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HudBay Minerals pitches Sudbury area suppliers

December 1, 2009
by Adelle Larmour
In: News with 0 Comments

Manitoba-based HudBay Minerals Inc. is spending money and wants Sudbury mining suppliers to know it.

It must have seemed like Christmas arrived early when HudBay Minerals’ president and COO Michael Winship presented his company’s growth plan and investment portfolio of $1.5 billion to 94 Sudbury-area mining suppliers at a SAMSSA breakfast in October.”We’ve got quite a bit of capital at our disposal and we’re trying to find a place to spend it,” Winship announced at the onset of his presentation, capturing the interest of all those in attendance.Winship, former COO of PT Inco in Indonesia and past winner of the CIM Metal Mining Award, has 30 years of experience in the metal mining industry, including a stint at Inco’s Sudbury operations. His familiarity with the area persuaded him to return to the city in search of supplier expertise. He also acknowledged SAMSSA members for having the foresight to band together and realize opportunities in other locations that may not offer the types of services and products for which Sudbury is known.

HudBay Minerals is a mid-sized company primarily focused on copper, zinc and nickel, but it has been reaping the benefits of gold and silver deposits that accompany those base metals. Formerly known as Hudson Bay Mining and Smelting, the company has an 80-year history in the mining industry. It has a number of operations in northern Manitoba, including the copper/zinc 777 Mine, its flagship operation in Flin Flon.

Lalor deposit

The company’s newest discovery is the Lalor deposit, where six drills are busy “chasing gold zones.” Winship described the deep deposit as a zinc mine paradigm. They have been proving up high-grade zinc in the eight to nine per cent range, but have located some “nice gold intersections” and, more recently, a high-grade copper zone.

“We’ve been drilling and trying to engineer the development of the mine, trying to get our arms around how big this deposit is,” he said.

The deposit is close to its Chisel North Mine and the town of Snow Lake. The company recently announced the restart of the mine along with the Snow Lake concentrator, both of which were put on hold in early 2009. The restart will coincide with work on the company’s $85 million production ramp from the Chisel North Mine to the Lalor deposit, phase one of the three-phase project. Construction on the ramp is expected to begin immediately in order to provide early production of zinc ore and access to the gold zones for additional underground exploration.

“Moving forward with Lalor is a key strategic milestone for HudBay,” said CEO Peter Jones in an October 2009 press release.

Lalor’s proximity to the company’s other mining operations and processing facilities makes it a very attractive deposit and one which is being pursued aggressively. Phase two will involve the production of ore and sinking the shaft, followed by phase three, which will involve shaft construction underground and increasing Snow Lake’s concentrator capacity from 1,000 tonnes per day to 3,500 tonnes per day.

Winship was not shy about showing the company’s current fleet of equipment and what may be required in the future as the Lalor project comes on line.

Michigan

HudBay Minerals is also exploring its Back Forty property located in the Upper Peninsula of Michigan. A scoping study is underway.

Winship described the VMS zinc/gold project as a rare discovery because it was found in a farmer’s field while drilling for water. The property has access to power, roads and a nearby railroad in a mining-friendly state.

He anticipates strong support and a prospective labour pool due to the region’s ailing automotive industry.

Globally, HudBay has its Fenix Nickel operation in Guatemala, a brownfield nickel laterite project purchased from Sky Resources. It has 41.4 million tonnes of mineral reserves with a potential capacity to put through 50 million pounds of nickel per year.

Winship calls it a sister project to PT Inco in Indonesia, both of which were built in the ’70s with similar technology.

Although the project was suspended because of the global recession, Winship said it is working behind the scenes, constructing roads and performing energy studies to come up with a reliable energy source.

He pointed out the opportunities for suppliers on this project because Guatemala has few mining suppliers and services.

Winship’s presentation was a breath of fresh air for SAMSSA members and an indication that HudBay Minerals anticipates a strong future.

“Our company knows of the talent that exists in Sudbury. There are a lot of great suppliers we’ve worked with in the past and we’ll work with in the future.”

www.samssa.ca
www.hudbayminerals.com

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