Hudbay has been mining in Snow Lake, located 215 kilometres east of Flin Flon, since 1958. 

Chisel North Mine

• Location: 215 kilometres east of Flin Flon
• Ownership: 100%
• Property: 4,193 hectares
• Primary metals: zinc
• Secondary metals: copper, gold, silver
• Type of mining: underground
• Production rate: 725 tonnes per day
• Number of employees: 74
• Expected mine life: 2012
• Permanently ceased operations as planned in September 2012

Discovered in 1987, Chisel North is an underground zinc mine located six kilometres south of the town of Snow Lake. The mine, which began producing in 2001, was placed on care and maintenance in 2009 as a result of depressed world zinc prices and returned to full production in 2010. The Chisel North mine permanently ceased operations as planned in September 2012.

A three-kilometre underground ramp from Chisel North to our Lalor project has been built. The Lalor project is expected to become Hudbay’s next major underground mine.

Processing Facilities

Snow Lake Concentrator

In anticipation of the significant increase in production associated with our Lalor project, we are investing
$263 million to construct a new concentrator and paste backfill plant at Snow Lake. The new concentrator will enable an enhanced production rate of 4,500 tonnes per day and allow for an extended mine life. Construction of the concentrator, to be built adjacent to the previously planned 985-metre production shaft at Lalor, is expected to commence in early 2013 and is scheduled for completion in late 2014 to coincide with the completion of the production shaft.

Our current concentrator at Snow Lake was re-started in 2010 after being placed on care and maintenance in January 2009. It processes zinc ore from the Chisel North mine and produces zinc concentrate, which is shipped by truck for processing at the zinc plant in Flin Flon. The concentrator, which has crushing, grinding, flotation, thickening, filtering and drying capabilities, has a capacity of approximately 1.2 million tonnes of ore per year. Tailings generated by the Snow Lake concentrator are deposited in the Anderson Lake tailings facility, which we believe mitigates environmental concerns, as the tailings are deposited in a subaqueous manner, minimizing the potential for generation of acid rock drainage.

Water Treatment Plant

In 2008, we commissioned a water treatment plant to be built approximately four kilometres from the Chisel North mine at Chisel Lake. The treatment plant operates at 1,000 US gpm (peak 1,600 US gpm) to treat Chisel North mine discharge water and water from the Chisel Lake open pit. Treated water is discharged to the environment south of the Chisel Lake open pit.

Geology

Our northern Manitoba mines are located within the Flin Flon Greenstone Belt (FFGB) in the Canadian Shield, one of the world’s largest exposed areas of Precambrian rocks. Within the Canadian Shield are large, deformed remnants of ancient volcanic-sedimentary terrain known as greenstone belts, which historically have been proven locations of base and precious metals.

The orebodies of the FFGB occur in a highly prospective early Proterozoic island-arc assemblage that stretches for an exposed length of 250 kilometres east-west and 75 kilometres north-south. The deposits are copper-zinc VMS type, rich in gold and silver, and hosted in both felsic and mafic volcanic rocks, with the felsic type hosting the largest deposits. VMS orebodies in the area have ranged in size from less than 100,000 tonnes to more than
60 million tonnes.

n-Mine Manitoba Mineral Reserves as at January 1, 2012

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

History

1958 – Mining begins at Snow Lake.

1987 – The Chisel North mine is discovered.

2001 – Chisel North begins production.

2007 – The Lalor deposit is discovered.

2009 – The Chisel North mine closes due to low zinc prices.

2010 – The Chisel North mine reopens.

2012 - The Chisel North mine permanently ceased operations as planned in September 2012