HudBay achieves first gold production at new Britannia mill

HudBay achieves first gold production at new Britannia mill
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TORONTO – HudBay Minerals Inc.  [HBM-TSX, NYSE] on Thursday said gold production has commenced at the New Britannia mill in Snow Lake, Manitoba. Refurbishment activities at the gold mill were completed in June, 2021, followed by commissioning and startup in July, 2021.

The mill achieved first gold production on August 11, 2021, in line with timelines assumed in recent company guidance and ahead of the schedule to produce the first gold before the end of 2021. HudBay is also completing construction of a new copper flotation facility at New Britannia, which remains on track for commissioning and ramp up in the fourth quarter of 2021.

HudBay has said its Lalor Mine (gold, zinc, copper, silver) in Snow Lake is fast becoming a meaningful low-cost gold producer that will benefit substantially from the refurbishment of the New Britannia mill.

Annual gold production from the Lalor and Snow Lake operations is expected to increase to over 180,000 ounces, during the first six full years of New Britannia’s operation at an average cash cost and sustaining cash cost, net of by-product credits, of US$412 and US$788 per ounce, respectively.

HudBay is an integrated mining company, primarily producing copper concentrate (containing copper, gold and silver), zinc concentrate and zinc metal. The company owns four polymetallic mines, four ore concentrators and a zinc production facility.

The operations are located in northern Manitoba and Saskatchewan, Peru and Arizona.

On Thursday, HudBay shares eased 2.7% or $0.23 to $8.21 on volume of 584,500. The shares are currently trading in a 52-week range of $11.62 and $4.55.

In another development, Hudbay said it sees the Copper World discovery in Arizona as a “very interesting, either alternative or add-on” to the adjacent Rosemont project, which remains in legal limbo, two years 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.

Rosemont is one of the world’s best undeveloped copper projects, one that delivers at 15.5% after-tax unlevered IRR at a copper price of US$3.00 a pound, based on the results of a 2017 feasibility study by HudBay.

Rosemont was expected to produce approximately 127,000 tonnes of copper annually at a cash cost of US$1.14 per pound (net of by-product credits) over the first 10 years of operations.

The Court ruling was a setback for Wheaton Precious Metals Corp. (WPM-TSX, WPM-NYSE), which has a precious metals purchasing agreement with HudBay. The deal entitles Wheaton to 100% of the payable silver and gold production from the mine.

Earlier this year, HudBay made a high-grade copper sulphide discovery on wholly-owned patented mining claims located about 7.0 kilometres from the Rosemont project. Four deposits have been identified with copper mineralization that contains higher grades, closer to surface than Rosemont.

“We are going to push Copper World forward very hard,’’ HudBay CEO Peter Kukielski said this week.


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