HudBay CEO provides exploration update

The primary crusher at HudBay's Rosemont Project 50 km southeast of Tucson, Arizona. Source HudBay Minerals Inc.

Share this article

HudBay Minerals Inc.  [HBM-TSX, NYSE] has announced a substantial increase in Proven and Probable Reserves at its Lalor gold zone, which is part of the company’s Snow Lake operations in Manitoba.

The company said Proven and Probable Reserves at the Lalor Zone have increased to 6.0 million tonnes grading 6.35 g/t gold and 26 g/t silver. That’s up from the previous year’s estimate of 3.0 million tonnes grading 6.72 g/t gold and 23 g/t silver. Total contained gold ounces have increased to 1.2 million ounces, up 90% on a year over year basis. As a result, total gold reserves in the Snow Lake camp now stand at 2.2 million ounces.

HudBay shares advanced on the news, rising 7.1% or 18 cents to $2.71 on volume of 1.6 million. The shares are trading in a 52-week range of $1.66 and $10.42.

HudBay is an integrated mining company, primarily producing copper concentrate (containing copper, gold and silver), zinc concentrate and zinc metal. The company owns four polymetallic mines, four ore concentrators and a zinc production facility.

The operations are located in northern Manitoba and Saskatchewan, Peru and Arizona.

HudBay has said its operational focus in Canada is shifting to Manitoba’s Snow Lake region as its reserves, processing capacity and exploration activities expand in the region, setting the stage for a new phase of growth.

The company said its Lalor Mine (gold, zinc, copper, silver) in Snow Lake is fast becoming a meaningful low-cost gold producer that will benefit substantially from the refurbishment of the New Britannia mill. The refurbishment is expected to be completed in 2022.

Lalor is a gold and zinc mine located in the Flin Flon Greenstone Belt. The 100%-owned mine is spread across an area of 916 hectares, approximately 3.0 km from HudBay’s Chisnel North Mine.

Meanwhile, the updated reserves support an extended 18-year mine plan that utilizes the existing 4,500 tonne-per-day Stall mill and the refurbished 1,500 tonne-per-day New Britannia mill, with ore sourced from the Lalor, WIM and 3 Zone deposits.

Annual gold production is now anticipated to be greater than 150,000 ounces annually over the first eight years after the start-up of New Britannia. That compares to the previous target of 140,000 ounces annually over the first five years.

However, the increase in production is offset by expected life-of-mine average mining costs at Lalor, which have increased to $110 per tonne from $92 per tonne, a 20% increase. Life-of-mine sustaining capital has also increased, the company said.

Separately, HudBay said its 777 Mine in Flin Flon, Man., is approaching the end of its life after 15 years of operations. Final production is anticipated in 2022.

Peter Kukielski, President and CEO of HudBay said he is pleased with the company’s exploration success over the past 12 months in Manitoba and at HudBay’s flagship Constancia mine in Peru.

“In addition to replacing ore that was mined at Constancia last year, we are also encouraged by recent drilling results north of the Constancia pit where high-grade skarn mineralization has been intersected,” he said.

Constancia is primarily a copper mine, situated in southern Peru and consists of the Constancia and Pampacancha deposits. The secondary metals are molybdenum and silver. Commercial production was achieved in April, 2015.

Share this article

Leave a Reply

Your email address will not be published. Required fields are marked *