Inmet shares soar on strong results
(Reuters) - Shares of Inmet Mining Corp IMN.TO rose more than 6 percent on Friday, the day after the Canadian base metal miner reported a 19 percent boost in quarterly profit, well above analyst expectations.
The company also nudged up its copper forecast for the year and said development is on budget at its $6.2 billion Cobre Panama project in Central America, where construction started in May.
Inmet holds an 80 percent stake in the massive Panamanian copper project, with the remaining interest held by a Korean consortium.
While the Canadian miner has secured financing for nearly all its share development costs, Chief Executive Jochen Tilk confirmed that Inmet is still looking at bringing in another partner - if the price is right.
"We believe we've created a lot of value in this project. We've derisked it substantially, we've moved it forward to the point we're fully-funded on the capital costs," he told analysts on a conference call on Friday. "So if someone is prepared to participate in this project - which has great upside - at fair value, then we'd consider it."
Tilk added that he is "quite comfortable" with the current cost estimate for the mine, but noted another partner would help cushion the blow should costs rise unexpectedly.
Indeed cost inflation is a top concern for mining executives. Barrick Gold Corp (ABX.TO) on Thursday again raised the cost of building its Pascua-Lama project in South America, while Cameco Corp (CCO.TO) on Wednesday upped its 2012 capital spending at its Canadian projects.
Cobre Panama is expected to produce some 266,000 tonnes of copper on average each year over a 30-plus year mine life. It is also expected to produce sizable volumes of gold, molybdenum and silver as byproducts.
Once complete, the mine will add to Inmet's growing copper output. Third quarter copper production rose 37 percent, boosted by strong performance at the Las Cruces mine in Spain and Cayeli mine in Turkey.
The company bumped up its full-year forecasts for the two mines to a combined 95,000 tonnes-100,000 tonnes, up from a previous estimate of 88,700 tonnes-98,600 tonnes.
Earnings climbed 19 percent to $116.5 million, or $1.68 per share, in the quarter ended Sept 30, coming in well above the average analyst estimate of $1.04 per share, according to Thomson Reuters I/B/E/S. <ID: nL3E8M1930>
Shares of Inmet rose 6.84 percent to C$56.21 on Friday afternoon on the Toronto Stock Exchange.
(Reporting by Julie Gordon; Editing by M.D. Golan)
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