UPDATE 1-Mexican miner Penoles posts steep drop in Q3 profit

Fri Oct 26, 2012 4:57pm EDT

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MEXICO CITY Oct 26 (Reuters) - Mexican mining company Industrias Penoles on Friday reported a 58.4 percent drop in third-quarter profit due to a fall in metal prices and a rise in costs for investment in expansion and exploration.

The miner and metals processor, which runs the world's largest primary silver producer Fresnillo, said profit in the third quarter was 1.67 billion pesos ($129.87 million) versus 4.01 billion pesos in the same period in 2011.

Revenue between July and September 2012 fell 9.6 percent compared with the previous year to 23.21 billion pesos, as silver prices fell by nearly a quarter, lead by 19.6 percent and copper by 14.2 percent.

Investment in expansion at the Tizapa, La Cienaga and Soledad-Dipolos mines along with renewed investment in exploration had raised costs, the company said.

Penoles spun off precious metals unit Fresnillo in 2008 and now focuses on base metals mining and refining.

Penoles' share price ended the day down 0.28 percent at 667.5 pesos.

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