Hudbay has reached a deal with a Japanese mining company that could lead to multiple years of mineral exploration around the Flin Flon area.
Hudbay announced July 6 that company representatives had signed a memorandum of understanding with Marubeni Corporation for “a multi-year exploration partnership focused on the discovery of new deposits within trucking distance of Hudbay’s existing processing facilities in Flin Flon.”
Along with the MOU comes an agreement between the two groups for Marubeni to outline what the new company will do with anything it finds in and around Flin Flon. Both companies have “agreed to negotiate the terms of a definitive agreement to govern the relationship,” meaning that Marubeni would be funding around $10-to-15 million of exploration around properties covered under the agreement. While Marubeni will fund the exploration, Hudbay workers themselves will carry it out.
“This exploration partnership would give us access to the Flin Flon greenstone belt, one of the most prospective base metal VMS camps in the world,” said Marubeni copper mining department general manager Masafumi Ichigetsu in a statement released by Hudbay.
“We see tremendous opportunity in this camp where we have the ability to partner with Hudbay and benefit from their technical expertise and proven track record of successful discovery, development and operation of many mines in the region.”
The deal also covers possible next steps if the Marubeni/Hudbay partnership leads to finding new deposits. Marubeni would enter into a joint venture with Hudbay after meeting certain earn-in requirements, with the Japanese company able to acquire what Hudbay calls a “substantial minority equity interest in the projects.” Finalized terms of any further Hudbay/Marubeni joint venture would be reached in the future.
“The recently announced MOU with Marubeni is an exciting development for Hudbay as we seek to unlock value in the Flin Flon region. Hudbay has always been committed to exploration and stated our openness to working with the right partner in the region to create value, which we have found in Marubeni,” said a Hudbay spokesperson.
Marubeni is a general trading company based in Tokyo, founded in 1858. The company has a wide range of operations, ranging from food and agriculture to consumer products, from renewable energy and wind farms to mining. Marubeni’s mining arm does not fully operate any mines, but does have minority interest in mine projects in Australia, Chile and Canada, where it owns a 13 per cent stake in the Alouette aluminum smelter in Quebec, one of the world’s biggest such facilities.
“We see excellent synergies between our businesses – notably Hudbay’s operational and exploration expertise and Marubeni’s balance sheet strength – that we are confident will deliver success,” said a Hudbay spokesperson.
“Hudbay is committed to northern Manitoba and believes there is a bright future for mining in the region. We hope this multi-year exploration agreement will help realize that potential and deliver prosperity for our investors and the local communities and beyond.”
