(Updates with details, background. Adds byline.)
By Carole Vaporean
NEW YORK, Nov 1 (Reuters) - Canada's HudBay Minerals Inc <HBM.TO> expects its full-year gold, copper and zinc production to remain in line with previous forecasts, President and Chief Executive David Garofalo said on Monday.
The miner expects to produce 100,000 ounces of gold, around 50,000 tonnes of copper and about 80,000 tonnes of zinc for full year 2010, the executive told Reuters in an interview.
"We're not expecting any changes in that," said Garofalo.
HudBay's latest guidance is in line with production ranges set in February when it announced plans to produce 75,000 to 90,000 tonnes of zinc, 45,000 to 55,000 tonnes of copper, and 85,000 to 100,000 of gold for 2010.
Late Wednesday, HudBay will release third quarter earnings results. While Garofalo declined to provide specifics, he said, "Operations are sound. We continue to meet production targets. We have good cost control and are very profitable."
The executive also said, HudBay is actively looking to add mining projects through relationships with junior companies.
While HudBay considers itself an exploration company as well as a miner, spending $42 million in 2010 to explore its existing properties, the CEO said, "It would be very cost inefficient for us to set up infrastructures in every mining camp that looks desirable to us."
Instead, the Toronto-based miner, with primary operations in northern Manitoba, views junior miners with promising properties as extensions of its exploration program.
"We give them capital. They have boots on the ground and then we get a toehold in the company's project. That's a way to leverage our exploration without having to build up the infrastructure," said Garofalo.
HudBay plans to continue that expansion strategy. And if its stake in a junior miner leads to deposits that can be developed into productive mines, HudBay plans to buy them out.
Garofalo said he sees the greatest potential to create value in the exploration and mine construction stages, rather than acquiring mature operations, which often means issuing shares for assets that are already fully valued.
Noting that HudBay has discovered, developed and operated 26 mines in its 80 years of existence, the CEO said it is now actively seeking projects in Canada, the United States, and parts of Latin America, like Mexico, Peru, Chile, and Brazil.
In its search, the company is focused more on types of geological settings rather than specific metals.
Citing Hudbay's technical ability, $1 billion in cash, lack of debt and $300 million from existing operations, he said, "We're in a great position to finance new opportunities."
In August, HudBay decided to move its Lalor project in the western Canadian province of Manitoba into construction after discovering more gold and copper deposits on the property.
"That brings an element of growth into the story that hasn't been there for a long time," he said.
Hudbay expects its gold production to double and zinc production to increase by 50 percent over the next five years.
By mid-2012, Garofalo said, Lalor should produce its first ore with full production expected in fourth quarter 2014, when precious metal production should increase considerably.
Though it already operates a zinc refinery that takes its zinc concentrates, HudBay is not looking to expand into refining or smelting and in June shut an aged copper refinery.
Hudbay sells all of its refined zinc to various buyers in North America. It delivers most of its copper concentrate under contract to a Canadian based smelter, with the rest going into the spot market, "Where there's a ready market."
"It's been almost a perfect storm for mining companies recently, because treatment charges have been depressed and metal prices have been elevated. So, margins in recent U.S. terms have been widening quite dramatically," the CEO said.
Garofalo will ring the opening bell at the New York Stock Exchange on Friday. HudBay's stock resumed trading on the NYSE last Monday under the <HBM.N> symbol that marked it from 1938 until 1983 when it was privatized.
He said he aims to increase HudBay shares' liquidity, shareholder diversity and U.S. presence with its NYSE listing.
(Reporting by Carole Vaporean; Editing by David Gregorio)