Highlights
- Lalor project proceeds to full construction, first production expected by second quarter 2012
- 777 North mine expansion begins development
- Semi-annual dividend of $0.10 per share declared
- Listing on New York Stock Exchange to be pursued
- Management further strengthened
- 2010 production objectives for all metals remain on track as steady quarter results in strong earnings and cash flows
TORONTO, ONTARIO, Aug 4, 2010 (Marketwire via COMTEX News
Network) -- HudBay Minerals Inc. ("HudBay", the "company") (TSX:HBM)
today released its second quarter and year-to-date 2010 financial
results. Operating cash flow(1) (before changes in working capital) in
the second quarter of 2010 was $41.0 million, versus $28.9 million in
the same period of last year.
Net earnings in the second quarter
of 2010 were $13.3 million, or $0.09 per share, compared to earnings of
$89.4 million or $0.58 per share during the second quarter of 2009.
Earnings were higher in 2009 due to an after-tax gain of $99.9 million
on the disposal of the company's interest in Lundin Mining Corporation.
Excluding that gain, earnings improved significantly due mainly to
stronger metals prices and a change from foreign exchange losses in 2009
to a foreign exchange gain in 2010. Cash costs per pound of zinc
sold(1), net of by-product credits, were negative US$0.49 per pound,
compared to negative US$0.05 per pound in the second quarter of 2009.
This decrease was primarily due to higher by-product copper, gold and
silver credits arising from higher metals prices, offset partially by
the stronger Canadian dollar.
"Our mines in northern Manitoba
continue to perform well and production of all metals remains on track
to meet our 2010 full-year guidance," said David Garofalo, HudBay's
president and chief executive officer. "The confidence in our operating
team and the significant progress we have made at our Lalor project has
enabled our board of directors to commit fully to its development on a
fast track basis."
HudBay's board of directors has declared a
semi-annual dividend in the amount of $0.10 per common share, payable on
September 30, 2010 to shareholders of record on September 15, 2010.
HudBay also announced its intention to seek a listing of
its common shares on the New York Stock Exchange ("NYSE"). The NYSE has
cleared HudBay to apply for a listing and HudBay expects to submit its
listing application in October, 2010, once the necessary documentation
is complete. The company intends to maintain its listing on the Toronto
Stock Exchange.
"The Board's decision to establish a dividend
policy is based on HudBay's strong business fundamentals and growth
potential," said Mr. Garofalo. "We believe that implementing a regular
dividend and listing on the New York Stock Exchange will enable us to
broaden our appeal to a larger group of investors and help increase our
overall trading liquidity."
(1) Operating cash flow and cash
costs per pound of zinc sold are considered non-GAAP measures. See
"Non-GAAP Performance Measures" in our Management's Discussion and
Analysis for the quarter ended June 30, 2010.
Steady
Production and Low Costs Result in Strong Financial Results
----------------------------------------------------------------------------
Three Months Ended Six Months Ended
($000s except per share amounts) June 30 June 30
----------------------------------------
2010 2009 2010 2009
----------------------------------------------------------------------------
Revenue 191,851 197,657 432,171 359,441
----------------------------------------------------------------------------
Earnings before tax 34,683 104,705 87,048 99,425
----------------------------------------------------------------------------
Net earnings 13,273 89,415 36,832 85,457
----------------------------------------------------------------------------
EBITDA(1),(2) 69,707 28,598 153,151 44,091
----------------------------------------------------------------------------
Operating cash flow(1),(3) 41,027 28,865 100,098 42,837
----------------------------------------------------------------------------
Basic EPS(4) 0.09 0.58 0.24 0.56
----------------------------------------------------------------------------
Operating cash flow per share(1),(3) 0.27 0.19 0.66 1.28
----------------------------------------------------------------------------
Cash and cash equivalents 911,778 845,956 911,778 845,956
----------------------------------------------------------------------------
Total assets 2,022,084 1,972,198 2,022,084 1,972,198
----------------------------------------------------------------------------
(1) EBITDA(3) operating cash flow before changes in non-cash working
capital, and operating cash flow per share are considered non-GAAP
measures. See "Non-GAAP Performance Measures" in our Management's
Discussion and Analysis for the quarter ending June 30, 2010.
(2)
EBITDA represents earnings before interest expense, taxes, depreciation
and amortization, gain/loss on derivative instruments, exploration and
interest and other income.
(3) Before changes in non-cash working capital.
(4) Earnings per share.
Lalor Mine Development Expected to Significantly Increase HudBay's Gold and Zinc Production
On
August 4, 2010, HudBay's board of directors made a full commitment to
the development of the company's 100% owned Lalor project by authorizing
the expenditures necessary to put the project into full production.
Initial production from the access ramp
is scheduled in the second quarter of 2012 and full production from the
985 meter production shaft is anticipated in late 2014. The project's
estimated capital cost of $560 million, which includes $21.5 million
spent as at June 30, 2010, is expected to fund full project development,
including access to the gold and copper-gold zones and a comprehensive
upgrade of the company's Snow Lake concentrator. HudBay intends to fully
fund the project from its current cash resources and future cash flows.
"The board's approval to proceed with full development of the
Lalor mine is a significant milestone for our company," said Mr.
Garofalo. "The excellent exploration results at Lalor combined with
HudBay's experience in the region over the past 80 years have given us
the confidence to develop Lalor on a fast track basis and establish it
as HudBay's next mine. When it reaches full production
we expect the Lalor mine will add significant value to our company by
nearly doubling gold production and increasing zinc production by 50%."
The company's current mine planning for Lalor contemplates the following:
-- Full production of 3,500 tonnes of ore per day.
-- The $560 million estimated capital cost, $21.5 million of which has been
spent as at June 30, 2010 on the ramp access, site preparation and
equipment purchases, includes an average 13% contingency. The approved
expenditure is intended to fully fund project development, including the
extension of power and water facilities to the site, a 300 person camp,
surface and underground construction at the mine site, including the
completion of the access ramp, a production shaft and a ventilation
shaft, an upgrade to the existing tailings facility and a comprehensive
upgrade of the company's Snow Lake concentrator.
-- Construction at the concentrator will include replacing copper and zinc
floatation cells and concentrate dewatering equipment, and construction
of a new gold leach plant which is intended to improve gold recovery.
Upon completion of the upgrades, the concentrator will be capable of
processing 3,500 tonnes of material per day and will principally produce
zinc and copper concentrates and gold dore bars.
Indicated Mineral Resource at Lalor Increases by 8.1%
The
company also announced today an updated National Instrument 43-101 ("NI
43-101") compliant mineral resource estimate for the base metal zone,
which increases the tonnage in the indicated resource category by 8.1%
from the resource announced in October 2009.
Base Metal Zone Mineral Resource- May 1, 2010(1),(2)
----------------------------------------------------------------------------
Category Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
(Million)
----------------------------------------------------------------------------
Indicated 13.3 1.6 24.9 0.66 8.87
Inferred 4.8 1.3 26.2 0.58 9.25
----------------------------------------------------------------------------
(1) For tables that show a zone by zone breakdown of the base metal
and gold resources and the potential mineral deposits in the gold and
copper-gold zones, please refer to http://media3.marketwire.com/docs/hbmsuppq210.pdf.
(2) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
In-fill
drilling completed between late 2009 and early 2010 has allowed gold
zone 21 and a portion of zone 25 to be classified as inferred mineral
resources in accordance with NI 43-101, as shown below:
Gold Zone Inferred Mineral Resource- May 1, 2010(1)
----------------------------------------------------------------------------
Category Tonnes Au1(g/t) Ag (g/t) Cu (%) Zn (%)
(Million)
----------------------------------------------------------------------------
Inferred 5.4 4.7 30.6 0.47 0.46
----------------------------------------------------------------------------
1) Mineral resources that are not mineral reserves do not have
demonstrated economic viability. Capping of the gold grades was employed
to avoid any disproportionate influence of random anomalously high gold
grades on the average grade determination as shown in the table
available at http://media3.marketwire.com/docs/hbmsuppq210.pdf.
A
revised conceptual estimate of the tonnes and grade of the remaining
portion of the gold zone was also completed. The Lalor gold zone
potential estimate is conceptual in nature and to date there has been
insufficient exploration to define a mineral resource compliant with NI
43-101 and it is uncertain if further exploration will result in the
target being delineated as a mineral resource.
Potential Gold Zone Conceptual Estimate - May 1, 2010
----------------------------------------------------------------------------
Tonnes (Million) Au(1)(g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
5.1 - 6.1 4.3 - 5.1 23 - 27 0.2 - 0.4 0.2 - 0.4
----------------------------------------------------------------------------
(1) Capping of the gold grades was employed to avoid any
disproportionate influence of random anomalously high gold grades on the
estimate of the range of average grade in accordance with the following
table available at http://media3.marketwire.com/docs/hbmsuppq210.pdf.
HudBay
also announced today a new conceptual estimate of the tonnes and grade
of the copper-gold zone. The Lalor copper-gold zone potential estimate
is conceptual in nature and to date there has been insufficient
exploration to define a mineral resource compliant with NI 43-101 and it
is uncertain if further exploration will result in the target being
delineated as a mineral resource.
Potential Copper-Gold Zone Conceptual Estimate - May 1, 2010
----------------------------------------------------------------------------
Tonnes (Million) Au(1)(g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
1.8 - 2.2 5.8 - 7.0 18 - 22 3.2 - 4.0 0.2 - 0.3
----------------------------------------------------------------------------
(1) Capping of the gold grades was employed to avoid any
disproportionate influence of random anomalously high gold grades on the
estimate of the range of average grade in accordance with the following
table available at http://media3.marketwire.com/docs/hbmsuppq210.pdf.
For
detail on the key assumptions, parameters and methods used to estimate
the mineral resources, and the basis on which the potential quantity and
grade of the gold zone and copper-gold zone was determined, see "Lalor
Project Supplementary Information."
"We are very pleased with our
assessment of the viability of developing the project, particularly
when the gold and copper-gold zones are included," said Mr. Garofalo.
"HudBay has a proven track record of significantly expanding the size of
its mines after production
has begun and given its substantial exploration potential, we expect
this will
continue with the Lalor project."
The copper-gold zone remains
open and HudBay is continuing to drill from surface at Lalor to explore
the periphery of the deposit for additional orebodies, including one
drill which is targeting the previously-announced copper-gold
intersection that was recently discovered down-plunge from base metal
zone 10. Drilling is also ongoing down-plunge of the copper-gold zone
identified in September 2009. HudBay also intends to conduct extensive
underground exploration at Lalor, including definition drilling on the
gold zone and copper-gold zone, starting in 2012 when ramp access to the
deposit has been completed. As of July 26, 2010, the company has driven
the ramp approximately 800 meters and upon reaching the deposit, the
ramp and ventilation infrastructure is expected to enable production of
up to 1,200 tonnes per day of ore from the base metal zone.
The company's production decision with respect to Lalor was not
based on the results of a pre-feasibility study or feasibility study of
mineral resources demonstrating economic or technical viability, because
significant portions of the deposit are not able to be classified as a
mineral reserve until they can be accessed from underground for
additional drilling. Because of this, the production decision was based
on mineral resources identified to date and estimates of potential
grades and quantities of the gold zone and copper-gold zone, along with
other available information, including cost estimates and portions of
the engineering design, which have been completed to a level suitable
for inclusion in a feasibility study. For further detail on assumptions
related to HudBay's mine planning please refer to "Lalor Project
Supplementary Information."
777 North Expansion
Approved
HudBay also announced plans to expand its 777 Mine. The
777 North expansion involves driving a ramp from surface to the 440
meter level to access mineral resources of 550,000 tonnes grading 1.5
g/t gold, 22.5 g/t silver, 1.0% copper and 3.6% zinc. These zones are
connected to the underground workings of the 777 Mine. Total capital
costs for the expansion are estimated at $20 million. Production is
expected to begin in 2012 at a rate of 330 tonnes per day, producing
approximately 5,500 tonnes of copper metal and 20,000 tonnes of zinc
metal over the six year life of the project.
The 777 North
expansion will provide an additional egress from the mine and supply
additional ore feed to the Flin Flon concentrator and zinc plant. It
will also help to sustain employment in Flin Flon as the Trout Lake mine
reaches the end of mine life and facilitate the development of an
underground exploration platform to evaluate additional exploration
opportunities near the 777 mine.
Management Further Strengthened
HudBay has taken measures to strengthen its management team with the
hiring of a corporate development executive and other key appointments.
The
company named Ken Gillis as its senior vice president, corporate
development. Mr. Gillis joins HudBay after 15 years as a leading mining
industry investment banker. Mr. Gillis will focus on the identification
and execution of acquisition opportunities, while Alan Hair, appointed
today as HudBay's senior vice president, business development and
technical services, will be responsible for performing technical
evaluations of these opportunities and then integrating acquisitions
into the organization with the goal of advancing them to development.
Tom
Goodman has been appointed senior vice
president and chief operating officer. Mr. Goodman has been with the
company for more than 30 years and will assume responsibility for
overseeing all of the company's operations. He will also ensure HudBay's
operating and human resource culture is properly implemented across new
development stage projects and mines.
Rounding out the senior
management team is Maura Lendon, appointed today as senior vice
president, corporate services and chief legal officer, and David Bryson,
the company's senior vice president and chief financial officer.
Production and Sales
Overall,
production remains on track to meet our 2010 guidance. Mine production
was 574,153 tonnes of ore, reflecting a slight decrease from 576,779
tonnes for the same quarter in 2009 as additional production from the
reopened Chisel North mine in 2010 was offset by lower production from
the 777 and Trout Lake
mines relative to the strong production levels achieved in 2009.
Our
cash cost per pound of zinc sold, net of by-product credits was minus
US$0.49/lb. compared to minus US$0.05/lb. in Q2 2009, excluding costs
and sales related to Balmat and HMI Nickel.
The decrease was
principally due to higher by-product copper, gold and silver by-product
credits arising from higher prices, offset in part by a stronger
Canadian dollar.
----------------------------------------------------------------------------
Three Months Ended Six Months Ended
Operating Highlights Jun 30 Jun 30 Jun 30 Jun 30
2010 2009 2010 2009
----------------------------------------------------------------------------
Production (HBMS contained metal in
concentrate)(1)
Zinc tonnes 24,961 16,867 40,103 36,757
Copper tonnes 12,123 11,036 23,840 23,895
Gold troy oz. 21,002 22,610 41,012 43,968
Silver troy oz. 235,106 210,236 428,091 457,652
Metal Sold
Zinc - refined(2) tonnes 22,277 24,473 52,043 51,422
Copper tonnes
Cathode & anodes 13,067 19,633 28,948 35,824
Payable metal in concentrate 543 - 543 -
Gold troy oz.
Contained in slimes & anode 20,117 24,397 47,624 53,021
Payable metal in concentrate 992 - 992 -
Silver troy oz.
Contained in slimes & anode 257,824 599,033 714,528 1,205,064
Payable metal in concentrate 11,220 - 11,220 -
----------------------------------------------------------------------------
(1) Metal reported in concentrate is prior to refining losses or deductions
associated with smelter terms.
(2) Zinc sales include sales to our Zochem facility of 4,930 tonnes in the
second quarter of 2010. In the second quarter, Zochem had sales of
10,242 tonnes of zinc oxide.
Revenues
Total revenue for the second quarter was $191.9
million, $5.8 million lower than the same quarter last year, due to the
following:
-------------------------------------------------------------------------
Three Months Ended Six Months Ended
(in $ millions) Jun 30, 2010 Jun 30,2010
-------------------------------------------------------------------------
Metal prices
Higher zinc prices 15.6 47.5
Higher copper prices 42.1 102.9
Higher gold prices 7.2 13.2
Sales volumes
Lower copper sales volumes (43.4) (46.8)
(Lower) higher zinc sales
volumes (4.9) 3.4
Lower gold sales volumes (4.1) (5.3)
Other
Unfavourable change in foreign
exchange (23.3) (49.3)
Other volume and pricing
differences 5.0 7.1
-------------------------------------------------------------------------
Change in net revenues (5.8) 72.7
-------------------------------------------------------------------------
Realized Metal Prices1 and Exchange Rate
----------------------------------------------------------------------------
HudBay HudBay
Realized Realized
Prices(1) Prices(1)
LME Q2 LME Q2 Three Months Six Months
2010 2009 Ended Ended
----------------------------
Average Average Jun 30 Jun 30 Jun 30 Jun 30
Prices(2) Prices(2) 2010 2009 2010 2009
----------------------------------------------------------------------------
Prices in US$
----------------------------------------------------------------------------
Zinc US$/lb. 0.92 0.67 0.99 0.70 1.04 0.63
----------------------------------------------------------------------------
Copper US$/lb. 3.19 2.12 3.18 2.22 3.24 1.98
----------------------------------------------------------------------------
Gold US$/troy oz. 1,196 922 1,199 919 1,149 901
----------------------------------------------------------------------------
Silver US$/troy oz. 18.32 13.73 17.71 13.55 17.16 12.97
----------------------------------------------------------------------------
Prices in C$
----------------------------------------------------------------------------
Zinc C$/lb. 0.94 0.78 1.01 0.82 1.08 0.76
----------------------------------------------------------------------------
Copper C$/lb. 3.28 2.47 3.27 2.60 3.36 2.38
----------------------------------------------------------------------------
Gold C$/troy oz. 1,229 1,076 1,239 1,077 1,190 1,099
----------------------------------------------------------------------------
Silver C$/troy oz. 18.83 16.03 18.34 15.85 17.84 15.75
----------------------------------------------------------------------------
Exchange rate US$1 to C$ 1.03 1.17 1.04 1.21
----------------------------------------------------------------------------
(1) Realized prices are before refining and treatment charges and only on
the sale of finished metal, excluding metal in concentrates.
(2) London Metals Exchange ("LME") average for zinc, copper and gold prices,
London Spot US equivalent for silver prices. HudBay's copper sales
contracts are primarily based on Comex copper prices.
Operating Expenses
For the second quarter of 2010, our
operating expenses were $118.2 million; $27.4 million lower than the
same quarter last year due to the following:
--------------------------------------------------------------------------
Three Months Six Months
Ended Jun Ended Jun
(in $ millions) 30,2010 30,2010
----------------------------------------------------------------------------
Decreased volumes of purchased zinc concentrate (7.1) (2.5)
Decreased volumes of purchased copper concentrate (23.4) (45.3)
Chisel North operating costs 7.0 7.0
Zochem zinc purchases 7.3 7.3
Adjustment of Balmat asset retirement obligation 3.1 3.1
Other provisions, primarily related to Smelter
closure (5.3) (3.2)
Smelter and refinery costs (3.2) (4.4)
Changes in domestic inventory (8.7) 16.1
Higher profit sharing 1.7 4.7
Other operating expenses 1.2 (0.4)
----------------------------------------------------------------------------
Decrease in operating expenses (27.4) (17.6)
----------------------------------------------------------------------------
Purchased copper concentrate volumes decreased due to the closure of
the smelter. Lower zinc concentrate purchases were offset by the Chisel
operating costs and production. During the first quarter, we sold excess
copper inventory that had accumulated in the fourth quarter of 2009,
resulting in copper sales that exceeded production and a higher
inventory charge in operating expenses compared to the first half first
quarter of 2009.
Please also see our consolidated financial
statements and related notes together with Management's Discussion and
Analysis of Operations and Financial Condition for the quarter ended
June 30, 2010, which are available under our profile on SEDAR at www.sedar.com and on our website at www.hudbayminerals.com. All amounts are in
Canadian dollars unless otherwise noted.
Lalor Project Supplementary Information
HudBay
has conducted a
preliminary assessment of the Lalor Deposit using all available
information concerning the project. This preliminary assessment is
preliminary in nature, it includes inferred mineral resources and
potential grades and quantities of minerals that are considered too
speculative geologically to have the economic considerations applied
that would enable them to be classified as mineral reserves and there is
no certainty that the preliminary assessment will be realized. Among
the risks associated with the decision to commence production at Lalor
is the possibility that the gold zone and copper-gold zone will not be
economically or technically viable and that construction timetables and
cost estimates may not be realized.
The total estimated project
cost for Lalor is $560 million. The capital spending is expected to
occur over the 2010-2014 period as follows:
2010 $133 million
2011 $128 million
2012 $116 million
2013 $94 million
2014 $89 million
Of the $133 million in spending planned for 2010, $21.5 million has
already been spent as at June 30, 2010. HudBay's initial 2010 guidance
for Lalor capital expenditures was $57 million, excluding capitalized
exploration expenditures.
Total sustaining capital, including
closure costs, is estimated at $180 million over the estimated mine life
of 15 years, based on mineralization identified to date.
HudBay's
mining assumptions include approximately seven million tonnes of
material currently classified as indicated mineral resource, six million
tonnes of inferred mineral resource and three million tonnes of ore
which is assumed to be mineable from the unclassified portion of the
gold zone and the copper-gold zone.
Operating costs for the mine
and concentrator are assumed to be approximately $80 per tonne once the
project reaches full production. This reflects
the use of a cyanide leaching circuit as well as the assumption that the
predominant mining method will be post pillar cut and fill, similar to
the Chisel North mine, which has comparable orebody geometry to Lalor.
Longhole stopes, the predominant (and generally lower cost) mining
method at the 777 mine, may be available in sections depending on the
thickness of the deposit.
While metallurgical characterization is
on-going, concentrator recoveries are currently expected to be 95%
zinc, 90% copper, 80% gold, and 75% silver. The gold recoveries reflect
the use of a gold cyanide leach plant to maximize gold recovery.
Production
from Lalor is expected to occur in two phases. The initial phase of
production will utilize the ramp from Chisel North to produce up to
1,200 tonnes per day of ore from the Base Metal zones only. This initial
production will replace production from the
Chisel North mine, which is expected to reach the end of its mine life
in 2012. Once the Lalor mine, production shaft and the Snow Lake
concentrator are fully commissioned and ramped up, production is
expected to increase to 3,500 tonnes per day, accessing all of the zones
at Lalor.
Approximate annual ore production at Lalor is expected as follows:
2012 100,000 tonnes
2013 310,000 tonnes
2014 525,000 tonnes
2015 1,000,000 tonnes
2016 and later years 1,240,000 tonnes
For more details on the Lalor project please refer to the NI 43-101
compliant technical report for Lalor entitled "Technical Report for
Lalor Deposit, Snow Lake, Manitoba, Canada" dated October 2009, and the
company's December 17, 2009, February 22, 2010 and June 23, 2010 news
releases, available at www.SEDAR.com
Mineral Resource Estimate and Conceptual Estimate Disclosure
The
mineral resource and conceptual estimates are effective as of a May 1,
2010 cut-off date for diamond drilling, which includes a total of 95
parent and 76 wedge offsets drilled from surface on the Lalor property.
Base
metal mineralized intersections from 64 parent and 48 wedge offset
holes were geologically interpreted into six stacked zones of zinc rich
polymetallic near solid to solid sulphide mineralization at
approximately 570 to
1,160 meters below surface. The base metal zones vary
in the east-west dimension from 180 to 450 meters and in the north-south
dimension from 400 to 900 meters. Average thickness of the base metal
zones varies from 2.6 to 11.8 meters. The deposit has been drilled at a
spacing of 25 to 50 meters in the middle of the base metal zones and 75
to 100 meters along the perimeter.
Five stacked gold zones of low
sulphide content either in contact with or entirely separate to the
base metal resources were interpreted from 49 parent and 38 wedge offset
holes at approximately 720 to 1,160 meters below surface. The gold
zones vary in the east-west dimension from 80 to 360 meters and in the
north-south dimension from 180 to 850 meters. Average thicknesses of the
gold zones varies from 4.6 to 12.5 meters. The gold zone resource has
been drilled at a spacing of 25 to 90 meters, while the gold potential
drilling is spaced at 50 to 160 meters.
One copper-gold zone was interpreted at approximately 1,100 to 1,390
meters below surface from seven wedge offset holes. The copper-gold zone
is situated down plunge and at depth to the gold zones. It has an
east-west dimension of 80 meters, a north-south dimension of 580 meters
and an average thickness of 16.4 meters. The copper-gold zone has been
drilled at a spacing of 90 to 160 meters.
Three dimensional
wireframes capturing the base metal, gold and copper-gold mineralization
were separately created using MineSight resource modeling software. The
base metal and gold zone 21 resource was based on an interpolation plan
using ordinary kriging methodology of the specific gravity weighted
composites and wireframes with MineSight software. Gold zone 25 and
potential, gold and copper-gold are based on inverse distance squared
methodology. Specific gravity measurements were taken on a
large portion of the samples, where actual measurements were not
available stoichiometric values were calculated.
The base metal
resources are estimated at a zinc equivalency (ZNEQ) cut-off of 4%
(ZNEQ% equals Zn% + Cu% x 2.352 + Au g/t x 0.867 + Ag g/t x 0.014) and a
minimum two meter true width. Long term $US metal prices of $700/oz
gold, $12.00/oz silver, $2.00/lb copper and $0.85/lb zinc were used for
the estimation of ZNEQ. Metal recovery assumptions of 65% gold, 60%
silver, 90% copper and 90% zinc were used for the estimation of ZNEQ.
The gold and copper-gold zones are estimated at a gold cut-off of 1.0
g/t over a minimum two meter true width.
Qualified Person
The
Lalor mineral resource and conceptual estimates were prepared by Brian
Hartman, M.Sc. P.Geo., HBMS geologist under the direct supervision of
Robert Carter, B.Sc. P. Eng., HBMS superintendent mines
technical services. Mr. Carter is a qualified person within the meaning
of NI 43-101,and has reviewed and approved the scientific and technical
information contained in this news release.
Website Links
HudBay Minerals Inc.:
www.hudbayminerals.com
Management's Discussion and Analysis:
http://media3.marketwire.com/docs/hbmmdaQ210.pdf
Financial Statements:
http://media3.marketwire.com/docs/hbmfsQ210.pdf
Conference Call and Webcast
Date: Thursday, August 5, 2010
Time: 10:00 a.m. (Eastern Time)
Webcast: www.hudbayminerals.com
Dial in: 416-644-3417 or 800-814-4861
Replay: 416-640-1917 or 877-289-8525
Replay Passcode: 4330313#
The conference call replay will be available until midnight (Eastern
Time) on August 19, 2010. An archived audio webcast of the call also
will be available on HudBay's website.
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.
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
its Lalor project and 777 North expansion, the ability to maintain a
regular dividend on its common shares and the ability to obtain a
listing on the New York Stock Exchange, the ability of management to
execute on key strategic and operational objectives, the ability to meet
production forecasts, the potential impact of changing economic
conditions on HudBay's financial results 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 Lalor project on an
economic basis, geological and technical conditions at Lalor differing
from areas successfully mined by Lalor in the past, the ability to meet
required solvency tests to support a dividend payment, and in accordance
with anticipated timelines, 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, including new and upgraded facilities at Lalor,
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, dilution 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 30, 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.
(F)
SOURCE: HudBay Minerals Inc.
HudBay Minerals Inc.
John Vincic, Vice President, Investor Relations
and Corporate Communications
(416) 362 0615
john.vincic@hudbayminerals.com
Copyright (C) 2010 Marketwire. All rights reserved.
News Provided by COMTEX