TORONTO - Zinc and copper miner HudBay Minerals Inc. (TSX:HBM) reported its net earnings in the second quarter nearly tripled as the company booked a big one-time gain from the sale of its stake in Lundin Mining Corp., a company it failed to take over after HudBay shareholders opposed the transaction.
HudBay reported late Thursday it earned $89.4 million or 58 cents a share for the three months ended June 30. That compared with earnings of $33.2 million or 26 cents in the same quarter a year earlier.
The higher profits reflect a gain of $99.9 million from the sale of HudBay's shareholding in Lundin (TSX:LUN) in May.
Partially offsetting this gain was the impact of significantly lower prices for copper and zinc and a foreign exchange loss of $14.7 million resulting from appreciation of the Canadian dollar, the miner reported.
HudBay said its revenues fell to $197.7 million from $284 million, mainly because of lower metals prices.
In late May, HudBay disposed of its 16.7 per cent stake in Lundin Mining for $235.7 million in cash, representing a gain of $99.9 million.
The shares were acquired as the company tried to buy Lundin in a stock swap deal, but shareholders opposed the planned acquisition, saying it would dilute the value of their shares.
Major HudBay shareholders forced the ouster of the company's former CEO, who had planned the Lundin deal, as well as changes to the board.
In a related development Thursday, HudBay announced it had struck a deal with Aquila Resources Inc. (TSX:AQA) to acquire a majority interest in Aquila's Back Forty project in Menominee County, Michigan.
Under the agreement, HudBay will acquire 12.1 million common shares of Aquila, a 14.9 per cent ownership stake, for an investment of C$2.2 million.
HudBay can also obtain an option to acquire a 51 per cent ownership interest in the project by spending US$10 million within three years.
'During the past quarter we made good progress in all aspect of our business," said Peter Jones, HudBay's chief executive.
'Our management and board transition is complete, and we are focused on executing the initiatives set out in our strategic plan. HudBay is well positioned to grow organically through the Lalor and Fenix projects and our growth profile has been enhanced with the acquisition of the joint venture opportunity with Aquila."