Located three kilometres from the Chisel North mine, the Lalor project is on a fast track to become our next major underground mine. The project is believed to hold the second-largest metal deposit in the Flin Flon Greenstone Belt and the largest pre-development deposit discovered in the Flin Flon-Snow Lake region.
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- Location: Chisel Basin of the Flin Flon Greenstone Belt in Manitoba, 210 kilometres east of Flin Flon
- Ownership: 100%
- Property: 916 hectares
- Primary metals: gold, zinc, copper
- Secondary metals: silver
- Type of mining: underground
- Production rate: 4,500 tonnes per day
- Projected life of mine: 20 years
- Capital costs for Lalor mine: (2010 to 2014): $441 million
- Annual sustaining capital expenditures: $22 million
- Estimated mining cost per tonne: $36
- Estimated milling cost per tonne: $16
The company has invested approximately $405 million at the Lalor project to October 31, 2013 and has entered into an additional $46 million in commitments. Included in the invested amount and total commitments are approximately $371 million and $40 million, respectively, related to the Lalor mine, which is on schedule and on budget.
The company intends to invest $9 million at its Snow Lake concentrator to refurbish existing equipment and facilities and double production capacity to approximately 2,700 tonnes per day. This investment is expected to enable the deferral of construction of the new Lalor concentrator until 2015. Hudbay expects to complete the increase in production capacity at the Snow Lake concentrator by mid‑2014, when the production shaft at Lalor is being commissioned. The company will continue with engineering and optimization work for the new concentrator and will reassess timing for construction of the new concentrator in 2014 following completion of an updated Lalor mine plan.
During the third quarter of 2013, Hudbay hoisted 110,695 tonnes of ore from the ventilation shaft at Lalor at a copper grade of 0.90% and zinc grade of 8.95%. In late September Hudbay experienced a breakdown of the temporary hoisting apparatus over the ventilation raise. No injuries were sustained and repairs will be at the expense of the contractor that was operating the hoist. Hudbay received permission to haul ore to surface via the access ramp until repairs were completed, and no material impact on Lalor's operations resulted.
Underground project development has continued, with completion of the 955 metre level load out facility and shaft bottom access to the 985 metre level. Hudbay has also started work on the ore pass and waste pass handling systems and the settling cones.
Construction work for the main ore and waste handling systems, as well as the main dewatering systems, has been awarded and will commence in the fourth quarter of 2013 and continue to mid-2014. Hudbay is near completion on the construction of the main substation, which is scheduled to be commissioned in the fourth quarter of 2013. The construction on the main intake fan system is 90% complete and is scheduled to be commissioned in the second quarter of 2014 after the main production shaft has been completed.
Given the nature of the Lalor project, Hudbay expects to refer to three phases of the Lalor project when determining commercial production for accounting purposes. The first phase of the project includes the main ventilation shaft and associated surface and underground workings that will contribute to the production of ore between 2012 and 2014. Hudbay commenced commercial production for the first phase on April 1, 2013 with Lalor initial production contributing to profit starting at that time.
The second phase of the project is expected to be completed by the second half of 2014 when the main production shaft has been commissioned for ore hoisting, subject to receipt of required regulatory permits. At that time Hudbay expects to discontinue the use of the ventilation shaft for hoisting and transition fully to use of the main production shaft. Sinking of the main production shaft was substantially complete subsequent to quarter end.
The third phase of the project involves the new concentrator. Hudbay is processing the Lalor ore at the nearby Snow Lake concentrator until the company completes the construction of the new concentrator located at the Lalor site. In the second quarter of 2013, Hudbay submitted permit applications for the new concentrator to the Manitoba and federal governments.
Lalor Project – Mineral Reserves* as at March 30, 2012
*The weighted average (based on planned production tonnage) price from 2012 to 2016 used for mineral reserve estimation for zinc was US$1.11 per pound (includes premium), the copper price was US$3.12 per pound, the gold price was US$1,399 per ounce and the silver price was US$27.28 per ounce using an exchange of 1.03 C$/US$. Post 2016 the mineral reserve estimation used a zinc price of US$1.00 per pound (includes premium), a copper price of US$2.75 per pound, a gold price of US$1,100 per ounce and a silver price of US$22 per ounce using an exchange of 1.05 C$/US$.
Lalor Project – Mineral Resources as at September 30,2011
(For more detailed information about reserves and resources at Lalor, please see Reserves and Resources.)
The estimates of the tonnes and grade of the gold zone and the 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. It is uncertain if further exploration will result in the target deposit being delineated as a mineral resource.
1955 – Exploration in the Chisel Basin has been active since 1955. The Basin has hosted five producing mines: Chisel Lake, Chisel Open Pit, Chisel North, Photo and Ghost-Lost.
2007 – Lalor deposit is discovered.
2009 – Gold zone and copper-gold zone identified. In December, construction begins on the three-kilometre underground ramp from the Chisel North mine to Lalor deposit.
2010 – Hudbay's board of directors made a full commitment to the development of Lalor by authorizing the expenditures necessary to put the project into full production.
2011 – Decision made to construct new concentrator.
2012 - Initial ore production commenced from ventilation shaft