TORONTO, Oct. 27 /CNW/ -

Third quarter highlights

- Comparable sales as lower sales volumes offset higher metal prices

Higher copper, zinc and gold prices increased sales by $35 million

this quarter compared to the same quarter in 2008. This was offset

somewhat by lower sales volumes, which reduced sales by $34 million,

of which $16 million was due to reduced pyrite sales volumes.

- Lower operating costs

Cost of sales in the third quarter of 2009 were $12 million lower

than they were last year mainly because Troilus is now only

processing stockpiles and costs are lower at Cayeli.

- Higher zinc production

Copper production this quarter was slightly lower than last year

because grades were lower. Zinc production was higher because grades

were higher. Gold production was lower because Troilus drew all of

its feed from its low grade stockpile.

- Las Cruces copper production was lower than planned

2,200 tonnes of copper cathode was produced during the third quarter.

This was significantly below our expectations, and was the result of

typical start-up issues encountered during the commissioning stage.

We do not expect any of these issues to affect the long-term

performance of the plant.

- Lower copper cash costs

Copper cash costs this quarter were US $0.46 per pound compared to

US $0.60 per pound in the third quarter of 2008. Lower unit direct

production costs and higher metal credits helped lower cash costs,

but this was partly offset by higher unit treatment charges. Cash

costs are a non-GAAP measure (see pages 30 to 33).

- Updated 2009 production outlook

We have revised our annual production objectives to reflect actual

production so far this year at Cayeli, Ok Tedi and Las Cruces. We now

expect to produce 87,000 tonnes of copper, 76,000 tonnes of zinc,

224,000 ounces of gold and 388,000 tonnes of pyrite in 2009.

- Las Cruces repaid its credit facility

On July 31, 2009, Las Cruces repaid the remaining $232 million

outstanding under its credit facility and cash collateralized

$32 million in letters of credit that had been secured under the

credit facility. This eliminated the Las Cruces project credit

facility and has significantly reduced long-term debt in our

consolidated financial statements. We recognized $21 million in net

gains from the settlement and the realization of hedge contracts

associated with the credit facility. We also realized a foreign

exchange loss of $14 million on US dollar cash we were holding in

Canada to repay the facility.

- Joint Development Agreement between Suez Energy Central America and

Cobre Panama

A joint development agreement was signed with Suez in July to develop

a coal fired power plant that will supply power to the project. The

agreement details how we will work together over the next few months

as the plant design is finalized. It also includes term sheets for a

prospective power purchase agreement.

Key financial data

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three months ended nine months ended

September 30 September 30

2009 2008 change 2009 2008 change

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FINANCIAL HIGHLIGHTS

(thousands, except

per share amounts)

Sales

Gross sales $241,121 $247,495 -3% $693,315 $805,239 -14%

Net income

Net income $61,551 $75,057 -18% $179,406 $249,436 -28%

Net income per

share $1.10 $1.55 -29% $3.51 $5.17 -32%

Cash flow

Cash flow provided

by operating

activities $89,277 $97,805 -9% $196,970 $293,513 -33%

Cash flow provided

by operating

activities per

share(1) $1.59 $2.03 -22% $3.86 $6.08 -37%

Capital spending(2) $23,789 $94,371 -75% $204,911 $326,813 -37%

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OPERATING HIGHLIGHTS

Production(3)

Copper (tonnes) 19,900 20,800 -4% 59,200 59,400 -

Zinc (tonnes) 21,700 14,600 +49% 54,500 55,900 -3%

Gold (ounces) 48,200 63,200 -24% 177,600 179,400 -1%

Pyrite (tonnes) - 177,800 -100% 323,000 483,500 -33%

Cash costs(4)

Copper

(US $ per pound) $0.46 $0.60 -23% $0.54 $0.51 +6%

Gold

(US $ per ounce) $240 $432 -44% $171 $395 - 57%

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as at as at

September 30 December 31

FINANCIAL CONDITION 2009 2008

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Current ratio 4.8 to 1 2.4 to 1

Gross debt to total equity(5) 1% 19%

Net working capital balance (millions) $577 $475

Cash balance (millions) $497 $573

Shareholders' equity (millions) $2,196 $1,868

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(1) Calculated as cash flow provided by operating activities divided by

average shares outstanding for the respective period.

(2) For the nine months of 2009 includes $108 million in spending at Las

Cruces and $70 million at Cobre Panama.

(3) Inmet's share.

(4) Cash cost per pound of copper and cash cost per ounce of gold are

non-GAAP measures - see Supplementary financial information on pages

30 to 33.

(5) Gross debt includes long-term debt and current portion of long-term

debt less the non-recourse note owing from Las Cruces to its non-

controlling shareholder.

Third quarter press release

Where to find it

Our financial results................................................ 4

Key changes in 2009.................................................. 4

Understanding our performance........................................ 5

Earnings from operations........................................... 7

Corporate costs.................................................... 11

Results of our operations............................................ 13

Cayeli............................................................. 14

Pyhsalmi.......................................................... 16

Las Cruces......................................................... 18

Troilus............................................................ 20

Ok Tedi............................................................ 22

Status of our development project.................................... 24

Cobre Panama....................................................... 24

Managing our liquidity............................................... 25

Financial condition.................................................. 28

Accounting changes................................................... 30

Supplementary financial information.................................. 30

Quarterly review..................................................... 34

Consolidated financial statements.................................... 35

In this press release, Inmet means Inmet Mining Corporation and we, us and our mean Inmet and/or its subsidiaries and joint ventures. This quarter refers to the three months ended September 30, 2009.

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 statements about our future financial condition, results of operations and business.

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, believe or other similar words. We believe the expectations reflected in these forward-looking statements are reasonable. However, actual events and results could be substantially different because of the risks and uncertainties associated with our business or events that happen after the date of this press release. You should not place undue reliance on forward-looking statements. As a general policy, we do not update forward-looking statements except as required by securities laws and regulations.

Our financial results

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three months ended nine months ended

(thousands, except September 30 September 30

per share amounts) 2009 2008 change 2009 2008 change

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EARNINGS FROM

OPERATIONS(1)

Cayeli $28,789 $32,004 -10% $65,875 $130,921 -50%

Pyhsalmi 20,800 29,660 -30% 39,126 84,886 -54%

Troilus 14,096 6,488 +117% 84,612 22,633 +274%

Ok Tedi 48,974 33,974 +44% 102,089 137,548 -26%

Other (409) (476) -14% (1,401) (1,464) -4%

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112,250 101,650 +10% 290,301 374,524 -22%

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DEVELOPMENT AND

EXPLORATION

Corporate development

and exploration (1,963) (3,548) -45% (7,922) (8,649) -8%

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CORPORATE COSTS

General and

administration (5,147) (3,411) +51% (14,056) (9,849) +43%

Investment and other

income 3,588 (5,467) +166% 8,851 (2,071) +527%

Asset impairment - - - (6,419) - +100%

Interest expense (496) (476) +4% (1,481) (1,394) +6%

Income and capital

taxes (39,988) (17,504) +128% (83,180) (106,831) -22%

Non-controlling

interest (6,693) 3,813 -276% (6,688) 3,706 -280%

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(48,736) (23,045) +111% (102,973) (116,439) -12%

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Net income $61,551 $75,057 -18% $179,406 $249,436 -28%

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Basic net income

per share $1.10 $1.55 -29% $3.51 $5.17 -32%

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Diluted net income

per share $1.09 $1.55 -30% $3.50 $5.16 -32%

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Weighted average

shares outstanding 56,107 48,282 +16% 51,062 48,282 +6%

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(1) Gross sales less smelter processing charges and freight, cost of

sales, depreciation and provisions for mine reclamation.

Key changes in 2009

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three nine

months ended months ended see

(millions) September 30 September 30 page

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EARNINGS FROM OPERATIONS

Sales

Higher (lower) copper and zinc prices

denominated in Canadian dollars $21 $(115) 7

Higher gold prices and other prices 15 66 7

Lower sales volumes (21) (32) 8

Lower pyrite sales, net of costs

to sell (20) (29) 8

Costs

Lower smelter processing charges and

freight 3 15 9

Lower operating costs, including costs

that vary with income and cash flows 15 24 10

Higher depreciation (3) (14) 10

Other 1 1

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Higher (lower) earnings from

operations, compared to 2008 $11 $(84)

CORPORATE COSTS

Change in income tax expense from

change in earnings (22) 24 12

Lower interest income on cash balances (5) (18) 11

Foreign exchange loss on US dollar cash (14) (14) 11

Other foreign exchange changes 13 33 11

Settlement and realization of hedge

contracts 21 21 11

Change in non-controlling interest (11) (10)

Other (7) (22)

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Lower net income, compared to 2008 $(14) $(70)

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Understanding our performance

Metal prices

The table below shows the average metal prices we realized in US dollars and Canadian dollars (the prices we realize include finalization adjustments - see Gross sales on page 7).

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three months ended nine months ended

September 30 September 30

2009 2008 change 2009 2008 change

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US dollar metal prices

Copper (per pound) $2.83 $2.66 +6% $2.39 $3.52 -32%

Zinc (per pound) $0.83 $0.73 +14% $0.68 $0.93 -27%

Gold (per ounce) $957 $715 +34% $945 $736 +28%

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Canadian dollar metal

prices

Copper (per pound) $3.11 $2.77 +12% $2.80 $3.59 -22%

Zinc (per pound) $0.91 $0.76 +20% $0.80 $0.95 -16%

Gold (per ounce) $1,050 $744 +41% $1,105 $751 +47%

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There has been an overall improvement in base metal prices in 2009 so far, and a steady increase in the price of gold.

Copper

The price of copper has increased progressively this year, doubling since the beginning of 2009, and rising 25 percent this quarter, closing at US $2.78 per pound.

The increase, which we believe is the combined result of economic optimism, investment fund interest, record Chinese consumption and imports, and a weaker US dollar, came about in spite of an increase in LME warehouse inventories. LME copper inventories rose 30 percent this quarter, to 346,000 tonnes.

Zinc

Zinc prices increased by 23 percent this quarter, to US $0.87 per pound.

This increase, which we believe comes from expectations that output from zinc smelters in China will be going down, is in spite of a reduction in world demand for zinc and an increase in LME warehouse inventories. LME zinc inventories went up by 24 percent this quarter, to 437,000 tonnes.

Gold

Gold prices continued to increase this quarter, closing September at US $996 per ounce. This is a 7 percent increase from the June close and a 22 percent increase from the start of the year. In mid- September the price reached US $1,018 per ounce - its highest level ever - mainly because of the depreciating US dollar and renewed investor demand.

Pyrite

The economic downturn began to have a significant effect on demand for sulphur and sulphuric acid near the end of 2008. Despite a slight increase in price this quarter, the sulphur markets are still feeling the effects of the downturn. We expect sulphur prices to continue to be lower over the short to medium term, which will have a direct impact on pyrite prices.

Exchange rates

Exchange rates affect revenue and earnings. The table below shows the average exchange rates we realized.

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September 30 September 30

2009 2008 change 2009 2008 change

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Exchange rates

1 US$ to C$ $1.10 $1.04 +6% $1.17 $1.02 +15%

1 euro to C$ $1.57 $1.56 +1% $1.59 $1.55 +3%

1 euro to US$ $1.43 $1.51 -5% $1.37 $1.52 -10%

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Our sales are affected by the conversion of US dollar revenue to Canadian dollars. The Canadian dollar dropped 6 percent this quarter relative to the US dollar, and 1 percent relative to the euro as compared to the same quarter last year. The result was a $2 million increase in net income, as described in the table below. In addition, because we were holding US dollar cash in Canada in a period where the Canadian dollar strengthened, we also realized a foreign exchange loss of $14 million in the quarter.

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three months ended

(millions) September 30

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US dollar sales and costs translated into Canadian dollars

(reflected in Canadian dollar sales price) $4

Foreign exchange loss realized on US dollar cash held in Canada (14)

Other (2)

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$(12)

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Treatment charges up for copper and down for zinc

Treatment charges are one component of smelter processing charges. We also pay smelters for content losses and price participation.

The table below shows the average charges we realized this quarter and year to date.

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three months ended nine months ended

September 30 September 30

2009 2008 change 2009 2008 change

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Treatment charges

Copper (per dry

metric tonne of

concentrate) $72 $41 +76% $77 $44 +75%

Zinc (per dry

metric tonne of

concentrate) $205 $341 -40% $221 $304 - 27%

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Price participation

Copper (per pound) $0.03 $0.06 -50% $0.03 $0.04 -25%

Zinc (per pound) $0.07 $0.04 +75% $0.03 $(0.01) +400%

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Freight charges

Copper (per dry

metric tonne of

concentrate) $48 $58 -17% $40 $53 - 25%

Zinc (per dry

metric tonne of

concentrate) $20 $31 -35% $27 $38 - 29%

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Statutory tax rates remain consistent

The table below shows the statutory tax rates for each of our taxable operating mines.