Highlights
- Updated mineral resource, including approximately one million ounces of contained gold
-
Significant drill hole intersections down-plunge of the known resource,
including 6.02 meters of 8.14 g/t gold, 312.2 g/t silver and 7.99%
zinc, and 6.23 meters of 6.39 g/t gold, 94.17 g/t silver
- Formed exploration alliance with Aquila Resources to seek out new deposits in the region
TORONTO, ONTARIO, Oct 15, 2010 (Marketwire via COMTEX News
Network) -- HudBay Minerals Inc. ("HudBay", the "company") (TSX:HBM)
today announced an updated National Instrument 43-101 ("NI 43-101")
mineral resource estimate at the Back Forty Project. The updated
resource includes 18.1 million tonnes of measured and indicated mineral
resources with nearly one million ounces of contained gold and 3.2
million tonnes of inferred mineral resources.
The company also
announced two significant intersections in drill hole LK-479, which
includes 6.02 meters of 8.14 g/t gold, 312.2 g/t silver and 7.99% zinc,
and 69.67 meters of 1.11 g/t gold, 27.0 g/t silver and 1.30% zinc,
including 6.23 meters of 6.39 g/t gold, 94.17 g/t silver.
"The
increased mineral resource, which includes approximately one million
ounces of contained gold, should significantly improve the economics of
the Back
Forty Project as we commence work on a preliminary economic assessment
in
2011," said David Garofalo, HudBay's president and chief executive
officer. "In addition, the new intersections illustrate the tremendous
geological upside of the project and increase the potential to mine
areas outside of the current resource area."
In September 2010,
HudBay announced it had exercised its option from Aquila Resources Inc.
("Aquila") (TSX:AQA)(FRANKFURT:JM4A), to earn a 51% joint venture
interest in the Back Forty Project, an advanced stage exploration
project evaluating a zinc and gold-rich volcanogenic massive sulphide
deposit ("VMS") located in Michigan's Upper Peninsula. HudBay is the
operator of the Back Forty joint venture and can increase its ownership
interest in the project to 65% by completing a feasibility study and
submitting a mine permit application to the State of Michigan.
Resource Update
The
new resource, which is shown in the table
below, reflects updated metal prices, a reinterpretation of mineral
domains and additional diamond drilling conducted during work to earn
into the Back Forty Project.
October 15, 2010 Resource Table(i)
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Tonnes
Classification (millions) Au (g/t) Ag (g/t) Cu (%) Zn (%)
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Open Pit (ii)
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Measured 14.2 1.64 17.26 0.15 2.58
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Indicated 2.2 1.65 33.80 0.42 1.16
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Measured and Indicated 16.4 1.64 19.47 0.18 2.39
---------------------------------------------------------------------------
Inferred 1.5 1.53 34.18 0.68 0.94
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Underground (iii)
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Measured 0.8 1.69 25.93 0.23 3.57
---------------------------------------------------------------------------
Indicated 0.9 1.31 25.33 0.33 3.11
---------------------------------------------------------------------------
Measured and Indicated 1.7 1.49 25.61 0.28 3.33
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Inferred 1.7 1.23 18.75 0.32 2.92
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Combined Open Pit and Underground
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Measured and Indicated 18.1 1.63 20.04 0.19 2.48
---------------------------------------------------------------------------
Inferred 3.2 1.38 26.18 0.49 1.97
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(i) Mineral resources are not mineral reserves and do not have
demonstrated economic viability. All figures have been rounded to
reflect the relative accuracy of the estimates. The cut-off grades are
based on metal price assumptions of US$0.85 per pound zinc, US$2.05
per pound copper, US$0.59 per pound lead, US$866 per troy ounce gold
and US$13.95 per troy ounce silver. Metallurgical recoveries were
determined and used for each of the metallurgical domains determined
for the deposit.
(ii) Cut off grades were determined for each of the metallurgical domains
based on NSR values. Average cut-off grade for the open pit resource
contained within an optimized pit shell was US$20. See "Mineral
Resource Estimate Disclosure."
(iii) Cut off grades were determined for each of the metallurgical domains
based on NSR values. Average cut-off grade for the underground
resources outside of the optimized pit shell was US$62. See "Mineral
Resource Estimate Disclosure."
The tables below, which are included for comparative purposes,
show the new mineral resource that is contained within the boundaries of
the original basic pit shell described in Aquila's NI 43-101 technical
report entitled "Mineral Resource Evaluation Back Forty Polymetallic
Deposit, Michigan U.S.A." dated February 25, 2009 (the "Aquila Technical
Report"), available at www.sedar.com.
Contained gold ounces in the measured and indicated category in the
original basic pit shell have increased to over 750,000 ounces from the
470,000 ounces included in the January 15, 2009 mineral resource
estimate contained in the Aquila Technical Report. In addition, the
conceptual strip ratio of measured and indicated resource blocks
assigned through pit optimization to waste rock (less than US$20 NSR) is
now approximately 3:1 and represents a
marked improvement from the 8:1 strip ratio
contemplated in the Aquila Technical Report.
October 15, 2010 Mineral Resource Contained Within the Original Basic Open Pit Shell
---------------------------------------------------------------------------
Tonnes
(millions) Au (g/t) Ag (g/t) Cu (%) Zn (%)
---------------------------------------------------------------------------
Measured and Indicated 12.2 1.77 18.93 0.22 2.22
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Inferred 0.8 2.01 45.09 1.24 0.56
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January 15, 2009 Open Pit Mineral Resource(i)
---------------------------------------------------------------------------
Tonnes
(millions) Au (g/t) Ag (g/t) Cu (%) Zn (%)
---------------------------------------------------------------------------
Measured and Indicated 5.9 2.46 33.1 0.61 4.06
---------------------------------------------------------------------------
Inferred 0.6 3.68 46.5 0.15 2.46
---------------------------------------------------------------------------
(i) For details on the January 15, 2009 Mineral Resource, please refer to
the Aquila Technical Report.
Exploration and Next Steps
Drill hole LK-479 was the
first drill hole testing an off-hole borehole pulse electromagnetic
anomaly and yielded two intersections of massive sulphide. The first is
an upper zone, which extends from 408.5 meters to 414.5 meters. The
second is a lower zone, which extends from 747.40 meters to 817.07
meters.
The Upper Zone closely resembles the Tuff Zone massive
sulfide (as described in the Aquila Technical Report), and represents a
step out of 100 meters from the modeled edge of the resource to the
east. The Lower Zone is likely the equivalent of the Deep Zone massive
sulfide, and represents a step out of nearly 330 meters from modeled
mineralization to the east. Both horizons remain open in all directions
and future drilling will be directed at expanding these significant
intercepts. The location relative to the current resource can be
viewed at http://www.hudbayminerals.com/ourBusiness/exploration.php.
The
number of drills operating at the Back Forty Project will be increased
from one to three drills. The drills will focus on further diamond
drilling, underground resource extension and geophysical anomaly
testing. Along with this additional exploration, trade off studies are
required to determine the optimum mine plan before permitting
requirements can be finalized.
Drill Hole Assay Results Table
---------------------------------------------------------------------------
From To Length(i) Au Ag
LDK-479 (meters) (meters) (meters) (g/t) (g/t) Cu (%) Zn (%)
---------------------------------------------------------------------------
Upper Zone 408.48 414.5 6.02 8.14 312.2 0.09 7.99
---------------------------------------------------------------------------
Lower Zone 747.40 817.07 69.67 1.11 27.00 0.41 1.30
---------------------------------------------------------------------------
including 747.40 793.10 45.70 0.71 21.71 0.47 0.71
---------------------------------------------------------------------------
Including 799.33 817.07 17.74 0.29 17.03 0.38 3.27
---------------------------------------------------------------------------
Including 793.10 799.33 6.23 6.39 94.17 0.10 0.03
---------------------------------------------------------------------------
Including 802.34 814.27 11.93 0.31 16.13 0.34 3.85
---------------------------------------------------------------------------
(i) "Length" is measured core length, not enough information is available
to determine true width.
Drill Hole Intersection Location Table(1)
---------------------------------------------------------------------------
From To Easting Northing Depth
LDK-479 (meters) (meters) (meters) (meters) (meters)
---------------------------------------------------------------------------
Collar 0 0 434650.1 5032991.7 0
---------------------------------------------------------------------------
Upper Zone 408.48 414.5 434684.7 5033142.1 374
---------------------------------------------------------------------------
Lower Zone(2) 747.40 817.07 434758.5 5033303.4 687
---------------------------------------------------------------------------
(1) Coordinates are stated in UTM NAD83 Zone 10 and depth is vertical
distance from the collar of the hole to the center of the intersection.
(2) The Lower Zone intersection has yet to be surveyed for accurate down
hole location and the coordinates are an approximation.
Exploration Alliance
The company also announced that it
formed an exploration alliance with Aquila where HudBay will fund
exploration conducted by Aquila in Michigan and other areas to be
agreed. HudBay will make an initial payment to Aquila of US$250,000,
which Aquila will use to seek out exploration targets anticipated to
host VMS and other deposits. Aquila will present HudBay with a minimum
of five exploration targets, and if HudBay agrees to continue to fund
any such target it will fund exploration up to US$2 million dollars,
following which the parties would form a 50/50 joint venture with
respect to the project. HudBay would then be able to increase its
interest to 65% by funding and completing a feasibility study and
required mine permit applications.
"The recent exploration success at Back Forty demonstrates Aquila's exploration expertise and we look
forward to continuing to work with them to seek out new deposits in the region," said Mr. Garofalo.
HudBay
has also agreed to invest up to US$2 million in a private placement for
Aquila common shares. Completion of the private placement is subject to
customary closing conditions.
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 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.
Quality
Assurance and Quality Control
Exploration core drilling was NQ
size. The core was logged and mineralized intersections were marked for
sampling and assaying by geologists and geo-technicians employed by
Aquila Resources Inc. and the HudBay Aquila Joint Venture. The marked
intersections or intervals were sawn in half by a diamond saw and one
half of the core was placed in sample bags and tagged with unique sample
numbers, while the second half was returned to the core box and stored.
Each bagged core sample was transported to Minerals Processing
Corporation's sample prep lab in Carney Michigan where it was dried,
crushed and pulverized and a 250-gram sample was prepared for assaying
at Inspectorate Labs in Sparks Nevada. Strict sampling and QA/QC
protocol are followed, including the insertion of standards and blanks
in the sample stream on a regular basis. Sample intervals are
typically 1.5 meters. Analytical method for gold is fire assay with
atomic adsorption finish and gravimetric finish for samples greater than
3.0 g/t gold. All other elements are analyzed by ICP with silver over
limits (greater than 200 g/t) analyzed by fire assay/gravimetric finish
and base metal over limits analyzed by AAS.
Assaying integrity is
monitored internally with a quality control program, which includes the
use of assay sample standards, blanks, duplicates and repeats, and
externally through national and international programs. In addition,
within each group of 10 core samples, one core sample has a second 250
gram split collected that was check assayed at another independent
laboratory. This news release provides core lengths and estimates of
vertical thickness only. True widths are not provided. Where metal
assays are provided for intersections they are either a single
assay of a sample of the entire intersection length or a composite of
assays calculated from interval weighted assays over the intersection
length.
Mineral Resource Estimate Disclosure
The mineral
resource estimate is effective as of the cut-off date August 1, 2010 for
diamond drilling, and includes a total 435 drill holes.
Resource
estimation was carried out using geostatistical block modelling
techniques with Datamine software on seven discrete mineralized zones
having an overall strike length of 1100 metres and trending in a
northeast - southwest direction. The bulk of the resource mineralization
is within 200m of surface but extends as much as 500m below surface.
Domaining
of the mineralized envelopes took into consideration differing
characteristics of the polymetalic (Au, Ag, Cu, Pb, Zn) occurrence, as
well as cross-cutting dykes and the natural break in
concentrations of Au, Ag, Zn (and in some instances Cu). The seven zones
consist of a folded massive and semi-massive sulphide zone to the
north, two smaller gossan zones near surface, a south-westerly plunging
massive sulphide zone, a smaller more vertical massive sulphide zone,
and two semi-massive sulphide zones to the south, also folded but
dipping in a southerly direction.
Drill hole samples were
captured with the mineral domains and density-weighted composites of
1.6m were created. To address the folded and irregular features of four
of the mineral zones, variogram analysis and grade estimation utilized
an 'Unfold' feature available in Datamine. Statistical analysis,
confirmed by visual investigation, was used to apply grade capping 50
g/t Au, 500 g/t Ag, 7% Pb, and 30% Zn to the composites. Results of
variogram modelling were used to determine estimation parameters, 8m x
8m
x 6m blocks were generated from the mineral domains, and Ordinary Kriged
estimates were carried out on all five elements. Nearest Neighbour
estimates were also done to provide declustered drill hole values for
model validation and grade smoothing analysis. Where dictated by the
smoothing analysis, a lognormal smoothing correction was applied to the
final Kriged grades.
Metallurgical test results included in the
previous resource statement along with current HudBay long term metal
pricing were also applied to the block model and used to approximate a
Net Smelter Return (NSR) value from the Kriged Au, Ag, Cu, Pb and Zn.
Metal pricing used was: Au $866/oz., Ag $13.95/oz., Cu $2.05/lb., Pb
$0.59/lb, and Zn $0.85/lb (all $US). A cutoff of $20 NSR was then used
in a Whittle optimization exercise to determine a potentially economic
open pit shell with a generic pit slope considered.
Blocks above the $20 NSR cutoff within this pit shell were tabulated for
the reported resource, and a $62 NSR cutoff was used to report the
potentially economic blocks remaining outside the pit shell. A visual
inspection of the reported blocks indicated that most belonged to
contiguous zones, and any exercise to exclude these 'blocks above
cutoff' outliers would have little effect.
Greg Greenough,
P.Geo., a Senior Resource Geologist with Golder Associates carried out,
and is responsible for the resource estimate described in this press
release.
Cashel Meagher P.Geo, VP Exploration for HudBay Minerals
Inc. is the Qualified Person for HudBay as described in NI 43-101 and
is responsible for the contents of this release.
Forward-Looking Information
This
news release contains "forward-looking information" within the meaning
of applicable securities laws.
Forward-looking information includes but is not limited to information
concerning the company's ability to develop the Back Forty Project and
the company's strategies and future prospects. 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 the ability to develop and operate the Back Forty
Project on an economic basis, risks associated with the mining industry
such as economic factors (including costs of construction materials,
future commodity prices, currency fluctuations and energy prices),
failure of plant, equipment, processes and transportation
services to operate as anticipated, dependence on key personnel,
employee relations and availability of equipment and skilled personnel,
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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