Toronto-listed Hudbay Minerals has reaffirmed its 2022 production and operating cost guidance, as its second-quarter output was in line with expectations and the company achieved strong operating cost performance despite inflationary pressures from higher input prices for many services and consumables.
Second quarter net earnings and earnings a share were $32.1-million and $0.12 a share, respectively. After adjusting for a non-cash gain of $60.7-million primarily related to a quarterly revaluation of the Flin Flon environmental provision given higher long-term risk-free discount rates, and a $95-million pre-tax impairment loss related to certain specific capitalised costs and assets associated with the previous standalone development plan for the Rosemont deposit, among other items, second quarter adjusted net earnings a share were $0.12.
Consolidated production in the second quarter included 25 668 t of copper and 58 645 oz of gold, an increase from the first quarter of 2022. Consolidated cash cost and all-in sustaining cash cost per pound of copper produced, net of by-product credits, were $0.65 and $1.93, respectively, a significant decrease from the first quarter of 2022.
“Our operating performance was strong during the second quarter with higher consolidated copper and gold production and lower consolidated cash costs,” said president and CEO Peter Kukielski.
“This was a result of a continuous focus on operating efficiencies which has allowed us to reaffirm our production and operating cost guidance for 2022. We have seen steady performance from our operations in Peru and the New Britannia mill in Manitoba achieved higher than expected throughput.”
Hudbay is also advancing a prefeasibility study to evaluate project optimisation opportunities on the private land plan at its Copper World Complex, while focusing on closure activities in Flin Flon and a smooth transition of its workforce to Snow Lake.
After 18 years of steady production at the 777 mine in Manitoba, the final reserves were depleted in June, consistent with the mine plan. Closure activities to decommission the 777 mine, the Flin Flon concentrator and the zinc plant started in the second quarter and are advancing ahead of schedule.