TORONTO (miningweekly.com) – Canada's HudBay Minerals has had some significant copper and gold drill hole intersections at its Lalor deposit, in Manitoba, and believes it has found a new copper/gold-rich zone of mineralisation, the firm announced on Tuesday.

The Lalor deposit is located near HudBay's Snow Lake concentrator, and CEO Peter Jones said he plans to move the asset to production “with the highest priority”.

Shares in the company surged 20,6% on Tuesday, to C$11,30 apiece by 16:10 in Toronto.

HudBay has already identified three other mineralised zones at Lalor – first the zinc-rich Base Metal zone and later two gold zones, dubbed the Separate and Contact zones.

The new copper/gold zone is lower in the stratigraphy than the others, the company said.

Most notably, one drill hole (DUB263W02) recently intersected the new copper/gold zone, and assayed 13,35 g/t gold, 27,98 g/t silver, 5,33% copper and 0,35% zinc over 34,54 m.

"The copper and gold intersection in hole DUB263W02 is among the best I have seen in nearly 40 years in the mining business and the new copper/gold zone may be very significant," Jones said on Tuesday.

Excluding the new copper/gold zone, HudBay's target is to reach three million contained ounces of gold.

“The Lalor project is our focus and we will continue to advance it to a production decision with the highest priority," he added.

Over the next few weeks, HudBay will publish an updated NI 43-101-compliant resource estimate for the Base Metal zone and a new conceptual estimate of potential tons and grade for the Seperate and Contact gold zones.

It will also decide on a way to access the Lalor deposit, either by dual shafts, or a single shaft and ramp from HudBay's Chisel North mine, which is three kilometers from the deposit.

Conceptual project design parameters, including construction and production timelines, and capital costs, will also be drawn up by early October.

"In addition, we expect to immediately commit to a prefeasibility study and consideration of an early access to the deposit," Jones said.

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