In a news release filed with strong operating outcomes and exciting developments in respect to a new Snow Lake deposit, Hudbay Minerals filed their second quarter of 2019 results.
The Toronto-based miner boasted a solid operating quarter, including record production at their Lalor Mine and similar throughput at the nearby Stall Lake concentrator.
Ore mined by Hudbay operations in Manitoba was only up by one per cent; however, it saw a significant increase at Lalor and 777 over the same period last year, which of course was offset by the closure of the Reed Mine. Nonetheless, the company reports they are on track to meet all production and cost guidance for 2019
Hudbay took the opportunity created by the report to announce that they have an initial National Instrument ("NI") 43-101 resource estimate for the 1901 deposit. The 1901 is zinc-rich orebody located between the Lalor deposit and the now defunct Chisel North Mine.
As well, the news release noted that Hudbay has progressed on several key strategic initiatives, including engineering and permitting for the Lalor Gold strategy and community negotiations near their Constancia producer in Peru.
One of the only drawbacks, it seems, is the suspension of construction work at the Rosemont Mine, located just southeast of Tucson, Arizona. This resulted from the U.S. District Court for the District of Arizona revoking the permission for the site given previously by the U.S. Forest Service, stating that the mine would be “inconsistent with standards and guidelines” on a number of wildlife, maintenance and habitat-related concerns. The company says it intends to appeal the decision and is evaluating options for advancing the project.
“We were surprised and disappointed by the court’s decision on Rosemont, which we intend to appeal,” stated Mr. Kukielski. “Rosemont aside, we continue to execute our strategy. In Snow Lake, we are pleased to announce the initial resource estimate for the 1901 deposit, a mere six months from the initial discovery. In the second half of the year, we will continue advancing the WIM, Pen II and New Britannia zones to upgrade them to a reserve classification, while advancing feasibility work on the 1901 deposit. In Peru, our focus will continue to be on accessing the high-grade Pampacancha satellite deposit while advancing discussions with the communities to the northwest to explore the other satellite properties.”
In reviewing their Manitoba operations, Hudbay said they reflect the first full quarter of the Lalor mine achieving 4,500 tonnes per day and the Stall mill achieving record quarterly throughput. “The combined Manitoba operations produced 31,838 tonnes of zinc, 6,131 tonnes of copper and 28,019 ounces of gold-equivalent precious metals,” read the release. “Total copper, gold and silver produced were lower compared to the same period in 2018 due to the closure of Reed mine, partially offset by increased production at 777 and Lalor.”
The company also provided a Snow Lake exploration update in respect to the 1901 deposit initial resource estimate. Hudbay advises that drilling has continued to define the extent and geometry of the deposit and this drill program, along with geological interpretation and resource modeling, has resulted in an initial resource estimate, a mere six months from discovery. “The deposit is located between the former producing Chisel North mine and Lalor mine, less than 1,000 metres from an active underground ramp at a depth ranging from 550 to 650 metres and within 15 kilometres trucking distance of the Stall concentrator,” the company said. “The mineralization is interpreted as two zinc-rich volcanogenic massive sulphide lenses with locally high-grade gold and silver content. The mineralization occurs along the hanging wall contact of the stratigraphic horizon hosting the Chisel North deposit.
“There remain opportunities for extension of the mineralization discovered at the 1901 deposit. Exploration targets for new discrete lenses also exist in the immediate vicinity of 1901 and two drills are actively exploring in the area. The company is studying alternatives to develop the 1901 deposit to optimize the net present value of the Manitoba business unit.”
Further to this drilling, Hudbay notes that it has had high-grade gold and copper-gold intercepts. Drilling has identified several high-grade gold and copper-gold zones, but the company is not yet at the point of establishing a mineral resource estimate for it. Highlights of intersections occurring in the footwall of the zinc rich lenses are Drill hole CH1916 assayed 29.8 grams per tonne (g/t) Au and 401.8 g/t Ag over 7.5 metres from 580.5 to 588.0 metres, and drill hole CH1925 assayed 3.2 g/t Au, 19.9 g/t Ag and 2.83 per cent Cu over nine metres from 637.5 to 646.5 metres. As well, several other high-grade copper and gold intersections of less than three metres occur throughout the footwall zone in altered felsic units. “As drilling progresses to an infill stage to convert the inferred zinc-rich resource estimates to an indicated category, the company also expects to establish the continuity of the gold and copper-gold rich mineralization and report a mineral resource estimate for this portion of the mineralization,” Hudbay said. “The gold and copper-gold rich mineralization is likely to constitute a suitable feed for the New Britannia gold mill after its refurbishment is completed in 2022 and could further enhance the gold production profile from the Snow Lake camp.
During the second quarter of 2019, Hudbay has also continued in-mine exploration activities at the Lalor mine and made progress on engineering studies for its other 100 per cent-owned deposits in the Snow Lake area, including the WIM, Pen II and New Britannia mine properties. Drilling and studies will continue throughout the year and are expected to be incorporated in the annual mineral reserve and resource estimate.
