Friday, March 12, 2010

Lumwana Mine records $195.7m profit

Lumwana Mine records $195.7m profit
By Mutale Kapekele
Fri 12 Mar. 2010, 08:20 CAT

LUMWANA Mine has recorded a US $195.7 million net profit for the 2009 production year.

Announcing the 2009 production results, via a global conference call on Wednesday, Equinox Minerals - the owners of Lumwana - president and chief executive officer Craig Williams said the mine achieved solid financial performance in its first year of production.

“The company recorded an operating profit for the year of $195.7 million and at year end held cash reserves of US $109.1 million,” Williams said.

“Operating costs for the year averaged US $1.49 per pound of copper. The company is continuing to focus on cost management initiatives as Lumwana ramps up to full production.”

He said the Equinox raised C$184,023,000 through the issuance of 102,235,000 common shares of the company.

“Strong first annual copper production of 109,413 tonnes of copper in concentrate was delivered with Lumwana steadily improving towards nameplate capacity,” Williams said.

“Operating profit achieved was of US $195.7 million. This operating profit is stated for the nine month period ended December 31, 2009 due to commercial production commencing April 1, 2009.”

He said operating profit was subsequently offset by non-cash derivative instrument losses resulting from the rising copper price leading to a net loss position, after tax, of US $183.1 million.

“This is primarily related to the remaining hedge book being marked to market at a copper price that has strengthened throughout the reporting period,” he said.

“Revenue was positively impacted by the same rising copper price. Realised copper price, net of smelter treatment charges, was US $2.61 per pound and 20,402 tonnes of payable copper was provisionally priced at $3.33 per pound US ,356 per tonne and remained subject to final pricing adjustment during the first quarter of 2010.”

He said the mine improved productivity, with total annual ore production of 13.1 million tonnes being achieved.

“The ramp up to full production of the Lumwana Mine will continue through the first half of 2010, with a target of achieving design throughput rate of 20 mt per annum for the mine and mill in second half of the year,” he said.

Williams said the target 2010 production guidance remained at 135,000 tonnes [300 M lbs) of copper in concentrate at a cash cost of $1.35/lb Cu.

Williams also said the Lumwana project achieved an excellent health and safety record.

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