VANCOUVER (CP) -- Lundin Mining Corp. [NYSE:LMC; TSX:LUN] is restating its financial results for the first three quarters of 2007 and expects to recognize a $55 million reduction in reported profits because of a ''misinterpretation'' of Portuguese tax laws.
The Vancouver-based company said Thursday the reduction in earnings for the nine months ended 30 September includes a $16 million increase in current taxes and a $46 million reversal of future income tax recovery which had been booked in the third quarter.
Lundin had previously reported nine-month earnings of $336.7 million or $1.05 per share on revenue of $806.6 million.
The company said the error related to tax rate reductions claimed by Somincor, its operating subsidiary in Portugal.
''Because a lower tax rate than allowed has been used, Somincor has under-declared past tax contributions in Portugal,'' Lundin said in a statement.
Lundin said it would file the restatements before issuing its full-year 2007 results.
The company also said it will restate its 2006 accounts to change the allocation of the price of acquiring EuroZinc Mining Corp., but the bottom-line impact of this ''is not expected to be significant.''
Lundin has two mines in Portugal, Neves-Corvo and Aljustrel, which were acquired in 2006 when the company merged with EuroZinc.
Neves-Corvo produced 64,865 tonnes of copper, 18,145 tonnes of zinc and 635,650 ounces of silver in the first nine months of 2007; Aljustrel began production in December.
Shares of Lundin Mining fell as much as 7% early Thursday, trading at mid-afternoon down about 3 cents, losing 23 cents to C$7.62 on the Toronto Stock Exchange.
Cormark Securities analyst Justin Reid said the restatements rang no alarm bells for him.
''These guys have to restate their financials quite often, especially with taxation,'' Reid said.
''It's a very common thing when you have a company that produces in a number of different countries, so you have a number of different tax laws.''
Since the EuroZinc deal, Lundin has been an acquirer in the mining sector with a $1.4 billion takeover of Tenke Mining Corp. for a stake in a Congolese copper-cobalt development, and a $925-million acquisition of Rio Narcea Gold Mines.
In addition to the mines in Portugal, Lundin owns the Zinkgruvan and Storliden mines in Sweden, the Galmoy mine in Ireland and the Spanish nickel-copper mine Aguablanca.
Lundin also has a 49% interest in the Ozernoe zinc-lead project in Russia and 24.75% of Tenke Fungurume, the copper-cobalt project in the Democratic Republic of Congo.
(c) The Canadian Press 2008