Hudbay targets 16% increase in copper production, shares up

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HudBay Minerals Inc.  [HBM-TSX, NYSE] has released its annual mineral reserve and resource update and issued production targets for the next three years.

Consolidated copper production is expected to average 153,000 tonnes per year over the next three years, marking a 16% increase from 2023. The company said the planned increase demonstrates Hudbay’s strong and stable operating portfolio with three long-life operations in tier-one mining jurisdictions in Canada, Peru and the U.S.

The company’s operating portfolio includes the Constancia mine in Cusco (Peru), the Snow Lake operations in Manitoba, and the Copper Mountain mine in British Columbia. The Constancia operations include the nearby Pampacancha satellite pit, a high-grade gold deposit where mining activity began in 2021.

Hudbay is expecting its consolidated gold production to average 272,500 ounces annually over the next three years, reflecting strong production in Manitoba and a contribution from the high grade gold zones at Pampacancha. Annual production at the Constancia operations is expected to average approximately 101,000 tonnes of copper and 62,000 ounces of gold over the next three years.

Hudbay’s 100%-owned Snow Lake operations in Manitoba include the Lalor gold, copper and zinc mine, the New Britannia gold mill, the Stall base metals concentrator and several satellite deposits. Annual production from Snow Lake is expected to average 185,000 ounces over the next three years, in line with 2023 levels.

Meanwhile, the company said three-year production targets in British Columbia (Copper Mountain) reflect sequentially higher annual copper production as a result of the implementation of several improvement initiatives as part of the company’s stabilization plan.

Targes for 2024 are 30,000 to 40,000 tonnes of copper, 17,000 to 26,000 ounces of gold, and 300,000 to 455,000 ounces of silver. The target for 2026 is 44,000 to 54,000 tonnes of copper, 24,000 to 29,000 ounces of gold and 450,000 to 550,000 ounces of silver.

The Copper Mountain production guidance ranges in 2024 and 2025 are wider than typical ranges and coincide with the operation ramp up activities over the stabilization period. Copper production is expected to increase by 32% in 2026 compared to 2024, reflecting operational improvements consistent with the NI 43-101 technical report for Copper Mountain issued in December 2023.

On Thursday, Hudbay shares rose 1.76% or 16.5 cents to $9.55 on volume of 908,738. The shares trade in a 52-week range of $9.50 and $5.46.

Hudbay was in the news recently when it 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.

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