Going back almost 100 years, Hudbay has built and maintained an outstanding record for finding – and extending the working life of – mines that are profitable throughout the commodity price cycle. The skills we have developed and our capacity to discover and understand high-potential mineral deposits help define our company, while creating attractive returns for our investors, jobs and investments for our communities, and sustainable business value that benefits all of our stakeholders.
In 2021, Hudbay’s Exploration and Geology team provided insights that will add to the mine life and profitability of our operations in Manitoba and Peru: they helped make a remarkable discovery, Copper World, on our wholly owned private land in Arizona, and they further confirmed the significant potential of our Mason project in Nevada. They also worked with our Technical Services team to assess the viability of a truly game-changing initiative: reprocessing close to a century’s worth of tailings at Flin Flon.
Hudbay’s corporate Exploration and Geology team works closely with corresponding in-house teams at our various operations. These teams also supplement our internal capabilities by engaging outside contractors who work according to our direction.
EXPANDING RESOURCES IN MANITOBA AND PERU
In Manitoba, mineral resources at Snow Lake, defined through test drilling and other methods, continued their record of year-over-year increases, and resource-to-reserve conversion offset mining depletion. Overall, the value of the mineral reserve estimates at Lalor and 1901 increased, resulting in the addition of approximately 220,000 ounces of gold and adding another year to the mine life after accounting for the 2021 mining depletion.
Exploration teams working at Constancia in Peru identified the potential for a satellite underground operation at the northern end of the mine, which we refer to as Constancia Norte. Although it was not included in the original mine plan, a preliminary economic assessment has confirmed the potential technical and economic viability of the satellite underground operation. Based on limited historical drilling done by Vale, geological mapping and geophysical surveys, we are also eager to explore Maria Reyna and Caballito, high-potential targets within trucking distance of Constancia’s existing processing infrastructure. Beyond Constancia, in 2021 we began a drilling program at our Llaguen property in northern Peru. Building on work done by Vale a decade ago, we anticipate publishing our results from recent drilling at Llaguen in 2022.
Demonstrating the economic potential of our large resource base in the United States, our most significant discovery of 2021 was Copper World in Arizona. A collaborative effort between our corporate and Arizona teams, Copper World was discovered adjacent to our Rosemont project, but from drilling activities on private land wholly owned by Hudbay. Historically, Copper World had been the site of past mining activities, and in late 2020 we decided to drill several exploratory holes. The results were encouraging. Consequently, we expanded our program in early 2021 to get a better understanding of the full area. Again, the results were very positive, as we kept intersecting high-grade mineralization close to the surface in an almost continuous fashion over a seven-kilometre strike extent. In December 2021, Hudbay announced an initial global resource estimate consisting of indicated mineral resources of 272 million tonnes at 0.36% copper and inferred mineral resources of 142 million tonnes at 0.36% copper. There is a significant high-grade portion of the resource that is located near-surface and is expected to be mined earlier in the mine life, including indicated mineral resources of 96 million tonnes at 0.57% copper and inferred mineral resources of 31 million tonnes at 0.71% copper. We look forward to publishing a preliminary economic assessment (PEA) in the first half of 2022, which will evaluate the potential for developing Copper World in conjunction with Rosemont.
At our Mason project in Nevada, we were similarly successful. As outlined in the PEA we released in April 2021, Mason, the third-largest undeveloped copper deposit in the United States, has a 2.2 billion tonne measured and indicated resource, and a predicted 27-year mine life. Guided by the Exploration and Geology team, Hudbay has been judiciously assembling and expanding its land package in Nevada. We know that in the 1930s and ’40s there had been small-scale mining in the area, extracting high-grade copper. As the grades declined, the mines were closed. However, by applying modern geophysical techniques, we have been able to expose the remarkable potential of this property, which provides further upside to the already robust PEA for Mason. We expect to begin drilling the expanded land package later in 2022.
OPPORTUNITY IN FLIN FLON
In addition to conducting and overseeing exploration and geological assessments of what could be described as conventional mineral resources, our team, as noted, is currently working with Technical Services to help them understand the scale, nature and potential of the resource represented by tailings in Flin Flon.