TORONTO (miningweekly.com) – Canadian base-metals producer HudBay Minerals on Tuesday posted a C$4-million net loss for the first quarter of 2009, compared with C$21,6-million profit a year earlier.

Revenue for the quarter dropped 40% year-on-year, to C$161,78-million, because of lower copper and zinc prices compared with the same period of 2008, HudBay said.

The company realised an average zinc price of $0,53/lb during the first three months of this year, compared with $1,10/lb a year ago.

Copper prices dropped to an average of $1,56/lb, from $3,54/lb in the first quarter of 2008.

Although zinc, copper and gold output declined year-on-year, the company said that production levels were on track to meet its full-year targets.

"I am pleased with HudBay's operational performance during the first quarter," said CEO Peter Jones.

"HudBay can weather a prolonged period of weak base-metals prices and can advance growth to allow the company to thrive when better economic conditions return.”

Jones was named CEO in March, by a new board of directors appointed at HudBay after a successful proxy battle led by shareholder SRM Global Master Fund.

The company also announced on Tuesday that it had almost doubled its 2009 budget for exploration at the high-grade Lalor Lake discovery, in Manitoba, after receiving additional precious metal intersections.

The depth of the zinc deposit at Lalor would make it costly to develop, particularly at current low zinc prices, but HudBay is hoping that a newly discovered gold zone could improve the economics of the project.

HudBay owns mines, concentrators and a metal production complex in northern Manitoba and Saskatchewan, in Canada, as well as a zinc-oxide production facility in Ontario, the White Pine copper refinery in Michigan and a zinc mine in New York.

Battling slumping zinc and copper prices, the firm has closed some assets and also is facing the prospect of declining production over the next few years from ageing mines.

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