Constancia

In 2011, Hudbay acquired Norsemont Mining Inc. and its wholly owned Constancia copper porphyry project located in southern Peru. Consistent with projections provided in July 2013, results from the completion of a revised Constancia capital cost estimate indicate total costs to project completion of US$1.708 billion, with initial production expected in late 2014 and commercial production in the second quarter of 2015.

Click here to view a time lapse video of Constancia.

Key Facts

  • Location: South-eastern Andes of Peru, in the Chamaca and Livitaca Districts, Province of Chumbivilcas, Department of Cusco
  • Ownership: 100%
  • Property: 22,516 hectares in 36 mineral concessions
  • Primary metals: copper
  • Secondary metals: molybdenum, silver
  • Contemplated type of mining: open pit

Project Status

At Hudbay’s 100% owned Constancia copper project in Peru, detailed engineering and procurement were substantially completed during 2013, with only minor process controls and final contracts outstanding. As at December 31, 2013, the project was over 56% complete. Of the total project capital budget of US$1.7 billion, Hudbay has incurred approximately US$1.03 billion in costs to December 31, 2013 and has entered into an additional US$319 million in commitments.

Hudbay continues to advance construction activities on the power transmission line from Tintaya to Constancia, with rights of way agreements in place for 100% of the alignment. The power line construction progress was 61% complete as at January 31, 2014. Hudbay is currently commissioning mining equipment and training operators and expects to begin pre-stripping late in the first quarter of 2014. SAG and ball mill shells and heads are 100% assembled, with trunnion installation and pinion and girth gear assembly upcoming, followed by liner installation and electromechanical tasks. Installation and assembly of the float cells is complete with work ongoing in structural steel and electromechanical equipment. Hudbay is conducting steel erection at the plant site and productivity is advancing well. Water capture for operations began in December 2013. Dam construction on the east tailings facility is well underway and on schedule. Bog removal in the east tailings facility is near completion and geomembrane liner installation continues with excellent progress.

 

In accordance with the agreements the company has entered into with local communities, Hudbay has delivered new homes to 29 of 36 families and has constructed a total of 32 homes. The relocation of these families is in progress. In the initial area required for operations, agreements with the three families yet to move have now been reached, and to date there has been no impact on Hudbay’s schedule.  Negotiations to secure surface rights over the Pampacancha deposit are expected to commence in the near future.

 

Hudbay has received approval of all required construction permits. In the third quarter of 2013, Hudbay received approval of its Environmental and Social Impact Assessment (“ESIA”) Modification 1 and submitted an application for a second amendment to the ESIA in December 2013 in respect of the final project configuration

and to permit the incorporation of Pampacancha into the mine plan. Hudbay has received the first round of

observations from the Ministry on ESIA Modification 2 and is addressing them with no critical items noted. All

permitting remains on schedule. Hudbay has also obtained approval for the early refund of value added tax on

purchases with retroactive effect to December 2012 and has received its first refund of US$21 million from the tax authorities in January 2014. Also in December 2013, Hudbay entered into a 15-year tax and fiscal stability agreement with the government of Peru.

Constancia Project – Reserves as at August 8, 2011

Category Ore (M tonnes) Cu (%)
Mo (g/t) Ag (g/t) Au (g/t) 
 Proven 349 0.37 100 3.29 0.043
 Probable 54 0.24 60 2.98 0.035
 Total 403 0.35 96 3.25 0.042

Pampacancha - Mineral Reserves as at August 8. 2012

Category Ore (M tonnes)
Cu (%)
Mo (g/t)
Ag (g/t)
Au (g/t) 
Proven 10 0.54 170 4.20 0.318
Probable 37 0.46 140 4.56 0.276
Total  47 0.48 149 4.49 0.285

Constancia Project – Resources as at November 2, 20111

Category Ore (M tonnes) Cu (%)
Mo (g/t) Ag (g/t) Au (g/t) 
 Measured  119 0.23 62 2.3 0.038
 Indicated 344 0.20 58 2.0 0.034
 Total 463 0.21 59 2.0 0.035
 Inferred  219  0.19  49  1.8 0.032 

Pampacancha - Mineral Resources as at April 2. 20122

Category Ore (M tonnes) Cu (%)
Mo (g/t) Ag (g/t) Au (g/t) 
 Inferred 4 0.41 103 6.2 0.207

1The Constancia mineral resources are reported at a 0.12% copper cut-off
2The Pampacancha mineral resources are reported at a 0.20% copper cut-off

(For more detailed information about reserves and resources at Constancia, please see Reserves and Resources.)

Pampacancha Deposit Expanded to the North and West, March 7, 2012

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Pampacancha Exploration Drill Results, August 9, 2011

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August 9, 2011 Cross Section 381 KB
August 8, 2011 Plan Map 846 KB
August 7, 2011 Collar Locations 7 KB
August 6, 2011 Composite Intervals 8 KB

Pampacancha Exploration Drill Results, June 14, 2011

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June 14, 2011 Cross Section 529 KB
June 14, 2011 Plan Map 1.21 MB
June 14, 2011 Pampacancha Results 10 KB

Constancia Project Exploration Drill Results, May 16, 2011

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May 16, 2011 Collar Locations 27 KB
May 16, 2011 Map 1.76 MB

Constancia Project Technical Report, November 6, 2012

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