Highlights:
- 288% increase in overall copper equivalent
reserves(1) to 3.1 million tonnes, including gold equivalent reserves(2)
of 3.0 million ounces
- A further of 1.1 million ounces and 1.9
million ounces, of measured and indicated and inferred gold equivalent
resources, respectively, as total gold equivalent reserves and resources
increased by 68% over 2010
- US$116 million pre-construction program
planned at Constancia in 2011 for exploration, procurement and project
resource model update; formal project construction decision expected in
Q1 2012
- NI 43-101 resource for Reed copper project announced, which
comprises an indicated resource of 2.6 million tonnes of 4.52% copper
and an inferred resource of 0.2 million tonnes of 4.26% copper;
construction decision expected by end of 2011.
- HudBay management to conduct conference call on April 1, 2011 at 12:30 p.m. ET
TORONTO, ONTARIO -- (MARKET WIRE) -- 03/31/11 --
HudBay Minerals Inc.
("HudBay") (TSX: HBM)(NYSE: HBM) today announced a 288% increase to its
overall copper equivalent mineral reserves to 3.1 million tonnes.
Included in these reserves is 3.0 million ounces of gold equivalent
reserves. In addition, the Company has 0.7 million tonnes of measured
and indicated copper equivalent mineral resources and 1.6 million tonnes
of inferred copper equivalent mineral resources. Included in those
categories are gold equivalent resources of 1.1 million ounces and 1.9
million ounces, respectively.
On a per share basis, HudBay's overall copper equivalent mineral
reserves grew to 39.2 pounds per share compared to 11.3 pounds per share
in 2010. Overall copper equivalent mineral reserves and resources grew
to 68.1 pounds per share compared to 45.8 pounds per share in 2010.
Notes:
(1) Overall copper equivalent and gold equivalent are based on estimated
proven and probable reserves at Constancia, 777, Lalor, Chisel North
and Trout Lake and do not include nickel reserves at the Fenix project.
Copper equivalent calculated using a Cu price of US$2.50/lb, Zn price
of US$0.95/lb, Au price of US$900/oz, Ag price of US$15.00/oz, Pb price
of US$0.70/lb and Mo price of US$12.00/lb. Per share metrics for 2010
are based on 153.9M basic shares outstanding as at Dec. 31, 2009. Per
share metrics for 2011 are based on 149.4M basic shares outstanding as
at Dec. 31, 2010 plus 23.4M shares issued to complete the Norsemont
Mining acquisition. Dates used for comparison of HudBay's reserves and
resources in 2010 and 2011 are as at January 1, 2010 and March 31,
2011, respectively.
(2) Gold equivalent reserves include silver converted to gold at ratio of
60:1.
"As promised, we have systematically executed on our objective of
growing our mineral exposure on a per share basis through accretive
acquisitions and exploration, which we believe will lead to a
substantial value re-rating of HudBay over the course of this year,"
said David Garofalo, president and CEO. "Much of this growth was driven by the value-accretive acquisition of the Constancia copper project in Peru,
where we plan to initiate procurement and engineering activities,
update the resource model and conduct a pit optimization study over the
course of the year to enable us to make a formal construction decision
in early 2012. With one of the largest exploration budgets in our
history in 2011, which has now increased to approximately $70 million, we expect to continue growing our reserves and
resources on our existing properties."
----------------------------------------------------------------------------
Cu Equivalent(2)(000
Project Category(1) tonnes)
----------------------------
Jan. 1,
2011 2010 Variance
----------------------------------------------------------------------------
Constancia Proven & Probable 1,865 - 1,865
Inferred 72 - 72
777 Proven & Probable 669 735 (66)
Inferred 62 58 4
Lalor Proven & Probable 505 - 505
Measured & Indicated 83 617 (534)
Inferred 423 255 168
Chisel North Proven & Probable 12 17 (5)
Inferred 1 2 (1)
Trout Lake Proven & Probable 20 39 (19)
Inferred - 3 (3)
Reed (70%)(3) Measured & Indicated 94 - 94
Inferred 6 - 6
Lost (67.5%)(3) Measured & Indicated 13 - 13
Inferred 2 - 2
Tom & Jason Measured & Indicated 277 277 -
Inferred 938 938 -
Back Forty (65%)(3) Measured & Indicated 246 227 19
Inferred 46 30 16
----------------------------------------------------------------------------
Total Proven & Probable 3,071 791 2,280
Measured & Indicated 713 1,121 (408)
Inferred 1,550 1,286 264
----------------------------------------------------------------------------
Notes:
(1) Mineral resources are exclusive of and additional to stated mineral
reserves
(2) Copper equivalent metal calculated using a copper price of US$2.50 per
pound, zinc price of US$0.95 per pound, gold price of US$900 per ounce,
silver price of US$15.00 per ounce, lead price of US$0.70 per pound and
molybdenum price of US$12.00 per pound
(3) Values shown represent the proportion of overall metal HudBay is or may
be entitled to pursuant to the applicable joint venture/option
agreement
----------------------------------------------------------------------------
Project Category(1) Gold Equivalent(2)(000 oz)
----------------------------
Jan. 1,
2011 2010 Variance
----------------------------------------------------------------------------
Constancia(3) Proven & Probable 1,247 - 1,247
Inferred 68 - 68
777 Proven & Probable 1,032 1,112 (80)
Inferred 110 105 5
Lalor(4) Proven & Probable 643 - 643
Measured & Indicated 122 792 (670)
Inferred 1,173 293 880
Chisel North Proven & Probable 9 - 9
Inferred - - -
Trout Lake Proven & Probable 31 41 (10)
Inferred - 3 (3)
Reed (70%)(5) Measured & Indicated 44 - 44
Inferred 2 - 2
Lost (67.5%)(5) Measured & Indicated 12 - 12
Inferred 2 - 2
Tom & Jason(3) Measured & Indicated 195 195 -
Inferred 445 445 -
Back Forty (65%)(5) Measured & Indicated 710 470 240
Inferred 121 88 33
----------------------------------------------------------------------------
Total Proven & Probable 2,962 1,153 1,809
Measured & Indicated 1,083 1,457 (374)
Inferred 1,921 934 987
----------------------------------------------------------------------------
Notes:
(1) Mineral resources are exclusive of and additional to stated mineral
reserves
(2) Gold equivalent reserves include silver converted to gold at ratio of
60:1
(3) Principal credits are from silver
(4) Excludes gold zone and copper-gold zone conceptual estimates
(5) Values shown represent the proportion of overall metal HudBay is or may
be entitled to pursuant to the applicable joint venture/option
agreement
Constancia 2011 Pre-Construction Program of US$116 Million Underway
HudBay today announced a 2011 pre-construction program for the Constancia copper project in Peru of US$116 million.
The program contemplates early equipment procurement for long lead
items, a resource model update, metallurgy review and pit optimization
study, geotechnical and condemnation drilling and a US$9 million exploration program. Amounts budgeted for key items are set forth in the following table:
----------------------------------------------------------------------------
Constancia 2011 Program Budget (US$ Millions)
----------------------------------------------------------------------------
Environmental, Permitting, Land 12
General and Administrative 12
Engineering 10
Preliminary Construction Estimate 27
Preliminary Procurement Estimate 46
Exploration 9
----------------------------------------------------------------------------
Total 116
----------------------------------------------------------------------------
The pre-construction program is based on the timeline of Norsemont Mining Inc.'s feasibility study optimization ("FSO") released on February 21, 2011.
The FSO outlined an increase in reserves using new long-term metal
pricing and increasing and sustaining production throughput in the
processing plant in the later years of the project.
Constancia Project Mineral Reserve February 21, 2011
----------------------------------------------------------------------------
Category Tonnes Au (g/t) Ag (g/t) Cu (%) Mo (%)
----------------------------------------------------------------------------
Proven 195,000,000 0.04 3.49 0.42 0.0117
Probable 177,000,000 0.05 3.66 0.37 0.0092
----------------------------------------------------------------------------
Total Reserves 372,000,000 0.05 3.57 0.39 0.0105
----------------------------------------------------------------------------
A technical review of the FSO is currently being carried out in
conjunction with a number of initiatives from both HudBay's earlier due
diligence review and the requirements of the existing FSO project
schedule, which currently remains the project base case. HudBay expects
construction to begin in early 2012, leading toward the first full year
of production by 2016.
This work includes items such as additional resource modelling,
geotechnical and hydrogeological studies along with further condemnation
drilling.
Actions are also underway to move the project forward into the next
phase of engineering and to prepare for project construction. To
maintain the FSO schedule, procurement of long lead items such as the
grinding mills and mining fleet is expected to commence by the end of
2011.
2011 Constancia Exploration Program Provides Opportunities for Mine Optimization
As part of the US$116 million pre-construction program, HudBay will also invest US$9 million
toward exploration at the Constancia project in 2011. Exploration will
continue to focus on Pampacancha and Chilloroya South, two satellite
skarn deposits outside of the main resource area. Drilling at
Pampacancha and Chilloroya South is intended to enable the definition of
a high grade, near surface mineral deposit, which may provide mine life
optimization opportunities. Results are being compiled and drill
results from Pampacancha are expected to be released in late April 2011.
It is expected that a preliminary resource for both areas will be completed in the third quarter of 2011.
HudBay currently has a land position of approximately 22,000 hectares in Peru.
In addition to drilling in the area around Constancia, work will be
carried out to complete geological mapping, geochemical sampling and
geophysical surveys to identify drill-ready targets for 2012. It is
expected that between two and four drills will be mobilized at
Constancia during the remainder of 2011 to explore and define the known
mineralization and to step out to test the extensions of the zones as
well as to conduct condemnation and geotechnical drilling.
"The area around Constancia is highly prospective and we believe much of the area has been underexplored," said Cashel Meagher,
vice president, exploration at HudBay. "Our goal is to identify areas
of mineralization in the region over the course of 2011 to provide us
with potential new mine targets for the 2012 drill campaign."
In-Mine Mineral Reserves - January 1, 2011
----------------------------------------------------------------------------
Category Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
777
Proven 4,516,000 2.27 29.38 2.87 4.44
Probable 8,307,000 1.79 27.31 1.78 4.24
777 North
Proven 81,000 1.61 26.52 0.68 4.89
Probable 449,000 1.44 21.48 1.09 3.31
Trout Lake
Proven 409,000 2.06 9.66 2.10 3.53
Probable 36,000 1.17 1.01 2.18 1.43
Chisel North - Zinc
Proven 164,000 - - - 8.77
Probable 56,000 - - - 10.60
Chisel North - Copper
Probable 92,000 2.41 31.56 1.72 3.67
Total Proven 5,170,000
Total Probable 8,940,000
----------------------------------------------------------------------------
Total Reserves 14,110,000
----------------------------------------------------------------------------
In-Mine Inferred Mineral Resources - January 1, 2011
----------------------------------------------------------------------------
Category Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
777
Inferred 1,326,000 1.91 34.40 1.25 5.21
777 North
Inferred 67,000 1.49 20.32 1.02 3.47
Chisel North - Zinc
Inferred 28,000 - - - 6.44
Total Inferred 1,421,000
----------------------------------------------------------------------------
The Chisel North and Trout Lake
mines are mature operations reaching the end of their mine lives and
little prospect exists for reserve or resource expansion. The addition
of the 777 North expansion will provide an incremental growth
opportunity for the 777 mining complex. This year will mark the first
year that a concentrated effort on exploration will be conducted from
underground at the 777 mine. Much of the drilling to date has been
focused on converting resources to reserves. Approximately 20,000 meters
of underground exploration drilling will be concentrated on identifying
additional resources in the hanging wall and along strike of the 777
deposit.
Lalor Project
Lalor Probable Mineral Reserves - January 1, 2011
----------------------------------------------------------------------------
Category Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
Probable 10,525,000 1.55 21.00 0.64 8.31
----------------------------------------------------------------------------
The mineral reserves at Lalor are estimated from the zinc-rich indicated
mineral resource. The reserves are supported by an updated
pre-feasibility study completed by HudBay in February 2011,
which provides the basis for an economic project, without relying on
gold and copper-gold mineralization in the inferred and potential
conceptual estimate categories. The reserve statement supports the
robust nature of the project and provides the economic justification for
the development of the project. Further conversion of resource to
reserve at Lalor is unlikely to occur in 2011 with efforts principally
focused on construction and exploration. Construction efforts will focus
on the completion of the access and exploration ramp from Chisel North,
excavation of the Lalor ventilation raise and commencement of
production shaft sinking.
Trade-off studies undertaken by the company indicate that the Lalor
orebody will support the construction of a new concentrator adjacent to
the production shaft. HudBay is continuing to evaluate options for the
capacity and flowsheet of a new concentrator, and expects to be in a
position to make a decision on whether to proceed with a new
concentrator and announce the results of its optimization efforts early
in the third quarter of 2011.
The ongoing next phase of project feasibility optimization work at Lalor
has the potential to bring additional mineral resources into the mine
plan, while the incremental investment associated with a new
concentrator adjacent to the production shaft could lead to higher daily
production levels along with other benefits including reduced operating
costs, higher gold recoveries in the plant and further production rate
scalability.
The primary catalyst for future conversion of reserves at Lalor will be
the establishment of underground exploration drill platforms from the
ramp. The ramp is anticipated to reach the ore zones by the first
quarter of 2012 to allow for underground diamond drilling to define the
mining lines for the base metal zones. The exploration platforms are
expected to be ready late 2012 and into 2013 for underground delineation
drilling.
Lalor Project - Summary of Mineral Resource - May 1, 2010
----------------------------------------------------------------------------
Zone Category Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
Base Metal Indicated 2,552,000 1.04 27.07 0.29 5.72
Base Metal Inferred 4,800,000 1.3 26.2 0.58 9.25
Gold Zone Inferred 5,400,000 4.7 30.6 0.47 0.46
----------------------------------------------------------------------------
Lalor Project - Summary of Potential Conceptual Estimate - May 1, 2010
----------------------------------------------------------------------------
Tonnes
Zone Category (M) Au (g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
Gold Zone Potential 5.1 - 6.1 4.3 - 5.1 23 - 27 0.2 - 0.4 0.2 - 0.4
Copper-
Gold Zone Potential 1.8 - 2.2 5.8 - 7.0 18 - 22 3.2 - 4.0 0.2 - 0.3
----------------------------------------------------------------------------
Exploration efforts at Lalor in 2011 will be focused on exploring the
copper-gold zone down plunge, establishing geophysical platforms
proximate to the deposit, and following up on existing geophysical
anomalies. Three drills are currently operating in and around the
project.
Reed Copper Project
----------------------------------------------------------------------------
Category Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
Indicated 2,550,000 0.64 7.86 4.52 0.91
Inferred 170,000 0.38 4.55 4.26 0.52
----------------------------------------------------------------------------
A NI 43-101 compliant resource was announced today for the Reed copper
project, which will allow HudBay to complete a prefeasibility study. The
project, in which HudBay has a 70% joint venture interest, is a
high-grade near surface copper deposit that could be accessed via a ramp
with the ore trucked to the Flin Flon
concentrator. Permitting and pre-feasibility efforts will be conducted
throughout 2011 with the expectation of a construction decision by
year-end.
Exploration at and around the Reed property will continue with efforts
in the immediate future concentrated on near deposit geophysical
anomalies as well as on completing required exploration on the adjacent
option properties, which HudBay is earning into from its joint venture
partner VMS Ventures Inc.
Back Forty Project - Summary of Mineral Resource - October 15, 2010
----------------------------------------------------------------------------
Category Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
Open Pit
Measured 14,100,000 1.59 16.97 0.15 2.54
Indicated 2,100,000 1.53 32.80 0.41 1.17
Measured + Indicated 16,200,000 1.58 19.00 0.18 2.36
Inferred 1,400,000 1.40 32.89 0.62 1.00
----------------------------------------------------------------------------
Underground
Measured 800,000 1.67 25.83 0.24 3.45
Indicated 900,000 1.28 24.72 0.34 2.85
Measured + Indicated 1,700,000 1.46 25.23 0.29 3.13
Inferred 2,000,000 1.22 18.34 0.32 2.64
----------------------------------------------------------------------------
Open Pit +
Underground
Measured + Indicated 17,900,000 1.57 19.6 0.19 2.44
Inferred 3,400,000 1.29 24.33 0.44 1.96
----------------------------------------------------------------------------
Exploration work at the Back Forty project with joint venture partner Aquila Resources Inc. in the Upper Peninsula of northern Michigan
continues with three drills currently mobilized. The principal
exploration targets will focus on the recently reported high grade gold
intercepts located at depth below the known deposit and on recently
identified surface and airborne geophysical targets located within a
kilometre east of the known deposit. Exploration drilling is currently
budgeted for $5 million and includes the drilling of 25,000 meters. Exploration expenditures of $11 million
are earmarked for continuing with engineering studies supporting the
parallel pre-feasibility and permitting preparation requirements.
A significant increase in measured and indicated resource tonnage of
greater than 100% was realized in 2010. The resource shells were
expanded because of elevated metal prices, new drilling and new
geological interpretation.
"Our initial plans were to complete a pre-feasibility study for the Back
Forty project by the end of the third quarter of 2011," said Mr.
Garofalo. "However, recent drilling success, which has led to the
discovery of high grade mineralization outside of the known deposit, and
the prospect of similar positive results in our current drill program
have justified a delay in our consideration of project economics until
we are better able to understand the magnitude of the deposit."
Tom and Jason - Summary of Mineral Resource - May 24, 2007
----------------------------------------------------------------------------
Category Tonnes Zn (%) Pb (%) Ag (g/t)
----------------------------------------------------------------------------
Tom
Indicated 4,980,000 6.64 4.36 47.77
Inferred 13,550,000 6.68 3.10 31.77
----------------------------------------------------------------------------
Jason
Indicated 1,450,000 5.25 7.42 86.68
Inferred 11,000,000 6.75 3.96 36.42
----------------------------------------------------------------------------
HudBay is planning a 5,000 meter diamond drill program at its 100% owned Tom and Jason properties in the Yukon.
The program is intended to enable the upgrading of some inferred
resources to indicated and collecting of metallurgical samples. HudBay
intends to complete a preliminary economic assessment on the project in
early 2012.
"We are encouraged to see more exploration activity along the Canol North Road in the Selwyn Basin of the Yukon,
which supports needed infrastructure improvements in the region," said
Mr. Meagher. "We have long believed in the quality and potential of our
Tom and Jason deposits and strong metals prices have allowed us to make
long-term price assumptions that we think will result in attractive
economics for this project."
Lost Property
----------------------------------------------------------------------------
Category Tonnes Au (g/t) Ag (g/t) Cu (%) Zn (%)
----------------------------------------------------------------------------
Indicated 411,000 1.0 20.0 1.8 6.1
Inferred 69,000 0.8 16.5 1.5 6.2
----------------------------------------------------------------------------
An updated NI 43-101 compliant resource was announced today for the Lost property in the Sherridon District in northern Manitoba, approximately 100 kilometres from the company's existing Flin Flon operations. HudBay has the right to earn up to a 67.5% joint venture interest in these properties from Halo Resources Inc.
Efforts for the balance of the year will be concentrated on conducting a
pre-feasibility study to determine how the project fits with HudBay's
long-term production plans.
"The high grade and near surface deposit confirms our belief that the
Lost property has the potential to be a future source of feed for our
concentrator in Flin Flon," said Mr. Garofalo.
Fenix Project - Mineral Reserve Statement, January 1, 2011
----------------------------------------------------------------------------
Category Tonnes Ni (%)
----------------------------------------------------------------------------
Proven 7,800,000 2.03
Probable 28,400,000 1.81
----------------------------------------------------------------------------
Total Reserves 36,200,000 1.86
----------------------------------------------------------------------------
The January 1, 2011 mineral reserve is based upon a
recently completed feasibility study, which contemplates a 27 year mine
plan. The reserve represents a higher grade than was contained in the
previous feasibility study in 2006 that contemplated 41.4 million tonnes
reserve at 1.63% nickel over a 31 year mine life. HudBay has begun the
process to explore financing options and identify a strategic partner
for the project.
Early Stage Opportunities
HudBay holds minority equity positions in 14 junior exploration
companies, representing investments currently valued at approximately $148 million
with an aim to populate a pipeline of projects ready for development
following the construction of Lalor and Constancia. HudBay's early stage
opportunity pipeline consists of projects in Canada, United States, Chile, Peru and Colombia. We are continuing to evaluate new projects and potential investments to incorporate in our portfolio.
Conference Call and Webcast
Date: Friday, April 1, 2011
Time: 12:30 p.m. ET
Webcast: www.hudbayminerals.com
Dial in: 416-644-3418 or 877-974-0448
Replay: 416-640-1917 or 877-289-8525
Replay Passcode: 4430167#
HudBay Minerals Inc.
HudBay Minerals Inc. (TSX: HBM)(NYSE: HBM) is a Canadian integrated mining company with assets in North, Central and South 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.
Additional Information Concerning Mineral Reserve and Resource Estimates
The reserve and resource estimates included in this news release were prepared in accordance with NI 43-101 and the Canadian Institute on Mining,
Metallurgy and Petroleum CIM Standards on Mineral Resources and
Reserves: Definitions and Guidelines. Mineral reserves are not mineral
reserves and do not have demonstrated economic viability. Unless stated
elsewhere to the contrary, metals prices used for reserve and resource
estimates were: Au - US$900/oz; Ag - US$15.00/oz; Cu - US$2.50/lb; Zn - US$1.00/lb with an exchange rate of 1.10 C$/US$.
Dates used for the comparison of HudBay's reserves and resources in 2010 and 2011 are as at January 1, 2010 and March 15, 2011, respectively.
In-Mine Mineral Reserves and Resources
-- To estimate mineral reserves, measured and indicated mineral resources
were first estimated in a 12-step process, which includes determination
of the integrity and validation of the data collected, including
confirmation of specific gravity, assay results and methods of data
recording. The process also includes determining the appropriate
geological model, selection of data and the application of statistical
models including probability plots and restrictive kriging to establish
continuity and model validation. The resultant estimates of measured and
indicated mineral resources are then converted to proven and probable
mineral reserves by the application of mining dilution and recovery, as
well as the determination of economic viability using full cost
analysis. Other factors such as depletion from production are applied as
appropriate.
-- Estimated inferred mineral resources within our mines were estimated by
a similar 12-step process, used to estimate measured and indicated
resources. The inferred mineral resources contained in our mines have
had dilution and recovery applied and were economically tested using the
same full cost analysis and long term metal prices as those used for the
estimation of the mineral reserves.
Lalor
-- The updated prefeasibility study for Lalor includes a re-calculated
mineral resource model incorporating the 2009/2010 winter diamond
drilling program, detailed calculation of dilutions and recoveries per
mining area, completion of trade off studies for mine backfill, mine ore
haulage and milling options and paste backfill requirement, detailed
capital and operating cost estimates for refurbishing the Snow Lake
concentrator.
-- The estimates of the tonnes and grade of the gold-zone and copper-gold
zone are 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. For additional detail relating to the
Lalor mineral resource and conceptual estimates, refer to HudBay's press
release dated August 4, 2010 entitled "HudBay Minerals Releases Second
Quarter 2010 Results; Announces Production Decision at Lalor Project and
Semi-Annual Dividend", available at www.sedar.com.
Back Forty
-- 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. For additional detail relating to
the Back Forty mineral resource estimate see "Technical Report, Back
Forty Deposit, Menominee County, Michigan" as filed on SEDAR by Aquila
Resources Inc. on November 29, 2010.
Tom and Jason
-- Metal prices used (US$0.57/lb Zn, US$0.35/lb Pb and US$7.00/oz Ag) and a
gross dollar value cut-off of US$50/tonne. Ag values were capped at 550
g/t. For additional detail relating to the Tom/Jason mineral resource
estimates see "Technical Report on the Tom and Jason Deposits, Yukon
territory, Canada" dated May 24 2007, available at www.sedar.com.
Reed
-- Mineral resources are estimated at a CUEQ cut-off of 1.5% (CUEQ% equals
Cu% + Zn% x 0.211 + Au g/t x 0.359 + Ag g/t x 0.006) and a minimum two
metre core length. Metal recovery assumptions of 65% gold, 60% silver,
95% copper and 50% zinc were used for the estimation of CUEQ.
-- Specific gravity measurements were taken on a portion of the samples,
where actual measurements were not available either stoichiometric
values were calculated or average SG values were used.
-- Drill holes incorporated in this resource as at March 15, 2011.
Lost
-- Mineral resources are estimated at a ZNEQ cut-off of 4% (ZNEQ% equals
Zn% + Cu% x 2.771 + Au g/t x 1.028 + Ag g/t x 0.015) and a minimum two
metre core length. Metal recovery assumptions of 65% gold, 57% silver,
92% copper and 83% zinc were used for the estimation of ZNEQ.
-- Specific gravity measurements were taken on a portion of the samples,
where actual measurements were not available average SG values were
used.
-- Drill holes incorporated in this resource as at December 31, 2010.
Fenix
-- The reserve has been appropriately modified to account for dilution,
contamination, ore losses, metallurgical process recovery, and economic
evaluation by means of resource optimisation and the scheduling of
phased pits in order to meet processing requirements and blending
constraints. The reserve also accounts for relevant economic, marketing,
legal, environment, socio-economic and government factors.
-- Mining dilution, grade cut-offs and minimum thicknesses were pre
calculated into the resource estimate. A mining recovery of 95% was
incorporated with the average of 4% external dilution principally
included from ballast. The reserve methodology utilised the resultant
pit shells from Whittle optimisation and considered only nickel being
the sole generator of revenue. A price of US$7.25 per pound of nickel
was used and process and mining cost criteria was provided for by Hatch
and Golder respectively.
Qualified Persons
The mineral reserve and mineral resource estimates contained in this
news release respecting Lalor (along with the estimate of tonnes and
grade of the gold and copper-gold zones) and HBMS' operating mines were
prepared by or under the supervision of Robert Carter,
Superintendent, Mines Technical Services with HBMS. The mineral resource
estimates and mineral reserve estimates for the other mineral
properties contained in this news release were prepared under the
supervision of Cashel Meagher, Vice President,
Exploration of HudBay. Both Mr. Carter and Mr. Meagher are "qualified
persons" for the purposes of National Instrument 43-101.
Forward-Looking Information
Certain of the statements made and information contained herein may
contain forward-looking information within the meaning of applicable
Canadian and United States
securities laws. Forward-looking information includes, but is not
limited to, information concerning HudBay's intentions with respect to
the exploration and development of its mineral properties.
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. 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.
Note to United States Investors
Information concerning our mineral properties has been prepared in
accordance with the requirements of Canadian securities laws, which
differ in material respects from the requirements of SEC Industry Guide
7. Under Securities and Exchange Commission (the "SEC")
Industry Guide 7, mineralization may not be classified as a "reserve"
unless the determination has been made that the mineralization could be
economically and legally produced or extracted at the time of the
reserve determination, and the SEC does not recognize the
reporting of mineral deposits which do not meet the United States
Industry Guide 7 definition of "Reserve". In accordance with National
Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI
43-101") of the Canadian Securities Administrators, the terms "mineral
reserve", "proven mineral reserve", "probable mineral reserve", "mineral
resource", "measured mineral resource", "indicated mineral resource" and
"inferred mineral resource" are defined in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Definition Standards for Mineral Resources and Mineral Reserves adopted by the CIM Council on December 11, 2005.
While the terms "mineral resource", "measured mineral resource",
"indicated mineral resource" and "inferred mineral resource" are
recognized and required by NI 43-101, the SEC does not
recognize them. You are cautioned that, except for that portion of
mineral resources classified as mineral reserves, mineral resources do
not have demonstrated economic value. Inferred mineral resources have a
high degree of uncertainty as to their existence and as to whether they
can be economically or legally mined. Under Canadian securities laws,
estimates of
inferred mineral resources may not form the basis of an economic
analysis. It cannot be assumed that all or any part of an inferred
mineral resource will ever be upgraded to a higher category. Therefore,
you are cautioned not to assume that all or any part of an inferred
mineral resource exists, that it can be economically or legally mined,
or that it will ever be upgraded to a higher category. Likewise, you are
cautioned not to assume that all or any part of measured or indicated
mineral resources will ever be upgraded into mineral reserves. You are
urged to consider closely the disclosure on the technical terms in
Schedule A "Glossary of Mining Terms" of HudBay's annual information
form for the fiscal year ended December 31, 2010, available on SEDAR at www.sedar.com and incorporated by reference as Exhibit 99.1 in the Offeror's Form
40-F filed on March 31, 2011 (File No. 001-34244).
(HBM-G)
Contacts:
HudBay Minerals Inc.
John Vincic, Vice President,
Investor Relations and Corporate Communications
(416) 362 0615
john.vincic@hudbayminerals.com
www.hudbayminerals.com
Source: HudBay Minerals Inc.
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