Hudbay CEO Peter Kukielski
Precious metals will form an increasingly important part of copper miner Hudbay’s overall production and revenue profile, as the Toronto-based company advances plans to transform Lalor, in Manitoba, into a gold mine.
“We have a burgeoning precious metals production profile that is driven by our Snow Lake gold camp, which, in turn, is anchored by our Lalor mine,” CEO Peter Kukielski said on Tuesday.
The work under way at the New Britannia mill would have the effect of transforming Lalor into a gold mine by the end of next year, while at the same time increasing the contribution of precious metals to the company’s consolidated revenue to about 30%.
Kukielski said that while copper remained Hudbay’s primary metal, he was driven by cashflow and, therefore, jumped at an opportunity to add value.
“Given the many near term catalysts, people will continue to see the gold story in front of us. Several analysts have already started to apply a gold discount rate to our Manitoba assets."
He said at the Gold Forum Americas conference that Hudbay would only consider options to maximise the value of its gold assets once it had delivered the New Britannia mill refurbishment.
New Britannia is the processing plant for the Lalor mine, in the Snow Lake region. The refurbishment will more than double gold production from the Lalor mine to 150 000 oz/y by 2022. The project includes the refurbishment of the mill itself and a new-build copper flotation building.
Kukielski reported that overall project delivery was about 40% complete and that the construction of the project would be completed early in the second half of next year.
Hudbay has allowed for a six-month ramp-up period, which the company now expects to beat, allowing gold production to be brought forward by “several months”.