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Jonathon Naylor Editor Hudbay expects copper output to drop but zinc production to rise in 2013 as the company overcomes the loss of two mines with the start of another. The company announced Wednesday that copper production is forecast to fall four to 17 per cent this year, with zinc output to go up five to 24 per cent. The anticipated drop in copper is blamed on the loss of the Trout Lake mine near Flin Flon and the Chisel North mine near Snow Lake, both of which depleted and closed in 2012. The expected rise in zinc comes courtesy of the Lalor mine near Snow Lake, as 2013 will mark its first full year of preliminary production. Unchanged Precious metal production is projected to remain essentially unchanged from 2012 levels. In actual terms, Hudbay is projecting 33,000 to 38,000 tonnes of copper this year compared to the 39,587 tonnes in 2012. Zinc is anticipated to come in at 85,000 to 100,000 tonnes compared to 80,866 tonnes in 2012. Precious metal production in 2012 totalled 101,059 ounces. Hudbay said 2012 production of all metals met anticipated levels, the sixth straight year its yearly projections were realized. This year's production at Lalor will come through the mine's main ventilation shaft. As of Nov. 30, Hudbay had invested about $316.5 million of the $704 million capital construction budget for Lalor, and entered into an additional $89.7 million in commitments for the project. Capital expenditures at Lalor this year are expected to come in at about $163 million. During the third quarter of 2012, Hudbay commissioned the hoisting system in the main ventilation shaft, which is now capable of hoisting 1,400 tonnes of combined ore and waste per day. See 'Gearin...' on pg. 7 Continued from pg. 1 First ore production from the base metal lens #10 began last August, and some 72,000 tonnes of ore were hoisted from then until the end of 2012. The main production shaft is now sunk to roughly 434 metres and is 44 per cent complete. Shaft-sinking is expected to wrap up sometime between July 1 and Sept. 30 of this year. Lalor ore will be processed at the nearby Snow Lake concentrator until completion of the production shaft and new concentrator, expected in late 2014. Basic engineering for the new concentrator is ongoing with value engineering reviews and design optimization underway. Construction of the new concentrator is set to begin in the third quarter of 2013, subject to receipt of required permits. Lalor's main substation is expected to be completed in the final three months of the year. Hudbay has submitted an application for an Environmental Act licence for the Lalor mine, which would allow for production from the main production shaft. The first year of full production at the mine is anticipated in 2015. Reed production Meanwhile at the Reed mine outside Snow Lake, Hudbay is gearing up for initial production by the fourth quarter of 2013 and full production, of about 1,300 tonnes of ore a day, by the first quarter of 2014. As of Nov. 30, the company had invested about $19.7 million of its $72 million capital construction budget at Reed. It has entered into an additional $17.8 million in commitments for the project. Capital expenditures at Reed are expected to total some $44 million in 2013. After completion of the first portal development round in October, the underground ramp has advanced about 72 metres. Hudbay has submitted the Environmental Act licence application for Reed to the provincial government. Unlike its other mines, Hudbay owns 70 per cent of Reed, with the remainder owned by junior miner VMS Ventures. Hudbay said it is well positioned to fund its projects with cash and cash equivalents of $1.499 billion as of Sept. 30 together with some US$485 million in other committed funding sources. Overseas work Overseas, Hudbay is also making progress on its Constancia project in Peru. As of Nov. 30, the company had spent about US$257 million of its $1.5 billion capital construction budget for Constancia. And it has entered into another US$672 million in commitments for the project. Capital expenditures at Constancia are expected to total about $901 million in 2013. The Constancia development schedule contemplates nine quarters of construction, with initial production in late 2014 and full production commencing in the second quarter of 2015. Site activity to date includes substantial completion of 2,800 beds in the construction camp, which is scheduled to expand to 3,500 beds early this year to accommodate peak construction needs. Hudbay's major earthworks contractor has mobilized and is now constructing the tailings management facility, haul roads and water diversion infrastructure. Access roads for heavy haulage are expected to be completed by the end of June, with the tailings management and waste rock facilities completed by the end of September.
