HudBay finishes 2010 strong, has big 2011 agenda

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This article was published 11/03/2011 (5342 days ago), so information in it may no longer be current.

HudBay Minerals posted a strong finish to 2010 on Thursday, with a boost from rising metals prices, and it has a jam-packed development schedule for 2011.

The Toronto-based miner, whose main bases of operation have been in Flin Flon and Snow Lake for more than 80 years, posted strong profits of $24.5 million for the fourth quarter, up 240 per cent compared to last year.

Revenue for the quarter rose to $183.3 million from $166.7 million.

For the full year, the company recorded a profit of $73 million versus $112.4 million in 2009 on revenue of $778.8 million, compared with $720.7 million the year before.

The fourth-quarter results were a little under analysts’ expectations. They were affected by higher metals prices, which more than offset the effect of lower sales volumes and a stronger Canadian dollar, the company said Thursday.

But HudBay remains on track to start initial ore production at its Lalor mine near Snow Lake in the second quarter of 2012. The $560-million construction project is well underway and company officials are doing trade-off studies to determine the economics of a new concentrator at the site.

Officials would not say how much a new concentrator would cost, but HudBay CEO David Garofalo said the original plan called for $110 million to refurbish the company’s concentrator at its Chisel North mine in Snow Lake.

The studies indicate the Lalor ore body will support construction of a new concentrator adjacent to the production shaft.

Garofalo said the company expects to make a decision on whether to go ahead with a new concentrator early in the third quarter this year.

“We remain on track to meet our target of first ore production from Lalor in the second quarter of 2012,” he said. “The incremental investment associated with a new concentrator could lead to higher daily production levels along with other benefits, including reduced operating costs and higher gold recoveries in the plant.”

In addition to the development of Lalor, HudBay is completing its $520-million acquisition of Norsemont Mining Inc. The company is completing a feasibility optimization study on Noresmont’s $920-million Constancia copper/molybdenum/silver open pit mine in Peru for the end of March.

HudBay said Thursday it will start construction at Constancia in the first quarter of 2012.

“Lalor remains on track to be our next big mine in Manitoba and the Constancia copper project in Peru provides us with another significant leg of growth in one of the world’s best mining jurisdictions,” Garofalo said in a statement.

The company is also expected to make a production decision on its joint-venture project at Reed Lake south of Snow Lake by the fourth quarter this year.

Given that the copper deposit is so close to the surface, its proximity to a provincial highway and to the Flin Flon complex, it is expected to require minimal capital expense. Production could start by late 2012 or early 2013.

martin.cash@freepress.mb.ca