HudBay Minerals Inc. 2010 Annual Report

We set a clear strategy in 2010.
In 2011, it will be a matter of
continuing to execute against
that strategy.
David Garofalo, President and Chief Executive Officer
Q: Does the Board support the
new strategy?
Our Board of Directors is very supportive of our new strategy.
They agree that we need to take a patient approach to
building the business, and leveraging our core competencies of
exploration and mine construction. This requires patient capital
investment, consistent exploration budgets, stakes in a number
of junior companies to diversify our exploration focus outside of
our traditional areas of operation, and time – to establish a lot
of opportunities that will eventually fill the pipeline.
Q: What are your priorities
for 2011?
Our two most pressing items of business are at Constancia and
Lalor. With the Norsemont acquisition completed, we have
outlined a US$116 million program in 2011 at Constancia for
exploration, procurement, engineering and feasibility study
optimization. We intend to be in a position to make a formal
production decision in early 2012, which would be followed
shortly afterwards by the commencement of construction.
We will also complete a trade-off study on whether to refurbish
the Snow Lake concentrator, which is 15 kilometres away from
Lalor, or construct a new concentrator at the mine site. While
a new concentrator would require more capital, it would offer
many advantages – enabling us to expand the production rate,
bring more material into the mine plan, eliminate ore haulage
costs and provide a source of paste backfill for the underground
operations, which would help drive down operating costs.
Additionally, with paste backfill, 15 to 20% of our tailings could
go underground instead of going to an impoundment facility,
so there would be some environmental benefits as well. A new
concentrator would also enable us to build a gold plant and
increase gold recovery rates.
In summary, we set a clear strategy in 2010. In 2011, it will be a
matter of continuing to execute against that strategy.
David Garofalo
President and Chief Executive Officer
At Lalor, we intend to finalize an optimized feasibility study
by the third quarter of 2011, which incorporates more of the
deeper copper-gold ore into the mine plan and increases the
production rate accordingly. While the current plan contemplates
a 3,500 tonne-per-day operation, we have sized the production
shaft for 6,000 tonnes in anticipation of geologically-driven stage
expansions of production well into the future.
6 HudBay Minerals Inc. 2010 Annual Report