern Star Mining stock was up five cents, or 5.5%, at 96 cents on about 64,000 shares traded. Kinross Gold shares were up 25 cents at C$18.30, and Inmet shares were up C$2.26, or 2.3%, at C$101.51. |
