Hudbay plans to spend $124 million to refurbish mill and double Lalor mine gold production

While recent news about the Northern Manitoba mining industry has mostly focused on ontraction and closures in Thompson and Flin Flon, Hudbay Minerals Inc. announced Feb. 19 that it expects gold production from its Lalor mine near Snow Lake to more than double by 2022 after it reopens the New Britannia mill, which will allow it to recover greater quantities of the precious metal from the ore.

Hudbay said in a press release that the refurbished New Britannia mill – a project the company will spend about $124 million on – is expected to achieve gold recoveries of 93 per cent from the copper-rich Lalor ore compared to current recovery rates of about 53 per cent at the stall Mill. Hudbay intends to spend $10 million this year on the New Britannia mill, which will eventually be equipped with a copper flotation and dewatering circuit as well as a pipeline to direct the tailings to an existing facility.

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The Lalor mine, which was discovered in 2007 and began commercial production just seven years later, has a current mining capacity of 4,500 tonnes per day, which the company intends to maintain for the first six years of their mine plan. The Stall mill is expected to process about 3,500 tonnes per day from now through the end of 2021, with the other 1,000 tonnes being trucked to Hudbay’s Flin Flon mill for processing. After the New Britannia mill is refurbished, the amount of ore processed at the Stall mill is expected to drop to about 1,800 tonnes per day.

“We are pleased to demonstrate the significant value we have unlocked so far by leveraging our exploration expertise, our existing processing infrastructure and several inexpensive acquisitions to develop a compelling strategy to maximize the value of our gold mineralization at Lalor and nearby deposits,” said Hudbay president and chief executive officer Alan Hair. “With our extensive experience operating responsibly in Manitoba, we look forward to delivering on this strategy over the next several years by refurbishing the New Britannia mill, substantially increasing our gold production at low cash costs and realizing additional value through continued exploration success.”

Hudbay hopes to complete detailed engineering for the New Britannia mill refurbishment by February 2020, have environmental permitting completed in by April of that year and to begin construction activities in June of next year, completing them by August of the following year with plant commissioning occurring during the fourth quarter of 2021.

Hudbay’s mineral reserve and resource estimate make the company believe that Lalor’s mine life could be extended beyond 10 years and that during the first five years of the New Britannia mill operations that it will produce an estimated 140,000 ounces of gold annually at a sustaining cash cost of $450 per ounce, which would make it one of the lowest-cost gold mines in Canada.

Satellite deposits in the Snow Lake area, including the WIM deposit about 15 kilometres by road from New Britannia, and Pen II, about six kilometres by road from the Stall mill, could provide additional feed, Hudbay says, with combined indicated resources totalling 4.4 million tones, with an average of about 1.44 grams of gold per tonne.

The company spent $14 million on airborne and ground geophysical surveys in the Flin Flon and Snow Lake areas and intends to spend $4 million on in-mine exploration at Lalor this year in hopes of converting inferred resources to indicated resources.

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