HudBay Minerals expects lower copper output in 2012
HudBay Minerals (TSE:HBM)(NYSE:HBM) said Monday that it expects contained copper production in 2012 to be lower than this year due to the pending closures of the Trout Lake and Chisel North mines in Manitoba.
Precious metal and zinc production is anticipated to remain unchanged from 2011 levels, the company added.
For 2012, the company, with assets across North, Central and South America, expects between 35,000 to 40,000 tonnes of copper, 70,000 to 85,000 tonnes of zinc and 85,000 to 105,000 ounces of precious metals.
In addition, HudBay said it has agreed to capital investment budget of roughly $391 million in 2012, including $296 million of growth initiatives.
Exploration investment is to total $54 million, allowing over 130,000 metres of drilling across its portfolio.
"Throughout our operating history in the Flin Flon Greenstone Belt, we have seen a strong correlation between exploration dollars spent and mineral discoveries, which is why we have committed $54 million, in the belief that we can replicate this success across the Americas," said president and chief executive officer David Garofalo.
"We have also committed to $296 million in capital expenditures to grow our production profile, including the commencement of development of the Reed copper project, the ongoing construction at Lalor and continued procurement and engineering activities at Constancia, where we expect to make a full project decision in the first quarter of 2012."
Indeed, the company's board approved a capital investment of $71 million toward the construction of the 70 percent-owned Reed copper project. First production is expected by late 2013, with annual copper production in concentrate anticipated to average 17,000 tonnes over the five year mine life.
Total operating costs are estimated to average roughly $91 per tonne milled over the five year. Ore from the Reed project will be trucked to HudBay's Flin Flon concentrator in Manitoba.
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