Hudbay starts plan to shift jobs to Snow Lake, announces updates for Snow Lake area

Company also reports new findings in Arizona

In a corporate update issued March 29, Hudbay confirmed that the company has officially begun its plans to transition workers from its Flin Flon operations to Snow Lake.

“Hudbay has begun its transition planning ahead of the 777 mine closure, including preparation for the training and transfer of personnel from Flin Flon to Snow Lake. The company plans to close and decommission the 777 mine and zinc plant upon the depletion of 777 reserves,” reads the update.

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The corporate update matches the company’s existing timeline for moving the brunt of its Manitoba operations from Flin Flon to the Snow Lake area. Workers are supposed to begin moving, on a permanent basis, from Flin Flon-based jobs to Snow Lake-based jobs next January, but training and selection was slated to take place this year.

The update does not show any change to the expected mine life of 777 mine in Flin Flon. The company still anticipates the mine will be depleted by next June and that it will produce about 2,800 tonnes per day until 777’s planned closure.

“Based on the most recent estimate of mineral reserves, there has been no change to the expected mine life for 777, which is expected to be depleted by the end of the second quarter of 2022,” reads the Hudbay update.

As 777 winds down, the company plans to wind up operations elsewhere to make up the difference - namely, growth projects in Snow Lake with New Britannia and with Hudbay’s Pampacancha project in Peru. Mining at Pampacancha, located not far from Hudbay’s existing Peruvian mine Constancia, is slated to begin later this year while renovations continue on the New Britannia mill in Snow Lake.

Hudbay had previously announced plans to shut down the 777 mine and the Flin Flon oxygen plant and zinc plant in 2022, with plans to keep the Flin Flon tailings pond facility and concentrator on “care and maintenance”, ready to go in case the company finds another deposit in or around Flin Flon.

Hudbay has announced that once the transition is complete, about 560 net positions in Manitoba will be shed from the company, including 50 administrative positions. Company plans released last fall show that Hudbay is planning on going from having around 785 workers in Flin Flon at present to around 50 in 2023, while increasing jobs in Snow Lake from 505 to 730 over the same time period.

Snow Lake

While news for the Flin Flon side of Hudbay is not looking positive, Snow Lake operations have been a bright spot. Along with the news of the worker shift and the New Britannia update, the company has announced an updated technical report and mineral reserves for Lalor mine and other operations in Snow Lake.

The new plan, announced by the company as the third phase of its gold strategy in Snow Lake, includes an increase in Snow Lake-area gold production to over 180,000 ounces in the first six years after the New Britannia mill becomes active.

“This updated mine plan contemplates an increase in annual gold production from Lalor and the Snow Lake operations to over 180,000 ounces during the first six years of New Britannia’s operation at industry-low cash cost and sustaining cash cost, net of by-product credits, of $412 and $788 per ounce of gold, respectively,” reads a Hudbay update.

Along with the increase comes plans to see production from the New Britannia mill as early as this fall, ahead of the company’s previous schedule, along with increasing mining rates at Lalor mine to 5,300 tonnes per day and adding the 1901 deposit, located near the former Chisel mine site, to the area’s mine plan. An updated resource for the 1901 deposit, released last August, has led Hudbay to add the project into its future plans to add to existing production from Lalor.

Higher throughput and higher copper and precious metal recovery rates at the Stall mill are also anticipated by the company. Hudbay currently is estimating the mines and facilities in Snow Lake will continue until 2037 - the same mine life as the company’s Constancia facility in Peru.

Hudbay also provided updates on three fully or partially owned deposits in the Snow Lake region - the Watts, Pen II and Talbot deposits, reporting what it called "upside opportunities" from the projects.

 

Arizona update

The company also announced March 29 that it had made what it calls a “significant new discovery” near its Rosemont project site in Arizona.

According to a separate Hudbay news release, the company has hit high-grade copper sulphide and oxide mineralization at shallow depth at a second site about seven kilometres away from Rosemont. The deposits, which Hudbay has called the Copper World deposits, were located near previous mine sites in the area, going back as far as the 1870s.

“Hudbay has recently received the assay results from the 2020 drill program and the results have exceeded Hudbay’s expectations. The program confirmed the discovery of four new deposits based on significant volumes of high-grade copper sulphide and oxide mineralization starting, in most cases, near surface or at shallow depth,” reads the Hudbay release.

Hudbay is currently working on an appeal of a 2019 decision in a U.S. court that revoked vital permissions to have the mine built. A final record of decision for the Rosemont project, which Hudbay values at around $1.9 billion, was revoked in July 2019, effectively suspending the project. The Rosemont project included, according to the company’s submitted mine plan, a proposal to dispose of mine waste on public lands.

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