Peru

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.

Click here to view a time lapse video of Constancia.

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

Life of Mine1

Ownership

100%

Daily ore throughput

80k tpd

Avg. annual Cu production2

82k tonnes

Cash cost per Cu lb3

US$1.25/lb

Mine and mill unit cost4

US$7.48/tonne

Avg. annual sustaining capital

US$47 million

Mine life

22 years

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

Overview

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.

Constancia Processing

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

 

Category

Tonnes

Cu (%)

Mo (g/t)

Au (g/t)

Ag (g/t)

Constancia

 

 

 

 

 

Proven

477,000,000

0.30

94

0.038

2.91

Probable

94,000,000

0.22

61

0.036

2.77

Pampacancha

 

 

 

 

 

Proven

23,000,000

0.52

142

0.298

4.28

Probable

20,000,000

0.44

159

0.252

3.74

Total Proven

500,000,000

0.31

97

0.050

2.97

Total Probable

114,000,000

0.26

78

0.074

2.94

Total Reserves

614,000,000

0.30

93

0.054

2.97

Note: totals may not add up correctly due to rounding

 

Peru Mineral Resources as at September 30, 2015

 

Category

Tonnes

Cu (%)

Mo (g/t)

Au (g/t)

Ag (g/t)

Constancia

 

 

 

 

 

Measured

68,000,000

0.22

59

0.036

2.17

Indicated

293,000,000

0.20

58

0.033

1.96

Inferred

200,000,000

0.19

51

0.031

1.86

Pampacancha

 

 

 

 

 

Measured

5,000,000

0.41

69

0.243

5.46

Indicated

6,000,000

0.34

98

0.211

4.68

Total Measured & Indicated

372,000,000

0.20

59

0.039

2.09

Total Inferred

200,000,000

0.19

51

0.031

1.86

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.) 

Constancia Technical Report, November 21, 2016

Thumb Date Download
November 21, 2016 Technical Report 18.14 MB

Constancia Project Technical Report, November 6, 2012

Thumb Date Download
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

Thumb Date Download
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

Thumb Date Download
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

Thumb Date Download
May 16, 2011 Collar Locations 27 KB
May 16, 2011 Map 1.76 MB

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