HudBay Minerals Inc. 2010 Annual Report
HudBay Minerals Inc. 2010 Annual Report
HudBay Minerals Inc. 2010 Annual Report
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Constancia<br />
In March 2011, we completed the acquisition of Norsemont<br />
Mining, owner of the Constancia advanced-stage copper<br />
development project, located in the Andes mountain range<br />
of southern Peru.<br />
Constancia is a perfect fit with our strategy in that it is a largescale<br />
porphyry deposit that offers significant exploration upside<br />
in an established mining-friendly jurisdiction with access to<br />
good infrastructure. We also have the financial capacity and<br />
mine development expertise to accelerate the development<br />
of Constancia.<br />
The plan is to mine the Constancia deposit as a low-cost open pit,<br />
using large-scale bulk mining techniques. With this new asset in<br />
our portfolio, our future combined copper production is expected<br />
to grow by approximately 155% between 2011 and 2016.<br />
Constancia will also contribute to our precious metals production,<br />
which is expected to increase by 130% during the same period.<br />
We have also announced a 2011 pre-construction program<br />
for the Constancia project of US$116 million. The program<br />
contemplates early equipment procurement for long lead<br />
items, a resource model update, a metallurgy review and pit<br />
optimization study, geotechnical and condemnation drilling and<br />
a US$9 million exploration program. The amounts budgeted for<br />
key items are as follows:<br />
Constancia 2011 Program Budget<br />
(US$ millions)<br />
Environmental, permitting, land 12<br />
General and administrative 12<br />
Engineering 10<br />
Preliminary construction estimate 27<br />
Preliminary procurement estimate 46<br />
Exploration 9<br />
Total 116<br />
Plans for Constancia 1<br />
Ownership 2 100%<br />
Projected life of mine<br />
Average annual copper production<br />
Concentrator capacity<br />
By-products<br />
Capital costs<br />
Cash costs 3<br />
15 years<br />
85,000 tonnes<br />
70,000 tonnes per day<br />
Molybdenum, gold, silver<br />
US$920 million<br />
US$0.93/lb copper<br />
Reserves Proven Probable<br />
Tonnes (millions) 195.00 177.00<br />
Cu (%) 0.42 0.37<br />
Mo (g/t) 117 92<br />
Ag (g/t) 3.49 3.66<br />
Au (g/t) 0.04 0.05<br />
1 Based on NI 43-101 technical report titled, “Constancia Project Technical <strong>Report</strong>”, dated February 21, 2011.<br />
2 Subject to <strong>HudBay</strong> completing compulsory acquisition of remaining ~2% of Norsemont shares it does not currently own.<br />
3 Excludes sustaining CAPEX, which equates to approximately $0.09/lb Cu.<br />
12 <strong>HudBay</strong> <strong>Minerals</strong> <strong>Inc</strong>. <strong>2010</strong> <strong>Annual</strong> <strong>Report</strong>
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