Constancia

In 2011, Hudbay acquired the 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.

Key Facts

  • 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

Last Twelve Months

Ownership 100%
Daily ore milled 83k tpd

Cu production1

128k tonnes

Unit operating cost2

$8.78/t

Cash cost per Cu lb3

$1.29/lb

Sustaining Capital4

$116 million

Sustaining Cash Cost5   $1.72/lb

Current mine life

19 years

Note: Last Twelve Months as of March 31, 2018

1.Production is contained metal in concentrate.
2.Combined mine, mill and G&A unit operating costs per tonne of ore processed (after impact of capitalized stripping).
3.Net of by-products. Includes impact of silver and gold streams.
4.Sustaining capital includes capitalized stripping costs, but excludes Pampacancha project capital.
5.Sustaining cash cost per pound copper produced, includes sustaining capital costs and royalties.

Overview

Constancia is Hudbay’s 100% owned copper mine in Peru. It is located in the Province of Chumbivilcas in southern Peru and consists of the Constancia and Pampacancha deposits.

Hudbay completed construction of the Constancia mine in the fourth quarter of 2014 at a capital cost of construction of approximately $1.7 billion and the mine reached commercial production in the second quarter of 2015. The mine reached full and steady state production in the second half of 2015 and Hudbay has since been focused on optimizing the operation.

Hudbay completed a twin hole drill program in the fourth quarter of 2017 that confirmed the extent of the positive grade bias that has existed since the commencement of production and Hudbay also constructed a new resource model that formed the basis for a new mine plan and technical report for Constancia. The updated National Instrument 43-101 technical report in respect of Constancia includes an updated mine plan showing an increase to the total metal contained in the estimated mineral reserves. This new mine plan also reflects updated throughput, recoveries and capital and operating cost assumptions for the remainder of the mine life.

The new technical report assumes that mining of the high-grade Pampacancha satellite deposit will commence in 2019.

Mineral Reserves and Resources

Peru Mineral Reserves as at January 1, 20181,2

Category Tonnes Cu (%) Mo (g/t) Au (g/t) Ag (g/t)
Constancia
  Proven 455,900,000 0.30 96 0.035 2.93
  Probable  72,800,000  0.23   72  0.035 3.09
Total Proven and Probable
528,700,000
0.29
93
0.035
2.95
Pampacancha
  Proven 32,400,000 0.59 178 0.368 4.48
  Probable  7,500,000  0.62   173  0.325 5.75
Total Proven and Probable
39,900,000
0.60
177
0.360
4.72
Total Mineral Reserve
568,600,000
0.32
99
0.058
3.07
1The mineral reserve estimates for Constancia are based on a long range mine plan with economic value calculation per block (NSR in $/t), mining, processing and detailed engineering parameters
2The Constancia reserve pits (Constancia and Pampacancha) consist of operations pits of proven and probable reserves and are based on the following long-term metals prices: $3.00 per pound of copper; $11.00 per pound of molybdenum; $18.00 per ounce of silver; and $1,260 per ounce of gold; metallurgical recoveries applied by ore type (between 84.4% to 90.5%); and processing cost of $4.54 per tonne, general and administrative costs of $1.60 per tonne and mining costs of $1.30 and $.135 per tonne (waste and ore, respectively).

Peru Mineral Resources as at January 1, 20181,2

Category Tonnes Cu (%) Mo (g/t) Au (g/t) Ag (g/t)
Constancia
  Measured 175,000,000 0.20 51 0.028 2.19
  Indicated  180,900,000  0.20   56  0.033 2.09
Inferred
54,100,000
0.24
43
0.018
1.71
Pampacancha
  Measured 11,400,000 0.41 101 0.245 4.95
  Indicated  6,000,000  0.35   84  0.285 5.16
Inferred
10,100,000
0.14
143
0.233
3.86
Total Measured + Indicated
373,300,000
0.21
56
0.041
2.28
Total Inferred
64,100,000
0.22
59
0.052
2.05
Note: totals may not add up correctly due to rounding.
1Mineral resources that are not mineral reserves do not have demonstrated economic viability.
2Mineral resources are constrained within a computer generated pit using the Lerchs-Grossman algorithm. Estimates of mineral resources are based on the following long-term metals prices: $3.00 per pound of copper; $11.00 per pound of molybdenum; $18.00 per ounce of silver; and $1,260 per ounce of gold; Metallurgical recoveries of 88.4% copper, 55% molybdenum, 90% silver and 60% gold were applied to mixed and supergene material. A metallurgical recovery of 84% copper, 52% silver and 60% gold for copper was applied to skarn and high zinc material. NSR was calculated for every model block and is an estimate of recovered economic value of copper, molybdenum, silver and gold combined.


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

History 

2011 – Hudbay acquires the Constancia project

2014 – Production begins at Constancia

2015 – Constancia achieves commercial production




1.LOM as per NI 43-101 Technical Report on the Constancia Mine dated November 21, 2016. LOM average calculated from 2017-2035

2.Production is contained metal in concentrate

3.Combined mine, mill and G&A unit operating costs per tonne of ore processed (after impact of capitalized stripping)

4.Net of by-products. Includes impact of silver and gold streams. Metal prices per the precious metals stream agreement are as follows: Gold US$400/oz, Silver US$5.90/oz. Other metal price assumptions in LOM estimate are based on reserve prices ($3.00/lb Cu, $11.00/lb Mo, $1,260/oz Au 

5.Sustaining capital includes capitalized stripping costs, but excludes Pampacancha project capital. 2017 Peru sustaining capital expenditure guidance is $120 million, including capitalized stripping costs of ~$15 million

6.Sustaining cash cost per pound copper produced, includes sustaining capital costs and royalties

7.Mine life as of January 1, 2017

Constancia Technical Report, March 29, 2018

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Constancia Technical Report, November 21, 2016

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November 21, 2016 Technical Report 18.14 MB

Constancia Project Technical Report, November 6, 2012

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November 12, 2014 Technical Report 28.36 MB

Pampacancha Deposit Expanded to the North and West, March 7, 2012

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Pampacancha Exploration Results, August 9, 2011

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August 9, 2011 Cross Section 381 KB
August 8, 2011 Plan Map 846 KB
August 7, 2011 Collar Locations 7 KB
August 6, 2011 Composite Intervals 8 KB

Pampacancha Exploration Results, June 14, 2011

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June 14, 2011 Cross Section 529 KB
June 14, 2011 Plan Map 1.21 MB
June 14, 2011 Pampacancha Results 10 KB

Constancia Exploration Results, May 16, 2011

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May 16, 2011 Collar Locations 27 KB
May 16, 2011 Map 1.76 MB

PERU LAND PACKAGE MAP

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