In 2011, Hudbay acquired Norsemont Mining Inc. and its wholly owned Constancia copper porphyry project located in southern Peru. Production began as expected during the fourth quarter of 2014 and achieved commercial production on April 30, 2015.
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- 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
Daily ore throughput
Avg. annual Cu production2
Cash cost per Cu lb3
Mine and mill unit cost4
Avg. annual sustaining capital
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
Constancia is Hudbay’s 100% owned copper mine in Peru, which the company acquired through its acquisition of Norsemont in 2011. It is located in the Province of Chumbivilcas in southern Peru and consists of the Constancia and Pampacancha deposits.
On August 8, 2012, Hudbay’s board of directors approved a US$1.5 billion investment to fund the development and construction of its Constancia project in Peru. Following substantial completion of the detailed engineering in the third quarter of 2013, the board approved a revised capital cost estimate for the project of US$1.7 billion.
Peru Operations Review
During the first quarter of 2016, Constancia mining operations continued as planned and cost optimization is underway. Ore milled decreased to 6.2 million tonnes from 7.4 million tonnes in the fourth quarter of 2015 due to lower mill capacity during the replacement of the trunnions on one of the grinding circuits. The average milled copper grade was 0.57% in the first quarter of 2016, compared to 0.63% in the fourth quarter of 2015.
The planned replacement of the damaged trunnions at the Constancia mill was completed without incident and ahead of schedule in late March 2016. The downtime was approximately five weeks, compared to the six to eight weeks originally planned, during which time the other grinding circuit continued to operate at full capacity with good throughput and recoveries. Both circuits have since ramped up to full capacity.
Optimization of plant performance remains the primary focus for Constancia. Recoveries have improved as the metallurgy associated with the varying ore types is better understood. The total copper recovery in the first quarter of 2016 was 81.8%, compared to 79.8% in the fourth quarter of 2015.
Combined mine, mill and G&A unit operating costs of $7.76 per tonne were within guidance expectations for 2016, notwithstanding the reduced throughput associated with the replacement of the trunnions. Cash cost and sustaining cash cost, net of by-product credits1, for Constancia was $1.15 per pound and $1.49 per pound, respectively, in the first quarter of 2016. Sustaining cash costs reflected seasonally low spending on capitalized civil earthworks offset by reduced mill throughput during the grinding circuit repairs.
Concentrate inventory levels in Peru were maintained at normal working levels during the first quarter of 2016 as a result of the improved trucking capacity implemented in 2015 and reduced port congestion. The ongoing port expansion at Matarani is expected to be completed by June 2016, which will improve access to Hudbay’s designated pier.
1Cash cost and sustaining cash cost (net of by-product credits) per pound of copper produced are not recognized under IFRS. For a detailed description of each of these non-IFRS financial performance measures used in this news release, please see the discussion under “Non-IFRS Financial Performance Measures” beginning on page 5 of this news release.
Our processing plant at Constancia is designed to process a nominal throughput of 81,900 tpd of ore and average annual throughput of 29 million tonnes per year from the Constancia open pit and Pampacancha satellite deposit. The principal products of the concentrator are copper concentrate and molybdenum concentrate. The primary crusher, belt conveyors, thickeners, tanks, flotation cells, mills and various other types of equipment are designed and constructed to be open to the environment. The concentrate filtration and storage building is enclosed. The tailings is pumped to the tailings management facility for storage and water is returned via parallel piping to the process plant for reuse.
Peru Mineral Reserves as at January 1, 2015
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.)
Peru Mineral Resources as at September 30, 2015
Total Measured & Indicated
Note: totals may not add up correctly due to rounding.