Efforts to extend the life of 777 Mine have failed so far, but there could always be next year.
Hudbay is currently reviewing its overall plans for mineral exploration in 2016.
“We are finalizing the results of the 2015 work and building the 2016 exploration plans for approval by our board in early December,” said Rob Winton, head of Hudbay’s Manitoba operations.
“Once our budget process is complete in early December, we will have more clarity regarding our exploration expenditures in and around 777.”
Based on current estimates, 777 will be depleted of ore in 2020. Winton said Hudbay has been focused on extending that time frame and last year gained access to the War Baby deposit to further that goal.
“The results of this exploration work, while not finalized, has not proven successful,” he said.
Hudbay has since 2010 spent more than $75 million on exploration in the Flin Flon region, excluding Snow Lake and other “further afield” sites, Winton said.
Most of that money was spent “in the shadow of 777,” he said.
The disappointing results out of 777 were reiterated in a recent news release from Silver Wheaton, a precious metals streaming company that has an agreement with Hudbay.
In 2012, Silver Wheaton entered into a deal with Hudbay to acquire an amount equal to 100 per cent of the silver and gold production from 777 until the end of 2016, and 100 per cent of the silver and 50 per cent of the gold for the rest of the mine life.
During the third quarter of 2015, Silver Wheaton was told that due to unsuccessful drilling at 777, “Hudbay’s management believes that the mine life for 777 is unlikely to be extended beyond 2020,” read the release.
As a result, an estimate of future production from 777 was lowered, with this reduction representing an indicator of impairment related to the 777 silver and gold interest, Silver Wheaton said.
A key question relating to 777 has been the impact a potential closure would have on Hudbay’s Flin Flon metallurgical complex if there is no other Flin Flon area mine in operation.
“The fate of the metallurgical facility is dependent on many factors, 777 being one,” Winton said, “however, more important to its future long-term success is sustainable cost control.”
On the plus side, Hudbay reported this summer that exploration results at Lalor Mine were highly encouraging.
