Shares in Hudbay Minerals Inc. fell by 11.4 per cent on Tuesday after it warned a mine development in Peru will be delayed because of government demands for more consultation.
The Toronto-based mining company closed on Tuesday at $7.76, down $1.
Hudbay has been negotiating with a local Peruvian community to gain surface rights for the Pampacancha satellite deposit near its existing Constancia copper mine.
In April, the community was designated as Indigenous, the company reported, which means that additional consultation between it and the government must take place after Hudbay reaches a surface rights agreement.
“Based on other recent consultation processes, we would expect the additional government consultation period to take between approximately three to six months,” chief executive Alan Hair said on a conference call.
He added he remains confident Pampacancha will be placed into production, but Hudbay must exercise patience.
The company, which reports in U.S. dollars, said it lost US$13.4-million, or 5 US cents a share, in the quarter ending March 31, compared with a profit of US$41.4-million, or 16 cents a share, for the same quarter a year earlier.
Hudbay said its copper-equivalent production in the first quarter fell by 6 per cent compared with the same period in 2018, primarily as a result of lower production in Manitoba after the closure of the Reed mine.
But, it said, it had record copper recoveries at Constancia and record throughput at both the Lalor mine and the Stall concentrator in Manitoba.
Hudbay’s adjusted earnings were below consensus forecast owing to lower sales and higher costs, analyst Sam Crittenden of RBC Dominion Securities said in a report.
Last Friday, Hudbay announced a settlement agreement with activist investor Waterton Global Resource Management on a slate of 11 board of director candidates, including one joint nominee and two Waterton nominees.
Hudbay board chairman Alan Hibben is to step down once a new chairman is selected, but will stay on the board until the company’s 2020 annual meeting.