HudBay to explore Constancia satellite properties, Peru
HudBay Minerals Inc. [HBM-TSX, NYSE] on Thursday announced details of an exploration agreement for the Maria Reyna and Caballito satellite properties near Constancia, Peru.
Constancia is one of the lowest cost open-pit sulphide copper mines in South America. The Constancia operations also include the nearby Pampcancha satellite pit, a high-grade copper-gold deposit where mining activities began in 2021.
The operations in Peru delivered a strong operating performance in the second quarter with copper production of 20,880 tonnes. They also produced 13,858 ounces of gold, 584,228 ounces of silver and 390 tonnes of molybdenum.
The company has also acquired a series of properties near Constancia, adding a large, contiguous block of exploration prospects within trucking distance of the Constancia processing facility.
In a press release, the company said the Uchucarcco community has formally approved an exploration agreement with HudBay Minerals granting surface rights to the Maria Reyna and Caballito properties. These satellite properties consist of a large, contiguous block of mineral rights held by Hudbay and have the potential to host mineral deposits within trucking distance of the Constancia processing facilities, the company said.
“Historic drilling at Maria Reyna indicates attractive grades over wide intersections starting at surface and the past-producing Caballito property has the potential to add higher grade copper mineralization to our Constancia operations,’’ said HudBay President and CEO Peter Kukielski.
The company expects to commence early field activities in August and finalization of the Uchucarcco agreement is anticipated to increase community investment costs on the second half of 2022, the company said.
On Thursday, Hudbay shares advanced on the news, rising 3.8% or $0.23 to $6.25 on volume of 132,120. The shares are trading in a 52-week range of $11.17 and $4.07.
HudBay recently announced a robust preliminary economic assessment (PEA) for its Copper World copper-molybdenum-silver deposit in Arizona.
Hudbay has said it sees the Copper World discovery as a “very interesting, either alternative or add-on” to the adjacent Rosemont project, which has been in legal limbo for over two years after a U.S. Federal Court blocked construction. The court overturned the Final Record of Decision issued by the U.S. Forest Service in mid-2017.
The PEA reflects a two-phase mine plan contemplating the development of the Copper World deposits in conjunction with an alternative plan for part of the adjacent Rosemont deposit, with a focus on near-term production solely from private lands and patented mining claims, supporting an initial 16-year mine life sourced from both oxide and sulphide ore.
Based on an average concentrator design throughput of 60,000 tonnes per day and an oxide heap leach of 20,000 tonnes per day, the project is expected to yield average copper production of 86,000 tonnes at relatively low cash costs of US$1.15 per pound and sustaining cash costs of US$1.44 per pound