TORONTO – HudBay Minerals has announced its intention to offer senior unsecured notes in the aggregate principal amount of US$400 million. They will be due in 2020. The company’s brief news release said it intends to use the “…net proceeds from the offering for general corporate purposes, development projects in Manitoba and, if HudBay’s board of directors approves the Constancia project, the development of the Constancia project.”
HudBay is advancing both the Lalor zinc-copper-gold and Reed copper-zinc-silver-gold projects in Manitoba.
The Lalor underground mine project is only 3 km from the working Chisel North mine, and the two are connected via drift until the Lalor shaft is completed later this year. The capital cost will be $704 million, including the mine, mill and backfill plant. Initial production is to begin later this year, and the commercial rate of 4,500 t/d will be reached in 2015.
HudBay has a 70% interest in the Reed high grade, underground copper deposit 120 km east of Flin Flon, MB. The remaining interest is held by VMS Ventures, the company that discovered the deposit in 2007. The HudBay board approved construction in December 2011, and initial production is scheduled for late 2013. Commercial production is to be 1,300 t/d for five years.
The Constancia copper porphyry project in southern Peru was added to the HudBay portfolio when that company acquired Norsemont Mining last year. An open pit mine and mill at Constancia would produce 85,000 tonnes of copper annually for more than 15 years, significantly boosting HudBay’s copper output as well as its output of precious metals. A 30,000-metre drilling program is planned for 2012.
Reserve and resource numbers for these and other HudBay projects are available at HudBayMinerals.com.