HudBay Minerals Inc. [HBM-TSX, NYSE] on Tuesday February 26 announced the discovery of a new higher-grade zinc-gold deposit located strategically near the company’s operating Lalor Mine 13 km west of Snow Lake, Manitoba.
While exploration is still in the early stages, the new discovery has the potential to extend the operator life of the Lalor camp, which is located in the Flin Flon Greenstone belt, where HudBay has operated for over 90 years.
HudBay is an integrated mining company primarily producing copper concentrate (containing copper, gold and silver), molybdenum concentrate and zinc metal. The company owns three polymetallic mines, four ore concentrators and a zinc production facility. These operations are located northern Manitoba, Saskatchewan Peru. It also has copper projects in Arizona and Nevada.
The Lalor Mine produces zinc, copper, gold and silver and is located in the Chisel Basin of the Flin Flon Greenstone Belt. Initial production began in August 2012 and the mine reached the commercial production in the third quarter of 2014.
On Tuesday, the company announced the discovery via drilling of 35.6 metres of 5.21% zinc, 0.33% copper, 1.37 g/t gold, and 15.7 g/t silver, including 4.6 metres of 20.76% zinc and 6.2 metres of 6.34 g/t gold.
HudBay said the discovery is located between the old Chisel North mine and the producing Lalor Mine at a down-hole depth of 540.7 and 576.3 metres. The property is 100%-owned by HudBay and free of any encumbrances.
This mineralization is less than 1,000 metres from the existing ramp between the Chisel North and Lalor Mine and is within trucking distance to surface and the crushing station at Chisel North.
HudBay advanced on the news, rising 1.12% or 10 cents to $9.01 on volume of 1.1 million. The shares trade in a 52-week range of $4.50 and $11.24.
“These zinc-rich and gold-rich intersections highlight the ever prospective nature of the Flin Flon greenstone belt and demonstrate the value of our Manitoba assets,” said Alan Hair, HudBay’s President and CEO.
“The discovery of these new zones with close proximity to our existing infrastructure and at shallow depth aligns very well with our Manitoba strategy and is another example of leveraging our exploration expertise to realize value,” he said.
“We look forward to continuing to drill this new discovery, while advancing exploration activities in the gold and copper-gold zones at Lalor and in the broader Snow Lake camp as we pursue our strategy over the next several years to maximize the value of our Manitoba assets and extend both base metals and gold production at Lalor beyond its current mine life.”