Hudbay is scaling back exploration in northern Manitoba this year, allotting $5 million for prospecting that will focus on the Lalor mine.
It’s part of a company-wide exploration plan, unveiled Wednesday amid continued weak metal prices, worth a projected $11 million before capitalization.
“Exploration activities in Manitoba will focus on targets within the Lalor mine in Snow Lake,” Hudbay announced in a news release that outlined its production targets and exploration plans for 2016.
The Lalor work will include continued drilling of the exploration potential of gold zones from the 865-metre-level exploration drift, the company said.
Pending complete results from last year’s work, Hudbay said exploration may continue on the down plunge potential of the copper-gold zones from the 955- to 1,025-metre-level exploration ramp.
The plans come after sources say Hudbay reduced its exploration department by 15 people, with 10 employees remaining at the Hudson Bay Exploration and Development office in Flin Flon.
The reductions were among the layoffs announced by Hudbay last month. Sources have put the total number of
Flin Flon layoffs at 27.
In terms of other exploration in 2016, Hudbay is projecting to spend $1 million in Peru, site of its Constancia copper mine, and $5 million at other locations.
The total exploration budget for the year is $11 million, but Hudbay puts the final figure at $8 million based on the assumption that $3 million of the Manitoba expenditures will be capitalized.
In 2015, Hudbay forecast pre-capitalization exploration costs at $55 million, including $20 million in Manitoba. Total post-capitalization expenses came in at $20 million.
As for production, Hudbay plans to boost Manitoba zinc output over 2015 despite a maintenance shutdown of the Flin Flon zinc plant planned for the second quarter.
Planned sustained capital expenditures in northern Manitoba have decreased from 2015, the company said, due mainly to the weaker Canadian dollar and “substantial completion” of a fleet renewal program at 777 mine.
Hudbay said 2015 production of copper (10 per cent), zinc (25 per cent) and precious metals (8 per cent) increased in Manitoba, thanks mainly to a full year of commercial output at the Lalor and Reed mines.
Assuming the mid-point of its 2016 production projections are reached, Hudbay expects company-wide production increases for copper (12 per cent), zinc (9 per cent) and precious metals (16 per cent).
(Note: An earlier version of this article incorrectly stated that the proposed Rosemont mine is in Peru. In fact, as reported multiple times before, it is in Arizona).
