Canadian Mining Journal

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FUNDING: Hudbay bulks up for three growth projects

TORONTO – Hudbay Minerals is bulking up its treasury by issues US$100 million of its 9.5% senior unsecured notes due Oct. 1, 2020. These notes are in addition to the US$650 million raised by issuing similar unsecured notes in September...



TORONTO – Hudbay Minerals is bulking up its treasury by issues US$100 million of its 9.5% senior unsecured notes due Oct. 1, 2020. These notes are in addition to the US$650 million raised by issuing similar unsecured notes in September 2012 and June 2013.

The company is going to need the cash. It has three growth projects on the go – the Lalor gold-zinc and Reed copper mines in Manitoba, as well as the Constancia copper-molybdenum project in Peru.

At the 4,500-t/d underground Lalor mine 210 km east of Flin Flon, MB, commercial production has begun after Hudbay spent C$405 million on the project. Construction of the main ore and waste handling and the dewatering systems will be complete in mid-2014. The main intake fan will be commission in Q2 2014 after the production shaft is complete. There remain roughly C$40 million to be spent. The next phase of work at Lalor will be the building of a new concentrator.

The high grade Reed mine near the Lalor project is a 1,300 t/d underground mine with a C$72 million capital construction budget. Initial production has begun. The timeline is very short for a deposit discovered only in 2007. The discoverer, VMS Ventures, retains a 30% interest in the project.

When Hudbay acquired Norsemont Mining in 2011, it gained ownership of the Constancia open pit copper project in southern Peru. Total capital costs are pegged at US$1.708 billion with initial production to begin in late 2014. The company said the project was over 47% complete at the end of October 2013. Silver Wheaton has agreed to buy half the by-product gold output over the life of the project.

Time lapse videos of all three projects are posted at HudbayMinerals.com.