Hudbay is stepping up its search for ore in the Flin Flon-Snow Lake region.
The company plans to spend at least $20 million on exploration in the area this year, a 25 per cent increase over 2014.
“Exploration activities in Manitoba will focus on targets in Flin Flon and Snow Lake,” Hudbay announced in a recent news release.
The work will include testing the down-plunge exploration potential of gold and copper-gold zones at the Lalor mine.
In accordance with an option agreement with Callinan Royalties Corp., underground drilling at Callinan’s War Baby claim is also planned with the aim of extending the life of 777 mine beyond 2020.
All told Hudbay will spend $55 million on exploration this year, including $10 million in Arizona, where it plans to transform its Rosemont deposit into a copper mine.
Hudbay is further allotting $5 million for exploration in Peru, where its Constancia copper mine is now churning out copper concentrate.
The remaining $20 million has been reserved to follow up potential exploration successes at in-mine drilling programs and other strategic opportunities.
Production
Production-wise, Hudbay for the first time expects to generate more copper from outside of Flin Flon-Snow Lake than within.
The company’s projections call for 40,000 to 50,000 tonnes of copper from 777, Lalor and Reed in 2015. Constancia is expected to yield 100,000 to 125,000 tones, or between 57 and 89 per cent of Hudbay’s total.
Flin Flon and Snow Lake are projected to produce 95,000 to 120,000 tonnes of zinc, which is between 15 and 45 per cent higher than in 2014. Constancia will not produce zinc.
“Hudbay’s planned higher Manitoba domestic zinc concentrate production in 2015 is expected to result in zinc plant production levels above 2014 results, notwithstanding an expected zinc plant maintenance shutdown during the third quarter,” the company said.
As for precious metals, Flin Flon and Snow Lake are expected to yield 85,000 to 105,000 ounces. That’s between zero and 24 per cent more than last year.
Constancia is projected to generate 50,000 to 65,000 ounces of precious metals.
Meanwhile, Hudbay is set to dole out $320 million on sustaining capital expenditures this year, almost three times as much as last year. Of that, $140 million will be spent in Manitoba and $180 million in Peru.
“Manitoba’s budgeted sustaining capital expenditures have increased over prior year levels primarily due to planned investments in new mine equipment for Lalor and 777 following restraints on discretionary spending in 2013 and 2014,” the company said.
