Inmet Mining Corporation
TSX : IMN

Inmet Mining Corporation

January 20, 2010 18:06 ET

Inmet Mining Announces 2009 Preliminary Operations' Results and 2010 Key Operations' Objectives

TORONTO, CANADA--(Marketwire - Jan. 20, 2010) - Inmet Mining Corporation (TSX:IMN) announced its 2009 preliminary production results and 2010 key performance objectives today.

Preliminary 2009 operations' results

Copper production in 2009 was slightly below our previously stated estimate because production at Las Cruces was lower than expected (see page 3 of this release for details). Zinc and gold production were both slightly higher than last estimated.

  Inmet's share of copper production   Inmet's share of zinc production   Inmet's share of gold production   Inmet's share of ore milled   Cost per tonne of ore milled   Inmet's share of capital expenditures  
  (tonnes ) (tonnes ) (ounces ) (tonnes ) (C$ per tonne ) (C$ millions )
Cayeli 29,200   50,900   -   1,151,000   $72   $15  
Pyhasalmi 14,600   27,100   -   1,396,000   $44   8  
Troilus 5,900   -   135,200   6,000,000   $9   -  
Ok Tedi 30,000   -   93,200   4,100,000   $24   21  
Las Cruces cathode 3,900   -   -   75,000   n/a   97  
Cobre Panama -   -   -   -   -   85  
Total 83,600   78,000   228,400   n/a   n/a   $226  

2010 key operations' objectives

We expect copper production to be 50 percent higher in 2010 because of the incremental production from Las Cruces.

Zinc production in 2010 should be higher than 2009 levels because of higher zinc grades mined at Pyhasalmi. We expect gold production to be lower because production will end at Troilus mid-year.

In December 2009, Cayeli finalized a three-year labour agreement, effective May 2009, that includes an inflation adjustment and other first year adjustments. We expect the agreement to increase operating costs by about US $0.02 per pound per year and US $0.06 per pound by the end of the three years (assuming 8 percent inflation in the next two years).

  Inmet's share of copper production   Inmet's share of zinc production   Inmet's share of gold production   Inmet's share of ore milled   Cost per tonne of ore milled   Inmet's share of capital expenditure  
  (tonnes ) (tonnes ) (ounces ) (tonnes ) (C$ per tonne ) (C$ millions )
Cayeli 30,500   51,700   -   1,200,000   $69   $21  
Pyhasalmi 13,400   31,300   -   1,370,000   $43   9  
Troilus 2,100   -   36,400   3,019,000   $9   -  
Ok Tedi 29,300   -   109,300   4,300,000   $23   21  
Las Cruces cathode 38,500   -   -   650,000(ore processed ) $122(2 ) 53  
Las Cruces ore to smelters(1) 12,600   -   -   n/a   n/a   n/a  
Cobre Panama -   -   -   -   -   122  
Total 126,400   83,000   145,700   n/a   n/a   $226  
(1) Production is subject to market conditions and permitting.
(2) Represents cost per tonne of ore processed (including mining costs related to direct ore shipping) subsequent to commercial production.

Progress at Las Cruces

We did not achieve commercial production in the fourth quarter, and produced 3,300 tonnes of copper cathode compared to our estimate of 8,700 tonnes.

A number of equipment failures and operational issues delayed the ramp-up of the plant. The chart below shows what contributed to the shortfall in the fourth quarter. Most of these have been addressed or will be remediated and resolved in the first quarter of 2010.

Reconciliation of fourth quarter 2009 production forecast to actual result

  Copper production  
100% (tonnes )
Forecast fourth quarter production 8,700  
Thickener failures (1,700 )
Filter failures (1,000 )
Conveyer blockages (300 )
General operational issues (600 )
Pond level maintenance (1,100 )
Other (700 )
Actual fourth quarter production 3,300  

The leach thickener's corrosion protection failed, causing the drive mechanism to fail completely in October. Filtration and conveyor operation improved by the end of December and we have scheduled additional modifications to the conveyor system to prevent blockages. The thickener has been repaired in the interim with final repairs to replace the components in the thickener with stainless steel scheduled for March.

We also lost a week of operation in December when we shut down the primary SX settler for repair and cleaning, and repaired the pre-neutralization thickener because bolts had fallen out of the rake supporting structure. Both of these issues have been addressed and should not re-occur.

Because of record high rainfall in the last two weeks of December, we had to use the water treatment plant to reduce the critically high water levels in the process ponds, rather than to treat additional process water. This reduced plant throughput significantly.

The grinding and leaching areas of the plant performed well throughout the ramp-up, and the agitated leach reactors regularly returned copper recovery values of higher than 90 percent. The solvent extraction area and electrowinning areas operated without any significant issues and we tested the cathode stripping operation at the design capacity of 250 tonnes per day. Cathode quality reached 99.999 percent copper, exceeding our expectations.

Throughput improved significantly in November: we processed 41,000 tonnes of ore, produced 1,500 tonnes of cathode and built up our in-process inventory. We also gained important operating experience over the month as we adjusted the plant to changing conditions and throughput rates.

Looking ahead

We believe that our ability to dewater the solids from the neutralization plant is a bottleneck to throughput. Solids are dewatered in a filter press and stored in the residue tailings facility as stackable filter cakes. The filter has not been performing at designed rates because of the nature of the material. We are augmenting capacity by adding filtration equipment and improving the performance of the press filter, and will be shutting down the operation for 10 days in March to complete this and the other modifications.

We expect overall throughput and cathode production to improve in January and again in February, and we now expect production to reach commercial production (about 60 percent of design capacity) in May 2010 and design capacity (72,000 tonnes of copper cathode per year) by August 2010.

Because of the continuing challenges of commissioning the process plant, we have retained a team of third party expert consultants to help us determine whether operational issues could further delay the ramp-up.

Cobre Panama studies

We have almost completed the front-end engineering and design (FEED) study, including the mineral reserves and resources, and expect to release a summary of the results by March 31, 2010.

Forward looking information
Securities regulators encourage companies to disclose forward-looking information to help investors understand a company's future prospects. This press release contains forward-looking information. These are "forward-looking" because we have used what we know and expect today to make a statement about the future. Forward-looking statements usually include words such as may, expect, anticipate, and believe or other similar words. Capital and operating cost estimates are forward-looking statements, and are based on assumptions that we believe to be reasonable. However, actual events and results could be substantially different because of the risks and uncertainties associated with our respective business or events that happen after the date of this press release. You should not place undue reliance on forward-looking statements.

About Inmet
Inmet is a Canadian-based global mining company that produces copper, zinc and gold. We have interests in five mining operations in locations around the world: Cayeli, Las Cruces, Pyhasalmi, Troilus and Ok Tedi. We also have a 100 percent interest in Cobre Panama, a development property in Panama.

This press release is also available at www.inmetmining.com.

Contact Information

  • Inmet Mining Corporation
    Jochen Tilk
    President and Chief Executive Officer
    (416) 860-3972