TORONTO, ONTARIO, Mar 31, 2010 (Marketwire via COMTEX News Network)
-- HudBay Minerals Inc. ("HudBay", the "company") (TSX:HBM) announced
today a new National Instrument 43-101 compliant mineral resource
estimate for the Fenix project in eastern Guatemala. Measured and
Indicated resources are 36.19 million tonnes of 1.92% nickel contained
in saprolite (Table 1).
This new resource estimate replaces the
previously reported 41.4 million tonnes at 1.63% nickel in the Proven
and Probable reserve category, as contained in the technical report on
Fenix filed by HudBay in November 2008. The previous reserve was
calculated from saprolite Measured and Indicated resources of 61.45
million tonnes at 1.49% nickel.
"This new resource estimate and
significant increase in the nickel grade enhances the overall economics
of the Fenix project," said W. Warren Holmes, executive vice
chairman and interim chief executive officer. "I expect the updated
feasibility
study will support our belief that Fenix is one of the world's best
undeveloped brownfield nickel laterite projects."
The principal
factors supporting the revised saprolite mineral resources amenable to
pyrometallurgical processing are largely related to:
- The use of a higher 1.6% nickel cut-off resulted in a reduction of total
resource. This increase in cut-off was deemed necessary in order to
support the potential for economic extraction. Previous mineral resource
estimates were based on low grade stockpiling assumptions, which are not
considered practical. When compared to the tonnage and grade reported
for a similar cut-off in the November 2008 technical report the revised
mineral resource estimates show more tonnage of higher grade
mineralization;
- A notable bias in results from auger drilling versus diamond drilling
was detected. The auger drilling presented problems with geologic
profile penetration, geochemical sampling and sample density
determination. In this resource update, in areas with less than 100
meters diamond drill spacing, auger drilling was excluded from the
calculation and these areas account for approximately 52% of the total
Measured and Indicated resource;
- A modification in the geological coding was employed to exclude the hard
saprolite typically containing low grade mineralization found at the
bedrock interface from the high grade nickel mineralization found in the
more altered softer saprolite layer; and
- A reconciliation of the previously mined resource of 0.9 million tonnes
of 2.14% nickel saprolite by Inco from 1977 to 1980 supports the current
resource estimation methodology.
The saprolite resource for the areas outside of the immediate
project area, which offer potential exploration upside and opportunity
for life of mine expansion, is 8.7 million tonnes at 1.79% nickel in the
Measured category; 26.1 million tonnes at 1.82% nickel in the Indicated
category and 26.1 million tonnes at 1.75% nickel in the Inferred
category. A revised resource estimate for these areas is currently
underway and is intended to be included with the updated feasibility
study for the Fenix project scheduled for completion later in 2010.
Further
details, including the methodology used in the resource estimate, are
contained in the NI 43-101 technical report which was prepared by Golder
Associates and filed today with securities regulators. The technical
report, entitled "Technical Report on an Update to the Mineral Resource
Estimates of the Fenix Project, Izabal,
Guatemala," dated March 31, 2010, is available at www.SEDAR.com.
Table 1: Mineral Resource Estimate for Fenix Project Area (March 31, 2010)
----------------------------------------------------------------------------
Classification Area %Ni cut-off 000' Dry Tonnes %Ni
----------------------------------------------------------------------------
Measured 212 1.6 4,793 2.09
------------------------------------------------------
213z1 1.6 724 2.19
------------------------------------------------------
217Z1 East 1.6 2,218 2.09
------------------------------------------------------
Total 7,735 2.09
----------------------------------------------------------------------------
Indicated 213z2 1.6 168 1.94
------------------------------------------------------
215 1.5 3,346 1.85
------------------------------------------------------
216 1.5 5,895 1.75
------------------------------------------------------
217z1 West 1.6 537 1.82
------------------------------------------------------
217z2 1.5 9,441 1.86
------------------------------------------------------
251 1.6 9,067 1.97
------------------------------------------------------
Total 28,454 1.87
----------------------------------------------------------------------------
Measured + Indicated Total 36,190 1.92
----------------------------------------------------------------------------
Inferred 215inf 1.5 5,800 1.8
------------------------------------------------------
217z3 1.5 3,900 1.8
------------------------------------------------------
Total 9,700 1.8
----------------------------------------------------------------------------
In parallel with the work that has been ongoing to update the resource estimates:
- HudBay is in the midst of a 7,000 meter diamond drill program at the
Fenix project which it expects to complete in the second half of 2010.
With four drills operating, the program is concentrated on proposed
mining areas 212 and 213, which are located closest to the plant where
previous mining by Inco had occurred and where little to no diamond
drilling was previously conducted.
- HudBay has been advancing a revised power strategy for Fenix.
- HudBay has engaged Hatch Engineering to update the prior feasibility
study incorporating the new resource estimate and results are expected
in the third quarter of 2010.
- HudBay is continuing to evaluate financing alternatives for Fenix.
HudBay expects that the various initiatives underway will help
the company reach a decision on restarting construction on the Fenix
project later in 2010.
Quality Assurance/Quality Control
The
diamond drill core was logged, photographed and marked for sampling by
company geologists. Sample lengths range from 0.3 to 1.3 meters. All
boreholes in the twin hole program (HQ size) were cut in half either by
knife or diamond saw depending on sample hardness, with one half bagged
and tagged for shipment to the sample preparation laboratory. The
remaining half of the split core was returned to the core box for
storage. Sample rejects were returned to the project after 15 days for
long term storage; sample pulps are returned from the sample preparation
lab for permanent storage at the project site.
In the in-fill drilling program one in 10 holes was split and one half
core saved. The other holes were sampled in their entirety and sent to the sample preparation lab.
Samples
were trucked from the Fenix Project site to BSI Inspectorate in
Guatemala City for sample preparation. Samples were dried at 105 degrees
C for 12 hours, crushed to 90% less than 10 mesh, riffle split and
pulverized to 95% less than 150 mesh. The prepared samples (150 grams to
200 grams of pulverized laterite) were air freighted to SGS Lakefield
in Canada for assay by lithium borate fusion, XRF. SGS Lakefield has
ISO/IEC 17025 accreditation for its mineral analytical services.
Twelve
major element oxides, Loss on Ignition plus nickel and cobalt were
analyzed. Detection limits are 0.05% for nickel and 0.01% for cobalt.
Field duplicates (1:20) and standards or blanks (1:20) were inserted at
the project site to monitor lab procedures and assay quality. All
batches of
analysis were subjected to statistical tests to ensure they meet
established quality control criteria. SGS Lakefield also did its own
quality control procedures which includes insertion of standards and
duplicates.
ALS-Chemex in Brisbane Australia was been selected
following a round robin assaying procedure to provide additional
analytical checks on the SGS Lakefield analyses. ALS-Chemex uses an
AES-ICP method for the same suite of elements measured at SGS Lakefield.
Analyzed pulps are selected for re-assay at a frequency of 1:50.
The
sample information was merged with the geological drill logs in the
drilhole database at the project site. Once results were received they
were reviewed and subjected to statistical tests to ensure quality
control criteria are met for each batch. Following verification the
results are entered in the drillhole database. The intercepts are
classified by sample chemistry and composites are weighted by sample
length and a calculated density. A detailed description of the QA/QC
methodology is available in the NI 43-101 technical report filed March
31 2010 on www.sedar.com.
Qualified Persons
Cashel
Meagher, P.Geo., Vice President, Exploration, of HudBay Minerals Inc.
is the Qualified Person accountable for the supervision of the technical
information contained within this document as defined by NI 43-101.
HudBay Minerals Inc.: Strength to Build the Future
HudBay
Minerals Inc. (TSX:HBM) is a Canadian integrated mining company with
assets in North and Central America principally focused on the
discovery, production and marketing of base metals. The company's
objective is to maximize shareholder value through efficient operations,
organic growth and
accretive acquisitions, while maintaining its
financial strength. A member of the S&P/TSX Composite Index and the
S&P/TSX Global Mining Index, HudBay is committed to high standards
of corporate governance and sustainability.
Forward Looking Information
This
news release and its attachments contain "forward-looking information"
within the meaning of applicable securities laws. Forward looking
information includes but is not limited to mineral resource estimates
and potential plans for the Fenix project. Generally, forward-looking
information can be identified by the use of forward-looking terminology
such as "plans", "expects", or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "understands" or "does not anticipate", or "believes" or
variations of such words and phrases or statements that certain actions,
events or results "will", "may", "could",
"would", "might", or "will be taken", "occur", or "be achieved".
Forward-looking information is based on the views, opinions, intentions
and estimates of management at the date the information is made, and is
based on a number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those anticipated or projected in the
forward-looking information (including the actions of other parties who
have agreed to do certain things and the approval of certain regulatory
bodies).
Many of these assumptions are based on factors and
events that are not within the control of HudBay and there is no
assurance they will prove to be correct. Factors that could cause actual
results or events to vary materially from results or events anticipated
by such forward-looking information include risks associated
with the mining industry such as economic factors (including future
commodity prices, currency fluctuations and energy prices), failure of
plant, equipment, processes and transportation services to operate as
anticipated, dependence on key personnel and employee relations,
environmental risks, government regulation, actual results of current
exploration activities, possible variations in ore grade or recovery
rates, permitting timelines, capital expenditures, reclamation
activities, land titles, and social and political developments and other
risks of the mining industry, as well as those risk factors discussed
in the company's Annual Information Form dated March 31, 2010, which
risks may cause actual results to differ materially from any
forward-looking statement.
Although HudBay has attempted to
identify important factors that could cause actual actions, events or
results to
differ materially from those described in forward-looking information,
there may be other factors that cause actions, events or results not to
be anticipated, estimated or intended. There can be no assurance that
forward-looking information will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such information. HudBay undertakes no obligation to update
forward-looking information if circumstances or management's estimates
or opinions should change except as required by applicable securities
laws, or to comment on analyses, expectations or statements made by
third parties in respect of HudBay, its financial or operating results
or its securities. The reader is cautioned not to place undue reliance
on forward-looking information.
(HBM-G)
SOURCE: HudBay Minerals Inc.
HudBay Minerals Inc.
John Vincic, Vice President,
Investor Relations and Corporate Communications
(416) 362 0615
john.vincic@hudbayminerals.com
www.hudbayminerals.com
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