Lalor

The 100%-owned zinc, gold and copper Lalor mine began ore production in 2012 through the ventilation shaft. Production from the main shaft began in the second half of 2014. We also commissioned the refurbished Snow Lake concentrator, which now has the capacity to treat 2,700 tonnes per day. 

Click here to view a time lapse video of Lalor

Key Facts

  • 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

Life of Mine1

Ownership

100%

Daily ore throughput

3,300 tpd

Avg. annual Zn production2

59k tonnes

Avg. annual Au-Eq. production2

43k ounces

Avg. annual Cu production2

5k tonnes

Cash cost per lb Zn3

$(0.07)/lb

Mine and mill unit cost4

$58/tonne

Avg. annual sustaining capital

$23 million

Mine life

15 years

Source: Hudbay company disclosure, Wood Mackenzie

1.LOM as per NI 43-101 Pre-Feasibility Study Technical Report on Lalor Deposit dated March 29, 2012, with the exception of cash costs (see note 4)
2.Production represents contained metal in concentrate; silver converted to gold at a rate of 50:1
3.Wood Mackenzie LOM average from 2015 to 2027; cash costs per pound of zinc, net of by-product credits
4.Combined mine and mill unit operating costs per tonne of ore processed. 2015 combined mine and mill unit operating cost guidance for the entire Manitoba Business Unit is C$73-88/tonne of ore.

Overview

Hudbay’s 100% owned Lalor mine is a zinc, copper and gold mine near the town of Snow Lake in the province of Manitoba. Lalor is located approximately 210 kilometres by road east of Flin Flon, Manitoba.

In the first quarter of 2014, Hudbay received the Environment Act licence for Lalor, which allowed the mine to move into full production via the main shaft. Lalor commenced initial ore production from the ventilation shaft in August 2012 and achieved commercial production from the main shaft in the third quarter of 2014.

In the third quarter of 2014, Hudbay+ completed a refurbishment of the equipment and facilities at the Snow Lake concentrator, which now has the capacity to treat 2,700 tonnes per day. Lalor ore is currently being transported for processing at the Snow Lake concentrator and Hudbay is evaluating options for the treatment of Lalor ore over the longer term.

An underground exploration program at Lalor is underway; drilling is intended to enable the upgrade of inferred resources into a higher resource category, to test the down plunge potential of the gold and copper-gold zones and to determine the optimal location to advance the exploration ramp. Drilling of the copper-gold zone began in the fourth quarter of 2014.

Background

Hudbay’s exploration team discovered the Lalor deposit in 2007 using an innovative adaptation of electromagnetic geophysical surveys to penetrate deep below the Flin Flon Greenstone Belt. Subsequent exploration identified separate and distinct gold and copper-gold zones in addition to the previously defined zinc zone. On the basis of these discoveries, the Hudbay team was awarded the PDAC Bill Dennis Award for exploration – and we fast-tracked development of the Lalor resource.

In 2009, we began construction of a three-kilometre ramp from our Chisel North mine to the Lalor deposit to enable early access to the zinc zone and establish an underground drilling platform. The next year, we committed to advancing Lalor to full production. By mid-2012, we had completed the ventilation shaft, enabling us to start mining and generate cash flow a mere five years after the initial Lalor discovery. The timing coincided with the closure of the Chisel North mine so as to provide a continuous source of zinc feed for our concentrator and zinc plant, as well as the necessary personnel.

Production

The following table sets forth actual production from the Lalor mine for the years ended December 31, 2014, 2013 and 2012.

 

Units

2014

2013

2012

Ore mined

tonnes

551,883

400,590

72,293

Copper grade in ore

%

0.88

0.84

0.63

Zinc grade in ore

%

8.52

9.44

11.83

Gold grade in ore

grams/tonne

2.29

1.21

1.67

Silver grade in ore

Grams/tonne

23.83

19.39

19.29

   

Lalor Copper-Gold Zone Exploration Results

The Phase 1 copper-gold zone drill program at Lalor included a total of 14 holes (totalling approximately 4,500 metres) drilled from the 1,025 metre level; assay results from seven holes were released with Hudbay’s first quarter results in May. Assay results from the remaining seven holes are shown in the table on the following page and were similar to those from previous holes, confirming a high grade thick core down the middle of the main zone with decreasing grade and thickness towards the contacts, as well as separate hanging wall and footwall mineralization.

The Phase 2 exploration ramp extension to the north, which will allow testing of the copper-gold zones down plunge, and step out drilling to the east and west, is progressing well and is expected to be complete by the end of August. Drilling from the Phase 2 exploration ramp is anticipated to commence in September 2015 with approximately 8,500 metres of drilling planned. The Phase 2 portion of the ramp development continues to maintain a drift size capable of accommodating future mine equipment and related infrastructure for mining the copper-gold zones.

Mineral Reserves and Resources 

Manitoba Mineral Reserves as at January 1, 2016

Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t)
Lalor – Base Metal
Proven 5,143,000 0.75 7.42 1.94 25.11
Probable 7,828,000 0.82 6.06 2.18 25.33
Lalor – Gold Zone
Proven 823,000 0.33 0.27 4.85 19.61
Probable 1,491,000 0.35 0.38 5.26 28.79

Manitoba Mineral Resources as at September 30, 2015

Category  Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t)
Lalor - Base Metal
Inferred 3,300,000 1.35 6.06 2.87 26.59
Lalor - Gold Zone 
Measured1 56,000  0.17 0.50 4.5218.49
Indicated11,097,000 0.390.43  4.24  31.29 
Inferred2 3,522,000  0.35 0.20   5.47  33.48

1Gold resources not in contact with base metal zone and are anticipated to be mined and milled separately from base metal ore.
2Includes gold resources in contact and not in contact with base metal zones.


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

History 

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.

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.2007 – Lalor deposit is discovered.

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

2014 - Lalor mine construction complete on time and on budget

Lalor NI 43-101 Technical Report March 29, 2012

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March 29, 2012 Technical Report 16.39 MB

New Lalor Copper-Gold Mineralization Discovered, March 7, 2012

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Lalor Project Exploration Drill Results – May 16, 2011

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May 16, 2011 Chisel 181 KB
May 15, 2011 Lalor 215 KB

Lalor Project Drill Results – March 11, 2011

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March 11, 2011 Lal C-Au Zone Plan View 160 KB
March 11, 2011 Lalor Drill Hole Table 47 KB

Lalor Project Exploration Drill Results – December 13, 2010

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November 13, 2010 Exploration Plan View 391 KB

Lalor Supplemental Disclosure – August 4, 2010

Lalor Drill Results and Interactions Information, October 8, 2009

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October 8, 2009 Assay Information for Gold Zones 267 KB
October 8, 2009 Collar Information 56 KB
October 8, 2009 Survey Information 364 KB
October 8, 2009 Collar Map 98 KB

Base Metal Zones and Gold Mineralization, January 29, 2009

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New Gold Zone at Lalor, January 9, 2009

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January 9, 2009 Lalor Collars 14 KB
January 9, 2009 Lalor Assasy 68 KB

Lalor Copper-Gold Zone Exploration Results, July 29, 2015

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July 29, 2015 Lalor Vertical Composite 57 KB
July 29, 2015 Lalor Plan View 42 KB

Lalor Copper-Gold Zone Exploration Results, May 7, 2015

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May 7, 2015 Lalor Veritcal Composite 64 KB
May 7, 2015 Lalor Plan View 46 KB

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