The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
Hudbay has announced an increase to its copper equivalent proven and probable mineral reserves for the second consecutive year. Copper equivalent proven and probable mineral reserves rose by five per cent to 3.2 million tonnes, including 3.5 million ounces of precious metal equivalent proven and probable reserves, which rose by 18 per cent from 2011. In addition, Hudbay has nearly one million tonnes of measured and indicated copper equivalent resources and 1.7 million tonnes of inferred copper equivalent resources. That includes 1.6 million ounces of precious metal equivalent measured and indicated resources and 2.6 million ounces of precious metal equivalent inferred resources. Hudbay said exploration success accounted for some 90 per cent of the increase in copper equivalent reserves and resources, and 75 per cent of the increase in precious metals equivalent reserves and resources. The remainder was due to revised commodity price and exchange rate assumptions. 'The continued growth in our metal reserves and resources per share demonstrates our success in providing our shareholders increasing leverage to commodity prices,' said David Garofalo, Hudbay president and CEO. 'We added more reserves and resources at Lalor and the initial resource at the higher grade Pampacancha deposit speaks to the value we have added to the Constancia project since we acquired it only one year ago.' Garofalo said an the mineral resource at Pampacancha _ located near Constancia in Peru _ 'is expected to improve the economics of the Constancia project by adding higher grade mineralization into the mine plan early in the mine life.' 'In addition, our exploration team is continuing to follow up on the recent drill success at the deposit, which demonstrated significantly higher grades than other previously released intersections,' he added. Expanding resource A 30,000-metre drill program at Constancia this year will focus on expanding the resource and exploration. Hudbay believes that, while the low-grade hypogene ore within the Constancia deposit is well defined, there is the potential to yield additional higher grade mineralization in satellite deposits. Exploration drilling is scheduled to resume early in the second quarter of this year at the Pampacancha deposit, which remains open in all directions. Two drills will initially focus on the north and west extensions, as these zones have been yielding higher grade intersections. At the same time, front-end engineering and design work at the Constancia project is nearing completion. By mid-2012, Hudbay expects to present its board of directors with a formal project recommendation, including a financing plan expected to involve project financing for Constancia. Project procurement is proceeding. Fixed price orders have been placed for over US$200 million in project expenditures, including grinding mills and mobile equipment. Permit applications are on track and the principle beneficiation concession permit is expected late this month. Hudbay said significant progress has also been made in relations with the two local communities adjacent to the Constancia project. Life of mine agreements have been entered into with both communities, which secure land required for project construction and operations and specify Hudbay's commitments to the communities over the course of mine construction and operations. As a result of general cost escalation and other factors, Hudbay's capital cost estimate for Constancia is estimated to be US$1.5 billion. Capitalized costs expected to be incurred prior to a formal project decision total US$141 million. Pre-construction To support the continuing pre-construction development of Constancia during the second quarter of this year, Hudbay's board has approved an incremental US$34 million in capitalized spending on Constancia, over and above the US$107 million approved for the first quarter. These expenditures will support ongoing engineering and procurement activity, hydrogeological drilling and camp construction among other activities. The anticipated project schedule currently remains unchanged, with first production expected in 2015 and full production in 2016. _ Compiled from a Hudbay news release
