HudBay board allocates $71m for construction of Reed Copper JV

While on track to achieve this year’s copper production guidance, HudBay warned copper output will drop in 2012 because of two pending mine closures.

HudBay Minerals announced Monday that its 2011 production remains on track to achieve guidance of 40,000 to 55,000 tonnes of copper production, 70,000 to 90,000 tonnes of zinc production, and 95,000 to 120,000 ounces of precious metals production.

The company said the HudBay Minerals board approved a capital investment of $71 million toward the construction of the 70% owned Reed Copper Project JV with VMS Ventures.

Located 120 kilometers from HudBay’s flagship Flin Flon Mine in Manitoba, the 1,300tpd Reed Copper operation planned to average production of 17,000 tonnes per year of contained copper metal after full production begins in late 2013. Mine life is expected to total five years.

Run of mine material will be transported by truck to Flin Flon. Proposed infrastructure required on site at Red Copper will support mining operations. The project will be powered by diesel generators.

Meanwhile HudBay warned that the company’s overall copper metal production in concentrate is expected to be lower next year “because of the pending closures of Trout Lake and Chisel North mines during 2012, while precious metal and zinc production are expected to remain essentially unchanged from 2011 levels. Guidance for 2012 copper production include 35,000-40,000 tonnes of copper, 2012 zinc output of 70,000-85,000 tonnes, and 85,000 to 105,000 ounces of precious metals next year.

HudBay has allocated $54 million in 2012 exploration expenditures, which will enable more than 130,000 meters of drilling across the company’s portfolio.

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