HudBay options three Manitoba projects to Japanese firm

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HudBay Minerals Inc.  [HBM-TSX, NYSE] has granted a unit of Japanese conglomerate Marubeni Corp. an option to acquire a 20% stake in three projects located within trucking distance of HudBay’s Flin Flon, Manitoba, milling complex.

During the earn-in period, Marubeni will fund up to t $12 million in exploration expenditures over a five-year period with HudBay carrying out the exploration activities as operator and work program manager (with $7 million agreed to for the 2025 winter exploration program).

Should any of the projects advance to production, the parties may discuss the utilization of Hudbay’s idle Flin Flon milling complex to process ore.

Upon completion of the earn-in obligations, Marubeni may exercise its option to form a joint venture with HudBay for any of the projects, and all subsequent costs for exploration and development will be funded by each company in proportion to their respective interest. The agreement follows an MOU signed in mid-2023.

“This exploration partnership with Marubeni represents a significant milestone towards unlocking potential future value in the Flon Flon region,’’ said HudBay President and CEO Peter Kukielski. “This arrangement allows us to partner with Marubeni and leverage our operational and exploration expertise to test our large Flin Flon land package to potentially bring another mine into production and utilize HudBay’s idle processing infrastructure in Flin Flon,’’ he said.

Marubeni Corp is a major Japanese integrated trading and investment business conglomerate that is engaged in resource development handles products and services in a broad range of business activities across wide-ranging fields.

“The signing of an option agreement with HudBay gives us access to the Flin Flon Greenstone Belt, one of the most prospective base metal VMS camps in the world,’’ said Masafumi Ichigetsu, General Manager, Copper Mining Dept, Marubeni.

The agreement focuses on three projects in the Flin Flon region, namely Cuprus-White Lake, Westarm and North Star, which were selected by Marubeni following a period of due diligence. All three properties hold past-producing mines that generated meaningful production and attractive grades of both base metals and precious metals.

The properties remain highly prospective with potential for further discovery based on the attractive geological setting, limited historical deep drilling and promising geochemical and geophysical targets.

HudBay recently said its copper production in the fourth quarter of 2023 was 45,450 tonnes, an increase of 8.0% from the third quarter of 2023, while consolidated gold productions was 112,776 ounces, an 11% increase. Consolidated silver production was 1.19 million ounces, marking a 13% increase. The company attributed the production increases to high recoveries at operations in Peru and Manitoba.

HuBay shares advanced on the news, rising 0.70% or $0.06 to $8.62. The shares trade in a 52-week range of $8.80 and $5.45.

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