Hudbay releases Q4 reports, announces Snow Lake expansion, tailings upgrades in Flin Flon

Hudbay’s 2020 fourth quarter and annual reports show more production and plans for Snow Lake, but less production from the company in Flin Flon.

Showings from 777 and the Flin Flon zinc plant both showed year-over-year decreases according to the report, released by the company Feb. 18.

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Ore mined at 777 dipped under one million tonnes in 2020, sitting at 991,576 tonnes mined according to Hudbay’s supplied data. Much of the reduction was seen in the fourth quarter of 2020, when total ore mined at 777 shrunk from just over 269,000 tonnes in 2019 to about 165,000 tonnes in 2020. The change was attributed by Hudbay to the suspension of work at the mine in the fall following a skip cable incident, which greatly reduced production. After several weeks of altered schedules, the company announced in December that it was back to full strength. Grades of copper, zinc, gold and silver obtained from the 777 ore all rose from 2019 levels.

Year over year, the amount of ore milled at the Flin Flon dropped from about 1.36 million tonnes to just over 1.2 million tonnes, but higher grades of copper, zinc, gold and silver were reported by the company. Recovery percentages from Flin Flon mostly dropped, with one percentage, that of zinc recovery, staying flat at 85.5 per cent. Recoveries for copper, gold and silver all dropped from 2019 levels over the past year.

Meanwhile in Snow Lake, the amount of ore mined at Lalor rose by more than 100,000 tonnes, hitting over 1.65 million tonnes total by the end of the year. Production ramped up in the fourth quarter to offset the slowdown in Flin Flon, with Hudbay mining almost 500,000 tonnes of ore in the fourth quarter alone. Grades of copper, zinc and silver mined at Lalor went down, while gold grades saw a modest increase.

The Stall concentrator in Snow Lake milled more than 200,000 more tonnes of ore than its Flin Flon counterpart in 2020, a stark contrast from 2019 when the Flin Flon concentrator milled more than 70,000 more tonnes than Stall. Ore milled at the Stall concentrator also went up in the fourth quarter, reaching over 370,000 tonnes by New Year’s. Rates of copper, zinc and gold recovery also climbed at Stall, while silver recovery rates stayed ad about 60 per cent.

Guidances released for 2021 show Hudbay plans to produce less zinc metal at the Flin Flon zinc plant, predicting it will produce between 96,000 and 103,000 tonnes.

Throughout its Manitoba operations, Hudbay is forecasting higher operating costs this year, due in part to what the company calls “[a] reduction in capitalized underground development at both 777 and Lalor, which increases the portion of mining costs that are expensed and included in unit costs” in the fourth quarter report.

The company plans to continue updating its tailings facility in Flin Flon, planning to spend around $20 million a year over the next two years to fully fix up the facility.

“These expenditures will not impact sustaining capital expenditures since they are associated with the decommissioning and restoration liability and therefore, will be accounted for as a drawdown of the liability through operating cash flow,” reads the company’s report.

In Snow Lake, Hudbay announced its plans to refurbish New Britannia are moving ahead of schedule and are almost 75 per cent complete, but the project is expected to be at least $13 million over budget. The company announced the increase in costs would be due to COVID-19-related costs adn adding on to the project, including a redesign of the tailings pipeline between New Brit and the Stall concentrator. Hudbay plans to commission the gold plant by the middle of this year, with first production expected at some point this summer (early in the third quarter) and a ramp-up in the fourth quarter. After ramping up, Hudbay is anticipating gold production from its Snow Lake properties will go up to over 150,000 ounces, starting in 2022.

The company also provided some updates for Snow Lake-area projects, including plans to increase production at Lalor mine, a pre-feasibility study for the 1901 deposit and methods to increase recovery for the Stall concentrator.

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