Hudbay Minerals Inc (HBM)

[NYBob]

HudBay's copper equivalent reserves increase 288%Toronto's HudBay Minerals says it will begin a US$116 million pre-construction program this year at the Constancia Copper Project in Peru.

Author: Dorothy Kosich
Posted: Friday , 01 Apr 2011

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RENO, NV -

HudBay Minerals Thursday announced more than a tripling of metal reserves including copper equivalent reserves of 3.1 million tonnes including gold equivalent reserves of 3 million ounces.

Overall copper equivalent mine reserves grew to 39.2 pounds per share, compared to 11.3 pounds per share in 2010.

The company's overall copper equivalent and gold equivalent are based on proven and probable reserves at the Constancia Copper Project in Peru; HudBay's flagship mine the 777, the Lalor Lake Project, the Chisel North Mine, and Trout Lake Mine, all located within the Flin Flon District near the provincial border of Manitoba and Saskatchewan.

The reserve and resource estimate does not include nickel reserves at the Fenix nickel project in Guatemala. HudBay is seeking a joint venture partner for Fenix.

In a statement, HudBay CEO David Garofalo said, "As promised, we have systematically executed on our objective of growing our mineral exposure on a per share basis through accretive acquisitions and exploration, which we believe will lead to a substantial value re-rating of HudBay over the course of this year. "

"Much of this growth was driven by the value-accretive acquisition of the Constancia copper project in Peru, where we plan to initiate procurement and engineering activities, update the resource model and conduct a pit optimization study over the course of the year to enable use to make a formal construction decision in early 2012," he noted.

HudBay has budgeted $70 million for what Garofalo called "one of the largest exploration budgets in our history" in 2011.

Meanwhile, HudBay also announced a 2011 pre-construction program of US$116 million for the Constancia copper project. The program contemplates early equipment procurement for long lead items, a resource model update, metallurgy review and pit optimization study, geotechnical and condemnation drilling and a US$9 million exploration program.

HudBay expects construction to begin at Constancia in early 2012 with the goal of the first full year of production by 2016.

The company has scheduled a conference call with analysts Friday at 12:30 p.m. ET.

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