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

Life of Mine1

Ownership

100%

Daily ore throughput

80k tpd

Avg. annual Cu production2

82k tonnes

Cash cost per Cu lb3

US$1.25/lb

Mine and mill unit cost4

US$7.48/tonne

Avg. annual sustaining capital

US$47 million

Mine life

22 years

Source: Hudbay company disclosure

1.LOM as per NI 43-101 Technical Report on the Constancia Project dated October 15, 2012 and subsequent updates to project estimates in public disclosure
2.Production is contained metal in concentrate
3.Net of by-products. Includes impact of silver and gold streams. Assumed metal prices per the Silver Wheaton stream agreement are as follows: Gold US$400/oz, Silver US$5.90/oz. Other metal price assumptions include: Molybdenum 2014-US$12/lb, 2015-US$13/lb, 2016-US$13/lb, LT-US$13.50/lb; Gold 2014-US$1,350/oz, 2015-US$1,325/oz, 2016-US$1,300/oz, 2017-US$1,275/oz, LT-US$1,250/oz
4.Combined mine and mill unit operating costs per tonne of ore processed

Project Status

At Hudbay’s 100% owned Constancia copper project in Peru, the project was approximately 85% complete on a proportion spent basis at the end of June 2014. Of the total project capital budget of US$1.7 billion, Hudbay has incurred approximately US$1.4 billion in costs to June 30, 2014 and entered into an additional US$0.2 billion in commitments.

 

Construction of the power transmission line from Tintaya to Constancia is complete and is expected to be commissioned shortly. The main substation at Constancia has already been energized using diesel power generation, and plant commissioning activities have commenced.

Pre-stripping continues to advance well and first ore was placed on the run of mine pad in July. Final negotiations are in progress and the contract for concentrate transport is expected to be awarded in the third quarter of 2014. Mine support facilities are well advanced with the explosives magazine substantially complete and construction of the truck shop well advanced.

 

Construction activities continue to progress well. Commissioning activities have commenced on the primary crusher and coarse ore stockpile conveying systems. Major mechanical installation is now complete in the grinding area, with work focused on piping and electrical installation. Tank and flotation cell leak testing has now commenced in the flotation and thickening area. Heavy civil works also continue to progress well in all areas and targeted water impoundment volumes for start-up have now been achieved.

 

The project remains on track for first production in late 2014 and commercial production in the second quarter of 2015.

 

Peru Mineral Reserves as at January 1, 2014

 

Category

Tonnes

Cu (%)

Mo (g/t)

Au (g/t)

Ag (g/t)

Constancia

 

 

 

 

 

Proven

483,000,000

0.32

93

0.040

3.04

Probable

94,000,000

0.22

61

0.036

2.77

Pampacancha

 

 

 

 

 

Proven

23,000,000

0.52

142

0.298

4.28

Probable

20,000,000

0.44

159

0.252

3.74

Total Proven

506,000,000

0.33

95

0.052

3.09

Total Probable

114,000,000

0.26

78

0.074

2.94

Total Reserves

620,000,000

0.32

92

0.056

3.07

Note: totals may not add up correctly due to rounding

 

Peru Mineral Resources as at September 30, 2013

 

Category

Tonnes

Cu (%)

Mo (g/t)

Au (g/t)

Ag (g/t)

Constancia

 

 

 

 

 

Measured

68,000,000

0.22

59

0.036

2.17

Indicated

293,000,000

0.20

58

0.033

1.96

Inferred

200,000,000

0.19

51

0.031

1.86

Pampacancha

 

 

 

 

 

Measured

5,000,000

0.41

69

0.243

5.46

Indicated

6,000,000

0.34

98

0.211

4.68

Total Measured & Indicated

372,000,000

0.20

59

0.039

2.09

Total Inferred

200,000,000

0.19

51

0.031

1.86

Note: totals may not add up correctly due to rounding.


(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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November 12, 2014 Technical Report 28.36 MB

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