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Hudbay looks at refurbishing New Britannia

The hope of resurrecting the New Britannia gold property was discussed in Hudbay’s third quarter results on Oct. 31.
mining

The hope of resurrecting the New Britannia gold property was discussed in Hudbay’s third quarter results on Oct. 31.

Hudbay has focused on test mining gold zones at Lalor during 2018, along with infill drilling in gold and copper-gold zones in support of trade-off studies to assess mining and processing options for Lalor gold. Hudbay said it believes the optimal processing scenario is to refurbish the New Britannia gold mill.

Recent drilling in a gold-rich area has confirmed the existence of a continuous high grade core of mineralization within a wider, lower grade mineral resource.

“We are also very encouraged by the progress we have made at Lalor, where we believe we can enhance the long-term value of the Manitoba business by refurbishing the New Britannia gold mill,” said Alan Hair, president and CEO of Hudbay.

Meanwhile, lower grades at Lalor and 777 Mine mean zinc production was down in the last quarter over the same period in 2017.

In its Manitoba operations review, Hudbay showed that mines in Manitoba produced 26,228 tonnes of zinc, 7,506 tonnes of copper and 26,118 ounces of gold-equivalent precious metals over the last three months.

Ore mined in Manitoba during the third quarter is down 15 per cent compared to the same period in 2017. While production over the third quarter increased at 777 Mine, a decrease in production at Lalor and the now-closed Reed Mine brought the number down overall.

Gold grades were one per cent higher, while copper grades saw a decrease of 23 per cent, zinc grades saw a decrease of 17 per cent and silver grades saw a decrease of 7 per cent against the third quarter of 2017.

“Grade variances reflected anticipated declines in 777 and Lalor grades in accordance with their respective mine plans, together with reduced high-grade copper production due to its closure,” read a press release from Hudbay.

An exhaust fan failure in June that constrained ore production at Lalor until August contributed to a six percent increase in operating cost in the third quarter. Additionally, a ground fall in August delayed a production stope, and the mine faces a shortage of skilled workers.

Production volumes and grades at Reed Mine over the third quarter were higher than what Hudbay expected. Reed Mine produced its last ore in August, and processing of ore from Reed Mine was complete by early September.

Hudbay said the production of all metals is expected to be within full year guidance.

Hudbay entered into an agreement on Oct. 31 to acquire the remaining 86 per cent of the issued and outstanding common shares of Mason Resources that it does not already own. Mason’s Ann Mason project is a large greenfield copper deposit in the Yerington district of Nevada. Hudbay said it is one of the largest undeveloped copper porphyry deposits in North America. According to Hudbay, it is acquiring the asset for an enterprise value of approximately $15 million, which is approximately 30 per cent of its 2018 exploration budget.  

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