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Hudbay swings to Q2 profit, ups FY'17 exploration guidance

Hudbay Minerals Inc. swung to a profit in the second quarter despite registering year-over-year production declines in copper, gold and silver.

The company booked a net profit of US$25.6 million, or 11 cents, during the period, reversing a year-ago net loss of US$5.7 million, or 2 cents per share.

Consolidated copper production totaled 40,842 tonnes compared to 45,892 tonnes a year earlier, driven by lower copper grades in Peru, where the company's Constancia mine is located.

Hudbay also produced 26,664 ounces of gold and 810,346 ounces of silver in the quarter, down from 29,705 ounces of gold and 996,511 ounces of silver produced in the year-ago period.

Consolidated zinc output, meanwhile, rose to 34,896 tonnes from 26,456 tonnes last year as a result of higher zinc grades from its Manitoba operations.

Revenue also rose to US$324.9 million from US$247.0 million, while operating cash flow increased to US$124.1 million from US$69.5 million a year ago.

Hudbay remains on track to meet its production, operating cost and capital cost guidance for 2017, but it earmarked more funds for exploration this year given the strong free cash flow generation of the business year-to-date.

The company now expects to spend US$21 million on exploration, up from US$8 million previously, and efforts will focus on high-priority drilling targets.

Hudbay declared a semi-annual dividend of 1 Canadian cent, payable on Sept. 29 to shareholders on record as of Sept. 8.