Things appear to be looking up for Hudbay in Snow Lake. The company’s current mine life plans have been extended by another year, while its Flin Flon operations are inching ever closer to closure.
The company released its annual reserve and resource update March 28, including new information about all of Hudbay’s current mining properties. Information about the company’s operations in Snow Lake has shown signs of progress, while those looking for good news about Hudbay’s Flin Flon operations will be disappointed.
According to the resource update, the company still plans to shut down 777 mine in June, with the plan being to operate at around 2,700 tonnes per day “with a continued focus on mining out the remaining reserves by completing the necessary ground rehabilitation to access old workings and remnant stopes,” according to the update.
The pending closure of 777 and the zinc plant, as well as the company’s plan to put the Flin Flon mill and tailings facility on “care and maintenance”, was confirmed yet again in the update.
“The company expects to spend approximately $25 million in 2022 on costs related to the closure of the Flin Flon complex and the transition to care and maintenance,” reads the update.
According to the update, the mine has about 459,000 of proven mineral reserve. At the rate of 2,700 tonnes per day, that reserve would be mined out in less than six months, possibly less.
Hudbay has also apparently had issues finding rail cars to transport its product from the north, expecting its own sales figures for the first quarter of 2022 to likely take a dip.
“Hudbay has been experiencing limited rail car availability in Manitoba due to recent weather-related impacts and higher-than-normal railcar demand in the rail network in Canada,” reads the update.
“As a result, first quarter sales volumes in Manitoba are likely to be impacted, and any resulting excess copper concentrate and refined zinc inventory buildup is expected to normalize during the second quarter of 2022.”
While the news isn’t bright for Flin Flon, it is for the town two hours down the road. Snow Lake area operations were also updated, with new mineral reserves reported at both Lalor mine and the 1901 deposit. Between the two, the mine life for Snow Lake is expected to be extended by a year, pushing the mine life for Hudbay’s operations in the area to 2038.
“As a result of exploration success in 2021, additional mineral reserves were identified at Lalor and the 1901 deposit, which are expected to extend the mine life of the Snow Lake operations by one year until 2038, maintaining the 17-year mine life,” reads the update.
The company plans to increase its own production from Snow Lake, following the reopening of the New Britannia gold mill last summer and the opening of a new copper floatation facility there last fall.
After the Flin Flon closures, the Lalor mine is anticipated to ramp up to 5,300 tonnes per day of production by the end of this year, pushing 3,800 tonnes of material through the Stall mill and bringing in possible feed from the 1901 deposit, located not far from Snow Lake, or even other, as-of-yet unprocessed or undiscovered areas.
“There also remains potential to further enhance the Snow Lake operations through exploration opportunities and additional mill processing projects,” the update says.
Exploration work is ongoing around Snow Lake, with drilling campaigns taking place throughout the region in order to find any new source of mineralization that hasn’t yet been located.
“Hudbay is actively conducting surface and underground winter drilling activities in the Snow Lake area, primarily focused on the copper-gold rich feeder zone at the 1901 deposit, the drilling gap between 1901 and lens 17 at Lalor and a high-priority geophysical target located immediately north of Lalor. In addition, the company continues to compile results from ongoing infill drilling programs at Lalor and 1901,” the update reads.
Hudbay is continuing on an attempt to pull mineral value out of its Flin Flon tailings facility, but results still seem far off.
Recent statements from the company have shed some light on its plans to possibly reprocess minerals from within its own Flin Flon area tailings facility.
“Hudbay is exploring an opportunity 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,” reads the resource update.
That drill program has not yet been completed, according to a company spokesperson.
“Hudbay is continuing a metallurgical testing program which is key to the viability of the tailing reprocessing project. Additionally, we are completing a winter drill program at the tailings facility. A successful outcome of these items would support the completion of a Preliminary Economic Assessment (PEA),” reads a statement from the spokesperson.
The company still plans to close down much of its Flin Flon area operations in the coming months, with 777 mine set to close in June and the mill and tailings facilities being put on care and maintenance.
Back in February during Hudbay’s 2021 fourth quarter report, Hudbay representatives said if a tailings reclamation project were to go forward and see a PEA completed, reprocessing the tailings could use the company’s existing concentrator after 777 mine is closed. Finding enough material worth processing in the tailings area could possibly change Hudbay’s closure plan, cutting costs relating to the shutdown and giving Flin Flon a slight reprieve post-closure, but the project is months away from any final result.
The recent resource update confirmed those plans - pending testing results - and that if the project moves ahead, it would offset expenses relating to the closure.
“This opportunity could utilise the Flin Flon concentrator, with modifications, after the closure of the 777 mine, creating operating and economic benefits in northern Manitoba and Saskatchewan,” reads the update.
“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.”
The company also conducted a scoping study on the site earlier this year.
Last year, Hudbay updated its environmental obligations for the Flin Flon mine site area, as well as the tailings compound. The company’s post-closure water management period has been extended until the year 2122 and the company will take on around $144 million in extra expenses for water management and monitoring, bringing the company’s total cost for environmental obligations up to over $300 million in total.
Meanwhile, a spokesperson for Hudbay also added that the company’s current exploration programs in Manitoba are centred around two main areas - around its existing Snow Lake sites and the Flin Flon tailings project.
“Hudbay’s exploration strategy is focused on expanding our Snow Lake operations and the Flin Flon tailings reprocessing. Hudbay considers there to be potential in the Flin Flon – Snow Lake greenstone belt and will continue to evaluate future exploration programs in the area,” said the spokesperson.