TORONTO (miningweekly.com) – Canada’s HudBay Minerals expects production could begin in 2012 from the Reed Lake project in Manitoba, CEO David Garofalo said on Thursday.
HudBay owns 70% of the project, located on the Flin Flon Greenstone belt, and junior VMS Ventures holds the balance. The company said on Wednesday it expects to make a production decision early next year.
„The deposit is very near surface, it would be accessed by ramp and we don’t need to build any surface infrastructure because we will be using the existing capacity at our Flin Flon concentrator, which is a relatively short drive down the provincial highway,“ Garofalo said in an interview.
The project will likely run at somewhere between 1 000 t/d and 2 000 t/d, he said earlier on a conference call.<steel crushers sellers in india stone crusher india/p>
HudBay is already working on the larger Lalor project in Manitoba, where it expects production from an initial access ramp in 2012, building up to full production from a new shaft in 2014.
The Toronto-based company currently operates the the 777 mine, the Trout Lake mine, a concentrator, copper smelter and zinc plant at Flin Flon, as well as the Chisel North mine and a concentrator near Snow Lake, also in Manitoba.
Both Chisel and Trout Lakdouble toothed roll crushere are mature operations, and are nearing the end of their operating lives, so the firm is moving quickly to develop Lalor, where it has discovered zinc, copper and gold mineralisation.
The firm is also studying whether it makes more economic sense to refurbish the existing concentrator at Snow Lake or to build a new concentrator at the Lalor mine site, and expects the results of the assessment by the end of this year.
GOLD MULTIPLES
Garofalo said on Thursday that the company’s ostone crushing plant for sale stone crusher indiaverall zinc output should grow by more than 50% once Lalor is in full production, which will provide „more than enough“ zinc concentrate to fill the Flin Flon zinc plant.
Total overall gold production will also double by 2016 from 2010 levels, thanks to output from Lalor, he said.
„Our gold business is almost achieving midtier status over the next five years and we are hoping the market starts to pay us the type of multiples that gold companies attract, at least fmobile crusher capacity per hour crusher mining processor our gold assets.“
Once the company has a better idea of the resources at Lalor, it might consider creating a separate gold business at some point in the future to try to get better recognition for the gold assets, he said.
GUATEMALA NICKEL
Garofalo also said on Thursday that HudBay will probably be able to give some indication of the way forward at its Fenix nickel project, in Guatemala, in the latter half of next year.
The company will complete an updated feasibility study on the asset late this year, and the next step will be considering funding options and potential partnerships.
„That [the feasibility study] will really be the catalyst for us to look at how we might finance this project,“ Garofalo told Mining Weekly Online.
„We are looking for both credit and equity partners, we are looking at limited recourse project financing with export credit agencies and we are looking for an equity partner that is looking for a secure supply of long-term nickel.“
HudBay acquired the Fenix nickel project in 2008 when it bought Skye Resources, but froze work in November that year because of market conditions at the time.
Shares in the company rose 5,6% on Thursday, to C$17,52 apiece by 16:00 in Toronto.
The firm reported a 40% slide in third-quarter profit on Wednesday, largely because of rail constraints that delayed shipments of copper concentrate.
However, Garofalo said the issue is being dealt with and the company expects that excess inventory, which stood at about 5 000 t of copper and 7 800 oz of gold contained in copper concentrate, will be drawn down in the first half of 2011.