Lundin Mining (TSE:LUN)(OMX:LUMI) said fourth quarter net earnings fell from a year earlier, hit by a $32.3 million impairment charge tied to some Portuguese exploration assets.
For the three months to the end of December, the Toronto-based base metals miner, which reports in U.S. currency, posted net earnings of $25.8 million, or 4 cents per share, compared to $42.1 million, or 7 cents per share, in the year-earlier period.
The latest quarter included a non-cash charge of $32.3 million, reflecting the stoppage of greenfield exploration programs in Portugal, and the relinquishment of certain concessions.
The most recent fourth quarter also included operating earnings from the Candelaria copper mine in Chile, in which it acquired an 80 percent stake last November from Freeport-McMoRan for $1.85 billion. The mine is expected to contribute significantly to Lundin's earnings and cash flows going forward, it said.
Adjusted earnings came in at 10 cents per share, in line with consensus estimates.
Sales jumped to $443 million from $186.9 million in the fourth quarter of 2013.
Cash flow from operations, a key industry metric, jumped to $68.4 million from $55.2 million.
Shares rose 2.5 percent to C$5.39 on Thursday, paring year-to-date losses to 5.7 percent.
"2014 was a very important year for Lundin Mining, as the company successfully executed on its strategy to rejuvenate its asset base," said president and chief executive officer Paul Conibear in a statement late Wednesday.
"Many milestones were achieved throughout the year including: bringing the Eagle nickel mine into full scale production ahead of schedule and under budget; successfully acquiring the high quality Candelaria copper operations in Chile; and recording zinc production records at our European operations."
The CEO said the company's focus for this year will be to improve its existing operations with the advancement of brownfield exploration programs at each of its mines.
Lundin said all of its operations in 2014 "substantially met or performed better" than what was forecast in terms of production, while total capital spending was below initial guidance.
For 2015, the company is guiding for total production of between 31,000 to 35,000 contained tonnes, which includes copper, zinc, nickel and lead output. Lundin said that since its guidance was announced in December, metal prices have declined significantly, and as such, is assessing the impact on its forecasts, with updated unit cost guidance to be announced with its first quarter results.
So far, it has identified $70 million of savings, cutting its capital expenditure budget for the year to $400 million from $470 million previously. The company is also planning to cancel or defer about $15 million in exploration expenses.
Lundin, which had net debt of $829.2 million as at December 31, has operations in Chile, Portugal, Sweden, Spain and the U.S. It holds a 24 percent stake in the Tenke Fungurume copper-cobalt mine in the Democratic Republic of Congo.