Base and precious metals miner Hudbay Minerals has outlined a new mine plan for the Lalor mine, in Manitoba, which extends the mine life beyond ten years and transitions the operation to a primary gold mine, which will be one of the lowest-cost in Canada.
The new mine plan includes the processing of gold and copper/gold ore at the New Britannia mill, which Hudbay will refurbish at a cost of C$124-million. This will increase production to about 140 000 oz/y during the first five years, at a sustaining cash cost, net of by-product credits, of $450/oz.
The New Britannia mill is expected to achieve gold recoveries of about 93% compared with current gold recoveries of about 53% at the Stall mill.
The revised mine plan uses the existing mining capacity of 4 500 t/d at Lalor for the first six years of the mine plan.
The production plan has the copper/gold-rich ore feeding a refurbished New Britannia mill starting in 2022 at an average feed rate of 1 100 t/d at 6.7 g/t gold and 1.2% copper for seven years based on the current reserve estimate.
Hudbay explained that it would invest C$124-million between 2019 and 2021 for the refurbishment of the New Britannia mill, including the addition of a copper flotation and dewatering circuit and a pipeline to direct the tailings to the existing Anderson facility.
Between 2019 and 2021, the Stall mill is expected to process about 3 500 t/d and about 1 000 t/d of Lalor base metal ore is expected to be transported to the Flin Flon mill for processing. Based on the current reserves, starting in 2022, Stall mill throughput will gradually decrease from about 3 200 t/d to about 1 800 t/d.
The company based its updated mine plan on a new mineral reserves estimate, which increased the contained gold by 65%, copper by 23%, zinc by 11% and silver by 15%, relative to the previous estimate of mineral reserves in 2018.
The mine has total proven and probable reserves of 13.68-million, grading 4.46% zinc, 3.78 g/t gold, 0.70% copper and 26.11 g/t silver.
The updated resource model at Lalor includes 5.9-million tonnes of inferred mineral resources, which has the potential to extend the mine life beyond ten years, while feeding both the Stall and New Britannia mills. In addition, the mineral resources at Hudbay’s satellite deposits in the Snow Lake region, including the copper/gold WIM deposit acquired last year for C$0.5-million from Alexandria Minerals Corporation, the former gold producing New Britannia mine and the zinc-rich Pen II deposit could provide feed for the Stall and New Britannia processing facilities and further extend the mine life.
“We are very pleased to release the next phase of our plan for the gold/zinc business at Lalor, which we believe will unlock value in the Snow Lake region through the refurbishment of the New Britannia gold mill and the potential for future resource conversion and further regional exploration success,” said Hudbay president and CEO Alan Hair.
Meanwhile, Hudbay reported that its Manitoba operations produced 27 408 t of zinc, 6 404 t of copper and 24 300 oz of gold-equivalent precious metals. Zinc production was 17% lower compared with the same period in 2017 as a result of lower grades at Lalor and 777, in line with their respective mine plans. The Reed mine closure in August 2018 affected contained copper production compared with the fourth quarter of 2017.
Production of copper and zinc metals met full-year 2018 guidance at 32 372 t and 115 588 t, respectively. Precious metals production of 24 189 oz of gold and 2.73-million ounces of silver reflected Hudbay’s updated strategy of mining the Lalor gold zones at a later date to achieve higher recoveries with the New Britannia gold mill.
During the fourth quarter of 2018, the Peru operations produced 30 834 t of copper and 18 247 oz of precious metals. The molybdenum plant continued to operate at substantially higher rates during the quarter, resulting in the production of 329 t and 904 t of molybdenum for the current quarter and full year, respectively.
Year-over-year copper production increased slightly to 122 178 t and exceeded the high end of the full-year guidance by 6%, owing to higher throughput and recoveries more than offsetting lower grade. Production of precious metals and molybdenum also increased year-over-year due to the same factors, and precious metals were within guidance expectations.