Hudbay released its first quarter report earlier this week, providing some updates on Flin Flon-area and northern Manitoba work, but little new information on other key projects.
Within Flin Flon, the company recently wrapped up a winter drilling program at its local tailings facility, hoping to find enough mineral supply within the tailings to cushion the blow of the planned 777 shutdown later this year or possibly even keep some portions of the company’s operations open. No results from that drilling campaign have yet been made public and none were released with the report.
“Hudbay is exploring the concept to potentially reprocess the Flin Flon tailings in the future. In early January 2022, the company commenced a confirmatory drill program on the tailings facility in Flin Flon to support the evaluation of the tailings reprocessing opportunity,” reads the relevant portion of the report.
“This opportunity could utilize the Flin Flon concentrator, with modifications, after the closure of the 777 mine, creating operating and economic benefits in northern Manitoba and Saskatchewan. It could also provide the opportunity to redesign the closure plans, increase metal production, defer or reduce certain closure costs and reduce the environmental impacts of the tailings facility.”
In other news for Hudbay’s Flin Flon operations, the company saw lower than expected production from Manitoba sites through the first quarter. Hudbay pins that on workers getting COVID-19 and having to stay home from work, as well as lower production at 777 mine as part of the company’s planned closure of the site.
“Ore mined at the Manitoba operations during the first quarter of 2022 was lower than the fourth quarter of 2021 due to employee absenteeism caused by COVID-19, unplanned maintenance requirements of the ore handling system that temporarily affected hoisting ability at Lalor and planned lower production at 777 as the mine approaches closure in June 2022,” reads the quarterly report.
The company plans to ramp up production at Lalor mine to 5,300 tonnes per day by the end of this year, expecting new mine equipment, expansion of Snow Lake-area facilities and transitioning workers from Flin Flon operations to Snow Lake to help boost production.
“The 777 equipment relocation strategy will commence in the second quarter of 2022, ahead of expected timeframes to advance the production ramp-up to 5,300 tonnes per day,” reads the report.
“A planned Lalor maintenance period has been advanced to the second quarter of 2022 in order to allow for increased availability during the third quarter after 777 has closed and the additional workforce and equipment have transitioned to Lalor.“
At 777, Hudbay plans to mine the place out by later this year, but what the company calls “challenging ground conditions” have thrown a wrench in the company’s plan. Once the remaining reserves at the mine are taken out, people and equipment will be sent to Snow Lake, according to Hudbay’s plans.
“The 777 mine is within months of closure and the focus continues to be on safely mining out the remaining reserves by completing the necessary ground rehabilitation to access remnant and pillar stoping blocks. Challenging ground conditions continue to cause delays in the production sequence and result in higher dilution than planned,” reads the first quarter report.
“These challenges are expected to continue until the end of the mine life in June 2022. Pre-closure activities are well underway in mined-out areas to decommission stationary equipment of value for redeployment at Lalor. As development requirements wind down, personnel and equipment are being redeployed to Lalor as part of the Lalor ramp-up strategy.”
Overall, the company says its first quarter measured up to expectations, saying production was “in line with quarterly cadence expectations.”
Hudbay’s operations in Peru took a hit over the first quarter due to what the company described as “COVID-19 related employee absenteeism and high rainfalls” as well as a partial mill closure for maintenance in January. The company says it made a total of $63.8 million in net earnings over the first quarter and produced over 43,000 ounces of gold from its Manitoba operations - though sales volumes were impacted by what the company called “availability of rail cars during the quarter”. The company claims about 7,000 tonnes of gold-containing copper concentrate stood as excess inventory as of the end of the quarter.