VANCOUVER (miningweekly.com) – Canadian base metals producer Hudbay Minerals has released a new technical report on its flagship Constancia mine, in Peru, which lifted the operation’s value, while also extending the mine life.

Toronto-headquartered Hudbay said a twin-hole drill programme during the fourth quarter of 2017 had successfully confirmed the extent of the positive grade bias that existed since the start of mining at the Constancia mine.

This reflected a yearly contained copper production profile of 105 000 t over the next five years from 2019 to 2023, at a cash cost of $1.09/lb and all-in sustaining capital of $1.38/lb of copper, net of by-product credits.

Relative to the prior technical report filed in 2016, Hudbay expects copper output to increase by 25% in years 2022 to 2025, and adding an additional year to the mine life, now stretching from 2018 into 2036.

Other key changes included higher copper life-of-mine recoveries of about 86%, up from 81% previously, and a new capital profile.

Hudbay noted that mining the satellite Pampacancha deposit has been delayed by one year, and should now start in 2019. The company advised that it is still negotiating to secure surface rights for the Pampacancha deposits, but was granted access to the land to carry out early works activities. In the interim, the company will mine the higher-grade copper ore from the main Constancia pit.

This will reduce Hudbay’s precious metals exposure for this year.

After accounting for 2017 depletion, Constancia and Pampacancha contained copper increased by 12% and 13%, respectively, mainly owing to higher-grade assumptions. The reason for the increase in contained metal is owing to improvements in the resource modelling process at both Constancia and Pampacancha and a correction of a sampling bias identified in the Supergene Domain at Constancia.

The 2018 mineral reserves were calculated using prices of $3/lb of copper, $11/lb molybdenum, $18/oz silver and $1 260/oz gold. Based on these assumptions, Constancia has 2018 mineral reserves of 528.7-million tonnes grading 0.29% copper, 93 g/t molybdenum, 3 g/t silver and 0.035 g/t gold for 1.56-million tonnes of copper.

At Pampacancha, Hudbay reported 2018 reserves comprising 39.9-million tonnes grading 0.6% copper, 177 g/t molybdenum, 4.7 g.t silver and 0.36 g/t gold for 238 000 t copper.

Hudbay advised that early-stage permitting and community relations work is ongoing at the newly acquired Caballito, Maria Reyna and Kusiorcco properties, which are all located within 10 km of Constancia. Their close proximity to the Constancia mill provides Hudbay with future optionality to leverage the existing infrastructure at Constancia and possibly further extend the mine life.

Meanwhile, Hudbay provided updated mineral reserves and resources for its Manitoba business unit that comprises the Lalor, 777 and Reed mines. Overall, the year-on-year reserve estimates decreased on the back of mining depletion. The Reed mine is expected to close during the third quarter and the focus now rests on the 777 mine to maximise value as it too nears the end of its economic life.

Hudbay’s TSX-listed equity closed 3.18% in the red on Monday at C$8.83 a share, following a trading day marked by trade jitters that sent most North American indexes into negative territory.