Profits were up in 2012 at Highland Valley Copper due to significantly higher grades of ore.
Teck Resources Ltd. released its year-end results Thursday showing its Highland Valley Copper operation continues to contribute to the bottom line.
The mine booked a gross profit of $513 million in 2012, up from $486 million the year before.
Teck reported its copper production was 37 per cent higher in 2012. Production was focused on higher grades in the Valley pit during the fourth quarter. Molybdenum production was down, however.
The company reported that detailed engineering was substantially complete and construction underway on its $475-million mill modernization project.
“It’s progressing along really well,” said mine spokesman Trevor Phelps. “We’re still looking to have it commissioned by the end of 2013.”
By the end of December an additional 360 full-time equivalent contractors were on the project. That comes in addition to the mine’s workforce of 1,300.
Phelps said contractors on site to build the new mill are expected to expand to 700 full-time equivalents later this year.
Major equipment for the new mill is now being placed by cranes.
Teck’s adjusted earnings and revenue for the fourth quarter beat analyst estimates by a wide margin but its net profit fell to $145 million, or 25 cents per share and revenue was down nearly $200 million from a year earlier.
Analysts had expected revenue to fall by even more, according to Thomson Reuters estimates, so Teck won praise on that front. However, there was concern about its plans to reduce copper production this year, and Teck shares fell.
“There were a lot of things to like in the quarter,” said Edward Jones analyst Jeff Nelson, who covers Canadian resource and industrial companies from St. Louis, Mo.
First and foremost, he said, coal and copper production came in ahead of expectations. As well, Teck reduced operating costs for its coal business and bought back shares from the public market, a move that tends to support share prices.
“You know, the items the company can control — for example production and costs — came in better than expected.”
Revenue for the quarter dropped to $2.73 billion from $2.97 billion year over year, but the consensus estimate had been for Teck’s revenue to fall to about $2.55 billion.
— With files from The Canadian Press