Hudbay Minerals Inc. (“Hudbay” or the “company”)
(TSX, NYSE: HBM) today announced a
National Instrument 43-101 (“NI 43-101”) initial mineral resource
estimate for the recently discovered Copper World deposits located
near the company’s Rosemont copper project in Arizona. The 100%
owned Copper World project is located in close proximity to the
100% owned Rosemont deposit, with mineralization closer to surface
than Rosemont. The Copper World project consists of seven deposits
extending over seven kilometres, including Bolsa, Broad Top Butte,
Copper World, Peach, Elgin, South Limb and North Limb.
“The initial resource for our Copper World
project is larger and at a higher level of geological confidence
than we expected at this stage due to the exploration team’s
success in discovering several quality deposits through an
extensive drill program this year,” said Peter Kukielski, President
and Chief Executive Officer. “The indicated and inferred resources
at Copper World include a significant higher-grade component
located near surface, which has the potential to form part of an
attractive, low-cost copper operation located predominantly on
private land. The metallurgical testing and mineralogical studies
on Copper World are well-advanced and we look forward to releasing
a preliminary economic assessment in the first half of 2022.”
“We are very encouraged by the initial resource
estimate for Copper World, where we have seven meaningful deposits
with relatively low strip ratios, and the project has the potential
to be an exciting operation for our Arizona business,” said Andre
Lauzon, incoming Senior Vice President and Chief Operating
Officer. “If Copper World is developed, it will support America’s
efforts to reduce greenhouse gas emissions by producing the copper
needed for renewable energy and electric vehicles, in a sustainable
and socially responsible manner. In addition, it would generate
many direct and indirect jobs in the region. There remains the
potential for further copper discoveries in the area and we look
forward to continuing the exploration and permitting process in
2022.”
Extensive Drill Program Results in Large
Resource Estimate
In October 2020, Hudbay began condemnation and
exploration drilling over the company’s patented private land
claims at Copper World and, following encouraging early results,
Hudbay expanded the exploration drill program. The initial drill
results were announced in March 2021, including four deposits with
the potential to be a viable open pit operation. Since then,
Hudbay’s exploration program at Copper World has continued to
define and extend seven mineral deposits hosting both oxide and
sulphide copper mineralization at shallow depths over a
seven-kilometre strike area. The deposits are located northwest of
and in continuity with the Rosemont deposit and are predominantly
located on Hudbay’s wholly owned private land mining claims (please
refer to the plan view in Figure 1). The mineralization consists of
both skarn and porphyry copper sulphides with a significant
oxidized component along a regional fault along the west side of
the Rosemont, Bolsa and Broad Top Butte deposits known as the
Backbone Fault (please refer to Figure 2).
Based on the assay results compiled and
validated as of October 13, 2021, the initial mineral resource
estimate for the Copper World deposits is summarized in Table 1
below. The mineral resources are shown with reference to the
potential processing methodology for the sulphide and oxide
mineralogy present.
Table 1: Copper World Project Global Mineral Resource
Estimates as at December 1, 2021
PotentialProcessingMethod |
Category |
Metric Tonnes |
CuT (%) |
CuSS (%) |
Mo (g/t) |
Ag (g/t) |
Flotation |
Indicated |
180,000,000 |
0.37 |
0.07 |
136 |
2.7 |
Inferred |
91,000,000 |
0.36 |
0.05 |
129 |
3.8 |
Leach |
Indicated |
92,000,000 |
0.34 |
0.27 |
74 |
3.4 |
Inferred |
51,000,000 |
0.35 |
0.27 |
61 |
2.5 |
Total |
Indicated |
272,000,000 |
0.36 |
0.13 |
115 |
2.9 |
Inferred |
142,000,000 |
0.36 |
0.13 |
105 |
3.3 |
Notes:1 CIM definitions were followed for the
estimation of mineral resources. Mineral resources that are not
mineral reserves do not have demonstrated economic viability.2
Mineral resources are reported within an economic envelope defined
by a pit shell optimization algorithm and assuming a selective
mining unit of 50x50x50 feet. This pit shell is defined by a
revenue factor of 1.0 assuming operating costs adjusted and updated
from the 2017 Rosemont Feasibility Study.3 Long-term metal prices
of US$3.45 per pound copper, US$20.00 per ounce silver and US$11.00
per pound molybdenum were used for the estimation of the mineral
resources. 4 Metal recovery estimates assume that this
mineralization would be processed at a combination of facilities,
including copper and molybdenum flotation and heap and/or
run-of-mine leach pads followed by solvent extraction and
electrowinning. 5 CuT represents total copper grade.6 CuSS
represents the copper grade in oxides.7 Specific gravity
measurements were estimated from core box weights validated by
industry standard laboratory measurements.
High Grade and Located Close to
Surface
The Copper World deposits contain higher grade
mineralization that often starts at or very near surface. This is
specifically observed at the Peach-Elgin, Broad Top Butte and Bolsa
deposits where significant higher-grade tonnage has the potential
to be mined with minimum waste stripping during the initial years
of mining (please refer to Figure 3). This higher grade, near
surface portion of the Copper World global mineral resource
estimate is shown in Table 2 below.
Table 2: Copper World Project High Grade
Mineral Resource Estimates as at December 1, 2021
PotentialProcessingMethod |
Category |
Metric Tonnes |
CuT (%) |
CuSS (%) |
Mo (g/t) |
Ag (g/t) |
Flotation |
Indicated |
48,000,000 |
0.68 |
0.14 |
125 |
4.0 |
Inferred |
13,000,000 |
0.78 |
0.18 |
136 |
3.6 |
Leach |
Indicated |
48,000,000 |
0.46 |
0.37 |
68 |
4.2 |
Inferred |
18,000,000 |
0.66 |
0.49 |
50 |
3.7 |
Total |
Indicated |
96,000,000 |
0.57 |
0.26 |
97 |
4.1 |
Inferred |
31,000,000 |
0.71 |
0.36 |
86 |
3.7 |
Notes:1 Mineral resource estimates in this Table
2 are defined by a revenue factor of 0.36. A lower revenue factor
typically indicates the optimal mining sequence and highlights
mineralization that has the potential to be mined earlier in the
mine life in order to maximize the value of the operation.2 The
higher grade mineral resources shown in Table 2 above are included
in the global mineral resource estimate presented in Table 1.
Additional Successful Drilling
Results
The resource estimate for Copper World includes
drilling completed since the last exploration update on September
22, 2021. The recent drilling activities have focused on filling
the drilling gap between the Bolsa and Rosemont deposits and have
been successful in continuing to delineate higher grade
mineralization. The drilling gap has now been reduced to 300 feet
from 1,500 feet, and the drilling has extended the Bolsa deposit to
the south. Four drill rigs continue to turn at site to conduct
infill drilling and to support future economic studies, as
discussed below.
Synergies Between Copper World and
Rosemont
Approximately 33 million tonnes of inferred
mineral resources at the Bolsa deposit were considered to be waste
in the resource pit shell used for the NI 43-101 Technical Report
Feasibility Study for Rosemont dated March 30, 2017 (“2017
Feasibility Study”). For that study, these tonnes were accounted
for as pre-stripping since there were no mineralized intersections
available at the time (please refer to Figure 2 for a visual of the
proximity of the Bolsa deposit to the Rosemont deposit). Any
ability to convert Bolsa mineral resources to reserves would be
expected to result in less waste being mined at Rosemont, thereby
reducing costs and energy consumption per tonne of ore mined. It is
expected that additional synergies will be identified as Hudbay
continues to close the drilling gap between Bolsa and Rosemont.
The Rosemont deposit also contains oxide
mineralization that was previously classified as waste, which may
be able to be processed with the oxide mineralization at Copper
World, further reducing costs and energy consumption per tonne of
ore mined at Rosemont.
Next Steps
Preliminary Economic Assessment on Track for the
First Half of 2022
The technical studies for Copper World are
well-advanced and the results will be incorporated into a
Preliminary Economic Assessment (“PEA”) contemplating the
development of the Copper World deposits in conjunction with the
Rosemont deposit. The company expects to publish the PEA results in
a NI 43-101 Technical Report in the first half of 2022. The PEA is
also expected to reflect preliminary expectations of potential
synergies between Copper World and Rosemont.
The Rosemont deposit is one of the world’s best
undeveloped copper projects with proven and probable mineral
reserves of 537 million tonnes at 0.45% copper and additional
measured and indicated mineral resources, exclusive of reserves, of
536 million tonnes at 0.29% copper. Hudbay is also completing a
review of the Rosemont resource model in the 2017 Feasibility Study
based on the recent knowledge gained from the shallow drilling
conducted at Copper World and notably at Bolsa, as described above.
The objective is to investigate opportunities to reduce some of the
grade smoothing inherent in the resource modeling methodology used
in 2017 for Rosemont.
Private Land Operation Permitting Underway
Hudbay holds approximately 4,500 acres of
private land and patented mining claims to support an operation
entirely on private land. In October, Hudbay received approval from
the Arizona State Mine Inspector for its Mined Land Reclamation
Plan (“MLRP”) for Copper World after applying for the MLRP in June
2021. The MLRP approval includes the requirement for reclamation
cost bonding prior to initiating work on the company’s private
lands and represents the first step in the state-level permitting
process for a private land operation.
The aquifer protection permit and air quality
permit are the key state-level permits required for a private land
operation, which, along with other minor permits, are expected to
be advanced in 2022 pending positive economic studies for Copper
World. Hudbay has previously received the aquifer protection and
air quality permits for Rosemont and these permits have been
successfully upheld through litigation.
Continued Exploration Success and 2022 Plans for
Further Drilling and Economic Studies
There remain opportunities for extension of the
mineralization discovered at the Copper World and Bolsa deposits.
The objectives of the current drilling program, which will continue
in 2022, is to convert a large portion of the inferred mineral
resources to the indicated category, convert some of the indicated
mineral resources to the measured category, to test the potential
connections between Broad Top Butte and Bolsa and between Bolsa and
Rosemont, to test for extensions of the Copper World deposit, and
to test for other discrete mineralized bodies in between the known
deposits. Hudbay is also planning to advance a pre-feasibility
study in 2022 after the completion of the PEA. Activities to
support the PEA will include additional technical studies and
drilling at Copper World.
In 2021, geophysical surveys have also
identified several new targets north and south of Copper World, one
of which is highlighted in Figure 4. A large portion of Hudbay’s
property in this prolific region has yet to be explored and
provides the potential for further discoveries.
Resource Estimation
Methodology
A total of 310 holes drilled by Hudbay and
previous owners of the project area have intersected copper
mineralization and were used to define the Copper World deposits.
The methodology followed to estimate mineral resources at the
Copper World deposits is identical to the approach used for several
years at Hudbay’s Constancia and Pampacancha mines in Peru where
the mineral resource and reserve estimates have shown positive
reconciliation results with mill credited production (please refer
to the NI 43-101 Technical Report for Constancia dated March 29,
2021 for more details).
This methodology is slightly different from the
one used for the Rosemont deposit in the 2017 Feasibility Study and
has also been adapted to reflect the recent knowledge gained from
the shallow and closely-spaced drilling conducted by Hudbay in 2020
and 2021 at the Copper World deposits. The distribution of the
copper mineralization is not bounded by each stratigraphic unit
but, rather, delimited by four structural domains with the porphyry
intrusives and the regional backbone and low-angle faults being the
key controlling structural features.
Resource classification adopted at Copper World
follows the same classification criteria found to be a reliable
measure of quarterly and annual performance in tonnes and grade
prediction at Hudbay’s operating mines and compares well with the
classification used at Rosemont in the past. Blocks initially
classified as measured were downgraded to indicated in order to
account for the impact of historical drilling in the Peach-Elgin
and Broad Top Butte areas, for which no quality assurance / quality
control results and core are available for validation.
The Copper World mineral resource estimates were
estimated assuming a selective mining unit of 50 feet by 50 feet by
50 feet and within economic pit shells defined by a Lerch Grossman
algorithm. This mineral resource estimate does not account for
marginal amounts of historical small-scale operations in the area
that occurred between 1870 and 1970 and is estimated to have
extracted approximately 200,000 tonnes, which is within rounding
approximations of the current resource estimates.
Qualified Person and NI
43-101
Because of the early stage of their development,
Hudbay does not consider the Copper World deposits to be material
mineral properties for purposes of NI 43-101.
The scientific and technical information
contained in or incorporated by reference into this news release
has been prepared under the supervision of Olivier Tavchandjian, P.
Geo., Hudbay’s Vice President, Exploration and Geology. Mr.
Tavchandjian is a “Qualified Person” for purposes of NI 43-101.
Mr. Tavchandjian has verified the exploration
data disclosed in this news release, including sampling,
analytical, and test data underlying the information or opinions
expressed herein. The data verification and quality assurance /
quality control (“QA/QC”) measures that were used as part of the
Copper World drill program conducted by Hudbay since 2020 are
summarized below:
- Recent exploration core drilling
done by Hudbay at the Copper World deposits was a combination of NQ
and PQ size. Drill core was removed from the core tube by drilling
contractors and placed in labelled core boxes. Core was logged by
geologist, photographed, measured for conductivity, and tagged with
sample tags. Core was cut in half and placed in labeled sample bags
with the sample tags and transported via commercial currier for
preparation and analysis to the facilities of three selected
independent commercial analytical laboratories: Skyline Assayers
& Laboratories in Tucson (AZ), SGS Canada in Burnaby (BC) and
ALS USA Inc in Tucson (AZ). The remaining second half of the core
was securely stored as a secondary backup sample for eventual
verification purposes and further analysis if required.
- Samples were prepared and assayed
following industry standard analytical protocols at each
laboratory. To keep consistency among the different Laboratories,
the sample preparation and analytical protocols were equivalent to
those carried out by Bureau Veritas Mineral Laboratories in Reno
(NV) and Vancouver (BC) as part of previous Hudbay’s 2014 and 2020
drilling campaigns. Analyses were carried using a combination of
ICP-MS and ICP-ES, following multi acid digestion to achieve near
total dissolution (Methods TE-5, GE_ICM40Q12 and ME-MS61 at each
Lab respectively). Gold was analyzed by fire assay with AAS finish
(Methods FA-1, GE_FAA30V5 and Au-AA23 respectively). Samples with
concentration of Cu>8000 ppm and Mo>1000 ppm, were reanalyzed
multi acid (Methods CuT & SEA/Mo, GO_ICP42Q100 ICP-ES and
MW-OG62) for ore grade base-metal sulfide and precious-metal ores.
Cu Sequential Analysis (sulfuric acid leach followed by sodium
cyanide leach) were analyzed by methods Cu-SEQ,
GC_ASQ01D50/GC_ASQ02D100 and Cu-AA05/17h at Skyline, SGS and ALS
respectively. QA/QC included the insertion of 5% of samples as
blanks, 5% as standards (from 4 certified reference materials) and
5% as pulp duplicates. Failure rates were nominal in all cases and
no significant QA/QC issue was identified.
- The validity of using historical
drilling for which core and or QAQC results are not available
anymore was confirmed by conducting global comparison of grade
interpolation using this data versus the recent drilling done by
Hudbay.
Hudbay is not aware of any drilling, sampling,
recovery, or other factors that could materially affect the
accuracy or reliability of the mineral resource estimates disclosed
in this news release.
Forward-Looking Information
This news release contains forward-looking
information within the meaning of applicable Canadian and United
States securities legislation. Forward-looking information
includes, but is not limited to, Hudbay’s expectations regarding
the future potential of the Copper World deposits and the Rosemont
project, its plans for additional drilling and other exploration
work on the Copper World deposits, its expectations regarding the
PEA for Copper World and the potential to advance a pre-feasibility
study in 2022, the anticipated state-level permitting process for
Copper World and potential synergies between Copper World and
Rosemont. Forward-looking information is not, and cannot be, a
guarantee of future results or events. Forward-looking information
is based on, among other things, opinions, assumptions, estimates
and analyses that, while considered reasonable by the company at
the date the forward-looking information is provided, inherently
are subject to significant risks, uncertainties, contingencies and
other factors that may cause actual results and events to be
materially different from those expressed or implied by the
forward-looking information.
The material factors or assumptions that Hudbay
identified and were applied by the company in drawing conclusions
or making forecasts or projections set out in the forward-looking
information include, but are not limited to, the company’s ability
to continue to operate safely and at full capacity during the
COVID-19 pandemic; no disruptions to supply chains, contractor
availability or technical services due to COVID-19 related
challenges and no unanticipated litigation or legal challenges
related to Copper World or Rosemont.
The risks, uncertainties, contingencies and
other factors that may cause actual results to differ materially
from those expressed or implied by the forward-looking information
may include, but are not limited to, risks associated with the
COVID-19 pandemic and its effect on Hudbay’s operations, financial
condition, projects and prospects, the possibility of a global
recession arising from the COVID-19 pandemic and attempts to
control it, risks generally associated with the mining industry,
such as economic factors (including future commodity prices,
currency fluctuations, energy prices and general cost escalation),
risks associated with the Copper World permitting process, risks
associated with the ongoing Rosemont litigation and the potential
for new legal challenges or litigation to arise as well as the
risks discussed under the heading “Risk Factors” in Hudbay’s most
recent Annual Information Form.
Should one or more risk, uncertainty,
contingency or other factor materialize or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, you should not place undue reliance on forward-looking
information. Hudbay does not assume any obligation to update or
revise any forward-looking information after the date of this news
release or to explain any material difference between subsequent
actual events and any forward-looking information, except as
required by applicable law.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a diversified mining
company primarily producing copper concentrate (containing copper,
gold and silver), zinc metal and silver/gold doré. Directly and
through its subsidiaries, Hudbay owns three polymetallic mines,
four ore concentrators and a zinc production facility in northern
Manitoba and Saskatchewan (Canada) and Cusco (Peru), and copper
projects in Arizona and Nevada (United States). The company’s
growth strategy is focused on the exploration, development,
operation and optimization of properties it already controls, as
well as other mineral assets it may acquire that fit its strategic
criteria. Hudbay’s vision is to be a responsible, top-tier operator
of long-life, low-cost mines in the Americas. Hudbay’s mission is
to create sustainable value through the acquisition, development
and operation of high-quality, long-life deposits with exploration
potential in jurisdictions that support responsible mining, and to
see the regions and communities in which the company operates
benefit from its presence. The company is governed by the Canada
Business Corporations Act and its shares are listed under the
symbol "HBM" on the Toronto Stock Exchange, New York Stock Exchange
and Bolsa de Valores de Lima. Further information about Hudbay can
be found on www.hudbay.com.
For further information, please contact:
Candace BrûléVice President, Investor
Relations(416) 814-4387candace.brule@hudbay.com
Figure 1: Plan View of the Copper World
ProjectThe Copper World project consists of seven mineral
deposits hosting both oxides and sulphide copper mineralization at
shallow depths over a seven-kilometre strike area, with a majority
of the deposits located on private mining claims adjacent to
Rosemont.https://www.globenewswire.com/NewsRoom/AttachmentNg/71d5a548-48f3-429d-946b-2b03d63a3ffa
Figure 2: Location of Deposits in Proximity to the
Backbone FaultSignificant oxide mineralization located
along a regional fault that runs near the west side of the
Rosemont, Bolsa and Broad Top Butte deposits known as the Backbone
Fault.https://www.globenewswire.com/NewsRoom/AttachmentNg/82ca0c6d-764c-4a7b-8db9-41fb74b3e130
Figure 3: Higher Grade Portion Expected to be Mined
EarlierLongitudinal section showing Bolsa, Copper World,
Peach-Elgin and Broad Top Butte pit shells with higher grade
mineralization located closer to surface and expected to be mined
earlier in the mine
life.https://www.globenewswire.com/NewsRoom/AttachmentNg/e70cf5ec-db02-4f50-bb59-58590b1bded1
Figure 4: Several Geophysical Exploration Targets
Identified in the Region The region remains prospective
with several geophysical targets identified north and south of the
Copper World deposits, including an untested geophysical anomaly
located near Broad Top
Butte.https://www.globenewswire.com/NewsRoom/AttachmentNg/a6214b82-c9a5-4363-bde7-2ae9c00eed5e
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