TSX- and NYSE-listed diversified miner Hudbay Minerals has posted record production from its Lalor mine, and record throughput at the Stall concentrator, in Manitoba, in the first quarter ended March 31.
The company reports that, on a quarter-on-quarter basis, Lalor increased its ore mined by 8%, while the Stall plant increased its throughput by 19%.
Hudbay owns, directly and through subsidiaries, three polymetallic mines, four ore concentrators and a zinc production facility across northern Manitoba and Saskatchewan (Canada), Cusco (Peru), and copper projects in Arizona and Nevada (US).
Despite solid metal productions, the company made a net loss of $76.1-million, or $0.29 apiece, in the quarter under review. This is owing to lower realised base metal prices, lower grades achieved at the Constancia mine and certain inventory valuation adjustments compared with the prior corresponding quarter.
The Constancia mine, in Peru, achieved its target mill throughput and operating costs during the quarter under review, but the company had to temporarily suspend mining near the end of March, owing to Covid-19 restrictions in the country.
The lower Constancia grades and lower realised base metal prices also impacted on the company’s cash generated from operating activities, which decreased to $9.1-million in the first quarter of the year, compared with almost $100-million cash generated in the fourth quarter of last year.
Hudbay confirms that its cash and cash equivalents of $306-million were enough to provide the company with financial flexibility during the temporary production disruption at Constancia and the current low base metal price environment.
The company states that Covid-19 has had a significant impact on Hudbay and the prices of the products it produces. It experienced operational and supply chain disruptions.
Hudbay, therefore, has suspended its Constancia mine production guidance and affirmed its Manitoba operations’ production guidance.
The company has been allowed to ramp up the Constancia operation from March 18.
Meanwhile, Hudbay’s New Britannia gold mill refurbishment is on track to be completed before the end of 2021, with orders already placed for long-lead items and with early construction works underway.
Once complete, the gold mill refurbishment will enable an increase in the Lalor mine’s production to more than 150 000 oz/y.
Hudbay produced 24 635 t of copper in the quarter under review, compared with 32 422 t produced in the fourth quarter of last year, while it produced 30 495 oz of gold in the first quarter of the year, compared with 32 712 oz produced in the fourth quarter of last year.
Silver production in the reporting quarter was 767 692 oz, compared with 930 137 oz in the preceding quarter, and zinc production was 30 355 t in the reporting quarter, which is similar to the zinc production of the preceding quarter.