Falling profits, changes at HudBay

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HudBay Minerals has announced a managerial shift on the heels of another quarter of plummeting profits, though the two are not necessarily linked. The HBMS parent company made $13.3 million in the second quarter, a $10.3 million decline from the first quarter and a precipitous $76.1-million drop from the second quarter of 2009. HudBay attributed the drastic year-over-year difference to the sizable profit generated last year when the company sold its stake in Lundin Mining Corporation. Excluding that profit, the company said earnings improved significantly in this year's second quarter due largely to healthier metal prices and a foreign-exchange gain. "Our mines in Northern Manitoba continue to perform well and production of all metals remains on track to meet our 2010 full-year guidance," said David Garofalo, HudBay's president and CEO in a news release issued last week. Mine production in the latest quarter totalled 574,153 tonnes of ore, a slight decrease from 576,779 tonnes for the same quarter in 2009. The company said additional tonnage from the reopened Chisel North mine in 2010 was offset by lower production from the 777 and Trout Lake mines relative to the output achieved in 2009. At the same time, purchased copper concentrate volumes decreased due to the closure of the smelter, and lower zinc concentrate purchases were offset by Chisel North mine operating costs and production. Meanwhile, HudBay has hired a corporate development executive and made other key appointments. Tom Goodman, who had been senior vice-president of operations for HBMS, has been elevated to the position of senior vice-president and chief operating officer for HudBay. Goodman, who has been with HBMS/HudBay for more than 30 years, will oversee all of the company's operations. He has also been tasked with ensuring HudBay's operating and human resource culture is properly implemented across new development-stage projects and mines. Ken Gillis has been appointed HudBay's senior vice president of corporate development. He joins HudBay after 15 years as a leading mining industry investment banker. Gillis will focus on identifying and executing acquisition opportunities, while Alan Hair, named senior vice-president of business development and technical services, will perform evaluations of these opportunities. Hair will then integrate acquisitions into the organization with the goal of advancing them to development. Rounding out the senior management team is Maura Lendon, appointed chief legal officer and senior vice-president of corporate services, and David Bryson, a senior vice-president and chief financial officer. Dividend In other news, HudBay's board of directors has for the first time declared a semi-annual dividend in the amount of 10 cents per common share, payable on September 30 to those owning shares on September 15. HudBay also announced its intention to seek a listing of its shares on the venerable New York Stock Exchange. The NYSE has cleared HudBay to apply for a listing and the company expects to submit its listing application in October, once the necessary documentation is complete. The company plans to maintain its listing on the Toronto Stock Exchange. "The board's decision to establish a dividend policy is based on HudBay's strong business fundamentals and growth potential," said Garofalo. "We believe that implementing a regular dividend and listing on the New York Stock Exchange will enable us to broaden our appeal to a larger group of investors and help increase our overall trading liquidity."

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